U.S. SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM 10-Q
__________________
x | QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 |
For the quarterly period ended |
September
30, 2014 |
|
or
¨ | TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 |
For the transition period ended to
Commission
File Number: 001-15697 |
ELITE
PHARMACEUTICALS, INC. |
(Exact
name of registrant as specified in its charter) |
Nevada |
|
22-3542636 |
(State
or other jurisdiction of incorporation or organization) |
|
(I.R.S.
Employer Identification No.) |
165
Ludlow Avenue, Northvale, New Jersey |
|
07647 |
(Address of principal
executive offices) |
|
(Zip Code) |
(201)
750-2646 |
(Registrant's telephone
number, including area code) |
(Former
name, former address and former fiscal year, if changed since last report)
Indicate by
check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange
Act of 1934 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 has submitted electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405
of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post
such files).
Yes
x
No ¨
Indicate by
check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition
of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):
Large Accelerated filer ¨ |
Accelerated Filer ¨ |
Non-Accelerated Filer ¨ |
Smaller Reporting Company x |
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
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. As of November
4, 2014, the issuer had outstanding 596,612,435 shares of common stock, $0.001 par value (exclusive of 100,000 shares held in
treasury).
ELITE PHARMACEUTICALS,
INC. AND SUBSIDIARY
INDEX
ELITE PHARMACEUTICALS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
| |
September 30, 2014 (Unaudited) | | |
March 31, 2014 (Audited) | |
ASSETS | |
| | | |
| | |
CURRENT ASSETS | |
| | | |
| | |
Cash | |
$ | 7,627,078 | | |
$ | 6,941,777 | |
Accounts receivable (net of allowance for doubtful accounts of $111,404 and $134,083, respectively) | |
| 1,097,784 | | |
| 732,076 | |
Inventories | |
| 2,523,617 | | |
| 1,932,486 | |
Prepaid expenses and other current assets | |
| 462,973 | | |
| 318,424 | |
| |
| | | |
| | |
Total Current Assets | |
| 11,711,452 | | |
| 9,924,763 | |
| |
| | | |
| | |
PROPERTY AND EQUIPMENT, net of accumulated depreciation of $5,934,888
and $5,508,377, respectively | |
| 5,167,376 | | |
| 4,199,602 | |
| |
| | | |
| | |
INTANGIBLE ASSETS – net of accumulated
amortization of $-0- | |
| 6,358,470 | | |
| 6,349,922 | |
| |
| | | |
| | |
OTHER ASSETS | |
| | | |
| | |
Investment in Novel Laboratories, Inc. | |
| — | | |
| 3,329,322 | |
Security deposits | |
| 37,242 | | |
| 16,314 | |
Restricted cash – debt service for EDA bonds | |
| 388,952 | | |
| 265,043 | |
EDA bond offering costs, net of accumulated amortization of $128,785 and $121,697, respectively | |
| 225,667 | | |
| 232,756 | |
| |
| | | |
| | |
Total Other Assets | |
| 651,861 | | |
| 3,843,435 | |
| |
| | | |
| | |
TOTAL ASSETS | |
$ | 23,889,159 | | |
$ | 24,317,722 | |
The accompanying notes are an integral
part of the condensed consolidated financial statements
ELITE PHARMACEUTICALS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
| |
September 30, 2014 (Unaudited) | | |
March 31, 2014 (Audited) | |
LIABILITIES AND STOCKHOLDERS’ DEFICIT | |
| | | |
| | |
CURRENT LIABILITIES | |
| | | |
| | |
Current portion of EDA bonds payable | |
$ | 210,000 | | |
$ | 3,385,000 | |
Short term loans and current portion of long-term debt | |
| 234,003 | | |
| 18,870 | |
Related Party Line of Credit | |
| 666,329 | | |
| 528,750 | |
Accounts payable and accrued expenses | |
| 2,682,439 | | |
| 2,214,871 | |
Deferred revenues | |
| 13,333 | | |
| 13,333 | |
| |
| | | |
| | |
Total Current Liabilities | |
| 3,806,105 | | |
| 6,160,824 | |
| |
| | | |
| | |
LONG TERM LIABILITIES | |
| | | |
| | |
EDA bonds payable – non current | |
| 2,065,000 | | |
| — | |
Deferred revenues | |
| 132,223 | | |
| 138,890 | |
Other long term liabilities | |
| 381,249 | | |
| 131,144 | |
Derivative liability – preferred shares | |
| 45,885,714 | | |
| 60,981,570 | |
Derivative liability – warrants | |
| 26,981,822 | | |
| 38,103,446 | |
| |
| | | |
| | |
Total Long Term Liabilities | |
| 75,446,008 | | |
| 99,355,050 | |
| |
| | | |
| | |
TOTAL LIABILITIES | |
| 79,252,113 | | |
| 105,515,874 | |
| |
| | | |
| | |
STOCKHOLDERS’ DEFICIT | |
| | | |
| | |
Common stock – par value $0.001, Authorized 995,000,000 shares and 690,000,000 shares, respectively. | |
| | | |
| | |
Issued 591,752,031 shares and 560,242,430 shares, respectively. | |
| | | |
| | |
Outstanding 591,652,031 shares and 560,142,430 shares, respectively | |
| 591,753 | | |
| 560,244 | |
| |
| | | |
| | |
Additional paid-in-capital | |
| 152,380,767 | | |
| 143,555,091 | |
| |
| | | |
| | |
Accumulated deficit | |
| (208,028,632 | ) | |
| (225,006,646 | ) |
| |
| | | |
| | |
Treasury stock at cost (100,000 common shares) | |
| (306,841 | ) | |
| (306,841 | ) |
| |
| | | |
| | |
TOTAL STOCKHOLDERS’ DEFICIT | |
| (55,362,954 | ) | |
| (81,198,152 | ) |
| |
| | | |
| | |
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT | |
$ | 23,889,159 | | |
$ | 24,317,722 | |
The accompanying notes are an integral
part of the condensed consolidated financial statements
ELITE PHARMACEUTICALS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS
OF OPERATIONS
(Unaudited)
| |
THREE MONTHS ENDED September 30, | | |
SIX MONTHS ENDED September 30, | |
| |
2014 | | |
2013 | | |
2014 | | |
2013 | |
REVENUES | |
| | | |
| | | |
| | | |
| | |
Manufacturing Fees | |
$ | 850,934 | | |
$ | 921,347 | | |
$ | 1,799,971 | | |
$ | 1,464,780 | |
Licensing Fees | |
| 405,483 | | |
| 231,578 | | |
| 613,128 | | |
| 404,833 | |
Lab Fee Revenues | |
| — | | |
| 5,972 | | |
| 5,000 | | |
| 10,972 | |
| |
| | | |
| | | |
| | | |
| | |
Total Revenues | |
| 1,256,417 | | |
| 1,158,897 | | |
| 2,418,099 | | |
| 1,880,585 | |
| |
| | | |
| | | |
| | | |
| | |
COSTS OF REVENUES | |
| 681,669 | | |
| 616,635 | | |
| 1,410,199 | | |
| 1,195,647 | |
| |
| | | |
| | | |
| | | |
| | |
Gross Profit | |
| 574,748 | | |
| 542,262 | | |
| 1,007,900 | | |
| 684,938 | |
| |
| | | |
| | | |
| | | |
| | |
OPERATING EXPENSES | |
| | | |
| | | |
| | | |
| | |
Research and Development | |
| 3,565,181 | | |
| 854,777 | | |
| 7,585,508 | | |
| 1,424,268 | |
General and Administrative | |
| 740,611 | | |
| 272,561 | | |
| 1,367,164 | | |
| 649,018 | |
Non-cash compensation through issuance of stock options | |
| 53,481 | | |
| 18,937 | | |
| 77,143 | | |
| 28,424 | |
Depreciation and Amortization | |
| 276,812 | | |
| 82,567 | | |
| 470,696 | | |
| 245,399 | |
| |
| | | |
| | | |
| | | |
| | |
Total Operating Expenses | |
| 4,636,085 | | |
| 1,228,842 | | |
| 9,500,511 | | |
| 2,347,109 | |
| |
| | | |
| | | |
| | | |
| | |
(LOSS) FROM OPERATIONS | |
| (4,061,337 | ) | |
| (686,580 | ) | |
| (8,492,611 | ) | |
| (1,662,171 | ) |
| |
| | | |
| | | |
| | | |
| | |
OTHER INCOME / (EXPENSES) | |
| | | |
| | | |
| | | |
| | |
Interest expense, net | |
| (70,075 | ) | |
| (255,945 | ) | |
| (148,281 | ) | |
| (330,723 | ) |
Change in fair value of warrant derivatives | |
| 10,379,665 | | |
| (6,129,579 | ) | |
| 11,121,624 | | |
| (3,233,122 | ) |
Change in fair value of preferred share derivatives | |
| 15,131,571 | | |
| (2,565,495 | ) | |
| 12,823,356 | | |
| (3,466,332 | ) |
Interest expense attributable to preferred share derivatives | |
| — | | |
| (17,476 | ) | |
| — | | |
| (41,060 | ) |
Gain on Sale on Investment | |
| — | | |
| — | | |
| 1,670,678 | | |
| — | |
Other Income | |
| — | | |
| 19,831 | | |
| — | | |
| 19,831 | |
| |
| | | |
| | | |
| | | |
| | |
Total Other Income / (Expense) | |
| 25,441,161 | | |
| (8,948,664 | ) | |
| 25,467,377 | | |
| (7,051,406 | ) |
| |
| | | |
| | | |
| | | |
| | |
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES | |
| 21,379,824 | | |
| (9,635,244 | ) | |
| 16,974,766 | | |
| (8,713,577 | ) |
| |
| | | |
| | | |
| | | |
| | |
PROVISION (CREDIT) FOR INCOME TAXES | |
| — | | |
| 2,269 | | |
| (3,248 | ) | |
| 2,269 | |
| |
| | | |
| | | |
| | | |
| | |
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS | |
$ | 21,379,824 | | |
$ | (9,637,513 | ) | |
$ | 16,978,014 | | |
$ | (8,715,846 | ) |
| |
| | | |
| | | |
| | | |
| | |
NET INCOME (LOSS) PER SHARE | |
| | | |
| | | |
| | | |
| | |
Basic | |
$ | 0.04 | | |
$ | (0.02 | ) | |
$ | 0.03 | | |
$ | (0.02 | ) |
Diluted | |
$ | (0.01 | ) | |
$ | (0.02 | ) | |
$ | (0.01 | ) | |
$ | (0.02 | ) |
| |
| | | |
| | | |
| | | |
| | |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING | |
| | | |
| | | |
| | | |
| | |
Basic | |
| 577,691,292 | | |
| 421,991,654 | | |
| 571,455,027 | | |
| 405,073,773 | |
Diluted | |
| 739,869,496 | | |
| 421,991,654 | | |
| 733,633,231 | | |
| 405,073,773 | |
The accompanying notes are an integral
part of the condensed consolidated financial statements
ELITE PHARMACEUTICALS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENT OF
CHANGES IN STOCKHOLDERS’ DEFICIT
(Unaudited)
| |
Common
Stock | | |
Additional Paid-In | | |
Treasury
Stock | | |
Accumulated | | |
Stockholders’ | |
| |
Shares | | |
Amount | | |
Capital | | |
Shares | | |
Amount | | |
Deficit | | |
Deficit | |
Balance at March 31, 2014 | |
| 560,242,430 | | |
$ | 560,244 | | |
$ | 143,555,092 | | |
| 100,000 | | |
$ | (306,841 | ) | |
$ | (225,006,646 | ) | |
$ | (81,198,151 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Net Income | |
| | | |
| | | |
| | | |
| | | |
| | | |
| 16,978,014 | | |
| 16,978,014 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Common shares sold pursuant to the Lincoln Park Capital purchase
agreement | |
| 19,004,103 | | |
| 19,004 | | |
| 6,208,481 | | |
| | | |
| | | |
| | | |
| 6,227,485 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Non-cash compensation through the issuance of stock options | |
| | | |
| | | |
| 77,143 | | |
| | | |
| | | |
| | | |
| 77,143 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Costs associated with raising capital | |
| | | |
| | | |
| (16,364 | ) | |
| | | |
| | | |
| | | |
| (16,364 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Common shares issued as commitment shares pursuant to the Lincoln
Park Capital purchase agreement | |
| 2,228,910 | | |
| 2,228 | | |
| (2,228 | ) | |
| | | |
| | | |
| | | |
| — | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Common shares issued pursuant to the exercise of cash warrants | |
| 4,167,423 | | |
| 4,168 | | |
| 282,063 | | |
| | | |
| | | |
| | | |
| 286,231 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Common shares issued pursuant to the exercise of cash options | |
| 33,333 | | |
| 33 | | |
| 3,967 | | |
| | | |
| | | |
| | | |
| 4,000 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Common shares issued in payment of employee salaries | |
| 15,842 | | |
| 16 | | |
| 6,175 | | |
| | | |
| | | |
| | | |
| 6,190 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Common shares issued pursuant to the conversion of Series I Preferred
Shares | |
| 6,060,000 | | |
| 6,060 | | |
| 2,266,440 | | |
| | | |
| | | |
| | | |
| 2,272,500 | |
| |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Balance at September 30, 2014 | |
| 591,752,041 | | |
$ | 591,753 | | |
$ | 152,380,767 | | |
| 100,000 | | |
$ | (306,841 | ) | |
$ | (208,028,632 | ) | |
$ | (55,362,953 | ) |
The accompanying notes are an integral
part of the condensed consolidated financial statements
ELITE PHARMACEUTICALS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS
OF CASH FLOWS
(Unaudited)
| |
SIX MONTHS ENDED SEPTEMBER 30 | |
| |
2014 | | |
2013 | |
CASH FLOWS FROM OPERATING ACTIVITIES | |
| | | |
| | |
Net Income (Loss) | |
$ | 16,978,014 | | |
$ | (8,715,845 | ) |
Adjustments to reconcile net loss to cash used in operating activities: | |
| | | |
| | |
Depreciation and amortization | |
| 435,537 | | |
| 222,299 | |
Change in fair value of warrant derivative liability | |
| (11,121,624 | ) | |
| 3,233,122 | |
Change in fair value of preferred share derivative liability | |
| (12,823,356 | ) | |
| 3,466,332 | |
Preferred share derivative interest satisfied by the issuance of common stock | |
| — | | |
| 52,196 | |
Non-cash compensation accrued | |
| 679,771 | | |
| 154,750 | |
Salaries satisfied by the issuance of common stock | |
| 6,190 | | |
| — | |
Non-cash interest expense | |
| — | | |
| 183,391 | |
Non-cash compensation from the issuance of common stock and options | |
| 83,333 | | |
| 28,424 | |
Non-cash rent expense | |
| 5,189 | | |
| 3,799 | |
Non-cash lease accretion | |
| 752 | | |
| 708 | |
Gain on Sale of Investment | |
| (1,670,678 | ) | |
| | |
Changes in Assets and Liabilities | |
| | | |
| | |
Accounts receivable | |
| (365,708 | ) | |
| 29,195 | |
Inventories | |
| (591,130 | ) | |
| (361,527 | ) |
Prepaid and other current assets | |
| (60,861 | ) | |
| (5,865 | ) |
Accounts payable, accrued expenses and other current liabilities | |
| (183,608 | ) | |
| 442,119 | |
Deferred revenues and Customer deposits | |
| (6,667 | ) | |
| (6,667 | ) |
Derivative interest payable | |
| — | | |
| (11,135 | ) |
NET CASH USED IN OPERATING ACTIVITIES | |
| (8,641,036 | ) | |
| (1,284,704 | ) |
CASH FLOWS FROM INVESTING ACTIVITIES | |
| | | |
| | |
Purchases of property, equipment and leasehold improvements | |
| (1,005,087 | ) | |
| (126,478 | ) |
Costs incurred for intellectual property assets | |
| (8,549 | ) | |
| (22,261 | ) |
Deposits to / (withdrawals from) restricted cash, net | |
| (123,909 | ) | |
| (27,642 | ) |
Proceeds from Sale of Investment in Novel | |
| 5,000,000 | | |
| — | |
NET CASH USED IN INVESTING ACTIVITIES | |
| 3,862,456 | | |
| (176,381 | ) |
| |
| | | |
| | |
CASH FLOWS FROM FINANCING ACTIVITIES | |
| | | |
| | |
Proceeds from sale of common shares to Lincoln Park Capital | |
| 6,227,485 | | |
| 1,900,000 | |
Proceeds from exercise of cash warrants and options | |
| 290,231 | | |
| 6,250 | |
Proceeds from draws against credit lines from related parties | |
| 137,579 | | |
| — | |
Payment of NJEDA bonds | |
| (1,110,000 | ) | |
| — | |
Other loan payments | |
| (65,049 | ) | |
| — | |
Costs associated with raising capital | |
| (16,364 | ) | |
| (47,987 | ) |
NET CASH PROVIDED BY FINANCING ACTIVITIES | |
| 5,463,881 | | |
| 1,858,263 | |
| |
| | | |
| | |
NET CHANGE IN CASH AND CASH EQUIVALENTS | |
| 685,301 | | |
| 397,178 | |
| |
| | | |
| | |
CASH AND CASH EQUIVALENTS – beginning of period | |
| 6,941,777 | | |
| 369,023 | |
CASH AND CASH EQUIVALENTS – end of period | |
$ | 7,627,078 | | |
$ | 766,201 | |
| |
| | | |
| | |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | |
| | | |
| | |
Cash paid for interest | |
$ | 141,342 | | |
$ | 146,624 | |
Cash paid for taxes | |
| — | | |
| — | |
| |
| | | |
| | |
Non-Cash Financing Transactions | |
| | | |
| | |
Financing of equipment purchases and insurance renewal | |
| 495,753 | | |
| — | |
Commitment shares issued to Lincoln Park Capital | |
| 756,053 | | |
| 260,538 | |
Conversion of Preferred Shares to Common Shares | |
| 2,272,500 | | |
| 9,597,945 | |
Acquisition of intellectual property | |
| — | | |
| 5,597,317 | |
Convertible note payable | |
| — | | |
| 5,597,317 | |
The accompanying notes are an integral
part of the condensed consolidated financial statements
ELITE PHARMACEUTICALS, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
THREE AND SIX MONTHS ENDED SEPTEMBER
30, 2014 AND 2013
(UNAUDITED)
NOTE 1 - DEFINITIONS
“Current Balance Sheet
Date” means September 30, 2014
“Current Fiscal Year”
means the twelve months ended March 31, 2015
“Current Quarter”
means the three months ended September 30, 2014
“Current YTD”
means the six months ended September 30, 2014
“FDA” means
the U.S. Food and Drug Administration
“Hakim Credit Line Limit”
equals $1,000,000
“Hakim Credit Line Balance”
equals $666,329
“Hakim Credit Line Interest
Due” equals $16,465
“Prior Year Balance Sheet
Date” means September 30, 2013
“Prior Fiscal Year”
means the twelve months ended March 31, 2014
“Prior Year Quarter”
means the three months ended September 30, 2013
“SEC” means
the Securities and Exchange Commission
NOTE 2 - BASIS OF PRESENTATION
The information in this quarterly
report on Form 10-Q includes the results of operations of Elite Pharmaceuticals, Inc. and its consolidated subsidiaries (collectively
the “Company” or “Elite”) for the Current Quarter and Prior Year Quarter. The accompanying unaudited condensed
consolidated financial statements have been prepared pursuant to rules and regulations of the Securities and Exchange Commission
in accordance with accounting principles generally accepted for interim financial statement presentation. Accordingly, they do
not include all of the information and footnotes required by accounting principles generally accepted in the United States of America
(“GAAP”) for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation of the condensed consolidated financial position, results of operations
and cash flows of the Company for the periods presented have been included.
The financial results for the
interim periods are not necessarily indicative of the results to be expected for the full year or future interim periods.
The accompanying
unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements
and notes included in the Company’s Annual Report on Form 10-K for the year ended March 31, 2014 and filed with the SEC on
June 30, 2014. There have been no changes in significant accounting policies since March 31, 2014.
The Company does not anticipate
being profitable for the Current Fiscal Year; therefore a current provision for income tax was not established for the Current
Quarter. Only the minimum liability required for state corporation taxes was considered.
