NOTICE
OF SPECIAL MEETING OF SHAREHOLDERS
To Be Held June 23, 2020
|
TO
THE SHAREHOLDERS OF ELITE PHARMACEUTICALS, INC.:
NOTICE
IS HEREBY GIVEN that a special meeting of shareholders (the “Special Meeting”) of Elite Pharmaceuticals, Inc., a Nevada
corporation (“we,” “us,” “our,” the “Company” or “Elite”) will be
held at the Residence Inn by Marriott located at 206 Route 303, Orangeburg, New York 10962 on June 23, 2020, at 10:30 a.m., local
time for the following purposes:
|
(1)
|
To
again vote on the prior amendment of our Articles of Incorporation to increase the number of shares
of common stock the Company is authorized to issue from 995,000,000 shares to 1,445,000,000
shares and to file a new amendment to our Articles of Incorporation
reflecting such approval;
|
|
(2)
|
To
approve a proposal to grant discretionary authority to adjourn the Special Meeting, if
necessary, to solicit additional proxies in the event that there are not sufficient votes
at the time of the Special Meeting to approve Proposal 1;
|
|
(3)
|
To
transact such other business as may properly come before the Special Meeting or any adjournments
or postponement thereof.
|
Our Board of Directors has fixed the close
of business on April 27, 2020 as the record date for the determination of the Shareholders entitled to notice of, and to vote
at, the Special Meeting.
While
we intend to hold the Special Meeting in person, we are actively monitoring the coronavirus (COVID-19) situation and may choose
to hold a Virtual Special Meeting instead. We currently anticipate that we will make that decision prior to filing the definitive
proxy statement with the Securities and Exchange Commission (the “SEC”).
If,
after the definitive proxy statement is filed with the SEC, we determine that it is not possible or advisable to hold our Special
Meeting in person or should we encounter printing delays due to COVID-19 and need to change the date of the meeting, we will promptly
notify Shareholders in a press release and in a filing with the SEC of Definitive Additional Materials related to this proxy statement
which will be available at https://elite.irpass.com/shareholder_meeting.
YOUR
VOTE IS IMPORTANT. To ensure that your vote is recorded promptly, please vote as soon as possible, even if you plan to attend
the Special Meeting. Most Shareholders have three options for submitting their vote: (i) via the Internet, (ii) by phone, or (iii)
by mail.
If
you have Internet access, we encourage you to record your vote on the Internet. It helps reduce the environmental impact
of our Shareholders’ meetings, it is convenient, and it saves us significant postage and processing costs. Please review
the instructions on the proxy card or the information forwarded by your bank, broker or other holder of record regarding each
of these voting options.
|
By order
of the Board of Directors
|
Date:
May [ ] , 2020
|
By:
|
/s/ Nasrat Hakim
|
|
|
Nasrat
Hakim
President
and Chief Executive Officer
|
This
Notice of Special Meeting and the attached Proxy Statement should be read in combination with the Company’s Annual Report
on Form 10-K for the fiscal year ended March 31, 2019 and Quarterly Report on Form 10-Q for quarter ended December 31, 2019. Collectively,
these documents contain all the information and disclosures required in connection with the Special Meeting of Shareholders. Copies
of all these materials can be found at: https://elite.irpass.com/shareholder_meeting
Preliminary
Copies
|
ELITE
PHARMACEUTICALS, INC.
|
|
|
165 Ludlow Avenue
|
|
|
Northvale, New
Jersey 07647
|
|
|
|
|
|
PROXY STATEMENT
|
|
Important
Notice Regarding the Availability of Proxy Materials for the
Special
Meeting of Shareholders to be held on June 23, 2020:
This
Proxy Statement, the proxy card, our Annual Report on Form 10-K for the fiscal year ended March 31, 2019 and our Quarterly Report
on Form 10-Q for quarter ended December 31, 2019 (together, the “Proxy Materials”) are available on the internet at:
https://elite.irpass.com/shareholder_meeting. Please note that, while our Proxy Materials are available at this website, no other
information contained on our website is incorporated by reference in or considered to be a part of this Proxy Statement.
This
Proxy Statement is being furnished to Shareholders in connection with the Special Meeting of Shareholders of Elite to be held
on June 23, 2020 at 10:30 a.m. local time, at the Residence Inn by Marriott located at 206 Route 303, Orangeburg, New York 10962,
and any adjournment thereof (the “Special Meeting”). This Proxy Materials are being mailed to Shareholders on or about
May 12, 2020.
Execution
and return of the enclosed proxy card is being solicited by and on behalf of the Board of Directors of the Company (the “Board
of Directors”). The costs incidental to soliciting and obtaining proxies, including the cost of reimbursing banks and brokers
for forwarding proxy materials to their principals, will be paid by us. Proxies may be solicited, without extra compensation,
by our officers and employees, both in person and by mail, telephone, facsimile and other methods of communication.
INFORMATION
CONCERNING THE MEETING
INFORMATION CONCERNING SOLICITATION AND VOTING
General
This
Proxy Statement is furnished in connection with the solicitation of proxies by the Board of Directors of Elite for our Special
Meeting of Shareholders to be held on June 23, 2020, and any adjournments thereof. You are receiving the Proxy Materials because
you own shares of Common Stock or shares of Series J Preferred Stock that entitle you to vote at the Special Meeting. By use of
the proxy, you can vote, whether or not you attend the Special Meeting. This Proxy Statement describes the matters we would like
you to vote on and provides information on those matters so you can make an informed decision.
