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, 2005
-----------------------------------------------
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: 333-45241
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ELITE PHARMACEUTICALS, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 22-3542636
- ---------------------------------------- -----------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
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 [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15 (d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of the common stock, $.01 par value,
as of November 10, 2005: 18,172,835 (exclusive of 100,000 shares held in
treasury).
ELITE PHARMACEUTICALS, INC. AND SUBSIDIARIES
INDEX
Page No.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets as of September 30, 2005 (unaudited) and
March 31, 2005 1 - 2
Consolidated Statements of Operations for the three and six months
ended September 30, 2005 and September 30, 2004 (unaudited) 3
Consolidated Statement of Changes in Stockholders' Equity
for the six months ended September 30, 2005 (unaudited) 4
Consolidated Statements of Cash Flows for the six months
ended September 30, 2005 and September 30, 2004 (unaudited) 5
Notes to Consolidated Financial Statements 6 - 12
Item 2. Management's Discussion And Analysis of Financial
Condition And Results Of Operations 13 - 17
Item 3. Quantitative And Qualitative Disclosures
About Market Risk 17
Item 4. Controls and Procedures 17
PART II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 17
SIGNATURES 20
ELITE PHARMACEUTICALS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
SEPTEMBER 30, MARCH 31,
2005 2005
(Unaudited) (Audited)
CURRENT ASSETS:
Cash and cash equivalents $1,856,262 $3,902,003
Accounts receivable, net of allowance for doubtful accounts of
$153,250 and $153,250, respectively -- 142,113
Current portion of restricted cash - debt service and project fund 1,259,235 113,425
Prepaid expenses and other current assets 380,592 346,905
---------- ----------
Total current assets 3,496,089 4,504,446
---------- ----------
PROPERTY AND EQUIPMENT, net of accumulated
depreciation and amortization 4,139,010 4,194,436
---------- ----------
INTANGIBLE ASSETS - net of accumulated amortization 70,324 81,184
---------- ----------
OTHER ASSETS:
Deferred charges -- 41,013
Security deposit 6,980 --
Restricted cash - debt service 415,500 300,000
EDA bond offering costs, net of accumulated amortization
of $1,000 and $73,648, respectively 353,452 124,212
---------- ----------
Total other assets 775,932 465,225
---------- ----------
Total assets $8,481,355 $9,245,292
========== ==========
The accompanying notes are an integral part of the
consolidated financial statements.
1
ELITE PHARMACEUTICALS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
SEPTEMBER 30, MARCH 31,
2005 2005
(Unaudited)
CURRENT LIABILITIES:
Current portion - note payable $ -- $ 127,946
Current portion of EDA bonds 175,000 165,000
Accounts payable and accrued expenses 1,043,303 882,917
------------ ------------
Total current liabilities 1,218,303 1,175,863
------------ ------------
LONG TERM LIABILITIES:
Note payable - net of current portion -- 187,128
EDA bonds - net of current portion 3,980,000 2,180,000
------------ ------------
Total long-term liabilities 3,980,000 2,367,128
------------ ------------
Total liabilities 5,198,303 3,542,991
------------ ------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred Stock -- $.01 par value;
Authorized 4,483,442 shares
None issued and outstanding -- --
Common Stock - $.01 par value;
Authorized - 65,000,000 shares
Issued and outstanding - 18,251,974 shares and 18,022,183
shares at September 30, 2005 and March 31, 2005,
respectively 182,520 180,222
Additional paid-in capital 47,531,860 47,006,379
Accumulated deficit (44,124,487) (41,177,459)
------------ ------------
3,589,893 6,009,142
Treasury stock, at cost (100,000 shares) (306,841) (306,841)
------------ ------------
Total stockholders' equity 3,283,052 5,702,301
------------ ------------
Total liabilities and stockholders' equity $ 8,481,355 $ 9,245,292
============ ============
The accompanying notes are an integral part of the
consolidated financial statements.
2
ELITE PHARMACEUTICALS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED SIX MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------- -------------
2005 2004 2005 2004
---- ---- ---- ----
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
REVENUES $ 272,162 $ 151,450 $ 386,943 $ 151,450
------------ ------------ ------------ ------------
COST OF OPERATIONS:
Research and development 999,340 565,390 1,738,327 1,211,619
General and administrative 434,685 641,146 861,215 1,049,718
Depreciation and amortization 215,362 120,360 309,112 225,720
------------ ------------ ------------ ------------
1,649,387 1,326,896 2,908,654 2,487,057
------------ ------------ ------------ ------------
LOSS FROM OPERATIONS (1,377,225) (1,175,446) (2,521,711) (2,335,607)
------------ ------------ ------------ ------------
OTHER INCOME (EXPENSES):
Interest income 16,636 2,667 36,466 5,711
Interest expense (73,381) (62,396) (129,506) (114,197)
Non-cash compensation through issuance
of stock options and warrants (286,727) (291,954) (331,277) (919,318)
------------ ------------ ------------ ------------
(343,472) (351,683) (424,317) (1,027,804)
------------ ------------ ------------ ------------
LOSS BEFORE PROVISION FOR INCOME TAXES (1,720,697) (1,527,129) (2,946,028) (3,363,411)
------------ ------------ ------------ ------------
PROVISION FOR INCOME TAXES -- -- 1,000 1,000
------------ ------------ ------------ ------------
NET LOSS $ (1,720,697) $ (1,527,129) $ (2,947,028) $ (3,364,411)
============ ============ ============ ============
BASIC AND DILUTED LOSS PER COMMON SHARE $ (.09) $ (.13) $ (.16) $ (.28)
============ ============ ============ ============
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 18,179,080 12,230,926 18,130,468 12,217,748
============ ============ ============ ============
The accompanying notes are an integral part of the
consolidated financial statements.