Segment Reporting
FASB ASC 280-10-50, “Disclosure
about Segments of an Enterprise and Related Information” requires use of the “management approach” model for
segment reporting. The management approach is based on the way a company’s management organizes segments within the company
for making operating decisions and assessing performance. Reportable segments are based on products and services, geography, legal
structure, management structure, or any other manner in which management disaggregates a company. The Company operates in one segment
for the three and six months ended September 30, 2014.
NOTE 3 - CASH
Cash consists of cash on deposit
with banks and money market instruments. The Company places its cash with high quality, U.S. financial institutions and, to date,
has not experienced losses on any of its balances.
NOTE 4 - INVENTORIES
Inventories consist of raw materials,
work in process and finished goods and are stated at the lower of cost (first-in, first-out basis) or market (net realizable value),
and summarized as follows:
| |
September 30, 2014 | | |
March 31, 2014 | |
Raw Materials | |
$ | 2,390,825 | | |
$ | 1,523,341 | |
Work-in-Process | |
| — | | |
| 409,145 | |
Finished Goods | |
| 132,792 | | |
| — | |
Total Inventory | |
$ | 2,523,617 | | |
$ | 1,932,486 | |
NOTE 5 - NJEDA BONDS
Bond financing consisting
of the following, as of:
| |
September 30 2014 | | |
March 31 2014 | |
Refinanced NJEDA Bonds | |
$ | 2,275,000 | | |
$ | 3,385,000 | |
| |
| | | |
| | |
Current portion | |
| (210,000 | ) | |
| (3,385,000 | ) |
| |
| | | |
| | |
Long term portion, net of current maturities | |
$ | 2,065,000 | | |
$ | — | |
Maturities of Bonds for the
next five years are as follows (please note that $1,110,000 in bond maturities scheduled for the fiscal year ending March 31, 2015
were paid during the quarter ended September 30, 2014):
YEAR ENDING MARCH 31, | |
AMOUNT | |
2016 | |
| 210,000 | |
2017 | |
| 220,000 | |
2018 | |
| 85,000 | |
2019 | |
| 90,000 | |
2020 | |
| 95,000 | |
Thereafter | |
| 1,365,000 | |
| |
$ | 2,065,000 | |
NOTE 6 - LOANS PAYABLE
During the ordinary course of
business, the Company has secured loans to support the collateralized financing of fixed asset acquisitions, or the renewal of insurance
policies. During the six months ended September 30, 2014, the Company has secured such loans with initial principal amounts totaling
$496k, and with payment terms that range from 9 months to 60 months at interest rates that range from 5.68% to 7.97%.
Loans Payable consisted of
the following as of:
| |
September 30 2014 | | |
March 31 2014 | |
Total loans | |
$ | 568,766 | | |
$ | 106,444 | |
Current Portion | |
| 233,827 | | |
| 18,870 | |
Long-term portion, net of current maturities | |
$ | 334,939 | | |
| 87,574 | |
Principal payments on loans for
each fiscal year are:
Fiscal year ending March 31, 2015 | |
$ | 132,610 | |
Fiscal year ending March 31, 2016 | |
| 169,275 | |
Fiscal year ending March 31, 2017 | |
| 143,442 | |
Fiscal year ending March 31, 2018 | |
| 72,609 | |
Fiscal year ending March 31, 2019 | |
| 44,983 | |
Thereafter | |
| 5,847 | |
Total Principal Payments | |
$ | 568,766 | |
NOTE 7 - DERIVATIVE LIABILITIES
Accounting Standard Codification
“ASC” 815 – Derivatives and Hedging, which provides guidance on determining what types of instruments
or embedded features in an instrument issued by a reporting entity can be considered indexed to its own stock for the purpose of
evaluating the first criteria of the scope exception in the pronouncement on accounting for derivatives. These requirements can
affect the accounting for warrants and convertible preferred instruments issued by the Company. As the conversion features within,
and the detachable warrants issued with the Company’s Series I Preferred Stock, do not have fixed settlement provisions because
their conversion and exercise prices may be lowered if the Company issues securities at lower prices in the future, we have concluded
that the instruments are not indexed to the Company’s stock and are to be treated as derivative liabilities.
Preferred Stock Derivative
Liabilities
| |
Series I | |
Preferred Shares Authorized | |
| 500 | |
| |
| | |
Preferred shares Outstanding | |
| 100 | |
| |
| | |
Underlying common shares into which Preferred may convert | |
| 142,857,143 | |
| |
| | |
Closing price on valuation date | |
$ | 0.3212 | |
| |
| | |
Preferred stock derivative liability at Current Balance Sheet Date | |
$ | 45,885,714 | |
| |
| | |
Preferred stock derivative liability at March 31, 2014 | |
$ | 60,981,570 | |
CHANGE IN VALUE OF PREFERRED STOCK DERIVATIVE LIABILITY |
| |
Three months ended September 30, | | |
Six months ended September 30, | |
| |
2014 | | |
2013 | | |
2014 | | |
2013 | |
Change in Preferred Stock Derivative Liability | |
$ | 15,131,571 | | |
$ | (2,565,495 | ) | |
| 12,823,356 | | |
| (3,466,332 | ) |
Warrant Derivative Liabilities
The portion of derivative liabilities
related to outstanding warrants was valued using the Black-Scholes option valuation model and the following assumptions on the
following dates:
FAIR VALUE OF WARRANT DERIVATIVE LIABILITY |
| |
March 31 2014 | | |
June 30 2014 | | |
Sept 30 2014 | |
Risk-Free interest rate | |
| 0.05% - 1.32 | % | |
| 0.02% - 1.25 | % | |
| 0.6% - 1.4 | % |
Expected volatility | |
| 111% - 207 | % | |
| 86% - 113 | % | |
| 65% - 108 | % |
Expected life (in years) | |
| 0.3 – 4.1 | | |
| 0.3 – 3.8 | | |
| 0.0 – 3.6 | |
Expected dividend yield | |
| — | | |
| — | | |
| — | |
Number of warrants | |
| 102,143,091 | | |
| 98,439,666 | | |
| 97,692,999 | |
| |
| | | |
| | | |
| | |
Fair Value of Warrant Derivative Liability | |
$ | 38,103,446 | | |
$ | 37,361,487 | | |
$ | 26,981,822 | |
CHANGE IN VALUE OF WARRANT DERIVATIVE LIABILITY |
| |
Three months ended September 30 | | |
Six months ended September 30 | |
| |
2014 | | |
2013 | | |
2014 | | |
2013 | |
Change in Warrant Derivative Liability | |
$ | 10,379,665 | | |
$ | (6,129,579 | ) | |
$ | 11,121,624 | | |
$ | (3,233,122 | ) |
The risk free interest rate was
based on rates established by the U.S. Treasury Department. The expected volatility was based on the historical volatility of the
Company’s share price for periods equal to the expected life of the outstanding warrants at each valuation date. The expected
dividend rate was based on the fact that the Company has not historically paid dividends on common stock and does not expect to
pay dividends on common stock in the future.
NOTE 8 - OPERATING LEASES
The Company entered into a lease
for a portion of a one-story warehouse, located at 135-137 Ludlow Avenue, Northvale, New Jersey, consisting of approximately 15,000
square feet of floor space. The lease term began on July 1, 2010.
On July 29, 2014, the Company
agreed to a modification of this operating lease, with the material terms of the modification including the Company being permitted
to occupy the entire 35,000 square feet in the building.
The lease terms, as modified,
include an initial term that expires on December 31, 2016, and the Company has the option to renew the lease for two additional
terms of five years each. The lease is classified as an operating lease.
The property related to this
lease is used for the storage of pharmaceutical finished goods, raw materials, equipment and documents, as well as a site at which
the Company engages in manufacturing packaging and distribution activities, inclusive of regulatory support and compliance activities.
Minimum 5 year payments* for
the initial term for the leasing of 35,000 square feet at 135 Ludlow are as follows:
Fiscal year ended March 31, 2015 | |
| 71,913 | |
Fiscal year ended March 31, 2016 | |
| 203,850 | |
Fiscal year ended March 31, 2017 | |
| 155,169 | |
Fiscal year ended March 31, 2018 | |
| — | |
Fiscal year ended March 31, 2019 | |
| — | |
Total Minimum 5 year lease payments | |
$ | 430,932 | |
* Minimum lease payments are
exclusive of additional expenses related to certain expenses incurred in the operation and maintenance of the premises, including,
without limitation, real estate taxes and common area charges which may be due under the terms and conditions of the lease, but
which are not quantifiable at the time of filing of this quarterly report on Form 10-Q.
Rent expense relating to the
operating lease is recorded using the straight line method, and is summarized as follows:
RENT EXPENSE |
| |
Three months ended September 30, | | |
Six months ended September 30, | |
| |
2014 | | |
2013 | | |
2014 | | |
2013 | |
Rent Expense | |
$ | 45,214 | | |
$ | 22,584 | | |
$ | 63,003 | | |
$ | 45,169 | |
| |
| | | |
| | | |
| | | |
| | |
Change in deferred rent liability | |
$ | 24,010 | | |
$ | 1,899 | | |
$ | 20,595 | | |
$ | 3,799 | |
DEFERRED RENT LIABILITY (LONG-TERM LIABILITY) |
| |
March 31 2014 | | |
June 30 2014 | | |
Sept 30 2014 | |
Balance of Deferred Rent Liability | |
$ | 18,824 | | |
$ | 16,437 | | |
$ | 7,573 | |
NOTE 9 COMMON STOCK
During the Current YTD, the Company
issued shares of Common Stock, as follows:
Description | |
Shares Of Common Stock | |
| |
| |
Common shares sold pursuant to the LPC-40 Purchase Agreement | |
| 19,004,103 | |
| |
| | |
Common shares issued as commitment shares pursuant to the LPC-40 Purchase Agreement | |
| 2,228,910 | |
| |
| | |
Common shares issued pursuant to the exercise of cash warrants | |
| 4,167,423 | |
| |
| | |
Common shares issued pursuant to the exercise of cash options | |
| 33,333 | |
| |
| | |
Common shares issued in payment of employee salaries | |
| 15,842 | |
| |
| | |
Common shares issued pursuant to the conversion of Series I Preferred Shares | |
| 6,060,000 | |
| |
| | |
| |
| | |
Total Common Shares issued during the Current YTD | |
| 31,509,611 | |
Options
Options issued and outstanding
as of the Current Balance Sheet Date are summarized as follows:
| |
Number of Options | | |
Range of Exercise Prices |
Vested Options | |
| 2,132,333 | | |
$0.10 to $2.75 |
Non-Vested Options | |
| 4,810,001 | | |
$0.07 to $0.4599 |
Each option represents the right
to purchase one share of common stock. The non-vested options are scheduled to vest in various increments during dates that are
within the period beginning on June 19, 2015 and through September 15, 2017, or upon the occurrence of certain defined events and
require that employees awarded such options be employed by the Company on the vesting date.
NOTE 10 - PER SHARE INFORMATION
Basic earnings per share of common
stock (“Basic EPS”) is computed by dividing the net (loss) income by the weighted-average number of shares of common
stock outstanding. Diluted earnings per share of common stock (“Diluted EPS”) are computed by dividing the net (loss)
income by the weighted-average number of shares of common stock, and dilutive common stock equivalents and convertible securities
then outstanding. GAAP requires the presentation of both Basic and Diluted EPS, if such Diluted EPS is not anti-dilutive, on the
face of Company’s Condensed Statements of Operations.
The calculation of Basic EPS
and Diluted EPS is summarized as follows:
| |
For the Three Months Ended September 30, | | |
For the Six Months Ended September 30, | |
| |
2014 | | |
2013 | | |
2014 | | |
2013 | |
Numerator | |
| | | |
| | | |
| | | |
| | |
Net Income (loss) attributable to common shareholders – Basic | |
$ | 21,379,824 | | |
$ | (9,637,513 | ) | |
| 16,978,014 | | |
| (8,715,846 | ) |
| |
| | | |
| | | |
| | | |
| | |
Effect of dilutive instruments on Net Income | |
| (25,511,236 | ) | |
| n/a | | |
| (23,944,980 | ) | |
| n/a | |
| |
| | | |
| | | |
| | | |
| | |
Net Income attributable to common shareholders – Diluted | |
| (4,131,412 | ) | |
| n/a | | |
| (6,966,966 | ) | |
| n/a | |
| |
| | | |
| | | |
| | | |
| | |
Denominator | |
| | | |
| | | |
| | | |
| | |
Weighted-average shares of common stock outstanding | |
| 577,691,292 | | |
| 421,991,654 | | |
| 571,455,027 | | |
| 40,073,773 | |
| |
| | | |
| | | |
| | | |
| | |
Dilutive effect of stock options, warrants and convertible securities | |
| 162,178,204 | | |
| n/a | | |
| 162,178,204 | | |
| n/a | |
| |
| | | |
| | | |
| | | |
| | |
Net (loss) income per share | |
| | | |
| | | |
| | | |
| | |
Basic | |
$ | 0.04 | | |
$ | (0.02 | ) | |
$ | 0.03 | | |
$ | (0.02 | ) |
Diluted | |
$ | (0.01 | ) | |
$ | (0.02 | ) | |
$ | (0.01 | ) | |
$ | (0.02 | ) |
NOTE 11 - RELATED PARTY TRANSACTION - BORROWING
AGAINST THE TREPPEL AND HAKIM CREDIT LINES
The Treppel Credit Line expired
on July 31, 2014, pursuant to the terms and conditions of the Treppel Credit. All principal and interest amounts have been repaid
in full. As of the Current Balance Sheet Date, there were no amounts due and owing in relation to the Treppel Credit Line. For
further details on the Treppel Credit Line, please refer to the Current Reports on Form 8-K filed with the SEC on June 13, 2012,
December 10, 2012 and August 6, 2013, with such filings being herein incorporated by reference.
As of the Current Balance Sheet
Date, Elite owed the Hakim Credit Line Balance and the Hakim Credit Line Interest Due in relation to the Hakim Credit Line. Both
amounts were recorded as current liabilities on Elite’s balance and included in the line item titled “Short term loans
and current portion of long-term debt”.
For further details on the Hakim
Credit Line, please refer to exhibit 10.16 of the Quarterly Report on Form 10-Q filed with the SEC on November 14, 2013 and the
Current Report on Form 8-K filed with the SEC on October 16, 2013 with filings being herein incorporated by reference.
NOTE 12 - RELATED PARTY
TRANSACTION – MANUFACTURING AND LICENSE AGREEMENT WITH EPIC PHARMA LLC
On October 2, 2013, we executed
a Manufacturing and License Agreement (the “Epic Agreement”) with Epic Pharma LLC. (“Epic”), to manufacture,
market and sell in the United States and Puerto Rico 12 generic products owned by Elite. Of the 12 products, Epic will have the
exclusive right to market six products as listed in Schedule A of the Epic Agreement, and a non-exclusive right to market six products
as listed in Schedule D of the Epic Agreement. Epic is responsible for all regulatory and pharmacovigilance matters related to
the products and for all costs related to the site transfer for all products. Pursuant to the Epic Agreement, Elite will receive
a license fee and milestone payments. The license fee will be computed as a percentage of the gross profit, as defined in the Epic
Agreement, earned by Epic as a result of sales of the products. The manufacturing cost used for the calculation of the license
fee is a predetermined amount per unit plus the cost of the drug substance (API) and the sales cost for the calculation is predetermined
based on net sales. If Elite manufactures any product for sale by Epic, then Epic shall pay to Elite that same predetermined manufacturing
cost per unit plus the cost of the API. The license fee is payable monthly for the term of the Epic Agreement. Epic shall pay to
Elite certain milestone payments as defined by the Epic Agreement. We received the first milestone payment in November 2013. Subsequent
milestone payments are due upon the filing of each product’s supplement with the FDA and the FDA approval of site transfer
for each product as specifically itemized in the Epic Agreement. The filing of the supplement with the FDA for Isradipine 2.5mg
and Isradipine 5mg was made on March 24, 2014 and accordingly a milestone of $200,000 has been earned and is due and owing from
Epic Pharma to Elite. The term of the Epic Agreement is five years and may be extended for an additional five years upon mutual
agreement of the parties. Twelve months following the launch of a product covered by the Epic Agreement, Elite may terminate the
marketing rights for any product if the license fee paid by Epic falls below a designated amount for a six month period of that
product. Elite may also terminate the exclusive marketing rights if Epic is unable to meet the annual unit volume forecast for
a designated Product group for any year, subject to the ability of Epic, during the succeeding six month period, to achieve at
least one-half of the prior year’s minimum annual unit volume forecast. The Epic Agreement may be terminated by mutual agreement
of Elite and Epic, as a result of a breach by either party that is not cured within 60 days’ notice of the breach or by Elite
as a result of Epic becoming a party to a bankruptcy, reorganization or other insolvency proceeding that continues for a period
of 30 days or more.
Revenues earned pursuant to
the Epic Agreement during the three months ended September 30, 2014 were $200,000.
NOTE 13- SALE OF
INVESTMENT IN NOVEL LABORATORIES
At the end of 2006, Elite entered
into a joint venture with VGS Pharma, LLC (“VGS”) and created Novel Laboratories, Inc. (“Novel”),
a privately-held company specializing in pharmaceutical research, development, manufacturing, licensing, acquisition and marketing
of specialty generic pharmaceuticals. Novel's business strategy is to focus on its core strength in identifying and timely executing
niche business opportunities in the generic pharmaceutical area. Elite’s ownership interest in Novel consists of 9,800 shares
of Novel’s Class A Voting Common Stock. As of October 1, 2007, Elite deconsolidated its financial statements from Novel and
the investment in Novel is accounted for under the cost method of accounting.
On June 10, 2014, the Company
received $5 million in exchange for the 9,800 shares of Novel’s Class A Voting Common Stock owned by the Company.
NOTE 14 - CONCENTRATIONS
Revenue Concentrations
Four customers accounted for
substantially all of the Company’s revenues for the six months ended September 30, 2014.
Four customers accounted for
substantially all of the Company’s revenues for the six months ended September 30, 2013.
Accounts Receivable Concentrations
Three customers accounted for
substantially all of the Company’s accounts receivable as of September 30, 2014.
Three customers accounted for
substantially all of the Company’s accounts receivable as of September 30, 2013.
Purchasing Concentrations
Five suppliers accounted for
more than 80% of the Company’s purchases of raw materials for the six months ended September 30, 2014. Included in these
five suppliers are one supplier that accounted for approximately 44% of raw material purchases for this period.
Four suppliers accounted for
more than 80% of the Company’s purchases of raw materials for the six months ended September 30, 2013. Included in these
three suppliers are one supplier that accounted for approximately 52% of raw material purchases for this period.
NOTE 15- LEGAL PROCEEDINGS
In the ordinary course of business
we may be subject to litigation from time to time. Except as discussed below, there is no current, pending or, to our knowledge,
threatened litigation or administrative action to which we are a party or of which our property is the subject (including litigation
or actions involving our officers, directors, affiliates, or other key personnel, or holders of record or beneficially of more
than 5% of any class of our voting securities, or any associate of any such party) which in our opinion has, or is expected to
have, a material adverse effect upon our business, prospects financial condition or operations.
Arbitration with Precision
Dose, Inc.
On May 9, 2014, Precision Dose
Inc., the parent company of TAGI Pharmaceuticals, Inc., commenced an arbitration against the Company alleging that the Company
failed to properly supply, price and satisfy gross profit minimums regarding Phentermine 37.5mg tablets, as required by the parties’
agreements. Elite denies Precision Dose’s allegations and has counterclaimed that Precision Dose is no longer entitled to
exclusivity rights with respect to Phentermine 37.5mg tablets, and is responsible for certain costs, expenses, price increases
and lost profits relating to Phentermine 37.5mg tablets and the parties’ agreements. As of the date of filing of this current
report on Form 10-Q this arbitration proceeding was ongoing.
GAAP requires that a contingency
loss may only be recognized if the event is (1) probable and (2) the amount of the loss can be reasonably estimated. There were
no liabilities of this type at September 30, 2014.
NOTE 16 - EQUITY LINE WITH LINCOLN PARK CAPITAL FUND LLC
On April 10, 2014, we entered
into a purchase agreement (the “LPC-40 Purchase Agreement”), together with a registration rights agreement (the “Registration
Rights Agreement”), with Lincoln Park Capital Fund, LLC (“Lincoln Park”).