The
information included in this Proxy Statement relates to the proposals to be voted on at the Special Meeting, the voting process
and other required information.
Purpose
The
purpose of the Special Meeting is:
|
(1)
|
To again vote on
the prior amendment of our Articles of Incorporation to increase the number of shares of common stock the Company is
authorized to issue from 995,000,000 shares to 1,445,000,000 shares and to file a new amendment to our Articles of
Incorporation reflecting such approval (“Proposal No. 1”);
|
|
(2)
|
To
approve a proposal to grant discretionary authority to adjourn the Special Meeting, if
necessary, to solicit additional proxies in the event that there are not sufficient votes
at the time of the Special Meeting to approve Proposal 1 (“Proposal No. 2”);
and
|
|
(3)
|
To
transact such other business as may properly come before the Special Meeting or any adjournments
or postponement thereof.
|
As
described below, we are again seeking approval from our Shareholders of the prior amendment to our Articles of Incorporation to increase
the number of shares of common stock our company is authorized to issue from 995,000,000 shares to 1,445,000,000 shares (the “Share
Increase Amendment”). A proposal to approve this amendment was included as Proposal No. 2 (the “Original Amendment
Proposal”) in the Proxy Statement (the “Annual Meeting Proxy Statement”) for our prior Annual Shareholders’
Meeting held on December 4, 2019 (the “Annual Meeting”). The Original Amendment Proposal was approved by Shareholders
at the Annual Meeting. Following such approval, the Share Increase Amendment was filed with the Secretary of State of Nevada and
became effective.
In
preparation for the Annual Meeting, we and our advisers assessed whether the Original Amendment Proposal was routine or non-routine
under applicable New York Stock Exchange (“NYSE”) rules. That determination is based on the particular facts and circumstances
associated with a proposal to increase the number of authorized shares; some share increase proposals are considered routine and
others are considered non-routine. Based on our assessment, we indicated in the Annual Meeting Proxy Statement that the Original
Amendment Proposal was a non-routine matter under NYSE rules and that, accordingly, brokers holding shares in “street name”
on behalf of beneficial owners did not have discretionary authority to vote those shares on the Original Amendment Proposal without
direction from the beneficial owners. However, Broadridge Financial Solutions (“Broadridge”) later determined that
the Original Amendment Proposal was a routine matter under NYSE rules. As such, the proxy cards prepared by Broadridge and sent
to its brokers (who, in turn, sent the ballots to their clients) clearly indicated that the Original Amendment Proposal was routine.
The proxy cards specifically included the statement: “If you do not provide us with your voting instructions, we will vote
your shares at our discretion on those proposals we are permitted to vote on by New York Stock Exchange rules.” As a result,
the vote on the Original Amendment Proposal was conducted properly as a routine matter (with brokers using discretionary authority
to vote in favor of the Original Amendment Proposal) and shareholder votes were tabulated correctly. The Share Increase Proposal
was approved by the requisite vote under Chapter 78 of the Nevada Revised Statutes and our Articles of Incorporation and Bylaws.
We
are confident that the vote on the Original Amendment Proposal was entirely proper and the Share Increase Amendment was
therefore adopted by our Shareholders and is now effective. However, we recognize the inconsistent description of the nature
of the proposal under NYSE rules in the Prior Proxy Statement and the proxy card. In an abundance of caution, we have
determined to permit Shareholders to again approve the Share Increase Amendment, this time with a consistent classification
of the proposal as routine in all solicitation materials and proxy cards. Upon Shareholder approval, we will file a new
amendment to our Articles of Incorporation reflecting such approval (the “Amendment”). We have not issued any of
the additional shares authorized by the Share Increase Amendment, and unless and until the Share Increase Amendment is again
approved by our Shareholders, we do not intend to issue or reserve for issuance any such additional shares.
Record
Date and Voting Rights
The
holders of our Common Stock and our Series J Preferred Stock as of April 27, 2020 (the “Record Date”) are entitled
to vote at the Special Meeting. Each share of Common Stock entitles the holder of record thereof at the close of business on the
Record Date to one vote on each of the matters to be voted upon at the Special Meeting. Each share of Series J Preferred Stock
entitles the holder of record thereof to the number of votes equal to the number of shares of Common Stock into which such share
of Series J Preferred Stock is convertible (6,574,621 shares of Common Stock per whole share of Series J Preferred Stock), on
each of the matters to be voted upon at the Special Meeting. As of the Record Date, we had outstanding [ ] shares of Common Stock
(excluding 100,000 treasury shares), and 24.03443452410 shares of Series J Preferred Stock that were convertible into 158,017,094
shares of Common Stock. Accordingly, the maximum number of votes entitled to be cast at the Special Meeting on each of the matters
to be voted upon is [ ].
Shareholders
vote at the Special Meeting by casting ballots (in person or by proxy) which will be tabulated by a person who is appointed by
the Board of Directors before the Special Meeting to serve as inspector of election at the Special Meeting and who has executed
and verified an oath of office.
Quorum;
Abstentions; Vote Required
A
quorum must exist for the transaction of business at the Special Meeting (other than a motion to adjourn the Special Meeting).
The presence at the Special Meeting, in person, by remote communication or by proxy, of the holders of a majority of the voting
power of the shares of capital stock of Elite issued and outstanding and entitled to vote at the Special Meeting, will constitute
a quorum for the transaction of business at the Special Meeting. Abstentions are counted as present and entitled to vote for purposes
of determining a quorum. If you submit a properly executed proxy card, even if you abstain from voting, your shares will be considered
part of the quorum.
Assuming
that a quorum is present, approval of Proposal No. 1 will require the affirmative vote of the holders of a majority of the voting
power of the shares of our capital stock outstanding as of the Record Date, or at least [ ] votes. If you abstain, your abstention
will have the same effect as a vote against this proposal.
Assuming
that a quorum is present, approval of Proposal No. 2 will require that the number of votes cast in favor of the Proposal must
exceed the number of vote cast in opposition to the Proposal. Abstentions with regard to this proposal are not considered to have
been voted on this proposal and therefore will not have any effect on the vote for such proposals.
Solicitation
Solicitation
of proxies may be made by our directors, officers and regular employees by mail, telephone, facsimile transmission or other electronic
media and in person for which they will receive no additional compensation. The expenses of preparing, printing and assembling
the materials used in the solicitation of proxies on behalf of the Board of Directors will be borne by us. Upon request, we will
reimburse the reasonable fees and expenses of banks, brokers, custodians, nominees and fiduciaries for forwarding proxy materials
to, and obtaining authority to execute proxies from, beneficial owners for whose accounts they hold shares of Common Stock.
Voting
of Proxies
If
the enclosed form of proxy is properly signed and returned, the shares represented thereby will be voted as specified in the proxy.
If you do not specify in the proxy how your shares are to be voted, the shares will be voted as recommended by the Board of Directors:
FOR Proposals No. 1 and No. 2.
Voting
of shares held in Brokerage Accounts
If
you hold your shares at a brokerage firm, you should instruct your broker how you would like to vote your shares by using the
written instruction form provided by your broker. Brokers holding shares of record in “street name” for a client have
the discretionary authority to vote on some matters (“routine” matters) if they do not receive timely instructions
from the client regarding how the client wants the shares voted. Both Proposal No. 1 and No. 2 are considered routine matters
and brokers will be permitted to vote in their discretion on these matters on behalf of clients who have not timely furnished
voting instructions.
If
you hold your common shares in your broker’s name and wish to vote in person at the Special Meeting, you must contact your
broker and request a document called a “legal proxy.” You must bring this legal proxy to the Special Meeting in order
to vote in person.
Revocation
You
have the right to revoke your proxy at any time before it is voted by attending the Special Meeting and voting in person or by
filing with our Secretary either a written instrument revoking the proxy or another executed proxy bearing a later date.
No
Appraisal Rights
Shareholders
entitled to vote will not have any appraisal rights in connection with any of the proposals to be voted on at the Special Meeting.
Could
emerging developments regarding the COVID-19 affect our ability to hold an in-person Meeting?
We
are closely monitoring the COVID-19 situation and if we determine that holding an in-person Meeting could pose a risk to the health
and safety of our shareholders, employees, or directors, we may decide instead to hold a Virtual Special Meeting. We currently
anticipate that we will make that decision prior to filing the definitive proxy statement with the Securities and Exchange Commission.
However, if we decide to use that format after we have filed our definitive proxy statement, we will make a public announcement
as soon as practicable prior to the meeting.
Questions
on the Proposals or How to Vote
If
you have any questions regarding any of the proposals or how to vote your shares, please contact Dianne Will, Investor Relations
for Elite at 518-398-6222 (collect calls will be accepted) or via email at dianne@elitepharma.com.
Recommendations
of the Board of Directors
This
proxy solicitation is being made by the Company. The Board of Directors recommends a vote:
|
●
|
FOR Proposal No. 1 - Approving the prior amendment of our
Articles of Incorporation to increase the number of shares of common stock the Company is authorized to issue from
995,000,000 shares to 1,445,000,000 shares and the filing of a new amendment to our Articles of Incorporation reflecting such approval;
|
|
●
|
FOR Proposal No. 2 - granting discretionary authority to adjourn
the Special Meeting, if necessary, to solicit additional proxies in the event that there are not sufficient votes at the time of
the Special Meeting to approve Proposal 1.
|
Other
Business
As
of the date of this Proxy Statement, we have no knowledge of any business other than that described in the Notice of Special Meeting
that will be presented for consideration at the Special Meeting. If any other business should properly come before the Special
Meeting, the persons appointed by the enclosed form of proxy shall have discretionary authority to vote all such proxies as they
shall decide.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following table sets forth certain information, as of April 15, 2020 (except as otherwise indicated), regarding beneficial ownership
of our Common Stock and our Series J Preferred Stock by (i) each person who is known by us to own beneficially more than 5% of
each such class, (ii) each of our directors, (iii) each of our executive officers and (iv) all our directors and executive officers
as a group. On April 15, 2020, we had 840,304,367 shares of Common Stock outstanding
(exclusive of 100,000 treasury shares) and 24.03443452410 shares of Series J Preferred Stock outstanding. On any matter presented
to the holders of our Common Stock for their action or consideration at any meeting of our Shareholders, each share of Common
Stock entitles the holder to one vote and each share of Series J Preferred Stock entitles the holder to the number of votes equal
to the number of shares of Common Stock into which such share of Series J Preferred Stock is convertible (6,574,621 per whole
share).