Under the terms and subject to
the conditions of the LPC-40 Purchase Agreement, the Company has the right to sell to and Lincoln Park is obligated to purchase
up to $40 million in shares of the Company’s common stock (“Common Stock”), subject to certain limitations, from
time to time, over the 36-month period commencing on the date that a registration statement, which the Company agreed to file with
the Securities and Exchange Commission (the “SEC”) pursuant to the Registration Rights Agreement, is declared effective
by the SEC and a final prospectus in connection therewith is filed. The Company may direct Lincoln Park, at its sole discretion
and subject to certain conditions, to purchase up to 500,000 shares of Common Stock on any business day, provided that at least
one business day has passed since the most recent purchase, increasing to up to 800,000 shares, depending upon the closing sale
price of the Common Stock (such purchases, “Regular Purchases”). However, in no event shall a Regular Purchase be more
than $760,000. The purchase price of shares of Common Stock related to the future funding will be based on the prevailing market
prices of such shares at the time of sales, but in no event will shares be sold to Lincoln Park on a day the Common Stock closing
price is less than the floor price as set forth in the LPC-40 Purchase Agreement. In addition, the Company may direct Lincoln Park
to purchase additional amounts as accelerated purchases if on the date of a Regular Purchase the closing sale price of the Common
Stock is not below the threshold price as set forth in the LPC-40 Purchase Agreement. The Company’s sales of shares of Common
Stock to Lincoln Park under the Purchase Agreement are limited to no more than the number of shares that would result in the beneficial
ownership by Lincoln Park and its affiliates, at any single point in time, of more than 9.99% of the then outstanding shares of
the Common Stock.
In connection with the LPC-40
Purchase Agreement, the Company issued to Lincoln Park 1,928,641 shares of Common Stock and is required to issue up to 1,928,641
additional shares of Common Stock pro rata as the Company requires Lincoln Park to purchase the Company’s shares under the
Purchase Agreement over the term of the agreement. Lincoln Park represented to the Company, among other things, that it was an
“accredited investor” (as such term is defined in Rule 501(a) of Regulation D under the Securities Act of 1933, as
amended (the “Securities Act”)), and the Company sold the securities in reliance upon an exemption from registration
contained in Section 4(2) under the Securities Act. The securities sold may not be offered or sold in the United States absent
registration or an applicable exemption from registration requirements.
The LPC-40 Purchase Agreement
and the Registration Rights Agreement contain customary representations, warranties, agreements and conditions to completing future
sale transactions, indemnification rights and obligations of the parties. The Company has the right to terminate the LPC-40 Purchase
Agreement at any time, at no cost or penalty. Actual sales of shares of Common Stock to Lincoln Park under the LPC-40 Purchase
Agreement will depend on a variety of factors to be determined by the Company from time to time, including, among others, market
conditions, the trading price of the Common Stock and determinations by the Company as to the appropriate sources of funding for
the Company and its operations. There are no trading volume requirements or restrictions under the LPC-40 Purchase Agreement. Lincoln
Park has no right to require any sales by the Company, but is obligated to make purchases from the Company as it directs in accordance
with the LPC-40 Purchase Agreement. Lincoln Park has covenanted not to cause or engage in any manner whatsoever, any direct or
indirect short selling or hedging of our shares.
The net proceeds under the LPC-40
Purchase Agreement to the Company will depend on the frequency and prices at which the Company sells shares of its stock to Lincoln
Park. The Company expects that any proceeds received by the Company from such sales to Lincoln Park under the Purchase Agreement
will be used for general corporate purposes and working capital requirements.
The foregoing descriptions of
the LPC-40 Purchase Agreements and the Registration Rights Agreement are qualified in their entirety by reference to the full text
of the LPC-40 Purchase Agreement and the Registration Rights Agreement, copies of which are attached to the Current Report on Form
8-K filed with the SEC on April 14, 2014 as Exhibit 10.1 and 10.2, respectively, and each of which is incorporated herein in its
entirety by reference. The representations, warranties and covenants contained in such agreements were made only for purposes of
such agreements and as of specific dates, were solely for the benefit of the parties to such agreements, and may be subject to
limitations agreed upon by the contracting parties, including being qualified by confidential disclosures exchanged between the
parties in connection with execution of the agreements.
A Registration
Statement on Form S-1 was filed with the SEC in relation to this transaction with Lincoln Park and it was declared effective by
the SEC as of May 1, 2014. A post-effective amendment to the Registration Statement was subsequently filed with the SEC and declared
effective on July 1, 2014.
During the six months ended September
30, 2014, a total of 19,004,103 shares of Common Stock were sold to Lincoln Park pursuant to the Purchase Agreement, with the proceeds
of such sales of Common Stock totaling $6,227,485. An additional 300,269 shares of Common Stock were issued to Lincoln Park during
this same period with such shares constituting additional commitment shares issued pursuant to the Purchase Agreement.
NOTE 17 - SUBSEQUENT EVENTS
Common Stock sold pursuant
to the LPC-40 Purchase Agreement
Subsequent to
the Current Balance Sheet Date and up to November 4, 2014 (the latest practicable date), a total of 4,582,256 shares of Common
Stock were sold pursuant to the LPC-40 Purchase Agreement inclusive of purchase and commitment shares, with proceeds received from
such transactions totaling $1,273,128.
For further
details on the LPC-40 Purchase Agreement and LPC Registration Rights Agreement, please refer to the Current Report on Form 8-K
filed with the SEC on April 14, 2014, with such filing being herein incorporated by reference. A Registration Statement on Form
S-3 was filed with the SEC on April 15, 2014, with amendments on Form S-1 being filed on April 28, 2014 and May 1, 2014. The Registration
Statement was declared effective by the SEC on May 1, 2014. A post-effective amendment to the Registration Statement was filed
with the SEC and declared effective on July 1, 2014.
Common shares issued pursuant
to the exercise of cash warrants and options
Subsequent to the Current Balance
Sheet Date, and up to November 4, 2014 (the latest practicable date), a total of 246,591 shares of Common Stock were issued pursuant
to the exercise of cash warrants, with proceeds received from such transactions totaling $17,870.
ITEM 2.
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
THREE AND
SIX MONTHS ENDED SEPTEMBER 30, 2014
COMPARED
TO THE
THREE AND
SIX MONTHS ENDED SEPTEMBER 30, 2013
(UNAUDITED)
The
following discussion and analysis should be read with the financial statements and accompanying notes included elsewhere in this
Form 10-Q and in the Annual Report on Form 10-K for the year ended March 31, 2014. It is intended to assist the reader in understanding
and evaluating our financial position.
This Quarterly
Report on Form 10-Q and the documents incorporated herein contain “forward-looking statements”. Such forward-looking
statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or
achievements of the Company, or industry results, to be materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. When used in this Form 10-Q, statements that are not statements of current
or historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, the words “plan”,
“intend”, “may,” “will,” “expect,” “believe”, “could,”
“anticipate,” “estimate,” or “continue” or similar expressions or other variations or comparable
terminology are intended to identify such forward-looking statements. All statements other than statements of historical fact
included in this Form 10-Q regarding our financial position, business strategy and plans or objectives for future operations are
forward-looking statements. Without limiting the broader description of forward-looking statements above, we specifically note,
without limitation, that statements regarding the preliminary nature of the clinical program results and the potential for further
product development, that involve known and unknown risks, delays, uncertainties and other factors not under our control, the
requirement of substantial future testing, clinical trials, regulatory reviews and approvals by the Food and Drug Administration
and other regulatory authorities prior to the commercialization of products under development, and our ability to manufacture
and sell any products, gain market acceptance, earn a profit from sales or licenses of any drugs or our ability to discover new
drugs in the future, are all forward-looking in nature. These risks and other factors are discussed in our filings with the Securities
and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only
as of the date hereof. Except as required by law, the Company undertakes no obligation to update any forward-looking statements,
whether as a result of new information, future events or otherwise.
Any reference
to “Elite”, the “Company”, “we”, “us”, “our” or the “Registrant”
refers to Elite Pharmaceuticals Inc. and its subsidiaries.
Overview
We are a specialty
pharmaceutical company principally engaged in the development and manufacture of oral, controlled-release products, using proprietary
know-how and technology, particularly as it relates to abuse deterrent products. Our strategy includes improving off-patent drug
products for life cycle management and developing generic versions of controlled-release drug products with high barriers to entry.
We own, license
or contract manufacture eight products currently being sold or approved for commercial sale, as follows:
| · | Phentermine
37.5mg tablets (“Phentermine 37.5mg”) |
| · | Lodrane
D® Immediate Release capsules (“Lodrane D”) |
| · | Methadone
10mg tablets (“Methadone 10mg”) |
| · | Hydromorphone
Hydrochloride 8mg tablets (“Hydromorphone 8mg”) |
| · | Phendimetrazine
tartrate 35mg tablets (“Phendimetrazine 35mg”) |
| · | Phentermine
15mg capsules (“Phentermine 15mg”) |
| · | Phentermine
30mg capsules (“Phentermine 30mg”) |
| · | Naltrexone
HCl 50mg tablets (“Naltrexone 50mg”) |
| · | Isradipine
2.5mg capsules (“Isradipine 2.5mg”) |
| · | Isradipine
5mg capsules (“Isradipine 5mg”) |
In August 2013,
we acquired (the “Mikah 13 ANDA Acquisition”) approved Abbreviated New Drug Applications (“ANDAs”) for
12 products, inclusive of Isradipine 2.5mg and Isradipine 5mg, (the “Mikah Approved ANDAs”) and one ANDA that is under
active review with the FDA that were acquired pursuant to the asset purchase agreement with Mikah Pharma dated August 1, 2013
(the “Mikah Asset Purchase Agreement”).
On October
2, 2013, we executed a Manufacturing and License Agreement (the “Epic Agreement”) with Epic Pharma LLC. (“Epic”),
to manufacture, market and sell in the United States and Puerto Rico 12 generic products owned by Elite. Of the 12 products, Epic
will have the exclusive right to market six products as listed in Schedule A of the Epic Agreement, and a non-exclusive right
to market six products as listed in Schedule D of the Epic Agreement. Epic is responsible for all regulatory and pharmacovigilance
matters related to the products and for all costs related to the site transfer for all products. Pursuant to the Epic Agreement,
Elite will receive a license fee and milestone payments. The license fee will be computed as a percentage of the gross profit,
as defined in the Epic Agreement, earned by Epic as a result of sales of the products. The manufacturing cost used for the calculation
of the license fee is a predetermined amount per unit plus the cost of the drug substance (API) and the sales cost for the calculation
is predetermined based on net sales. If Elite manufactures any product for sale by Epic, then Epic shall pay that same predetermined
manufacturing cost per unit plus the cost of the API. The license fee is payable monthly for the term of the Epic Agreement. Epic
shall pay to Elite certain milestone payments as defined by the Epic Agreement. We received the first milestone payment in November
2013. Subsequent milestone payments are due upon the filing of each product’s supplement with the FDA and the FDA approval
of site transfer for each product as specifically itemized in the Epic Agreement. The term of the Epic Agreement is five years
and may be extended for an additional five years upon mutual agreement of the parties. Twelve months following the launch of a
product covered by the Epic Agreement, Elite may terminate the marketing rights for any product if the license fee paid by Epic
falls below a designated amount for a six month period of that product. Elite may also terminate the exclusive marketing rights
if Epic is unable to meet the annual unit volume forecast for a designated Product group for any year, subject to the ability
of Epic, during the succeeding six month period, to achieve at least one-half of the prior year’s minimum annual unit volume
forecast. The Epic Agreement may be terminated by mutual agreement of Elite and Epic, as a result of a breach by either party
that is not cured within 60 days’ notice of the breach or by Elite as a result of Epic becoming a party to a bankruptcy,
reorganization or other insolvency proceeding that continues for a period of 30 days or more.
Elite has executed
a license agreement with Precision Dose, Inc. (the “Precision Dose License Agreement”) and a manufacturing agreement
with The PharmaNetwork LLC (the “TPN Agreement”). The PharmaNetwork LLC was recently purchased by Alkem Laboratories
Ltd (“Alkem”). The PharmaNetwork now goes by the name Ascend Laboratories LLC (“Ascend”) and is a wholly
owned subsidiary of Alkem.
The Precision
Dose License Agreement provides for the marketing and distribution, in the United States, Puerto Rico and Canada, of Phentermine
37.5mg, Phentermine Capsules, Hydromorphone 8mg, Naltrexone Generic, and certain additional products that require approval from
the FDA. Phentermine 37.5mg tablets were launched in April 2011. Hydromorphone 8mg was launched in March 2012. Phentermine 15mg
and Phentermine 30mg were launched in April 2013. Naltrexone 50mg was launched in September 2013.
On May 9, 2014
Precision Dose Inc, the parent company of TAGI Pharmaceuticals, Inc., commenced an arbitration proceeding alleging that the Company
failed to properly supply, price and satisfy gross profit minimums regarding Phentermine 37.5mg tablets, as required by the parties’
agreements. Elite denies Precision Dose’s allegations and has counterclaimed that Precision Dose is no longer entitled to
exclusivity rights with respect to Phentermine 37.5mg tablets, and is responsible for certain costs, expenses, price increases
and lost profits relating to Phentermine 37.5mg tablets and the parties’ agreements.
As of the date
of filing of this quarterly report on Form 10-Q, this arbitration proceeding was ongoing.
The TPN Agreement,
executed on June 23, 2011, and amended on September 24, 2012, provides for the manufacture and packaging by the Company of Ascend’s
methadone hydrochloride, 10mg tablets (“Methadone 10mg”), with the Methadone 10mg to be marketed by Ascend. The FDA
has approved the manufacturing of Methadone 10mg at the Northvale Facility and the initial shipment of Methadone 10mg occurred
during January 2012.
In addition,
Elite also has an undisclosed generic product filed with the FDA that is awaiting review and for which Elite retains all rights.
The Company
also has a pipeline of additional generic drug candidates under active development.
Additionally,
the Company is developing abuse deterrent opioid products, and once-daily opioid products.
On May 22,
2012, the United States Patent and Trademark Office (“USPTO”) issued U.S. Patent No. 8,182,836, entitled “Abuse-Resistant
Oral Dosage Forms and Method of Use Thereof, with such patent providing further protection for the Company’s Abuse Deterrent
Technology.
On April 23,
2013, the USPTO issued U.S. Patent No. 8,425,933, entitled “Abuse-Resistant Oral Dosage Forms and Method of User Thereof”,
with such patent providing further protection for the Company’s Abuse Deterrent Technology.
On February
11, 2014, the Canadian Patent Office issued Canadian Patent 2,521,655 entitled “Abuse-Resistant Oral Dosage Forms and Method
of Use Thereof”, with such patent providing further protection for the Company’s abuse deterrent technology
On April 22,
2014, the USPTO issued U.S. Patent No. 8,703,186, entitled “Abuse-Resistant Oral Dosage Forms and Method of Use Thereof”,
with such patent providing further protection for the Company’s Abuse Deterrent Technology.
On September
16,2014, the Canadian Patent Office allowed Canadian Patent application 2,541,371 entitled “Extended Release Formulations
of Opioids and Method of Use Thereof”, with such patent providing further protection for the Company’s controlled
release technologies. This patent has not issued yet.
The Northvale
Facility operates under Current Good Manufacturing Practice (“cGMP”) and is a United States Drug Enforcement Agency
(“DEA”) registered facility for research, development and manufacturing.
Strategy
Elite is focusing
its efforts on the following areas: (i) development of Elite’s pain management products; (ii) manufacturing of a line of
generic pharmaceutical products with approved ANDAs; (iii) development of additional generic pharmaceutical products; (iv) development
of the other products in our pipeline including the products with our partners; (v) commercial exploitation of our products either
by license and the collection of royalties, or through the manufacture of our formulations; and (vi) development of new products
and the expansion of our licensing agreements with other pharmaceutical companies, including co-development projects, joint ventures
and other collaborations.
Elite is focusing
on the development of various types of drug products, including branded drug products which require new drug applications (“NDAs”)
under Section 505(b)(1) or 505(b)(2) of the Drug Price Competition and Patent Term Restoration Act of 1984 (the “ Drug Price
Competition Act ”) as well as generic drug products which require ANDAs.
Elite believes
that its business strategy enables it to reduce its risk by having a diverse product portfolio that includes both branded and
generic products in various therapeutic categories and to build collaborations and establish licensing agreements with companies
with greater resources thereby allowing us to share costs of development and improve cash-flow.
Commercial
Products
Phentermine
37.5mg, Phentermine 15mg and Phentermine 30mg
The first shipment
of Phentermine 37.5 mg to TAGI was made in April 2011, with such initial shipment triggering a milestone payment under the Precision
Dose License Agreement. The first shipments of Phentermine 15mg and Phentermine 30mg were made in April 2013, with such initial
shipments triggering a milestone payment under the Precision Dose License Agreement, with such milestone payments being made.
All three products are now commercial products being manufactured by Elite and distributed by TAGI under the Precision Dose License
Agreement.
Lodrane
D® Immediate Release capsules
On September
27, 2011, the Company, along with ECR Pharmaceuticals (“ECR”), a wholly owned subsidiary of Hi-Tech Pharmacal (“Hi-Tech”)
launched Lodrane D®, an immediate release formulation of brompheniramine maleate and pseudoephedrine HCl, an effective, low-sedating
antihistamine combined with a decongestant.
Lodrane D®
is promoted and distributed in the U.S. by ECR, Hi-Tech’s branded division. Lodrane D® is available over-the-counter
but also has physician promotion. Lodrane D® is the one of the only adult brompheniramine containing products available to
the consumer at this time.
Lodrane D®
is marketed under the Over-the-Counter Monograph (the “OTC Monograph”) and accordingly, under the Code of Federal
Regulations can be lawfully marketed in the US without prior approval. Under the Federal Food Drug and Cosmetic Act (“FDCA”),
FDA regulations and statements of FDA policy, certain drug products are permitted to be marketed in the U.S. without prior approval.
Within the past few years, the FDA has revised its enforcement policies, significantly limiting the circumstances under which
these unapproved products may be marketed. If the FDA determines that a company is distributing an unapproved product that requires
approval, the FDA may take enforcement action in a variety of ways, including, without limitation, product seizures and seeking
a judicial injunction against distribution.
Elite is manufacturing
the product for ECR and will receive revenues for the manufacturing, packaging and laboratory stability study services for the
product, as well as royalties on sales.
Methadone
10mg tablets
On January
17, 2012, Elite commenced shipping Methadone 10mg tablets to Ascend Laboratories, LLC. (“Ascend”) pursuant to a commercial
manufacturing and supply agreement dated June 23, 2011 between Elite and Ascend (the “Methadone Manufacturing and Supply
Agreement”). Under the terms of the Methadone Manufacturing and Supply Agreement, Elite performs manufacturing and packaging
of Methadone 10mg for Ascend.
Hydromorphone
8mg tablets
The first shipment
of Hydromorphone 8mg to TAGI was made in March 2012, with such initial shipment triggering a milestone payment under the Precision
Dose License Agreement. This product is now a commercial product being manufactured by Elite and distributed by TAGI under the
Precision Dose License Agreement.
Phendimetrazine
Tartrate 35 mg tablets
On November
13, 2012, the Company made the initial shipment of Phendimetrazine tartrate 35mg tablets, the generic equivalent of Bontril PDM®
35mg tablets under a previously announced manufacturing and supply agreement with Mikah Pharma (“Mikah”). Subsequently,
Elite acquired the ANDA for Phendimetrazine 35mg as part of the Mikah 13 ANDA Acquisition. This product is now a commercial product
being manufactured by Elite and distributed by Epic on a non-exclusive basis, and by Elite.
Naltrexone
50mg tablets
The first shipment
of Naltrexone 50mg to TAGI was made in September 2013, with such initial shipment triggering a milestone payment under the Precision
Dose License Agreement. This product is now a commercial product being manufactured by Elite and distributed by TAGI under the
Precision Dose License Agreement.
Isradipine
2.5mg and Isradipine 5mg capsules
The ANDAs for
the Isradipine Capsules were acquired by Elite as part of the Mikah 13 ANDA Acquisition. The transfer of the manufacturing process
of these products to the Northvale Facility was completed during the quarter ended September 30, 2014 and Elite is currently planning
to commence commercial shipments during the current fiscal year.