As
used in the table below and elsewhere in this Proxy Statement, the term beneficial ownership with respect to a security consists
of sole or shared voting power, including the power to vote or direct the vote, and/or sole or shared investment power, including
the power to dispose or direct the disposition, with respect to the security through any contract, arrangement, understanding,
relationship, or otherwise, including a right to acquire such power(s) during the 60 days immediately following April 15, 2020.
Except as otherwise indicated, the Shareholders listed in the table have sole voting and investment powers with respect to the
shares indicated.
|
|
Amount
and Nature of
Beneficial Ownership
|
|
|
Percent (%)
of Voting
|
|
Name
and Address Of Beneficial Owner of Common Stock
|
|
Common
Stock
|
|
|
Series
J
Preferred
Stock
|
|
|
Securities
Beneficially
Owned (11)
|
|
Nasrat Hakim, President, Chief Executive Officer and Chairman of the Board of Directors*
|
|
|
107,760,381
|
(1)
|
|
|
24.03443452410
|
(2)
|
|
|
24.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Barry Dash, Director*
|
|
|
1,932,792
|
(3)
|
|
|
|
|
|
|
**
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jeffrey Whitnell, Director*
|
|
|
1,884,257
|
(4)
|
|
|
|
|
|
|
**
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Eugene Pfeifer, Director*
|
|
|
233,414
|
(5)
|
|
|
|
|
|
|
**
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Davis Caskey, Director*
|
|
|
746,673
|
(6)
|
|
|
|
|
|
|
**
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carter J. Ward, Chief Financial Officer *
|
|
|
4,697,089
|
(7)
|
|
|
|
|
|
|
**
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Douglas Plassche, Executive Vice President *
|
|
|
4,133,572
|
(8)
|
|
|
|
|
|
|
**
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ashok Nigalaye, Former Director
|
|
|
50,265,539
|
(9)
|
|
|
|
|
|
|
4.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Directors and Officers as a group
|
|
|
42,146,103
|
(10)
|
|
|
24.03443452410
|
(2)
|
|
|
25.9
|
%
|
|
*
|
The address is c/o Elite Pharmaceuticals Inc.,
165 Ludlow Avenue, Northvale, NJ 07647.
|
(1)
|
Includes 11,797,561 shares of Common Stock held
and 16,954,159 shares of Common Stock due and owing to Mr. Hakim as of the Record Date for compensation earned pursuant to
Mr. Hakim’s employment agreement with the Company and 79,008,661 shares of Common Stock issuable upon exercise of the
Series J Warrants.
|
|
|
(2)
|
Series J Preferred Stock has an aggregate of
158,017,094 voting rights.
|
|
|
(3)
|
Includes 1,416,011 shares of Common Stock held
and 516,781 shares of Common Stock due and owing to Dr. Dash as of the Record Date for Directors fees accrued as of such date.
|
|
|
(4)
|
Includes 1,367,476 shares of Common Stock held
and 516,781 shares of Common Stock due and owing to Mr. Whitnell as of the Record Date for Directors fees accrued as of such
date.
|
(5)
|
Mr. Pfeifer passed away on June 10, 2018. Includes
233,414 shares still held in Mr. Pfeifer’s account with the Company’s transfer agent.
|
|
|
(6)
|
Includes 229,892 shares of Common Stock held
and 516,781 shares of Common Stock due and owing to Mr. Caskey as of the Record Date for Directors fees accrued as of such
date.
|
|
|
(7)
|
Includes 3,771,919 shares of Common Stock held
and 775,170 shares of Common Stock due and owing to Mr. Ward as of the Record Date for salaries earned pursuant to Mr. Ward’s
employment agreement with the Company, and vested options to purchase 150,000 shares of Common Stock.
|
|
|
(8)
|
Includes 487,596 shares of Common Stock held
645,976 shares of Common Stock due and owing to Mr. Plassche as of the Record Date for salaries earned pursuant to Mr. Plassche’s
employment agreement with the Company, and vested options to purchase 3,000,000 shares of Common Stock.
|
|
|
(9)
|
Dr. Nigalaye resigned on June 5, 2015. Address
is c/o Granulation Technology Inc. 12 Industrial Road, Fairfield, NJ 07004. Includes 50,265,539 shares of Common Stock held
with the Company’s transfer agent in account(s) that is (are) beneficially owned by Dr. Nigalaye.
|
|
|
(10)
|
Relates only to current directors and officers.
Includes 19,070,455 shares of Common Stock held 19,925,648 shares of Common Stock due and owing as of the Record Date for
director’s fees and salaries accrued as of such date, and vested options to purchase 3,150,000 shares of Common Stock.
Excludes warrants to purchase 79,008,661 shares of Common Stock which are not currently exercisable and 24.03443452410 Series
J Preferred Convertible Shares.
|
|
|
(11)
|
The denominator includes 158,017,094 votes
attributable to the outstanding Series J Preferred Stock. Accordingly, the percentage of Common Stock beneficially owned by
each Owner listed in the table other than Mr. Hakim is slightly greater than the percentage listed in this column.
|
Changes
in Control
The
following information is provided with respect to any arrangements known to the Company the operation of which may at a subsequent
date result in a change of control of the Company. Each share of Series J Preferred Stock entitles the holder of record thereof
to the number of votes equal to the number of shares of Common Stock into which such share of Series J Preferred Stock is convertible.
As of the Record Date, Nasrat Hakim beneficially owns approximately 24.7% of our voting equity (calculated in accordance with
Rule 13d-3 of the Securities Exchange Act of 1934). However, pursuant to Rule 13d-3, beneficial ownership includes shares of common
stock issuable within 60 days of the date of computation of beneficial ownership.
PROPOSAL
NO. 1
approval
of THE PRIOR amendment to our Articles of Incorporation
to
increase the number of shares of common stock the Company is authorized
to
issue from 995,000,000 shares to 1,445,000,000 shares AND THE FILING OF A
NEW AMENDMENT TO OUR ARTICLES OF INCORPORATION REFLECTING SUCH APPROVAL
THE
BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” PROPOSAL NO. 1
For
the reasons stated above in Information Concerning The Meeting; Purpose, this proposal, which was previously voted upon
in Elite’s December 4, 2019 Annual Shareholder’s Meeting as Proposal No. 2, is being presented again for Shareholder
approval. The language for this Proposal’s vote count has been edited for clarity. Since the date of the prior approval
of the authorized share increase, we have not issued or reserved for issuance any of the additionally authorized shares of Common
Stock. The following disclosure assumes that we did not amend our Articles of Incorporation for the authorized share increase,
except where explicitly stated otherwise.
Prior
to our 2019 Annual Meeting, our Articles of Incorporation authorized us to issue up to 995,000,000 shares of Common
Stock, $.001 par value, and 15,000 shares of Preferred Stock, $0.01 par value. For the reasons stated above, our Board of
Directors again unanimously adopted, subject to shareholder approval, the same amendment to our Articles of Incorporation to
increase the authorized number of shares of our Common Stock by 450,000,000 shares to 1,445,000,000 shares. Under
the amendment, Article IV, Section 4.1 of our Articles of Incorporation would read as follows:
“4.1.
Authorized Capital Stock. The aggregate number of shares which this Corporation shall have authority to issue is One Billion Four
Hundred Forty Five Million Fifteen Thousand (1,445,015,000) shares, consisting of (a) One Billion Four Hundred Forty five Million
(1,445,000,000) shares of Common Stock, par value $0.001 per share (the “Common Stock”) and (b) Fifteen Thousand,
(15,000) shares of Preferred Stock, par value $0.01 per share (the “Preferred Stock”), issuable in one or more series
as hereinafter provided. A description of the classes of shares and a statement of the number of shares in each class and the
relative rights, voting power, and preferences granted to and restrictions imposed upon the shares of each class are as follows:”
The
complete text of the proposed Amendment to the Articles of Incorporation is attached as Appendix A to this Proxy
Statement. If Shareholders approve Proposal No. 1, this Amendment will
be filed with the Secretary of State of Nevada.
Background
We
may issue shares of capital stock to the extent such shares have been authorized under our Articles of Incorporation.
As
of the Record Date, the total shares of Common Stock issued and outstanding and reserved for issuance upon the exercise of outstanding
warrants, options, and the conversion of outstanding shares of preferred stock totaled [ ] shares, including, without limitation:
|
●
|
158,017,094
shares issuable upon conversion of shares of our outstanding Series J of preferred stock;
|
|
|
|
|
●
|
79,008,661
shares issuable upon exercise of certain warrants;
|
|
|
|
|
●
|
[ ] shares of Common Stock (exclusive of 100,000 treasury shares);
|
|
|
|
|
●
|
[ ] shares of Common Stock reserved as per the Registration Statement on Form S-3 declared effective by the SEC on June 7, 2017;
|
|
|
|
|
●
|
[ ] shares reserved for issuance pursuant to options to purchase Common Stock;
|
|
|
|
|
●
|
[ ] shares reserved pursuant to the 2014 Equity Incentive Plan (the “2014 Plan”).
|
The
foregoing excludes an aggregate of 19,925,648 shares issuable to officers and directors as of March 31, 2020 as part of their
compensation arrangements.
Had
the Original Amendment Proposal not passed, the number of shares of Common Stock we are required to issue under the derivative
securities described above would have exceeded the number of shares of Common Stock available for future issuances.
The
terms of our 2014 Plan, the certificates of designation for the Series J Preferred Stock, the instruments governing the rights
of option and warrant holders and our Purchase Agreement with Lincoln Park Capital all provide that we will at all times reserve
and keep available out of our authorized and unissued shares of Common Stock for the sole purpose of issuance under or upon the
conversion or exercise of such securities not less than the aggregate number of shares of the Common Stock as shall from time
to time be sufficient to effect the conversion or exercise of all such outstanding securities. If at any time the number of authorized
but unissued shares of Common Stock is not sufficient to effect the issuance, conversion or exercise of such securities, we are
required to take such corporate action as may be necessary to increase our authorized but unissued shares of Common Stock to such
number of shares as shall be sufficient for such purposes, including, without limitation, using our best efforts to obtain the
requisite shareholder approval of an amendment to our Articles of Incorporation. The Share Increase Amendment accomplished this.
Proposal No. 1 simply would validate the Share Increase Amendment.