The Isradipine
Capsules are included as products in the Epic Agreement for which certain licenses and rights are granted to Epic in relation
to the distribution and sale of these products.
Approved
Products
Elite is the
owner of the following approved Abbreviated New Drug Applications:
| · | Isradipine
2.5mg capsules and Isradipine 5mg capsules (“Isradipine Capsules”) |
| · | 10
undisclosed ANDAs acquired as part of the Mikah 13 ANDA Acquisition |
Phentermine
HCl 37.5mg tablets
The ANDA for
Phentermine 37.5mg was acquired pursuant to an asset purchase agreement with Epic Pharma LLC (“Epic”) dated September
10, 2010 (the “Phentermine Purchase Agreement”).
Hydromorphone
HCl 8mg tablets
The ANDA for
Hydromorphone 8mg was acquired pursuant to an asset purchase agreement with Mikah Pharma LLC (the “Hydromorphone Purchase
Agreement”).
Transfer of
the manufacturing process of Hydromorphone 8mg to the Northvale Facility, a prerequisite of the Company’s commercial launch
of the product, was approved by the FDA on January 23, 2012. However, please note that the completion of such transfer had been
significantly delayed as a result of the FDA’s reclassification of the Company’s CBE-30 supplement filing to a prior
approval supplement filing. As a result of the delays caused by this reclassification, the Company recorded an impairment of the
Hydromorphone 8mg ANDA in an amount equal to the entire purchase price of the acquisition. This impairment was recorded and is
included in the Company’s audited financial statements as of March 31, 2011.
Naltrexone
HCl 50mg tablets
The ANDA for
Naltrexone 50mg was acquired pursuant to an asset purchase agreement with Mikah Pharma LLC (the “Naltrexone Purchase Agreement”).
Transfer of
the manufacturing process of Naltrexone 50mg to the Northvale Facility, a prerequisite of the Company’s commercial launch
of the product, was approved and initial shipment of Naltrexone 50mg was made in September 2013. However, please note that the
completion of such transfer had been significantly delayed as a result of the FDA’s reclassification of the Company’s
CBE-30 supplement filing to a prior approval supplement filing. As a result of the delays caused by this reclassification, the
Company recorded an impairment of the Naltrexone 50mg ANDA in an amount equal to the entire purchase price of the acquisition.
This impairment was recorded and is included in the Company’s audited financial statements as of March 31, 2011.
Phentermine
15mg and Phentermine 30mg
Elite received
approval as of September 28, 2012 from the FDA for Phentermine 15mg and Phentermine 30mg. These products were developed by Elite.
The commercial launch of Phentermine 15mg and Phentermine 30mg had been delayed due to the sole supplier of the API approved for
these products restricting the amount of such API available to Elite. We resolved this issue and the Phentermine 15mg and Phentermine
30mg products were launched in April 2013. The resolution of this issue related to the supply of API, however, required us to
pay substantially higher prices than previously paid for the Phentermine API in order to launch the products in April 2013, while
seeking approval from the FDA of an alternate supplier of the API. Approval by the FDA of the alternate supplier was received
in January 2014, resulting in lower prices and a sufficient supply of materials.
Phendimetrazine
35mg
The ANDA for
Phendimetrazine 35mg was acquired by Elite as part of the Mikah 13 ANDA Acquisition. The Northvale Facility was already an approved
manufacturing site for this product as of the date of the Mikah Purchase Agreement. Prior to the acquisition of this ANDA, Elite
had been manufacturing this product on a contract basis pursuant to a manufacturing and supply agreement with Mikah Pharma, dated
June 1, 2011 (please see below for details).
Isradipine
2.5mg tablets and Isradipine 5mg tablets
The ANDAs for
the Isradipine Capsules were acquired by Elite as part of the Mikah 13 ANDA Acquisition. The transfer the manufacturing process
of these products to the Northvale Facility was completed during the quarter ended September 30, 2014 and the Company is currently
planning to commence commercial shipments during the current fiscal year.
The Isradipine
Capsules are included as products in the Epic Agreement for which certain licenses and rights are granted to Epic in relation
to the distribution and sale of these products.
Development
and License Agreement with Hong Kong based company
On March 16,
2012, Elite executed a Development and License Agreement (“D&L Agreement”) with a private Hong Kong-based company
(the “Hong Kong-based Customer”) for Elite to develop for the Hong Kong-based Customer a branded prescription pharmaceutical
product in the United States. The Hong Kong-based Customer has informed us that it has been in business for more than five years
and it has multiple FDA approved manufacturing sites outside of the United States.
Pursuant to
the D&L Agreement, the Hong Kong-based Customer has engaged Elite to develop and manufacture a prescription pharmaceutical
product (the “Prescription Product”). Elite agrees to be the Preferred Manufacturer and supplier of the Prescription
Product pursuant to the D&L Agreement and perform maintenance activities such as stability or annual report filings for the
Prescription Product. The Hong Kong-based Customer, or its designees, shall prepare all applications necessary to obtain any Prescription
Product registration and permits required to file the Prescription Product in the Territories required to market the Prescription
Product. All Registrations shall be solely owned by the Hong Kong-based Customer including any NDA filed with the FDA for the
Prescription Product. Elite shall provide the Hong Kong-based Customer with all pharmaceutical, technical, and clinical data and
information in support of the NDA application by the Hong Kong-based Customer for the approval of the Prescription Product. In
consideration of Elite’s performance in accordance with the terms and conditions of the D&L Agreement, the Hong Kong-based
Customer shall pay Elite milestone for the Development Program and shall pay Elite for the manufacturing of the Prescription Product.
Maintenance activities will be paid separately on a quarterly basis.
The Hong Kong-based
Customer shall own and market the Prescription Product under its own Trademark. The term of this D&L Agreement shall be effective
from the date consummated and shall continue for a five (5) year term after the commercial launch of the Prescription Product.
Upon the expiration of the initial term or any renewal term, this D&L Agreement will automatically renew for an additional
one (1) year term, unless one Party gives at least six (6) months notice in writing in advance of its intent not to renew.
Products
Under Development
It is our general
policy not to disclose products in our development pipeline or the status of such products until a product reaches a stage that
we determine, for competitive reasons, in our discretion, to be appropriate for disclosure and because the disclosure of such
information might suggest the occurrence of future matters or events that may not occur.
Abuse Deterrent
and Sustained Release Opioids
The abuse deterrent
opioid products utilize our patented abuse-deterrent technology that is based on a pharmacological approach. These products are
combinations of a narcotic agonist formulation intended for use in patients with moderate to severe pain, and an antagonist, formulated
to deter abuse of the drug. Both, agonist and antagonist, have been on the market for a number of years and sold separately
in various dose strengths. Elite has filed INDs for the first two abuse deterrent products under development and has
tested products in various pharmacokinetic studies. Elite expects to continue to develop multiple abuse deterrent products.
Products utilizing the pharmacological approach to deter abuse such as Suboxone®, a product marketed in the United States
by Reckitt Benckiser Pharmaceuticals, Inc., and Embeda®, a product marketed in the United States by Pfizer, Inc., have been
approved by the FDA and are being marketed in the United States.
Elite has developed,
and retains the rights to these abuse deterrent and sustained release opioid products. Elite may license these products
at a later date to a third party who could provide funding for the remaining clinical studies and who could provide sales and
distribution for the product. The drug delivery technology development underlying the sustained release products was initiated
under a joint venture with Elan which terminated in 2002.
According to
the Elan Termination Agreement, Elite acquired all proprietary, development and commercial rights for the worldwide markets for
the products developed by the joint venture, including the sustained release opioid products. Upon licensing or commercialization
of a once daily oxycodone product, Elite will pay a royalty to Elan pursuant to the Termination Agreement. If Elite
were to sell the product itself, Elite will pay a 1% royalty to Elan based on the product’s net sales, and if Elite enters
into an agreement with another party to sell the product, Elite will pay a 9% royalty to Elan based on Elite’s net revenues
from this product. (Elite’s net product revenues would include license fees, royalties, manufacturing profits and milestones)
Elite is allowed to recoup all development costs including research, process development, analytical development, clinical development
and regulatory costs before payment of any royalties to Elan.
Product
Development Agreements
Elite is currently
performing services pursuant to product development agreements with the following:
| · | Hi-Tech
Pharmacal Co. (the “Hi-Tech Development Agreement”) |
| · | A
Private Hong Kong based company (the “Hong Kong D&L Agreement”) |
For further
details on the Hi-Tech Development Agreement, please refer to the current report on Form 8-K filed with the SEC on January 4,
2011 and exhibit 10.68 of our Annual Report on Form 10-K for the fiscal year ended March 31, 2011, such filings being herein incorporated
by reference.
For further
details on the Hong Kong D&L Agreement, please refer to the current report on Form 8-K filed with the SEC on March 22, 2012,
our amended Annual Report on Form 10-K/A for the fiscal year ended March 31, 2012 (filed with the SEC on September 14, 2012),
and exhibit 10.77 of our Annual Report on Form 10-K for the fiscal year ended March 31, 2012, such filings being herein incorporated
by reference.
Critical Accounting Policies
and Estimates
Management’s
discussion addresses our Consolidated Financial Statements, which have been prepared in accordance with accounting principles
generally accepted in the United States of America. The preparation of these financial statements requires management to make
estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and
liabilities at the date of financial statements and the reported amounts of revenues and expenses during the reporting period.
On an ongoing basis, management evaluates its estimates and judgment, including those related to bad debts, intangible assets,
income taxes, workers compensation, and contingencies and litigation. Management bases its estimates and judgments on historical
experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form
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.
Management
believes the following critical accounting policies, among others, affect its more significant judgments and estimates used in
the preparation of its Consolidated Financial Statements. Our most critical accounting policies include the recognition of revenue
upon completion of certain phases of projects under research and development contracts. We also assess a need for an allowance
to reduce our deferred tax assets to the amount that we believe are more likely than not to be realized. We assess a need for
allowances relating to the valuation of inventories. We assess the recoverability of long-lived assets and intangible assets whenever
events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. We assess our exposure
to current commitments and contingencies. It should be noted that actual results may differ from these estimates under different
assumptions or conditions.
Results
of Consolidated Operations
Three Months
Ended September 30, 2014 Compared to Three Months Ended September 30, 2014
Our
revenues for the three months ended September 30, 2014 were $1,256k, an increase of $98k or approximately 8% over revenues for
the comparable period of the prior year, and consisted of $851k in manufacturing fees and $405k in licensing fees. Revenues for
the three months ended September 30, 2013, consisted of $921k in manufacturing fees, $232k in licensing fees and $6k in lab fees.
Manufacturing
fees decreased by approximately 8%, mostly due to timing differences in shipments, with product shipments in 2014 missing the
September 30th cutoff by a few days and accordingly being recorded in the subsequent period. In addition, the Company
launched Naltrexone 50mg in September 2013, recording shipments of launch quantities in that period, which also contributed to
the variance in manufacturing revenues between the period. Licensing fees increased by approximately 75% due to milestones earned
pursuant the Epic Agreement and related to the successful manufacturing site transfer of Isradipine 2.5mg and Isradipine 5mg.
Research
and development costs for the three months ended September 30, 2014 were $3,565k, an increase of $2,710k or approximately 317%
from $855k of such costs for the comparable period of the prior year. The increase was primarily due to increased activities related
to the development of Elite’s abuse deterrent opioid products.
General
and administrative expenses for the three months ended September 30, 2014, were $741k, an increase of $468k, or approximately
172% from $273k of general and administrative expenses for the comparable period of the prior year. The increase was primarily
due to significant increases in regulatory costs, including, without limitation, increased fees paid to the US-FDA and the hiring
of additional staff to support regulatory compliance activities, additional costs incurred in relation to compliance with the
Sarbanes-Oxley Act and significant increases in legal fees, insurance and employee benefits. Please note that these higher levels
of overhead costs are expected to continue.
Depreciation
and amortization for the three months ended September 30, 2014 was $276k, an increase of $194k, or approximately 235%, from $83k
for the comparable period of the prior year. The increase was primarily due to the expansion and upgrade of the Northvale facility,
which has required significant investments in property, plant and equipment, which, when commissioned and placed in service result
in increased depreciation.
Non-cash
compensation through the issuance of stock options and warrants for the three months ended September 30, 2014 was $54k, an increase
of $35k, or approximately 182% from $19k for the comparable period of the prior year. The increase is due to the issuance of employee
stock options during the quarter ended September 30, 2014. For further details on such employee stock options, please see Note
9 of the financial statements included herein.
As
a result of the foregoing, our loss from operations for the three months ended September 30, 2014 was $4,261k, compared to a loss
from operations of $687k for the three months ended September 30, 2013.
Other
income/expenses for the three months ended September 30, 2014 were a net income of $25,441k, an increase in other income of $34,390k
from the net other expense of $8,949k for the comparable period of the prior year. The increase in other income/expense was due
to derivative income relating to changes in the fair value of our preferred shares and outstanding warrants during the quarter
ended September 30, 2014 totaling an income of $25,511k, as compared to a net derivative expense of $8,695k for the comparable
period of the prior year. Please note that derivative income/(expenses) are most significantly determined by the number of preferred
shares and warrants outstanding and the change in the closing price of the Company’s Common Stock as of the end of the period,
as compared to the closing price at the beginning of the period, with a strong inverse correlation between derivative revenues
and increases in the closing price of the Company’s Common Stock.
As
a result of the foregoing, our net income for the three months ended September 30, 2014 was $21,380k, compared to a net loss of
$9,638k million for the comparable period of the prior year.
Six Months
Ended September 30, 2014 Compared to Six Months Ended September 30, 2014
Our
revenues for the six months ended September 30, 2014 were $2,418k, an increase of $537k or approximately 29% over revenues for
the comparable period of the prior year, and consisted of $1,800k in manufacturing fees, $613k in licensing fees and $5k. Revenues
for the six months ended September 30, 2013, consisted of $1,465k in manufacturing fees, $405k in licensing fees and $11k in lab
fees.
Manufacturing
fees increase by approximately 23%, as a result of continued growth in the Company’s generic product sales, combined with
the current year period including a full six months of sales of Naltrexone 50mg, as compared to only one shipment of this product
in the comparable period of the prior year, due to this product being launched in September 2013. Licensing fees increased by
approximately 51% due to milestones earned pursuant the Epic Agreement and related to the successful manufacturing site transfer
of Isradipine 2.5mg and Isradipine 5mg.
Research
and development costs for the six months ended September 30, 2014 were $7,586k, an increase of $6,161k or approximately 432% from
$1,424k of such costs for the comparable period of the prior year. The increase was primarily due to increased activities related
to the development of Elite’s abuse deterrent opioid products.
General
and administrative expenses for the six months ended September 30, 2014, were $1,367k, an increase of $718k, or approximately
111% from $649k of general and administrative expenses for the comparable period of the prior year. The increase was primarily
due to significant increases in regulatory costs, including, without limitation, increased fees paid to the US-FDA and the hiring
of additional staff to support regulatory compliance activities, additional costs incurred in relation to compliance with the
Sarbanes-Oxley Act and significant increases in legal fees, insurance and employee benefits. Please note that these higher levels
of overhead costs are expected to continue.
Depreciation
and amortization for the six months ended September 30, 2014 was $471k, an increase of $225k, or approximately 92%, from $245k
for the comparable period of the prior year. The increase was primarily due to the expansion and upgrade of the Northvale facility,
which has required significant investments in property, plant and equipment, which, when commissioned and placed in service result
in increased depreciation.
Non-cash
compensation through the issuance of stock options and warrants for the six months ended September 30, 2014 was $77k, an increase
of $49k, or approximately 171% from $28k for the comparable period of the prior year. The increase is due to the issuance of employee
stock options during the quarter ended September 30, 2014. For further details on such employee stock options, please see Note
9 of the financial statements included herein.
As
a result of the foregoing, our loss from operations for the six months ended September 30, 2014 was $8,693k, compared to a loss
from operations of $1,662k for the six months ended September 30, 2013.
Other
income/expenses for the six months ended September 30, 2014 were a net income of $25,467k, an increase in other income of $32,519k
from the net other expense of $7,051k for the comparable period of the prior year. The increase in other income/expense was due
to derivative income relating to changes in the fair value of our preferred shares and outstanding warrants during the six months
ended September 30, 2014 totaling an income of $23,945k, as compared to a net derivative expense of $6,699k for the comparable
period of the prior year, offset by a gain on sale of investment totaling $1,671k during the current year, without a corresponding
gain in the comparable period of the prior year. Please note that derivative income/(expenses) are most significantly determined
by the number of preferred shares and warrants outstanding and the change in the closing price of the Company’s Common Stock
as of the end of the period, as compared to the closing price at the beginning of the period, with a strong inverse correlation
between derivative revenues and increases in the closing price of the Company’s Common Stock.
As
a result of the foregoing, our net income for the six months ended September 30, 2014 was $16,978k, compared to a net loss of
$8,716k million for the comparable period of the prior year.
Material
Changes in Financial Condition
Our
working capital (total current assets less total current liabilities), increased to a surplus of $7.9 million as of September
30, 2014 from a working capital surplus of $3.8 million as of March 31, 2014, primarily due to the loss from operations sustained
during the six months ended September 30, 2014 being financed by $6.2 million in proceeds from the sale of Common Stock pursuant
to the Purchase Agreement with Lincoln Park Capital Fund, LLC (“Lincoln Park”) and $5.0 million in proceeds from the
sale of our investment in Novel Laboratories. Capital financings, such as those occurring pursuant to the Purchase Agreement with
Lincoln Park provide cash to the Company without a corresponding current liability and accordingly have an accretive effect on
working capital. In addition, the Company retired the Series B NJEDA Bonds and cured the monetary default in the Series A NJEDA
Bonds during the current year which resulted in the Company recording as a current liability only those principal amounts scheduled
for redemption within 12 months from the balance sheet date, and all other principal amounts being recorded as non-current liabilities.
In prior periods, the entire principal amount of the NJEDA Bonds were recorded as a current liability due to the monetary defaults
which have now been cured. The classification of a portion of the bond liability as a non-current asset has an accretive effect
on working capital.
Net
cash used by operations was $8.6 million for the six months ended September 30, 2014, primarily due to our net income from continuing
operations of $17.0 million, offset by non-cash credits totaling $24.4 million, which included, without limitation, depreciation
and amortization charges of $0.4 million, net income credits from the change in fair value of derivative liabilities of $23.945
million and gain from the sale of investment of $1.7 million. In addition, net cash used by operations was effected by changes
in the balances of assets and liabilities, including, without limitation, increases in inventories of $0.6 and increases in accounts
receivable of $0.4 million, all of which result in a net outflow of cash.
LIQUIDITY AND CAPITAL RESOURCES
Cash and
Working Capital
As of September
30, 2014, the Company had cash on hand of $7.6 million and a working capital surplus of $7.9 million. The Company believes that
such resources, combined with the Company’s access to amounts available pursuant to the $40 million equity line with Lincoln
Park, and approximately $0.4 million available under the Hakim Credit Line are sufficient to fund operations through the current
operating cycle. For the six months ended September 30, 2014, it had losses from operations totaling $8.7 million, net other income
totaling $25.5 million and a net income of $17.0 million. Please note that the Company’s other income/(expenses) are significantly
influenced by the fluctuations in the fair value of outstanding preferred share and warrant derivatives, and that such fair values
strongly correlate to and vary inversely with the market share price of the Company’s Common Stock.
The
Company does not anticipate being profitable for the fiscal year ending March 31, 2015, due in large part to its plans to conduct
clinical development and commercialization activities on a range of abuse deterrent opioid products, on an accelerated and simultaneous
basis. Such activities require the investment of significant amounts in clinical trials, safety and efficacy studies, bioequivalence
studies, product manufacturing, regulatory expertise and filings, as well as investments in manufacturing and lab equipment and
software. In order to finance these significant expenditures, the Company entered into two purchase agreements with Lincoln Park,
with such agreements providing the company with equity lines totaling $50 million. We believe this amount of financing, if received,
is sufficient to fund the commercialization of the abuse deterrent opioid products identified. Please see below for further details
on the financing transactions with Lincoln Park.
Lincoln
Park Capital
Pursuant
to an April 19, 2013 purchase agreement with Lincoln Park Capital Fund, LLC (“Lincoln Park”) we had the right to sell
to and Lincoln Park was obligated to purchase up to $10 million in shares of the Company’s Common Stock, subject to certain
limitations, from time to time, over the 36 month period commencing on May 9, 2013. We raised the entire $10 million from the
sale of shares to Lincoln Park pursuant to that agreement. That agreement terminated in March 2014 with the sale of all shares
covered by that agreement.
On
April 10, 2014, we entered into another Purchase Agreement and a Registration Rights Agreement with Lincoln Park. Pursuant to
the terms of the Purchase Agreement, Lincoln Park has agreed to purchase from us up to $40 million of our common stock (subject
to certain limitations) from time to time over a 36-month period. Pursuant to the terms of the Registration Rights Agreement,
we have filed with the SEC a registration statement to register for resale under the Securities Act the shares that have been
or may be issued to Lincoln Park under the Purchase Agreement. That registration statement was declared effective by the SEC on
May 1, 2014. A post-effective amendment to that Registration Statement was subsequently filed with the SEC and declared effective
on July 1, 2014.
Upon
execution of the Purchase Agreement, we have issued 1,928,641 shares of our common stock to Lincoln Park pursuant to the Purchase
Agreement as consideration for its commitment to purchase additional shares of our common stock under that agreement and we are
obligated to issue up to an additional 1,928,641 commitment shares to Lincoln Park pro rata as up to $40 million of our common
stock is purchased by Lincoln Park. Through November 4, 2014, we have sold to Lincoln Park an aggregate of 23,524,974 shares under
the Purchase Agreement for aggregate gross proceeds of approximately $7.5 million. In addition, we have issued an additional 361,654
Commitment Shares.
We
may, from time to time and at our sole discretion but no more frequently than every other business day, direct Lincoln Park to
purchase (a “Regular Purchase”) up to 500,000 shares of our common stock on any such business day, increasing up to
800,000 shares, depending upon the closing sale price of the common stock, provided that in no event shall Lincoln Park purchase
more than $760,000 worth of our common stock on any single business day. The purchase price of shares of Common Stock related
to the future Regular Purchase funding will be based on the prevailing market prices of such shares at the time of sales (or over
a period of up to 10 business days leading up to such time), but in no event will shares be sold to Lincoln Park on a day the
Common Stock closing price is less than the floor price of $0.10 per share, subject to adjustment.
In
addition to Regular Purchases, on any business day on which we have properly submitted a Regular Purchase notice and the closing
sale price is not below $0.15, we may purchase (an “Accelerated Purchase”) an additional “accelerated amount”
under certain circumstances. The amount of any Accelerated Purchase cannot exceed the lesser of three times the number of purchase
shares purchased pursuant to the corresponding Regular Purchase; and 30% of the aggregate shares of our common stock traded during
normal trading hours on the purchase date. The purchase price per share for each such Accelerated Purchase will be equal to the
lower of (i) 97% of the volume weighted average price during the purchase date; or (ii) the closing sale price of our common stock
on the purchase date.
In
the case of both Regular Purchases and Accelerated Purchases, the purchase price per share will be equitably adjusted for any
reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction occurring during
the business days used to compute the purchase price.
Other
than as set forth above, there are no trading volume requirements or restrictions under the Purchase Agreement, and we will control
the timing and amount of any sales of our common stock to Lincoln Park.
Our
sales of shares of Common Stock to Lincoln Park under the Lincoln Park Purchase Agreement are limited to no more than the number
of shares that would result in the beneficial ownership by Lincoln Park and its affiliates, at any single point in time, of more
than 9.99% of the then outstanding shares of Common Stock.
The
Lincoln Park Purchase Agreement and the Lincoln Park Registration Rights Agreement contain customary representations, warranties,
agreements and conditions to completing future sale transactions, indemnification rights and obligations of the parties. The Company
has the right to terminate the Lincoln Park Purchase Agreement at any time, at no cost or penalty. Actual sales of shares of Common
Stock to Lincoln Park under the Lincoln Park Purchase Agreement will depend on a variety of factors to be determined by the Company
from time to time, including, without limitation, market conditions, the trading price of the Common Stock and determinations
by the Company as to appropriate sources of funding for the Company and its operations. There are no trading volume requirements
or restrictions under the Lincoln Park Purchase Agreement. Lincoln Park has no right to require any sales by the Company, but
is obligated to make purchases from the Company as it directs in accordance with the Lincoln Park Purchase Agreement. Lincoln
Park has covenanted not to cause or engage in any manner whatsoever, any direct or indirect short selling or hedging of our shares.
The
net proceeds under the Purchase Agreement to the Company will depend on the frequency and prices at which the Company sells shares
of its stock to Lincoln Park. The Company expects that any proceeds received by the Company from such sales to Lincoln Park under
the Lincoln Park Purchase Agreement will be used for general corporate purposes and working capital requirements.
Treppel
$1,000,000 Bridge Revolving Credit Line
On November
21, 2013, Elite entered into an unsecured convertible note (the “Treppel Note”) with Jerry Treppel (“Treppel”),
Elite’s Chairman of the Board, in the amount of $600,000 for the unpaid current principal amount owed pursuant to the Treppel
Bridge Loan Agreement (“Treppel Credit Line”). The original Treppel Credit Line agreement was executed on June 12,
2012 and amended on December 5, 2012 and August 2, 2013. The Treppel Note was amended on February 7, 2014 to make it convertible
into shares of the Company’s Series I Preferred Stock. The Treppel Note, as amended, was interest free and due and payable
on the third anniversary of its issuance. Subject to certain limitations, the principal amount of the Note was convertible at
the option of Treppel on and after the first anniversary of the date of the Note into shares of the Company’s Common Stock
at a rate of $0.099 (approximately 10,101 shares per $1,000 in principal amount), the closing market price of the Company’s
Common Stock on the date that the Note was executed, and/or into shares of the Company’s Series I Preferred Stock at a rate
of 1 share of Series I Preferred Stock for each $141,442.7157 of principal owed on the Treppel Note. The conversion rate was adjustable
for customary corporate actions such as stock splits and, subject to certain exclusions, includes weighted average anti-dilution
for common stock transactions at prices below the then applicable conversion rate.
On February
7, 2014, Treppel converted the principal amount of $600,000, representing the entire principal balance due under the Treppel Note
into 4.242 shares of the Company’s Series I Preferred Stock.
The Treppel
Credit Line expired on July 31, 2014, with no amounts due or owing.
Hakim $1,000,000
Bridge Revolving Credit Line
On October
15, 2013 (the “Hakim Credit Line Effective Date”), we entered into a bridge loan agreement (the “Hakim Loan
Agreement”) with Nasrat Hakim, our President and CEO. Under the terms of the Hakim Loan Agreement, we have the right, in
our sole discretion, to a line of credit (“Hakim Credit Line”) in the maximum principal amount of up to $1,000,000
at any one time. Mr. Hakim provided the Credit Line for the purpose of supporting the acceleration of our product development
activities. The outstanding amount will be evidenced by a promissory note which shall mature on June 30, 2015, at which time the
entire unpaid principal balance plus accrued interest thereon shall be due and payable in full. We may prepay any amounts owed
without penalty. Any such prepayments shall first be attributable to interest due and owing and then to principal. Interest only
shall be payable quarterly on January 1, April 1, July 1 and October 1 of each year. Prior to maturity or the occurrence of an
Event of Default as defined in the Hakim Loan Agreement, we may borrow, repay, and reborrow under the Hakim Credit Line through
maturity. Amounts borrowed under the Hakim Credit Line will bear interest at the rate of ten percent (10%) per annum. As of September
30, 2014, the principal balance owed under the Credit Line was $666,329 with an additional $16,465 in accrued interest being also
owed, in accordance with the terms and conditions of the Credit Line.
NJEDA
Bonds
On August 31,
2005, the Company successfully completed a refinancing of a prior 1999 bond issue through the issuance of new tax-exempt bonds
(the “Bonds”). The refinancing involved borrowing $4,155,000, evidenced by a 6.5% Series A Note in the principal amount
of $3,660,000 maturing on September 1, 2030 and a 9% Series B Note in the principal amount of $495,000 maturing on September 1,
2012. The net proceeds, after payment of issuance costs, were used (i) to redeem the outstanding tax-exempt Bonds originally issued
by the Authority on September 2, 1999, (ii) refinance other equipment financing and (iii) for the purchase of certain equipment
to be used in the manufacture of pharmaceutical products. As of June 30 2014, all of the proceeds were utilized by the Company
for such stated purposes.
Interest is
payable semiannually on March 1 and September 1 of each year. The Bonds are collateralized by a first lien on the Company’s
facility and equipment acquired with the proceeds of the original and refinanced Bonds. The related Indenture requires the maintenance
of a $415,500 Debt Service Reserve Fund consisting of $366,000 from the Series A Notes proceeds and $49,500 from the Series B
Notes proceeds. The Debt Service Reserve is maintained in restricted cash accounts that are classified in Other Assets. $1,274,311
of the proceeds had been deposited in a short-term restricted cash account to fund the purchase of manufacturing equipment and
development of the Company’s facility.
Bond issue
costs of $354,000 were paid from the bond proceeds and are being amortized over the life of the bonds. Amortization of bond issuance
costs amounted to $3,545 for the three months ended September 30, 2014.
The NJEDA Bonds
require the Company to make an annual principal payment on September 1st of varying amounts as specified in the loan documents
and semi-annual interest payments on March 1st and September 1st, equal to interest due on the outstanding principal at the applicable
rate for the semi-annual period just ended.
The interest
payments due on March 1st and September 1st of 2009, 2010 2011, 2012 and 2013, totaling $1,146,150 for all ten payments, were
paid from the debt service reserved held in the restricted cash account, due to the Company not having sufficient funds to make
such payments when they were due.
The principal
payment due on September 1, 2009, totaling $210,000 was paid from the debt service reserve held in the restricted cash account,
due to the Company not having sufficient funds to make the payment when due.
The Company
did not have sufficient funds available to make principal payments due on September 1, 2010, September 1, 2011, September 1, 2012
and September 1, 2013, on their scheduled due dates. These principal payments, totaling $915,000, were paid on July 23, 2014.
By making this payment, plus also paying accrued interest of $25,876 due and owing on the principal amounts paid, the Company
retired all outstanding Series B Notes at par, as well as all amounts which were in arrears at the time.
On September
1, 2014, the Company paid the scheduled principal payment of $195,000 on the Series A Notes, plus the scheduled interest payment
of $80,275.
As of the date
of filing of this Quarterly Report on Form 10-Q, there are no amounts scheduled for payment under the bond indenture as of this
date which have not been paid.
As a result
of the Company’s curing of all prior monetary defaults, and in accordance with GAAP, the Company has classified the principal
amounts with a maturity of not more than twelve months from September 30, 2014, totaling $210,000, as current liabilities. Principal
amounts with maturities in excess of twelve months from September 30, 2014, totaling $2,065,000 have been recorded as non-current
liabilities.
Off-Balance
Sheet Arrangements
We have not
entered into any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial
condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital
resources that would be considered material to investors.
Effects
of Inflation
We are subject
to price risks arising from price fluctuations in the market prices of the products that we sell. Management does not believe
that inflation risk is material to our business or our consolidated financial position, results of operations, or cash flows.
ITEM 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation
of Disclosure Controls and Procedures
Under the supervision
and with the participation of our management, including the Chief Executive and Chief Financial Officers, we evaluated the effectiveness
of the design and operation of our disclosure controls and procedures, as defined in Rule 13a-15(e) and 15d-15(e) under the Securities
Exchange Act of 1934 (the “Exchange Act”), as of the end of the period covered by this Quarterly Report on Form 10-Q.
Based upon that evaluation, our Chief Executive and Chief Financial Officers concluded that our disclosure controls and procedures
as of the end of the period covered by this report were not effective so that that the information required to be disclosed by
us in reports filed under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified
in the SEC’s rules and forms and (ii) accumulated and communicated to our management in order to allow for timely decisions
regarding disclosure. A controls system cannot provide absolute assurance, however, that the objectives of the controls system
are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any,
within a company have been detected.
Changes
in Internal Controls
There have
been no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15 (f) under
the Exchange Act) during the three months ended September 30, 2014 that have materially affected, or are reasonably likely to
materially affect, our internal control over financial reporting.
PART II. OTHER
INFORMATION
ITEM
1. LEGAL PROCEEDINGS
In
the ordinary course of business we may be subject to litigation from time to time. Except as discussed below, there is no current,
pending or, to our knowledge, threatened litigation or administrative action to which we are a party or of which our property
is the subject (including litigation or actions involving our officers, directors, affiliates, or other key personnel, or holders
of record or beneficially of more than 5% of any class of our voting securities, or any associate of any such party) which in
our opinion has, or is expected to have, a material adverse effect upon our business, prospects financial condition or operations.
Arbitration
with Precision Dose, Inc.
On
May 9, 2014, Precision Dose Inc., the parent company of TAGI Pharmaceuticals, Inc., commenced an arbitration against the Company
alleging that the Company failed to properly supply, price and satisfy gross profit minimums regarding Phentermine 37.5mg tablets,
as required by the parties’ agreements. Elite denies Precision Dose’s allegations and has counterclaimed that Precision
Dose is no longer entitled to exclusivity rights with respect to Phentermine 37.5mg tablets, and is responsible for certain costs,
expenses, price increases and lost profits relating to Phentermine 37.5mg tablets and the parties’ agreements. As of the
date of filing of this quarterly report on Form 10-Q this arbitration proceeding was ongoing.
ITEM 1A. RISK
FACTORS
There have
been no material changes from the Risk Factors described in our Annual Report on Form 10-K for the fiscal year ended March 31,
2014.
ITEM
2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
During the
six months ended September 30, 2014, we issued 10,227,423 shares of Common Stock that were unregistered, consisting of 4,167,423
shares being issued pursuant to the exercise of cash warrants and options, with proceeds received totaling $290,231 and 6,060,000
shares being issued pursuant to the conversion of Series I Preferred Stock. We relied on the exemption provided by Section 4(a)(2)
of the Securities Act of 1933 to issue the common stock The securities were offered and sold without any form of general solicitation
or general advertising and the offerees made representations that they were accredited investors.
Subsequent
to September 30, 2014 and up to and including November 4, 2014 (the latest practicable date), we issued a total of189,924 shares
of Common Stock that were unregistered, with all such unregistered shares being issued pursuant to the exercise of cash warrants,
with proceeds received totaling $11,870.
ITEM
3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM
4. Mine Safety Disclosures.
Not applicable.
ITEM 5. Other
Information
None.
Item
6. Exhibits
The
exhibits listed in the index below are filed as part of this report..