Similarly,
the terms of the Series J Preferred Stock obligated to use our best efforts to obtain shareholder approval to increase the number
of authorized shares to an amount sufficient to allow the issuance of Common Stock pursuant to conversion of the Series J Preferred
Stock. If such shareholder approval had not been obtained prior to April 28, 2021 (the “Dividend Commencement Date”)
and our authorized shares of Common Stock had not been sufficiently increased by such date, Nasrat Hakim, the holder of the Series
J Preferred Stock, would have been entitled to a dividend equal to twenty percent of the stated value ($1,000 per share) of Series
J Preferred Stock commencing on the Dividend Commencement Date. As a result of the Share Increase Amendment, Mr. Hakim is not
entitled to such dividend.
In
addition, our employment agreements with Nasrat Hakim, Carter J Ward and other employees provide that we make certain payments
to them in Common Stock as part of their compensation.
We
anticipate that we may issue additional shares in connection with one or more of the following:
|
●
|
financing
transactions, such as private and/or public offerings of Common Stock or convertible securities to fund business and business
expansion (In this regard, we anticipate needing funding for the development and filing of products until the time when currently
filed ANDAs are approved and launched and revenues are sufficient to cover research and development costs);
|
|
|
|
|
●
|
strategic
investments;
|
|
|
|
|
●
|
corporate
transactions, such as stock splits or stock dividends;
|
|
|
|
|
●
|
Incentive
and employee benefit plans; and
|
|
|
|
|
●
|
otherwise
for corporate purposes that have not yet been identified.
|
No
Other Current Plans for Issuance of Newly Authorized Shares
Except,
as described above, we have no current plans to issue any of the shares that would be authorized should this Proposal No. 1 be
approved by our Shareholders for the potential purposes discussed below.
Our
Board of Directors believes that the lack of additional authorized shares of Common Stock available for issuance will restrict
our flexibility to act in a timely manner in meeting future capital needs. In order to provide our Board of Directors with
certainty and flexibility to meet such needs, the Board of Directors believes it is in the best interests of our Company at this
time to increase the number of authorized shares of our Common Stock beyond that required to permit the conversion or exercise
of outstanding derivative securities.
If
this proposal is not adopted, management believes we will be severely limited in our ability to raise capital, enter transactions
that could be advantageous to the Company or issue stock as required under outstanding derivative securities. Further,
if we are unsuccessful in gaining approval for this increase in our authorized shares, and other funding sources are not available
to us, our ability to pursue development and commercialization activities may be limited or delayed.
If
our Shareholders approve the prior amendment to our Articles of Incorporation to increase our authorized shares, we will have
259,842,449 shares of Common Stock (exclusive of 19,925,648 shares owed to officers and directors) not reserved for any
specific use and available for future issuances.
If
this proposal is adopted, in addition to purposes discussed above, the additional authorized shares of Common Stock may be issued
upon the approval of our Board of Directors at such times, in such amounts, and upon such terms as our Board of Directors may
determine, without further approval of the Shareholders, unless such approval is expressly required by applicable law, regulatory
agencies, or any exchange or quotation service on which our Common Stock may then be listed. The ability of our Board of Directors
to issue shares from the additional authorized shares will allow the Board, except under limited circumstances, to perform the
functions for which they are currently empowered under our Articles of Incorporation and By-Laws in executing certain transactions,
such as acquisitions, investments, or other transactions, pursuant to which such additional authorized shares could be issued
without further shareholder approval of the specific transaction.
Our
Shareholders do not have preemptive rights with respect to future issuances of additional shares of Common Stock, which means
that current Shareholders do not have a prior right to purchase any new issue of Common Stock of our Company in order to maintain
their proportionate ownership interest. As a result, the issuance of a significant amount of additional authorized
Common Stock (other than as the result of a stock split or other pro rata distribution to Shareholders) would result in a significant
dilution of the beneficial ownership interests and/or voting power of each company Shareholder who does not purchase additional
shares to maintain his or her pro rata interest. As additional shares are issued, the shares owned by our existing Shareholders
will represent a smaller percentage ownership interest in our Company. In addition, the issuance of additional shares
of our Common Stock could result in a decrease in the trading price of our Common Stock, depending on the price at which such
shares are issued.
Possible
Anti-Takeover Effects of the Proposal
Our
Board of Directors does not intend or view the proposed increase in the number of authorized shares of our Common Stock as an
anti-takeover measure, but rather, as a means of providing greater flexibility to the Board of Directors as indicated above. Nevertheless,
the proposed increase in our authorized shares could enable the Board of Directors to issue additional shares to render more difficult
or discourage an attempt by another person or entity to obtain control of our Company, even if the holders of our Common Stock
deem such acquisition of control of our Company to be in their best interests. The issuance of additional shares of
Common Stock in a public or private sale, merger or similar transaction would increase the number of outstanding shares and thereby
could dilute the proportionate interest of a party attempting to gain control of our Company. As of the date of this
Proxy Statement, our Board of Directors and our management are not aware of any attempt or plan to takeover or acquire our Company
or our Common Stock, and the proposal to increase the authorized shares of our Common Stock was not prompted by any takeover or
acquisition effort or threat.