Exhibit
No. |
|
Description |
|
|
|
2.1 |
|
Agreement and Plan of Merger between
Elite Pharmaceuticals, Inc., a Delaware corporation (“Elite-Delaware”) and Elite Pharmaceuticals, Inc., a Nevada
corporation (“Elite-Nevada”), incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed
with the SEC on January 9, 2012. |
|
|
|
3.1(a) |
|
Articles of Incorporation of Elite-Nevada, incorporated
by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the SEC on January 9, 2012. |
|
|
|
3.1(b) |
|
Certificate of Incorporation of Elite-Delaware,
together with all other amendments thereto, as filed with the Secretary of State of the State of Delaware, incorporated by
reference to (a) Exhibit 4.1 to the Registration Statement on Form S-4 (Reg. No. 333-101686), filed with the SEC on December
6, 2002 (the “Form S-4”), (b) Exhibit 3.1 to the Company’s Current Report on Form 8-K dated July 28, 2004
and filed with the SEC on July 29, 2004, (c) Exhibit 3.1 to the Company’s Current Report on Form 8-K dated June 26,
2008 and filed with the SEC on July 2, 2008, and (d) Exhibit 3.1 to the Company’s Current Report on Form 8-K dated December
19, 2008 and filed with the SEC on December 23, 2008.* |
|
|
|
3.1(c) |
|
Certificate of Designations, Preferences and Rights
of Series A Preferred Stock, as filed with the Secretary of the State of Delaware, incorporated by reference to Exhibit 4.5
to the Current Report on Form 8-K dated October 6, 2004, and filed with the SEC on October 12, 2004.* |
|
|
|
3.1(d) |
|
Certificate of Retirement with the Secretary of
the State of the Delaware to retire 516,558 shares of the Series A Preferred Stock, as filed with the Secretary of State of
Delaware, incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K dated March 10, 2006, and filed with
the SEC on March 14, 2006.* |
|
|
|
3.1(e)
|
|
Amended Certificate of Designations of Preferences,
Rights and Limitations of Series B 8% Convertible Preferred Stock, as filed with the Secretary of State of the State of Delaware,
incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K dated April 24, 2007, and filed with the SEC on
April 25, 2007.* |
|
|
|
3.1(f) |
|
Amended Certificate of Designations, Preferences
and Rights of Series C 8% Convertible Preferred Stock, as filed with the Secretary of the State of Delaware, incorporated
by reference to Exhibit 3.1 to the Current Report on Form 8-K dated April 24, 2007, and filed with the SEC on April 25, 2007.* |
|
|
|
3.1(g) |
|
Amended Certificate of Designations, Preferences
and Rights of Series C 8% Convertible Preferred Stock, as filed with the Secretary of the State of Delaware, incorporated
by reference to Exhibit 3.2 to the Current Report on Form 8-K dated September 15, 2008, and filed with the SEC on September
16, 2008.* |
|
|
|
3.1(h) |
|
Amended Certificate of Designations of Preferences,
Rights and Limitations of Series D 8% Convertible Preferred Stock, as filed with the Secretary of State of the State of Delaware,
incorporated by reference to Exhibit 3.3 to the Current Report on Form 8-K dated September 15, 2008, and filed with the SEC
on September 16, 2008.* |
|
|
|
3.1(i) |
|
Certificate of Designation of Preferences, Rights
and Limitations of Series E Convertible Preferred Stock, as filed with the Secretary of State of the State of Delaware, incorporated
by reference to Exhibit 3.1 to the Current Report on Form 8-K dated June 1, 2009, and filed with the SEC on June 5, 2009.* |
|
|
|
3.1(j) |
|
Amended Certificate of Designations of the Series
D 8% Convertible Preferred Stock as filed with the Secretary of State of the State of Delaware on June 29, 2010, incorporated
by reference to Exhibit 3.1 to the Current Report on Form 8-K, dated June 24, 2010 and filed with the SEC on July 1, 2010.* |
|
|
|
3.1(k) |
|
Amended Certificate of Designations of the Series
E Convertible Preferred Stock as filed with the Secretary of State of the State of Delaware on June 29, 2010, incorporated
by reference to Exhibit 3.2 to the Current Report on Form 8-K, dated June 24, 2010 and filed with the SEC on July 1, 2010.* |
|
|
|
3.1(l) |
|
Certificate of Designations of the Series G Convertible
Preferred Stock as filed with the Secretary of State of the State of Nevada on April 18, 2013, incorporated by reference to
Exhibit 4.1 to the Current Report on Form 8-K, dated April 18, 2013 and filed with the SEC on April 22, 2013 . |
3.1(m) |
|
Certificate of Designation of
the Series H Junior Participating Preferred Stock, incorporated by reference to Exhibit 2 (contained in Exhibit 1) to the
Registration Statement on Form 8-A filed with the SEC on November 15, 2013. |
|
|
|
3.1(n) |
|
Certificate of Designations of the Series I Convertible
Preferred Stock as filed with the Secretary of State of the State of Nevada on February 6, 2014, incorporated by reference
to Exhibit 3.1 to the Current Report on Form 8-K, dated February 6, 2014 and filed with the SEC on February 7, 2014 |
|
|
|
3.2(a) |
|
Amended and Restated By-Laws of the Company, incorporated
by reference to Exhibit 3.1 to the Current Report on Form 8-K dated March 17, 2014 and filed with the SEC on March 18, 2014. |
|
|
|
3.2(b) |
|
By-Laws of Elite-Delaware, as amended, incorporated
by reference to Exhibit 3.2 to the Company’s Registration Statement on Form SB-2 (Reg. No. 333-90633) made effective
on February 28, 2000 (the “Form SB-2”).* |
|
|
|
4.1 |
|
Form of specimen certificate for Common Stock of
the Company, incorporated by reference to Exhibit 4.1 to the Form SB-2.* |
|
|
|
4.2 |
|
Form of specimen certificate for Series B 8% Convertible
Preferred Stock of the Company, incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K, dated March 15,
2006 and filed with the SEC on March 16, 2006.* |
|
|
|
4.3 |
|
Form of specimen certificate for Series C 8% Convertible
Preferred Stock of the Company, incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K, dated April 24,
2007 and filed with the SEC on April 25, 2007.* |
|
|
|
4.4 |
|
Form of Warrant to purchase shares of Common Stock
issued to purchasers in the private placement which closed on March 15, 2006 (the “Series B Financing”), incorporated
by reference to Exhibit 4.2 to the Current Report on Form 8-K, dated March 15, 2006 and filed with the SEC on March 16, 2006.* |
|
|
|
4.5 |
|
Form of Warrant to purchase shares of Common Stock
issued to purchasers in the Series B Financing, incorporated by reference to Exhibit 4.3 to the Current Report on Form 8-K,
dated March 15, 2006 and filed with the SEC on March 16, 2006.* |
|
|
|
4.6 |
|
Form of Warrant to purchase shares of Common Stock
issued to the Placement Agent, in connection with the Series B Financing, incorporated by reference to Exhibit 4.4 to the
Current Report on Form 8-K, dated March 15, 2006 and filed with the SEC on March 16, 2006.* |
|
|
|
4.7 |
|
Form of Warrant to purchase 600,000 shares of Common
Stock issued to Indigo Ventures, LLC, incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K, dated July
12, 2006 and filed with the SEC on July 18, 2006.* |
|
|
|
4.8 |
|
Form of Warrant to purchase up to 478,698 shares
of Common Stock issued to VGS PHARMA, LLC, incorporated by reference as Exhibit 3(a) to the Current
Report on Form 8-K, dated December 6, 2006 and filed with the SEC on December 12, 2006.* |
|
|
|
4.9 |
|
Form of Non-Qualified Stock Option Agreement for
1,750,000 shares of Common Stock granted to Veerappan Subramanian, incorporated by reference as Exhibit 3(b) to the Current
Report on Form 8-K, dated December 6, 2006 and filed with the SEC on December 12, 2006.* |
|
|
|
4.10 |
|
Form of Warrant to purchase shares of Common Stock
issued to purchasers in the private placement which closed on April 24, 2007 (the “Series C Financing”), incorporated
by reference to Exhibit 4.2 to the Current Report on Form 8-K, dated April 24, 2007 and filed with the SEC on April 25, 2007.* |
4.11 |
|
Form of Warrant to purchase
shares of Common Stock issued to the placement agent in the Series C Financing, incorporated by reference to Exhibit 4.3 to
the Current Report on Form 8-K, dated April 24, 2007 and filed with the SEC on April 25, 2007.* |
|
|
|
4.12 |
|
Form of specimen certificate for Series D 8% Convertible
Preferred Stock of the Company, incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K, dated September
15, 2008 and filed with the SEC on September 16, 2008.* |
|
|
|
4.13 |
|
Form of Warrant to purchase shares of Common Stock
issued to purchasers in the private placement which closed on September 15, 2008 (the “Series D Financing”), incorporated
by reference to Exhibit 4.2 to the Current Report on Form 8-K, dated September 15, 2008 and filed with the SEC on September
16, 2008.* |
|
|
|
4.14 |
|
Form of Warrant to purchase shares of Common Stock
issued to the placement agent in the Series D Financing, incorporated by reference to Exhibit 4.3 to the Current Report on
Form 8-K, dated September 15, 2008 and filed with the SEC on September 16, 2008.* |
|
|
|
4.15 |
|
Form of specimen certificate for Series E Convertible
Preferred Stock of the Company, incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K, dated June 1,
2009, and filed with the SEC on June 5, 2009.* |
|
|
|
4.16 |
|
Warrant to purchase shares of Common Stock issued
to Epic Investments, LLC in the initial closing of the Strategic Alliance Agreement, dated as of March 18, 2009, by and among
the Company, Epic Pharma, LLC and Epic Investments, LLC, incorporated by reference to Exhibit 4.2 to the Current Report on
Form 8-K, dated June 1, 2009, and filed with the SEC on June 5, 2009.* |
|
|
|
4.17 |
|
Form of specimen certificate for Series G Convertible
Preferred Stock of the Company, incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K, dated April 18,
2013 and filed with the SEC on April 22, 2013. |
|
|
|
4.18 |
|
Form of specimen certificate for Series I Convertible
Preferred Stock of the Company, incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K, dated February
6, 2014 and filed with the SEC on February 7, 2014. |
|
|
|
4.19 |
|
Rights Agreement, dated as of November 15, 2013,
between the Company and American Stock Transfer & Trust Company, LLC., incorporated by reference to Exhibit 1 to the Registration
Statement on Form 8-A filed with the SEC on November 15, 2013. |
|
|
|
4.20 |
|
Form of Series H Preferred Stock Certificate, incorporated
by reference to Exhibit 1 to the Registration Statement on Form 8-A filed with the SEC on November 15, 2013. |
|
|
|
10.1 |
|
Elite Pharmaceuticals, Inc. 2014 Equity Incentive
Plan, incorporated by reference to Appendix B to the Company’s Definitive Proxy Statement for its Annual Meeting of
Shareholders, filed with the SEC on April 3, 2014. |
|
|
|
10.2 |
|
Form of Confidentiality Agreement (corporate),
incorporated by reference to Exhibit 10.7 to the Form SB-2. |
|
|
|
10.3 |
|
Form of Confidentiality Agreement (employee), incorporated
by reference to Exhibit 10.8 to the Form SB-2. |
10.4 |
|
Product Development and Commercialization
Agreement, dated as of June 21, 2005, between the Company and IntelliPharmaceutics, Corp., incorporated by reference as Exhibit
10.1 to the Current Report on Form 8-K, dated June 21, 2005 and originally filed with the SEC on June 27, 2005, as amended
on the Current Report on Form 8-K/A filed September 7, 2005, as further amended by the Current Report on Form 8-K/A filed
December 7, 2005 (Confidential Treatment granted with respect to portions of the Agreement). |
|
|
|
10.5 |
|
Agreement, dated December 12, 2005, by and among
the Company, Elite Labs, and IntelliPharmaCeutics Corp., incorporated by reference as Exhibit 10.1 to the Current Report on
Form 8-K, dated December 12, 2005, and originally filed with the SEC on December 16, 2005, as amended by the Current Report
on Form 8-K/A filed March 7, 2006 (Confidential Treatment granted with respect to portions of the Agreement). |
|
|
|
10.6 |
|
Loan Agreement, dated as of August 15, 2005, between
New Jersey Economic Development Authority (“NJEDA”) and the Company, incorporated by reference to Exhibit 10.1
to the Current Report on Form 8-K, dated August 31, 2005 and filed with the SEC on September 6, 2005. |
|
|
|
10.7 |
|
Series A Note in the aggregate principal amount
of $3,660,000.00 payable to the order of the NJEDA, incorporated by reference to Exhibit 10.2 to the Current Report on Form
8-K, dated August 31, 2005 and filed with the SEC on September 6, 2005. |
|
|
|
10.8 |
|
Series B Note in the aggregate principal amount
of $495,000.00 payable to the order of the NJEDA, incorporated by reference to Exhibit 10.3 to the Current Report on Form
8-K, dated August 31, 2005 and filed with the SEC on September 6, 2005. |
|
|
|
10.9 |
|
Mortgage from the Company to the NJEDA, incorporated
by reference to Exhibit 10.4 to the Current Report on Form 8-K, dated August 31, 2005 and filed with the SEC on September
6, 2005. |
|
|
|
10.10 |
|
Indenture between NJEDA and the Bank of New York
as Trustee, dated as of August 15, 2005, incorporated by reference to Exhibit 10.5 to the Current Report on Form 8-K, dated
August 31, 2005 and filed with the SEC on September 6, 2005. |
|
|
|
10.11 |
|
Form of Securities Purchase Agreement, between
the Registrant and the signatories thereto, incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, dated
March 15, 2006 and filed with the SEC on March 16, 2006. |
|
|
|
10.12 |
|
Form of Registration Rights Agreement, between
the Registrant and signatories thereto, incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K, dated
March 15, 2006 and filed with the SEC on March 16, 2006. |
|
|
|
10.13 |
|
Form of Placement Agent Agreement, between the
Registrant and Indigo Securities, LLC, incorporated by reference as Exhibit 10.3 to the Current Report on Form 8-K, dated
March 15, 2006, and filed with the SEC on March 16, 2006. |
|
|
|
10.14 |
|
Financial Advisory Agreement between the Registrant
and Indigo Ventures LLC, incorporated by reference as Exhibit 10.1 to the Current Report on Form 8-K dated July 12, 2006 and
filed with the SEC on July 18, 2006. |
|
|
|
10.15 |
|
Product Collaboration Agreement between the Registrant
and ThePharmaNetwork LLC, incorporated by reference as Exhibit 10.1 to the Current Report on Form 8-K, dated November 10,
2006 and filed with the SEC on November 15, 2006. (Confidential Treatment granted with respect to portions of the Agreement). |
10.16 |
|
Strategic Alliance Agreement
among the Registrant, VGS Pharma (“VGS”) and Veerappan S. Subramanian (“VS”), incorporated
by reference as Exhibit 10(a) to the Current Report on Form 8-K, dated December 6, 2006 and filed with the SEC on December
12, 2006. |
|
|
|
10.17 |
|
Advisory Agreement, between the Registrant and
VS, incorporated by reference as Exhibit 10(b) to the Current Report on Form 8-K, dated December 6, 2006 and filed with the
SEC on December 12, 2006. |
|
|
|
10.18 |
|
Registration Rights Agreement between the Registrant,
VGS and VS, incorporated by reference as Exhibit 10(c) to the Current Report on Form 8-K, dated December 6, 2006 and filed
with the SEC on December 12, 2006. |
|
|
|
10.19 |
|
Employment Agreement between Novel Laboratories
Inc. (“Novel”) and VS, incorporated by reference as Exhibit 10(d) to the Current Report on Form 8-K, dated December
6, 2006 and filed with the SEC on December 12, 2006. |
|
|
|
10.20 |
|
Stockholders’ Agreement between Registrant,
VGS, VS and Novel, incorporated by reference as Exhibit 10(e) to the Current Report on Form 8-K, dated December 6, 2006 and
filed with the SEC on December 12, 2006. |
|
|
|
10.21 |
|
Form of Securities Purchase Agreement, between
the Registrant and the signatories thereto, incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, dated
April 24, 2007 and filed with the SEC on April 25, 2007. |
|
|
|
10.22 |
|
Form of Registration Rights Agreement, between
the Registrant and the signatories thereto, incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K, dated
April 24, 2007 and filed with the SEC on April 25, 2007. |
|
|
|
10.23 |
|
Form of Placement Agent Agreement, between the
Company and Oppenheimer & Company, Inc., incorporated by reference as Exhibit 10.3 to the Current Report on Form 8-K,
dated April 24, 2007 and filed with the SEC on April 25, 2007. |
|
|
|
10.24 |
|
Form of Securities Purchase Agreement, between
the Registrant and the signatories thereto, incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, dated
July 17, 2007 and filed with the SEC on July 23, 2007. |
|
|
|
10.25 |
|
Form of Registration Rights Agreement, between
the Registrant and the signatories thereto, incorporated by reference as Exhibit 10.2 to the Current Report on Form 8-K, dated
July 17, 2007 and filed with the SEC on July 23, 2007. |
|
|
|
10.26 |
|
Consulting Agreement, dated as of July 27, 2007,
between the Registrant and Willstar Consultants, Inc., incorporated by reference as Exhibit 10.1 to the Quarterly Report on
Form 10-Q for the period ending September 30, 2007 and filed with the SEC on November 14, 2007. |
|
|
|
10.27 |
|
Form of Securities Purchase Agreement, between
the Company and the signatories thereto, incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, dated
September 15, 2008 and filed with the SEC on September 16, 2008. |
|
|
|
10.28 |
|
Form of Placement Agent Agreement, between the
Company, ROTH Capital Partners, LLC and Boenning & Scattergood, Inc., incorporated by reference to Exhibit 10.3 to the
Current Report on Form 8-K, dated September 15, 2008 and filed with the SEC on September 16, 2008. |
|
|
|
10.29 |
|
Separation Agreement and General Release of Claims,
dated as of October 20, 2008, by and between the Company and Stuart Apfel, incorporated by reference to Exhibit 10.1 to the
Current Report on Form 8-K, dated October 15, 2008 and filed with the SEC on October 21, 2008. |
10.30 |
|
Consulting Agreement, dated
as of October 20, 2008, by and between the Company and Parallex Clinical Research, incorporated by reference to Exhibit 10.2
to the Current Report on Form 8-K, dated October 15, 2008 and filed with the SEC on October 21, 2008. |
|
|
|
10.31 |
|
Separation Agreement and General Release of Claims,
dated as of November 3, 2008, by and between the Company and Charan Behl, incorporated by reference to Exhibit 10.1 to the
Current Report on Form 8-K, dated October 28, 2008 and filed with the SEC on November 3, 2008. |
|
|
|
10.32 |
|
Consulting Agreement, dated as of November 3, 2008,
by and between the Company and Charan Behl, incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K, dated
October 28, 2008 and filed with the SEC on November 3, 2008. |
|
|
|
10.33 |
|
Separation Agreement and General Release of Claims,
dated as of November 5, 2008, by and between the Company and Bernard J. Berk, incorporated by reference to Exhibit 10.1 to
the Current Report on Form 8-K, dated November 6, 2008 and filed with the SEC on November 6, 2008. |
|
|
|
10.34 |
|
Compensation Agreement, dated as of December 1,
2008, by and between the Company and Jerry I. Treppel, incorporated by reference to Exhibit 10.1 to the Current Report on
Form 8-K, dated December 1, 2008 and filed with the SEC on December 4, 2008. |
|
|
|
10.35 |
|
Strategic Alliance Agreement, dated as of March
18, 2009, by and among the Company, Epic Pharma, LLC and Epic Investments, LLC, incorporated by reference to Exhibit 10.1
to the Current Report on Form 8-K, dated March 18, 2009 and filed with the SEC on March 23, 2009. |
|
|
|
10.36 |
|
Amendment to Strategic Alliance Agreement, dated
as of April 30, 2009, by and among the Company, Epic Pharma, LLC and Epic Investments, LLC, incorporated by reference to Exhibit
10.1 to the Current Report on Form 8-K, dated April 30, 2009 and filed with the SEC on May 6, 2009. |
|
|
|
10.37 |
|
Second Amendment to Strategic Alliance Agreement,
dated as of June 1, 2009, by and among the Company, Epic Pharma, LLC and Epic Investments, LLC, incorporated by reference
to Exhibit 10.1 to the Current Report on Form 8-K, dated June 1, 2009, and filed with the SEC on June 5, 2009. |
|
|
|
10.38 |
|
Third Amendment to Strategic Alliance Agreement,
dated as of Aug 18, 2009, by and among the Company, Epic Pharma LLC and Epic Investments, LLC, incorporated by reference to
Exhibit 10.3 to the Quarterly Report on Form 10-Q, for the period ending June 30, 2009 and filed with the SEC on August 19,
2009. |
|
|
|
10.39 |
|
Employment Agreement, dated as of November 13,
2009, by and between the Company and Chris Dick, , incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form
10-Q, for the period ending September 30, 2009 and filed with the SEC on November 16, 2009. |
|
|
|
10.40 |
|
Employment Agreement, dated as of November 13,
2009, by and between the Company and Carter J. Ward, incorporated by reference to Exhibit 10.2 to the Quarterly Report on
Form 10-Q, for the period ending September 30, 2009 and filed with the SEC on November 16, 2009. |
|
|
|
10.41 |
|
Elite Pharmaceuticals Inc. 2009 Equity Incentive
Plan, as adopted November 24, 2009, incorporated by reference to Exhibit 10.1 to the Registration Statement Under the Securities
Act of 1933 on Form S-8, dated December 18, 2009 and filed with the SEC on December 22, 2009. |
10.42 |
|
Stipulation of Settlement and
Release, dated as of June 25, 2010, by and among the Company, Midsummer Investment, Ltd., Bushido Capital Master Fund, LP,
BCMF Trustees, LLC, Epic Pharma, LLC and Epic Investments, LLC, incorporated by reference to Exhibit 10.1 to the Current Report
on Form 8-K, dated June 25, 2010 and filed with the SEC on July 1, 2010 |
|
|
|
10.43 |
|
Amendment Agreement, dated as of June 25, 2010,
by and among the Company, and the investors signatory thereto, incorporated by reference to Exhibit 10.2 to the Current Report
on Form 8-K, dated June 25, 2010 and filed with the SEC on July 1, 2010 |
|
|
|
10.44 |
|
Amendment Agreement, dated as of June 2010, by
and among the Company, Epic Pharma, LLC and Epic Investments, LLC, incorporated by reference to Exhibit 10.3 to the Current
Report on Form 8-K, dated June 25, 2010 and filed with the SEC on July 1, 2010 |
|
|
|
10.45 |
|
Asset Purchase Agreement dated as of May 18, 2010,
by and among Mikah Pharma LLC and the Company, incorporated by reference to Exhibit 10.4 to the Quarterly Report on Form 10-Q,
for the period ended September 30, 2010 and filed with the SEC on November 15, 2010. |
|
|
|
10.46 |
|
Asset Purchase Agreement, dated as of August 27,
2010, by and among Mikah Pharma LLC and the Company, incorporated by reference to Exhibit 10.5 to the Quarterly Report on
Form 10-Q, for the period ended September 30, 2010 and filed with the SEC on November 15, 2010 (Confidential Treatment granted
with respect to portions of the Agreement). |
|
|
|
10.47 |
|
Master Development and License Agreement, dated
as of August 27, 2010, by and among Mikah Pharma LLC and the Company incorporated by reference to Exhibit 10.6 to the Quarterly
Report on Form 10-Q, for the period ended September 30, 2010 and filed with the SEC on November 15, 2010 (Confidential Treatment
granted with respect to portions of the Agreement). |
|
|
|
10.48 |
|
Purchase Agreement, dated as of September 10, 2010,
by and among Epic Pharma LLC and the Company, incorporated by reference to Exhibit 10.7 to the Quarterly Report on Form 10-Q,
for the period ended September 30, 2010 and filed with the SEC on November 15, 2010 (Confidential Treatment granted with respect
to portions of the Agreement). |
|
|
|
10.49 |
|
License Agreement, dated as of September 10, 2010,
by and among Precision Dose Inc. and the Company, incorporated by reference to Exhibit 10.8 to the Quarterly Report on Form
10-Q, for the period ended September 30, 2010 and filed with the SEC on November 15, 2010 (Confidential Treatment granted
with respect to portions of the Agreement). |
|
|
|
10.50 |
|
Manufacturing and Supply Agreement, dated as of
September 10, 2010, by and among Precision Dose Inc. and the Company, incorporated by reference to Exhibit 10.9 to the Quarterly
Report on Form 10-Q, for the period ended September 30, 2010 and filed with the SEC on November 15, 2010 (Confidential Treatment
granted with respect to portions of the Agreement). |
|
|
|
10.51 |
|
Product Development Agreement between the Company
and Hi-Tech Pharmacal Co., Inc. dated as of January 4, 2011, incorporated by reference to Exhibit 10.1 to the Current Report
on Form 8-K, dated January 4, 2011 and filed with the SEC on January 10, 2011 (Confidential Treatment granted with respect
to portions of the Agreement). |
|
|
|
10.52 |
|
Settlement Agreement between the Company and ThePharmaNetwork,
LLC, dated as of March 11, 2011, incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, dated March
11, 2011 and filed with the SEC on March 17, 2011. |
|
|
|
10.53 |
|
Manufacturing & Supply Agreement between the