As
of the date hereof, we do have certain other measures that can be deemed to be anti-takeover measures. our current Articles of
Incorporation allow us to issue shares of preferred stock without any vote or further action by our Shareholders. Our Board of
Directors has the authority to fix and determine the relative rights and preferences of preferred stock. Our Board of Directors
also has the authority to issue preferred stock without further shareholder approval. As a result, our Board of Directors could
authorize the issuance of a series of preferred stock that would grant to holders the preferred right to our assets upon liquidation,
the right to receive dividend payments before dividends are distributed to the holders of Common Stock and the right to the redemption
of the shares, together with a premium, prior to the redemption of our Common Stock. The foregoing provisions remain unchanged
in the Articles of Incorporation as anticipated to be amended pursuant to this Proposal No. 1. In addition, on November 15, 2013,
we enacted a Shareholder Rights Plan. This Plan, if triggered could deter any potential acquirer from making a hostile bid to
take over our company Also, our By-Laws provide for the classification of our Board of Directors into three classes.
Other
than the amendment to our Articles of Incorporation to increase the number of authorized shares of our Common Stock, our Board
of Directors does not currently contemplate recommending the adoption of any other proposals or amendments to our Articles of
Incorporation that could be construed to affect the ability of third parties to take over or change the control of our Company.
Required
Vote
The
affirmative vote of the holders of a majority of the voting power of the outstanding shares of capital stock of Elite as of the
Record Date is required to approve this Proposal No. 1. If you abstain, your abstention will have the same effect as a vote against
this proposal. It will become effective upon the filing of an amendment to our Articles of Incorporation with the Secretary of
State of Nevada, which we intend to make promptly after the completion of the Special Meeting.
OUR BOARD OF DIRECTORS RECOMMENDS THAT YOU
VOTE "FOR" THIS PROPOSAL TO APPROVE THE PRIOR AMENDMENT OF OUR ARTICLES OF INCORPORATION TO INCREASE THE NUMBER OF SHARES
OF COMMON STOCK THE COMPANY IS AUTHORIZED TO ISSUE FROM 995,000,000 SHARES TO 1,445,000,000 SHARES AND TO FILE A NEW AMENDMENT
TO OUR ARTICLES OF INCORPORATION REFLECTING SUCH APPROVAL
PROPOSAL
NO. 2
GRANT
OF DISCRETIONARY AUTHORITY TO ADJOURN THE SPECIAL MEETING
IF
NECESSARY TO SOLICIT ADDITIONAL PROXIES
THE
BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” PROPOSAL NO. 2
Although
it is not expected, the Special Meeting may be adjourned for the purpose of soliciting additional proxies. Any such adjournment
of the Special Meeting may be made without notice, other than by the announcement made at the Special Meeting, by approval of
the holders of a majority of the outstanding shares of our Common Stock and Series J Preferred Stock, voting together as a single
class, present in person or by proxy and entitled to vote at the Special Meeting, whether or not a quorum exists. We are soliciting
proxies to grant discretionary authority to the chairperson of the Special Meeting to adjourn the Special Meeting, if necessary,
for the purpose of soliciting additional proxies in favor of Proposal No. 1. The chairperson will have the discretion to decide
whether or not to use the authority granted to such person pursuant to this Proposal No. 2 to adjourn the Special Meeting.
Required
Vote
To
approve the grant of discretionary authority to the chairperson of the Special Meeting to adjourn the Special Meeting, if necessary,
for the purpose of soliciting additional proxies in favor of Proposal No. 1, the number of votes cast in favor of the Proposal
must exceed the number of vote cast in opposition to the Proposal. Although failure to submit a proxy or vote in person at the
Special Meeting, or a failure to provide your broker, nominee, fiduciary or other custodian, as applicable, with instructions
on how to vote your shares will not affect the outcome of the vote on this proposal, the failure to submit a proxy or vote in
person at the Special Meeting will make it more difficult to meet the requirement under our bylaws that the holders of a majority
of the our capital stock issued and outstanding and entitled to vote at the Special Meeting be present in person or by proxy to
constitute a quorum at the Special Meeting.
OUR
BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR” THIS PROPOSAL
TO
GRANT DISCRETIONARY AUTHORITY TO ADJOURN THE SPECIAL MEETING
IF
NECESSARY TO SOLICIT ADDITIONAL PROXIES
HOUSEHOLDING
OF MATERIALS
In
some instances, only one copy of the proxy materials is being delivered to multiple Stockholders sharing an address, unless the
Company has received instructions from one or more of the Stockholders to continue to deliver multiple copies. The Company will
deliver promptly, upon oral or written request, a separate copy of the applicable materials to a Stockholder at a shared address
to which a single copy was delivered. If you wish to receive a separate copy of the proxy materials you may call the Company at
(201) 750-2646 or send a written request to Elite Pharmaceuticals, Inc., 165 Ludlow Avenue, Northvale, New Jersey 07647, Attention:
Secretary. If you wish to receive a separate copy of the proxy materials, and wish to receive a separate copy for each stockholder
in the future, you may call the Company at the telephone number or write the Company at the address listed above. Alternatively,
stockholders sharing an address who now receive multiple copies of the proxy materials may request delivery of a single copy,
also by calling the Company at the telephone number or writing to the Company at the address listed above.
DEADLINE
FOR SHAREHOLDER PROPOSALS FOR THE 2020 MEETING
The
Company does not currently provide a formal process for Shareholders to present proposals or for possible inclusion in the Company’s
proxy materials for presentation at the next Annual meeting of Shareholders.
You
may submit proposals on matters appropriate for shareholder action at future Annual meetings by following the rules of the SEC
and the requirements of our Amended and Restated Bylaws. We must receive proposals intended for inclusion in next year’s
proxy statement and proxy card no later than June 20, 2020. Any such proposal when submitted must be in full compliance with applicable
law, including Rule 14a-8 of the Exchange Act, and our Amended and Restated Bylaws.