Company and Mikah Pharma LLC, dated as of June 1, 2011, incorporated by reference to Exhibit 10.70 to the Annual Report on
Form 10-K, for the period ended March, 31, 2011 and filed with the SEC on June 29, 2011 (Confidential Treatment granted with
respect to portions of the Agreement). |
10.54 |
|
Manufacturing & Supply Agreement
between the Company and ThePharmaNetwork, LLC, dated as of June 23, 2011, incorporated by reference to Exhibit 10.71 to the
Annual Report on Form 10-K, for the period ended March, 31, 2011 and filed with the SEC on June 29, 2011 (Confidential Treatment
granted with respect to portions of the Agreement). |
|
|
|
10.55 |
|
Amendment, dated as of November 1, 2011, to the
Master Development and License Agreement, dated as of August 27, 2010, by and amount Mikah Pharma LLC and the Company (Confidential
Treatment granted with respect to portions of the Agreement), incorporated by reference to Exhibit 10.1 to Quarterly Report
on Form 10-Q for three and nine months ended December 31, 2011. |
|
|
|
10.56 |
|
Settlement Agreement between the Company and ThePharmaNetwork,
LLC, dated as of March 11, 2011, incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, dated March
11, 2011 and filed with the SEC on March 17, 2011. |
|
|
|
10.57 |
|
Securities Purchase Agreement with Socius dated
December 30, 2011, incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on January
5, 2012. |
|
|
|
10.58 |
|
Amendment to Agreement with Socius dated February
28, 2012, incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K/A filed with the SEC February 29, 2012. |
|
|
|
10.59 |
|
Manufacturing & Supply Agreement between the
Company and Mikah Pharma LLC, dated as of June 1, 2011, incorporated by reference to Exhibit 10.70 to the Annual Report on
Form 10-K, for the period ended March, 31, 2011 and filed with the SEC on June 29, 2011 (Confidential Treatment granted with
respect to portions of the Agreement). |
|
|
|
10.60 |
|
Manufacturing & Supply Agreement between the
Company and ThePharmaNetwork, LLC, dated as of June 23, 2011, incorporated by reference to Exhibit 10.71 to the Annual Report
on Form 10-K, for the period ended March, 31, 2011 and filed with the SEC on June 29, 2011 (Confidential Treatment granted
with respect to portions of the Agreement). |
|
|
|
10.61 |
|
Amendment, dated as of November 1, 2011, to the
Master Development and License Agreement, dated as of August 27, 2010, by and amount Mikah Pharma LLC and the Company (Confidential
Treatment granted with respect to portions of the Agreement), incorporated by reference to Exhibit 10.1 to Quarterly Report
on Form 10-Q for three and nine months ended December 31, 2011. |
|
|
|
10.62 |
|
Treppel $500,000 Bridge Loan Agreement dated June
12, 2012, incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on June 13, 2012. |
|
|
|
10.63 |
|
December 5, 2012 amendment to the Treppel Bridge
Loan Agreement incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on December
10, 2012. |
|
|
|
10.64 |
|
Development And License Agreement between the Company
and a Hong Kong-based client dated March 16, 2012 incorporated by reference to Exhibit 10.77 to the Annual Report on Form
10-K filed with the SEC on June 29,2012 (Confidential Treatment granted with respect to portions of the Agreement). |
|
|
|
10.65 |
|
Letter Agreement between the Company and ThePharmaNetwork
LLC, dated September 21, 2012 incorporated by reference to Exhibit 10.6 to the Quarterly Report on Form 10-Q filed with the
SEC on November 14,2012 (Confidential Treatment granted with respect to portions of the Agreement). |
10.66 |
|
Purchase Agreement between the
Company and Lincoln Park Capital LLC dated April 19, 2013 , incorporated by reference to Exhibit 10.1 to the Current Report
on Form 8-K, dated April 18, 2013 and filed with the SEC on April 22, 2013. |
|
|
|
10.67 |
|
Registration Rights Agreement between the Company
and Lincoln Park Capital LLC dated April 19, 2013 , incorporated by reference to Exhibit 10.2 to the Current Report on Form
8-K, dated April 18, 2013 and filed with the SEC on April 22, 2013. |
|
|
|
10.68 |
|
August 1, 2013 Employment Agreement with Nasrat
Hakim, incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K, dated August 1, 2013 and filed with the
SEC on August 5, 2013. |
|
|
|
10.69 |
|
August 1, 2013 Mikah LLC Asset Purchase Agreement,
incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, dated August 1, 2013 and filed with the SEC on
August 5, 2013. (Confidential Treatment granted with respect to portions of the Agreement). |
|
|
|
10.70 |
|
Revised Schedule 1 to the August 1, 2013 Mikah
LLC Asset Purchase Agreement (revised to remove confidential treatment with regard to one item set forth thereon) incorporated
by reference to Exhibit 10.12 to the Quarterly Report on Form 10-Q for the period ending December 31, 2013, filed with the
SEC on February 14, 2014. |
|
|
|
10.71 |
|
August 1, 2013 Secured Convertible Note from the
Company to Mikah Pharma LLC., incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K, dated August 1,
2013 and filed with the SEC on August 5, 2013. |
|
|
|
10.72 |
|
August 1, 2013 Security Agreement from the Company
to Mikah Pharma LLC., incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K, dated August 1, 2013 and
filed with the SEC on August 5, 2013. |
|
|
|
10.73 |
|
Termination of June 2011, Manufacturing and Supply
Agreement between Mikah Pharma LLC and the Company, incorporated by reference to Exhibit 10.15 of the Quarterly Report on
Form 10-Q for the period ending December 31, 2014 and filed with the SEC on February 14, 2014. |
|
|
|
10.74 |
|
October 15, 2013 Hakim Credit Line Agreement, incorporated
by reference to Exhibit 10.16 to the Quarterly Report on Form 10-Q for the period ended September 30, 2013. |
|
|
|
10.75 |
|
October 2, 2013 Manufacturing and Licensing Agreement
with Epic Pharma LLC, incorporated by reference to Exhibit 10.17 to the Amended Quarterly Report on Form 10-Q/A for the period
ended September 30, 2013 and filed with the SEC on April 25, 2014. Confidential Treatment granted with respect to portions
of the Agreement. |
|
|
|
10.76 |
|
August 19, 2013, Master Services Agreement with
Camargo Pharmaceutical Services, LLC, incorporated by reference to Exhibit 10.18 to the Quarterly Report on Form 10-Q for
the period ended September 30, 2013 and filed with the SEC on November 14, 2013 |
|
|
|
10.77 |
|
November 21, 2013 Unsecured Convertible Note from
the Company to Jerry Treppel, incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, dated November
26, 2013 and filed with the SEC on November 26, 2013. |
|
|
|
10.78 |
|
February 7,2014 Amendment to Secured Convertible
Note from the Company to Mikah, incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, dated February
7, 2014 and filed with the SEC on February 7, 2014. |
10.79 |
|
February 7, 2014 Amendment to
Secured Convertible Note from the Company to Jerry Treppel, incorporated by reference to Exhibit 10.2 to the Current Report
on Form 8-K, dated February 7, 2014 and filed with the SEC on February 7, 2014. |
|
|
|
10.80 |
|
Purchase Agreement between the Company and Lincoln
Park Capital LLC dated April 10, 2014 , incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, dated
April 10, 2014 and filed with the SEC on April 14, 2014. |
|
|
|
10.81 |
|
Registration Rights Agreement
between the Company and Lincoln Park Capital LLC dated April 10, 2014 , incorporated by reference to Exhibit 10.1 to the
Current Report on Form 8-K, dated April 10, 2014 and filed with the SEC on April 14, 2014. |
|
|
|
10.82** |
|
October 20, 2014 Employment
Agreement with Dr. G. Kenneth Smith. |
|
|
|
31.1** |
|
Certification of Chief Executive Officer pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002 |
|
|
|
31.2** |
|
Certification of Chief Financial Officer pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002 |
|
|
|
32.1** |
|
Certification of Chief Executive Officer pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002 |
|
|
|
32.2** |
|
Certification of Chief Financial Officer pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002 |
|
|
|
101 |
|
The following materials from Elite Pharmaceuticals’
Quarterly Report on Form 10-Q, related to the audited financial statements as and for the fiscal years ended March 31, 2014
and 2013, formatted in eXtensible Business Reporting Language (“XBRL”): (i) the Consolidated Statements of Income;
(ii) the Consolidated Balance Sheets; (iii) the Consolidated Statements of Cash Flows; and (iv) Notes to Consolidated Financial
Statements |
* On January 5, 2011, the Company
changed its domicile from Delaware to Nevada. All corporate documents from Delaware have been superseded by Nevada corporate documents
filed or incorporated by reference herein. All outstanding Delaware securities certificates are now outstanding Nevada securities
certificates.
** Filed herewith.
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.
|
|
ELITE PHARMACEUTICALS,
INC. |
|
|
|
Date: |
November 14, 2014 |
|
/s/
Nasrat Hakim |
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Nasrat Hakim |
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Chief Executive Officer |
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(Principal Executive Officer) |
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Date: |
November 14, 2014 |
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/s/
Carter J. Ward |
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Carter J. Ward |
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Chief Financial Officer |
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(Principal Financial
and Accounting Officer) |
Exhibit 10.82
EMPLOYMENT AGREEMENT
This agreement (“Agreement”)
is made on October 20, 2014, by and between Elite Pharmaceuticals, Inc., a Nevada corporation (“Company”), and
George Kenneth Smith (“Executive”).
WHEREAS, Company desires
Executive to be General Counsel (“General Counsel”) and Executive desires to provide employment services to Company
in such a capacity and in accordance with the terms of this Agreement.
In consideration of
the mutual promises and considerations herein contained, the parties hereby agree as follows:
AGREEMENT:
1. Employment.
1.1 Company hereby
employs Executive in the capacity of General Counsel reporting to the CEO (the “CEO”) effective October 20, 2014. Executive
hereby accepts such employment, subject to the terms herein contained. In such capacity Executive’s duties shall include
leading strategic and tactical legal initiatives, providing senior management with effective advice on legal strategies and their
implementation; managing the legal function; and obtaining and overseeing the work of outside counsel; and negotiating critical
business contracts. The General Counsel shall report to and receive direction from the CEO and shall perform such functions and
duties as are required by the Company’s CEO (collectively the “Duties”). Executive shall devote such time and
effort to his Duties as are reasonably necessary for him to perform such Duties in a competent and professional manner.
2. Compensation
and Benefits.
2.1. Salary.
During the Term (as defined below), Company shall pay to Executive a base salary at the annual rate of Four Hundred Thousand Dollars
($400,000) (the “Salary”) which shall be payable in Cash (the “Cash”) and Stocks Compensation
portion (the “Stock Compensation”). The Cash portion of the Salary shall be one hundred and fifty thousand dollars
($150,000) and shall be paid in accordance with the Company’s payroll practices. The
Stock Compensation portion of the Salary shall be two hundred and fifty thousand dollars ($250,000) and shall be earned in equal
increments, on an annual basis, with amounts accruing only while Executive is employed by the Company. The Stock Compensation shall
be paid annually on or before March 31st via the issuance of shares of $0.001 par value common stock (the “ELTP
Shares”) of Elite Pharmaceuticals Inc. (“Elite”). The number of ELTP Shares to be issued in payment of the Stock
Compensation is calculated as the quotient of the annual amount of Stock Compensation accrued as of the December 31st
immediately preceding such issuance of ELTP Shares divided by the simple average of the daily closing price (as posted on Google,
Yahoo, Wall Street Journal or any similar data source) of each trading day during which Executive was employed by the Company during
the prior year. The ELTP Shares will be registered on Form S-8, if deemed appropriate by Elite’s Board of Directors.
2.2 Discretionary
Bonuses. In addition to the Annual Bonus, the CEO may award discretionary bonuses from time to time.
2.3 Stock
Options. Upon the approval by the Board of Directors of Elite, you will be granted stock options to purchase one million five
hundred thousand (1,500,000) ELTP Shares. The options will vested over a three year period, commencing one year from the date of
issuance. The stock purchase price will be equal to the closing stock price on your first day of employment (October 20, 2014).
2.4. Executive
Benefits.
2.4.1. Expenses.
The Company shall promptly reimburse Executive for all reasonable and documented travel, entertainment and other business expenses
actually and properly incurred by him in relation to Company’s business. No such expense reimbursement shall be allowed with
regard to such expenses that exceed $5,000 unless such expenses have been pre-approved by Company in writing. Such expense reimbursement
shall include reasonable hotel accommodations and/or housing incurred by Executive specifically related to his duties under this
Agreement against receipts or other appropriate written evidence of such expenditures as required by the appropriate Internal Revenue
Service regulations or by Company.
2.4.2. Company
Plans. Executive shall be entitled to participate in such employee benefit plans and programs as Company may from time to time
generally offer or provide to senior executive officers of Company, including medical and retirement plans. Nothing in the foregoing
shall limit or restrict Company’s discretion to amend, revise or terminate any benefit or plan without notice to or consent
of Executive.
2.4.3. Vacation.
Executive shall be entitled to four (4) weeks of paid vacation per Fiscal Year, pro-rated for periods of less than a full
Fiscal Year.
3. Employment
Term; Termination.
3.1. Employment
Term. Executive’s employment hereunder shall commence on October 20, 2014 (the “Commencement Date”).
3.2. Events of
Termination. Executive’s employment may be terminated as follows:
3.2.1 Termination
for Cause. This Agreement may be terminated by Company for Cause. For purposes of this Agreement, “Cause”
justifying the termination of this Agreement by Company is defined as: (1) failure or refusal to perform the services required
hereunder; (2) a material breach by Executive of any of the terms of this Agreement; or (3) Executive’s conviction of a crime
that either results in imprisonment or involves embezzlement, dishonesty, or activities injurious to Company or its reputation.
Following termination pursuant to this subsection, Company’s only obligation to Executive shall be to pay to Executive all
accrued Annual Salary and all accrued vacation time (both payable in Stock computed in the same manner as set forth in Section
2.1) and any reasonable and necessary business expenses incurred by Executive in connection with his duties, all to the Date of
Termination and payable in a lump sum, less applicable deductions and withholdings, as soon as administratively practicable following
Executive’s termination, but in no event later than March 15th following the end of the calendar year in which
such termination occurs. Notwithstanding the foregoing, any expense reimbursement will take place no later than the time required
under Section 409A.
3.2.2 Disability.
This Agreement may be terminated by Company upon at least thirty (30) days’ written notice if Executive is prevented by illness,
accident or other disability (mental or physical) from performing the essential functions of the position for one or more periods
cumulatively totaling three (3) months during any consecutive twelve (12) month period. In the event this Agreement is terminated
pursuant to this subsection, Company shall pay to Executive all accrued Salary, pro rata Annual Bonus, and all accrued vacation
time (all payable in Stock computed in the same manner as set forth in Section 2.1) and any reasonable and necessary business expenses
incurred by Executive in connection with his duties, all to the Date of Termination and payable in a lump sum, less applicable
deductions and withholdings. In addition, Company shall pay to Executive severance payments in an amount equal to one (1) year
of Executive’s Salary, payable in Stock computed in the same manner as set forth in Section 2.1 and payable in a lump sum,
less applicable deductions and withholdings, as soon as administratively practicable (but in no event later than 60 days) following
Executive’s termination, but in no event later than March 15th following the end of the calendar year in which
such termination occurs (“Disability Severance Payments”). Disability Severance Payments made by Company to
Executive pursuant to this Section 3.2.2 are conditioned on the Executive signing a Confidential Severance Agreement and Release.
Notwithstanding the foregoing, any expense reimbursement will take place no later than the time required under Section 409A
3.2.4 Death.
This Agreement shall be automatically terminated in the event of Executive’s death during the Term of employment. In the
event this Agreement terminates upon Executive’s death, Company shall pay Executive’s estate or beneficiary, as applicable,
all accrued Salary, pro-rated Annual Bonus and all accrued vacation time (both payable in Stock computed in the same manner as
set forth in Section 2.1) and any reasonable and necessary business expenses incurred by Executive in connection with his duties,
all to the Date of Termination and all payable in a lump sum, less applicable deductions and withholdings, as soon as administratively
practicable (but in no event later than 60 days) following Executive’s termination, but in no event later than March 15th
following the end of the calendar year in which such termination occurs.
3.2.5 Without
Cause. This Agreement may be terminated by Company without Cause provided that Company pays Executive
the following:
(i) Company
shall pay Executive severance payments, payable in cash and Stock computed in the same manner as set forth in Section 2.1 (the
“Severance Payments”) in an amount equal to one years’ Salary at the rate in effect upon the Date of Termination,
less applicable deductions and withholdings, as soon as administratively practicable following Executive’s termination. In
addition, Company shall pay to Executive all accrued vacation time and any reasonable and necessary business expenses incurred
by Executive in connection with his duties, all to the Date of Termination and payable in a lump sum, less applicable deductions
and withholdings, as soon as administratively practicable (but in no event later than 60 days) following Executive’s termination.
3.2.6 Resignation.
This Agreement may be terminated by Executive for any reason or no reason at all by giving notice to Company of Executive’s
resignation at least sixty (60) days prior to the effective resignation date. Following termination pursuant to this subsection
3.2.6, Company’s only obligation to Executive shall be to pay to Executive all accrued Salary and all accrued vacation time
(both payable in Stock computed in the same manner as set forth in Section 2.1) and any reasonable and necessary business expenses
incurred by Executive in connection with his duties, all to the Date of Termination and payable in a lump sum, less applicable
deductions and withholdings no later than March 15th following the end of the calendar year in which such termination
occurs.
3.2.7. Termination
Upon Change of Control. Upon “Change of Control” as defined in section 3.3.1, Executive is entitled to a payment
in an amount equal to one (1) year Annual Salary in effect upon the Date of Termination, less applicable deductions and withholdings,
payable in Stock computed in the same manner as set forth in Section 2.1 as soon as administratively practicable (but in no event
later than 60 days) following Executive’s termination, but in no event later than March 15th following the end
of the calendar year in which such termination occurs. Executive also shall be entitled to a continuation of his Executive benefits
for a period of (1) year from the Date of Termination. In addition, Company shall pay to Executive all accrued Annual Salary, pro-rated
Annual Bonus and all accrued vacation time (both payable in Stock computed in the same manner as set forth in Section 2.1) and
any reasonable and necessary business expenses incurred by Executive in connection with his duties, all to the Date of Termination
and payable in a lump sum, less applicable deductions and withholdings, as soon as administratively practicable (but in no event
later than 60 days) following Executive’s termination, but in no event later than March 15th following the end
of the calendar year in which such termination occurs. In addition any securities of the Company owned by Executive and subject
to vesting schedules shall immediately vest.
3.2.8 Section
409A Compliance.
(i) All
in-kind benefits provided and expenses eligible for reimbursement under this Agreement shall be provided by the Company or incurred
by the Executive during the time periods set forth in this Agreement. All reimbursements shall be paid as soon as administratively
practicable, but in no event shall any reimbursement be paid after the last day of the taxable year following the taxable year
in which the expense was incurred. The amount of in-kind benefits provided or reimbursable expenses incurred in one taxable year
shall not affect the in-kind benefits to be provided or the expenses eligible for reimbursement in any other taxable year. Such
right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit.
(ii) To
the extent that any of the payments or benefits provided for in Section 3 are deemed to constitute non-qualified deferred compensation
benefits subject to Section 409A of Code, the following interpretations apply: (A) Any termination of the Executive’s employment
triggering payment of benefits under Section 3 must constitute a “separation from service” under Section 409A(a)(2)(A)(i)
of the Code and Treas. Reg. §1.409A-1(h) before distribution of such benefits can commence. To the extent that the termination
of the Executive’s employment does not constitute a separation of service under Section 409A(a)(2)(A)(i) of the Code and
Treas. Reg. §1.409A-1(h) (as the result of further services that are reasonably anticipated to be provided by the Executive
to the Company or any of its affiliates, at the time the Executive’s employment terminates), any benefits payable under Section
3 that constitute deferred compensation under Section 409A of the Code shall be delayed until after the date of a subsequent event
constituting a separation of service under Section 409A(a)(2)(A)(i) of the Code and Treas. Reg. §1.409A-1(h). For purposes
of clarification, this Section 3.2.8(ii) shall not cause any forfeiture of benefits on the Executive’s part, but shall only
act as a delay until such time as a “separation from service” occurs. (B) If the Executive is a “specified employee”
(as that term is used in Section 409A of the Code and regulations and other guidance issued thereunder) on the date his separation
from service becomes effective, any benefits payable under Section 3 that constitute non-qualified deferred compensation under
Section 409A of the Code shall be delayed until the earlier of (1) the business day following the six-month anniversary of the
date his separation from service becomes effective, and (2) the date of the Executive’s death, but only to the extent necessary
to avoid such penalties under Section 409A of the Code. On the earlier of (3) the business day following the six-month anniversary
of the date his separation from service becomes effective, and (4) the Executive’s death, the Company shall pay the Executive
in a lump sum the aggregate value of the non-qualified deferred compensation that the Company otherwise would have paid the Executive
prior to that date under Section 5(b) of this Agreement. (C) It is intended that each installment of the payments and benefits
provided under Section 3 shall be treated as a separate “payment” for purposes of Section 409A of the Code; and neither
the Company nor the Executive shall have the right to accelerate or defer the delivery of any such payments or benefits except
to the extent specifically permitted or required by Section 409A of the Code.