Additionally,
our Amended and Restated By-Laws permit Shareholders to propose business to be considered and to nominate Directors for election
by the Shareholders at future Annual meetings. To propose business or to nominate a Director for our 2020 Annual Meeting of Shareholders
not for inclusion in next year’s proxy statement and proxy card, the Shareholder must deliver notice between 120 and 90
days before the first anniversary of the prior year’s Annual meeting setting forth the information required to be included
in such notice under our Amended and Restated Bylaws. If no Annual meeting of Shareholders was held in the previous year, a proposal
must deliver notice not later than the later of ten days after we have publicly disclosed the date of the meeting and 90 days
prior to the date of the shareholder meeting. Any such proposal or nomination when submitted must be in full compliance with our
Amended and Restated Bylaws.
Shareholders
interested in submitting such a proposal are advised to contact knowledgeable legal counsel with regard to the detailed requirements
of applicable securities laws.
If
a Shareholder gives notice of a proposal or a nomination after the applicable deadline specified above, the notice will not be
considered timely, and the Shareholder will not be permitted to present the proposal or the nomination to the Shareholders for
a vote at the meeting.
OTHER
MATTERS
We
do not expect any matters to be presented for a vote at the meeting, other than the proposals described in this Proxy Statement.
If you grant a proxy, the person(s) named as proxy holder, or their nominee or substitute, will have the discretion to vote your
shares on any additional matters properly presented for a vote at the meeting.
Unless
contrary instructions are indicated in a proxy, all shares of Common Stock and Series J preferred stock represented by valid proxies
received pursuant to this solicitation (and not revoked before they are voted) will be voted FOR Proposal No. 1 and FOR Proposal
No. 2.
May
[ ], 2020
|
|
By Order
of the Board of Directors
|
|
|
|
|
|
Carter Ward, Secretary
|
SHAREHOLDERS
ARE URGED TO VOTE BY INTERNET, BY TELEPHONE OR BY SIGNING
AND RETURNING THE ENCLOSED PROXY IN THE ENCLOSED ENVELOPE.
Appendix
A
|
ROSS
MILLER
Secretary
of State
204
North Carson Street, Suite 1 Carson City,
Nevada 89701-4520 (775) 684-5708
Website:
www.nvsos.gov
|
Certificate
of Amendment
(PURSUANT TO NRS 78.385 AND 78.390)
|
|
USE BLACK INK ONLY - DO NOT HIGHLIGHT
|
ABOVE SPACE IS FOR OFFICE USE ONLY
|
Certificate
of Amendment to Articles of Incorporation For Nevada Profit Corporations
(Pursuant
to NRS 78.385 and 78.390 - After Issuance of Stock)
1.
Name of corporation:
Elite Pharmaceuticals, Inc.
|
2. The articles have been amended as follows: (provide article numbers, if available)
NOTE: This Certificate of Amendment is identical in
all material respects to a Certificate of Amendment which was filed with the Nevada Secretary of State on December 5, 2019. The
amendment to the Corporation’s Articles of Incorporation set forth herein has been re-adopted by the Board of Directors and
stockholders of the Corporation and is being filed out of an abundance of caution, to make sure that stockholder votes in favor
of the amendment have been accurately tabulated.
The beginning of Article IV, Section 4.1 is amended
and, as amended, reads as follows:
“4.1. Authorized
Capital Stock. The aggregate number of shares which this Corporation shall have authority to issue is One Billion Four Hundred
Forty Five Million Fifteen Thousand (1,445,015,000) shares, consisting of (a) One Billion Four Hundred Forty Five Million (1,445,000,000)
shares of Common Stock, par value $0.001 per share (the “Common Stock”) and (b) Fifteen Thousand, (15,000) shares
of Preferred Stock, par value $0.01 per share (the “Preferred Stock”), issuable in one or more series as hereinafter
provided. A description of the classes of shares and a statement of the number of shares in each class and the relative rights,
voting power, and preferences granted to and restrictions imposed upon the shares of each class are as follows:”
|
3. The vote by which the stockholders holding shares in the corporation entitling them to exercise at least a majority of the voting power, or such greater proportion of the voting power as may be required in the case of a vote by classes or series, or as may be required by the provisions of the articles of incorporation* have voted in favor of the amendment is: _________________
4. Effective date and time of filing: (optional)
|
Date:
|
|
Time:
|
|
|
(must not be later than 90 days after the certificate is filed)
|
5. Signature: (required)
Signature of Officer
*
If any proposed amendment would alter or change any preference or any relative or other right given to any class or series of
outstanding shares, then the amendment must be approved by the vote, in addition to the affirmative vote otherwise required,
of the holders of shares representing a majority of the voting power of each class or series affected by the amendment
regardless to limitations or restrictions on the voting power thereof.
IMPORTANT:
Failure to include any of the above information and submit with the proper fees may cause this filing to be rejected.
This form must be accompanied
by appropriate fees.
|
Revised: 11-27-13
|
Elite Pharmaceuticals (QB) (USOTC:ELTP)
Historical Stock Chart
From Aug 2024 to Sep 2024
Elite Pharmaceuticals (QB) (USOTC:ELTP)
Historical Stock Chart
From Sep 2023 to Sep 2024