(iii) It
is the intention of the parties that payments or benefits payable under this Agreement not be subject to the additional tax imposed
pursuant to Section 409A of the Code. To the extent such potential payments or benefits could become subject to such Section, the
parties shall cooperate to amend this Agreement with the goal of giving Executive the economic benefits described herein in a manner
that does not result in such tax being imposed.
3.2.9. Termination
of Employment. This Agreement shall terminate simultaneously with the termination of Executive’s employment for any reason;
provided, that the covenants set forth in Sections 3, 4, 5, 6, 7 and 8 of this Agreement shall survive the termination of
this Agreement to the extent provided in such Sections.
3.3. Definitions.
3.3.1. “Change
of Control” Defined. The term “Change of Control” shall mean (a) the acquisition of Company pursuant
to a consolidation of Company with, or merger of Company with or into, any other Person with the result of which the holders of
Company’s voting stock immediately prior to such transaction hold less than fifty (50%) percent of the combined voting power
after giving effect to such transaction; (b) the sale of all or substantially all of the assets or capital stock of Company to
any other Person; or (c) securities of Company representing greater than fifty (50%) percent of the combined voting power of Company’s
then outstanding voting securities are acquired by a Person, or group of related Persons, in a single transaction or series of
related transactions.
3.3.2. “Notice
of Termination” Defined. “Notice of Termination” means a written notice that indicates the specific
termination provision relied upon by Company or Executive.
3.3.3. “Date
of Termination” Defined. “Date of Termination” means such date as Executive’s employment expires
as written in the Notice of Termination.
5. Proprietary
Information.
5.1 Executive
represents and warrants to Company that (i) Executive is not subject to any limitation or agreement restricting employment by Company
or performance of Executive’s Duties hereunder, and (ii) neither Executive nor any third party has any right or claim to
Executive’s work produced on behalf of Company or using the property, personnel, or facilities of Company. Executive shall
not misappropriate proprietary rights of Company or any third party.
5.2 Executive
further agrees not to make, use, disclose to any third party, or permit to be made, used, or disclosed, any records, plans, papers,
articles, notes, memoranda, reports, lists, records, drawings, sketches, specifications, software programs, data, or other materials
of any nature relating to any matter within the scope of the business of Company or concerning any of its dealings or affairs (“Materials”),
whether or not developed, in whole or in part, by Executive and whether or not embodying Confidential Information (defined below),
otherwise than for the benefit of Company. Executive shall not, on and after the Date of Termination, use, disclose, or permit
to be used or disclosed, any such Materials, it being agreed that all such Materials shall be and remain the sole and exclusive
property of Company. Immediately upon the Date of Termination, Executive shall deliver all such Materials, and all copies thereof,
to Company, at its designated office.
6. Non-Competition;
Non-Solicitation; Anti-Raiding; Non-Disparagement. Without the prior written approval of the CEO, Executive shall not, directly
or indirectly, during his employment and until the end of one (1) year after the Date of Termination (however such termination
occurs, including, without limitation, termination pursuant to Section 3.2):
6.1 Solicit,
offer employment to, otherwise attempt to hire, or assist in the hiring of any employee or officer of Company or any of its Affiliates;
(ii) encourage, induce, assist or assist others in inducing any such person to terminate his or her employment with Company
or any of its Affiliates; or (iii) in any way interfere with the relationship between Company or any of its Affiliates and
their employees; or
6.2 Make
any public statement or perform or do any other act prejudicial or injurious to the reputation or goodwill of Company or any of
its Affiliates or otherwise interfere with the business of Company or any of its Affiliates.
7. Confidentiality.
7.1 The
term “Confidential Information” shall include, but not be limited to confidential information and the workpapers, concepts,
formulas, techniques, strategies, components, programs, reports, studies, memoranda, correspondence, materials, manuals, records,
data, technology, financial information, products, plans, research, service, design information, procedures, methods, documentation,
policies, pricing, billing, customer lists and leads, and any other technical data, information and know-how which relates to products
or customers or potential customers or suppliers or potential suppliers or are otherwise useful in the parties' businesses, and
which one of the parties considers proprietary and desires to maintain confidential. Confidential Information is entitled to protection
hereunder whether or not such information is oral or written, whether or not such information is identified as such by an appropriate
stamp or marking on each document provided or, if orally first provided, identified at that time as proprietary or confidential.
In addition, Confidential Information shall include information developed by the Executive in the performance of his Duties under
this Agreement. All such Confidential Information is extremely valuable and is intended to be kept secret to Company; is the sole
and exclusive property of Company or its Affiliates; and, is subject to the restrictive covenants set forth herein. The term Confidential
Information shall not include any information generally available to the public or publicly disclosed by Company (other than by
the act or omission of Executive), information disclosed to Executive by a third party under no duty of confidentiality to Company
or its Affiliates, information that Executive can demonstrate was in his possession prior to the date of this Agreement or Executive
can demonstrate was independently developed by him without the use or assistance of Confidential Information, or information required
by law or court order to be disclosed by Executive.
7.2 Executive
shall not, without Company’s prior written approval, use, disclose, or reveal to any person or entity any of Company’s
Confidential Information, except as required in the ordinary course of performing duties hereunder. Executive shall not use or
attempt to use any Confidential Information in any manner which has the possibility of injuring or causing loss, whether directly
or indirectly, to Company or any of its Affiliates.
7.3 In
the event that Executive’s employment with Company is terminated for any reason whatsoever, he shall return to Company, promptly
upon Company’s written request therefore, any documents, photographs, tapes, discs, memory devices, and other property containing
Confidential Information which were received by him during his employment, without retaining copies thereof.
8 Assignment
of Intellectual Property.
8.1. Executive
shall promptly disclose to Company any and all Inventions (as defined below). Executive shall promptly communicate to Company all
information, details and data pertaining to any Inventions in such form as Company requests. Executive agrees that Inventions,
patents and patent applications are the property of Company, and any and all rights, titles or interests in and to Inventions,
patents or patent applications which Executive may have in any and every jurisdiction are hereby assigned in full. Whenever Executive
is requested to do so by Company, during or after the Term, Executive shall, at the Company’s sole cost and expense, promptly
execute and deliver any and all applications, assignments or other documents or instruments reasonably deemed necessary or advisable
by Company to apply for and obtain Letters Patent of the United States or any foreign country or to otherwise protect, confirm
or establish Company’s full and exclusive interests in any Inventions. The obligations set forth in this Section 8.1 shall
be binding upon the successors, assigns, executors, administrators and other legal representatives of Executive.
8.2 Any
and all Works for Hire (as defined below) shall be considered “works made for hire” under the copyright laws of the
United States or property of Company under applicable federal, state, local and foreign trademark laws (as appropriate). Executive
shall promptly communicate to Company any and all Works for Hire, and any and all information, details and data pertaining to any
Works for Hire, in such form as Company requests. To the extent that Works for Hire fail to qualify as (A) “works made for
hire” under the copyright laws of the United States or any other jurisdiction or (B) property of Company under applicable
federal, state, local or foreign trademark laws, Executive hereby assigns each Work for Hire and all right, title and interest
therein in any and every jurisdiction to Company. Whenever Executive is requested to do so by Company, during or after the Term,
Executive shall, at the Company’s sole cost and expense, promptly execute and deliver any and all applications, assignments
or other documents or instruments reasonably deemed necessary or advisable by Company to apply for and confirm and effectuate full
and exclusive ownership of Works for Hire in Company, including, but not limited to, ownership of any moral rights under the copyright
law of any nation, or any other rights under the intellectual property laws of any nation. The obligations set forth in this Section
8.2 shall be binding upon the successors, assigns, executors, administrators and other legal representatives of Executive.
8.3 If
a court declares that any term or provision of this Section 8 is invalid or unenforceable, the parties to this Agreement agree
that the court making the determination of invalidity or unenforceability shall have the power to reduce the scope, duration or
area of the term or provision, to delete specific words or phrases, or to replace any invalid or unenforceable term or provision
with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable
term or provision, and this Agreement shall be enforceable as so modified.
8.4 Definitions.
8.4.1 “Inventions”
Defined. “Inventions” means any and all inventions, discoveries, improvements, patent, copyrights and/or
other property rights, whether or not patented or patentable made, conceived, created, developed or contributed to by Executive
during the Term which are (i) directly or indirectly related to the business, operations or activities of the Company or any of
its subsidiaries or affiliates, (ii) directly or indirectly related to Executive’s employment by, or performance of other
services (including as a director, manager, officer, advisor, agent, representative, consultant or other independent contractor)
for, the Company or any of its Affiliates, or (iii) based upon Confidential Information.
8.4.2 “Work
for Hire” Defined. “Work for Hire” means any and all sales approaches, sales material, training material,
computer software, documentation, other copyrightable works or any other intellectual property (including, but not limited to,
materials or services subject to trademark or service mark registration, but excluding Inventions) made, conceived, created, developed
or contributed to by Executive during the Term and which are (i) directly or indirectly related to the business, operations or
activities of the Company or any of its Affiliates, (ii) directly or indirectly related to Executive’s employment by, or
performance of other services (including as a director, manager, officer, advisor, agent, representative, consultant or other independent
contractor) for, the Company or any of its Affiliates, or (iii) based upon Confidential Information.
9. Acknowledgments;
Equitable Remedies. Executive acknowledges that the covenants contained in Sections 4, 5, 6, 7 and 8, including those related
to duration, geographic scope, and the scope of prohibited conduct, are reasonable and necessary to protect the legitimate interests
of Company. He further acknowledges that the covenants contained in Sections 4, 5, 6, 7 and 8 are designed, intended, and necessary
to protect, and are reasonably related to the protection of, Company’s proprietary information, to which he will be exposed
and with which he will be entrusted. Specifically, without limitation, Executive is entrusted with trade secrets regarding: Inventions,
the strategic planning initiatives; business development plans; budgets; financial information; management training; future business
plans; and operational strategies and procedures. Executive understands that any breach of Sections 5 or 7 will also constitute
a misappropriation of Company’s proprietary rights, and may constitute a theft of Company’s trade secrets under applicable
local, state, and federal statutes, and will result in a claim for injunctive relief, damages, and/or criminal sanctions and penalties
against Executive by Company, and possibly others. Executive acknowledges that any breach of Sections 4, 5, 6, 7 or 8 will cause
Company immediate and irreparable injury and damage, for which monetary relief would be inadequate or difficult to quantify. Company
will be entitled to, in addition to all other remedies available to it, injunctive relief and specific performance to prevent a
breach and to secure the enforcement of Sections 4, 5, 6, 7 or 8. Executive further acknowledges that the covenants set forth in
Sections 4, 5, 6, 7 and 8 shall survive the Date of Termination in accordance with their terms
10. Miscellaneous
Provisions.
10.1 Severability.
If, in any jurisdiction, any term or provision hereof is determined to be invalid or unenforceable, (a) the remaining terms and
provisions hereof shall be unimpaired; (b) any such invalidity or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such term or provision in any other jurisdiction; and (c) the invalid or unenforceable term or provision shall,
for purposes of such jurisdiction, be deemed replaced by a term or provision that is valid and enforceable and that comes closest
to expressing the intention of the invalid or unenforceable term or provision.
10.2 Execution
in Counterparts. This Agreement may be executed in one or more counterparts, and by the two parties hereto in separate counterparts,
each of which shall be deemed to be an original and all of which taken together shall constitute one and the same agreement (and
all signatures need not appear on any one counterpart), and this Agreement shall become effective when one or more counterparts
has been signed by each of the parties hereto and delivered to each of the other parties hereto. This Agreement, once executed
by a Party, may be delivered to the other Party hereto by facsimile or electronic transmission of a copy of this Agreement bearing
the signature of the Party so delivering this Agreement. A faxed or electronically delivered signature shall have the same legally
binding effect as an original signature.
10.3. Notices.
All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed duly given upon receipt
when delivered by hand, overnight delivery or facsimile (with confirmed delivery), or three (3) business days after posting, when
delivered by registered or certified mail or private courier service, postage prepaid, return receipt requested, as follows:
If to Company, to:
Elite Pharmaceuticals, Inc.
165 Ludlow Avenue
Northvale, New Jersey
Facsimile No.: (201) 391-7693
Attn: CEO
If to Executive, to:
George Kenneth Smith
or to such other address(es) as a party
hereto shall have designated by like notice to the other parties hereto.
10.4. Amendment.
No provision of this Agreement may be modified, amended, waived or discharged in any manner except by a written instrument executed
by both Company and Executive.
10.5. Entire
Agreement. Except as specifically provided herein, this Agreement constitutes the entire agreement of the parties hereto
with respect to the subject matter hereof, and supersedes all prior agreements and understandings of the parties hereto,
oral or written. Company and Executive shall execute and deliver all such further documents as may be necessary to carry out the
intent of the preceding sentence.
10.6. Applicable
Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New Jersey applicable to
contracts made and to be wholly performed therein.
10.7. Headings.
The headings contained herein are for the sole purpose of convenience of reference, and shall not in any way limit or affect the
meaning or interpretation of any of the terms or provisions of this Agreement.
10.8. Binding
Effect; Successors and Assigns. Executive may not delegate any of his duties or assign any of his rights hereunder. This Agreement
shall inure to the benefit of, and be binding upon, the parties hereto and their respective heirs, legal representatives and beneficiaries,
successors and permitted assigns. Company shall require any successor (whether direct or indirect and whether by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or assets of Company, by an agreement in form and substance
reasonably satisfactory to Executive, to expressly assume and agree to perform this Agreement in the same manner and to the same
extent that Company would be required to perform if no such succession had taken place.
10.9. Waiver.
The failure of either of the parties hereto to at any time enforce any of the provisions of this Agreement shall not be deemed
or construed to be a waiver of any such provision, nor to in any way affect the validity of this Agreement or any provision
hereof or the right of either of the parties hereto thereafter to enforce each and every provision of this Agreement. No waiver
of any breach of any of the provisions of this Agreement shall be construed or deemed to be a waiver of any other or subsequent
breach.
10.10. Capacity,
etc. Each of Executive and Company hereby represents and warrants to the other that, as the case may be: (a) he or it has full
power, authority and capacity to execute and deliver this Agreement and to perform his or its obligations hereunder; (b)
such execution, delivery and performance shall not (and with the giving of notice or lapse of time or both would not) result in
the breach of any agreements or other obligations to which he or it is a party or he or it is otherwise bound or violate any law;
and (c) this Agreement is his or its valid and binding obligation enforceable in accordance with its terms.
10.11. Enforcement;
Jurisdiction. If any party institutes legal action to enforce or interpret the terms and conditions of this Agreement, the
prevailing party shall be awarded reasonable attorneys’ fees at all trial and appellate levels and the expenses and
costs incurred by such prevailing party in connection therewith. Any legal action, suit or proceeding, in equity or at law, arising
out of or relating to this Agreement shall be instituted exclusively in the State or Federal courts located in the State of New
Jersey and each party agrees not to assert, by way of motion, as a defense or otherwise, in any such action, suit or proceeding,
any claim that such party is not subject personally to the jurisdiction of any such court, that the action, suit or proceeding
is brought in an inconvenient forum, that the venue of the action, suit or proceeding is improper or should be transferred, or
that this Agreement or the subject matter hereof may not be enforced in or by any such court. Each party further irrevocably submits
to the jurisdiction of any such court in any such action, suit or proceeding. Any and all service of process and any other notice
in any such action, suit or proceeding shall be effective against any party if given personally or by registered or certified mail,
return receipt requested or by any other means of mail that requires a signed receipt, postage prepaid, mailed to such party as
herein provided. Nothing herein contained shall be deemed to affect or limit the right of any party to serve process in any other
manner permitted by applicable law.
10.12. Advice
of Counsel. Executive represents and warrants that he has had full opportunity to seek advice and representation by independent
counsel of his own choosing in connection with the interpretation, negotiation and execution of this Agreement.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, this
Agreement has been executed and delivered by the parties hereto as of the date first above written.
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Elite Pharmaceuticals, Inc. |
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By: |
s/ Nasrat Hakim |
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Name: Nasrat Hakim
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Title: President and CEO |
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By: |
s/ George Kenneth Smith |
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Name: George Kenneth Smith |
Exhibit 31.1
CERTIFICATION
I,
Nasrat Hakim, certify that:
| 1. | I have reviewed
this Quarterly Report on Form 10-Q for the quarter ended September 30, 2014 of Elite
Pharmaceuticals, Inc. (the “Registrant”); |
| 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 report; |
| 3. | Based on
my knowledge, the financial statements, and other financial information included in this
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 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)) and
internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f)
and 15d-15(f)) 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) | Designed
such internal control over financial reporting, or caused such internal control over
financial reporting to be designed under our supervision, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting principles; |
| (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. |
| 5. | The Registrant’s
other certifying officer 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: |
November 14,
2014 |
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/s/
Nasrat Hakim |
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Nasrat Hakim |
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Chief Executive Officer |
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(Principal Executive
Officer) |
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Exhibit
31.2
CERTIFICATION
I,
Carter J. Ward, certify that:
| 1. | I have reviewed
this Quarterly Report on Form 10-Q for the quarter ended September 30, 2014 of Elite
Pharmaceuticals, Inc. (the “Registrant”); |
| 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 report; |
| 3. | Based on
my knowledge, the financial statements, and other financial information included in this
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 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)) and
internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f)
and 15d-15(f)) 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) | Designed
such internal control over financial reporting, or caused such internal control over
financial reporting to be designed under our supervision, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting principles; |
| (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. |
| 5. | The Registrant’s
other certifying officer 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: |
November 14, 2014 |
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/s/
Carter J. Ward |
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Carter J. Ward |
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Chief Financial Officer |
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(Principal Accounting
and Financial Officer) |
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Exhibit
32.1
CERTIFICATION
PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection
with the Quarterly Report of Elite Pharmaceuticals, Inc. (the “Registrant”) on Form 10-Q for the quarter ended September
30, 2014 filed with the Securities and Exchange Commission (the “Report”), I, Nasrat Hakim, Chief Executive Officer
of the Registrant, certify, pursuant to 18 U.S. C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002, that:
(1) The
Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and
(2) Information
contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the
Registrant.
Date: November 14, 2014 |
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/s/
Nasrat Hakim |
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Nasrat Hakim |
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Chief Executive Officer |
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of Elite Pharmaceuticals, Inc. |
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(Principal Executive
Officer) |
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This certification has been furnished
solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
A signed original of this written
statement required by Section 906 has been provided to Elite Pharmaceuticals, Inc. and will be retained by Elite Pharmaceuticals,
Inc. and furnished to the Securities and Exchange Commission or its staff upon request.
Exhibit 32.2
CERTIFICATION
PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection
with the Quarterly Report of Elite Pharmaceuticals, Inc. (the “Registrant”) on Form 10-Q for the quarter ended September
30, 2014 filed with the Securities and Exchange Commission (the “Report”), I, Carter J Ward, Chief Financial Officer
and Treasurer of the Registrant, certify, pursuant to 18 U.S. C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, that:
(1) The
Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and
(2) Information
contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the
Registrant.
Date: November 14, 2014 |
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/s/
Carter J. Ward |
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Carter J. Ward |
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Chief Financial Officer of |
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Elite Pharmaceuticals, Inc. |
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(Principal Accounting
and Financial Officer |
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This certification has been furnished
solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
A signed original of this written
statement required by Section 906 has been provided to Elite Pharmaceuticals, Inc. and will be retained by Elite Pharmaceuticals,
Inc. and furnished to the Securities and Exchange Commission or its staff upon request.
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