3
ELITE PHARMACEUTICALS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
COMMON STOCK ADDITIONAL
------------ PAID-IN TREASURY ACCUMULATED STOCKHOLDERS'
SHARES AMOUNT CAPITAL STOCK DEFICIT EQUITY
------ ------ ------- ----- ------- ------
BALANCE AT MARCH 31, 2005 (Audited) 18,022,183 $ 180,222 $47,006,379 $(306,841) $(41,177,459) $ 5,702,301
Six months ended September 30, 2005
(unaudited)
Exercise of stock options 20,000 200 39,800 -- -- 40,000
Exercise of stock warrants 209,791 2,098 154,404 -- -- 156,502
Non-cash compensation through the issuance
of stock options and warrants -- -- 331,277 -- -- 331,277
Net loss for six months ended September 30,
2005 -- -- -- -- (2,947,028) (2,947,028)
------------ ---------- ----------- --------- ------------ -----------
BALANCE AT SEPTEMBER 30, 2005 18,251,974 $ 182,520 $47,531,860 $(306,841) $(44,124,487) $ 3,283,052
(Unaudited) ============ ========== =========== ========= ============ ===========
The accompanying notes are an integral part of the
consolidated financial statements.
4
ELITE PHARMACEUTICALS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED
SEPTEMBER 30,
-------------
2005 2004
---- ----
(UNAUDITED) (UNAUDITED)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(2,947,028) $(3,364,411)
Adjustments to reconcile net loss to cash used in operating activities:
Depreciation and amortization 309,112 225,720
Charges related to issuance of common stock -- 58,300
Non-cash compensation 331,277 919,318
Changes in assets and liabilities:
Accounts and accrued interest receivable 142,113 --
Prepaid expenses and other current assets (33,687) (5,365)
Security deposit (6,980) --
Accounts payable, accrued expenses and other current liabilities 160,386 (139,100)
----------- -----------
NET CASH USED IN OPERATING ACTIVITIES (2,044,807) (2,305,538)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of equipment (117,613) (399,656)
Payment of deposit for manufacturing equipment -- 398,580
Deposits to restricted cash (1,674,735) --
Release of restricted cash 413,425 399,461
----------- -----------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES (1,378,923) 398,385
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal equipment note payments (274,061) --
Principal bank note payments -- (252,330)
Proceeds from equipment loan -- 400,000
Principal repayments of NJEDA Bonds (2,345,000) (150,000)
Proceeds - NJEDA Tax Exempt Bonds 4,155,000 --
Payment - EDA Bond Offering Costs (354,452) --
Deferred lease payments -- (41,013)
Proceeds from exercise of stock options 40,000 --
Proceeds from exercise of stock warrants 156,502 --
----------- -----------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 1,377,989 (43,334)
----------- -----------
NET CHANGE IN CASH AND CASH EQUIVALENTS (2,045,741) (1,950,496)
CASH AND CASH EQUIVALENTS - beginning of period 3,902,003 2,104,869
----------- -----------
CASH AND CASH EQUIVALENTS - end of period $ 1,856,262 $ 154,373
----------- -----------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for interest $ 92,937 $ 115,166
Cash paid for income taxes 1,000 1,000
The accompanying notes are an integral part of the
consolidated financial statements.
5
ELITE PHARMACEUTICALS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
(UNAUDITED)
NOTE 1 - BASIS OF PRESENTATION
The information in this Form 10-Q Report includes the results of
operations of Elite Pharmaceuticals, Inc. and its consolidated
subsidiaries (collectively the "Company") including its
wholly-owned subsidiaries, Elite Laboratories, Inc. ("Elite
Labs") and Elite Research, Inc. ("ERI"), for the three and six
months ended September 30, 2005 and September 30, 2004. As of
September 30, 2005, the financial statements of all entities are
consolidated and all significant intercompany accounts are
eliminated upon consolidation. The accompanying unaudited
consolidated financial statements have been prepared pursuant to
rules and regulations of the Securities and Exchange Commission.
Accordingly, they do not include all of the information and
footnotes required by accounting principles generally accepted
in the United States of America for complete financial
statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary
for a fair presentation of the 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 consolidated financial statements of the
Company have been prepared in accordance with accounting
principles generally accepted for interim financial statement
presentation and 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, 2005. There have been no changes in significant accounting
policies since March 31, 2005.
The Company does not anticipate being profitable for fiscal year
2006; therefore a current provision for income tax was not
established for the three or six months ended September 30,
2005. Only the minimum corporation tax liability required for
state purposes is reflected.
NOTE 2 - EDA REFINANCING
On August 31, 2005, the Company successfully completed a
refinancing through the issuance of the tax-exempt bonds (the
"Bonds") by the New Jersey Economic Development Authority (the "
Authority"). The refinancing involved the borrowing of
$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, are to be used (i) to redeem the outstanding tax-exempt
Bonds originally issued by the Authority on September 2, 1999,
(ii) refinance other former equipment financing and (iii) for
the purchase of certain equipment to be used in the manufacture
of pharmaceutical products.
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 Bonds proceeds and
$49,500 from the Series B proceeds. $1,259,235 is deposited in a
short-term restricted cash account to fund the future purchase
of manufacturing equipment and development of the Company's
facility.
6
ELITE PHARMACEUTICALS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
(UNAUDITED)
NOTE 3 - STOCKHOLDERS' EQUITY
WARRANTS AND OPTIONS
On July 20, 2004, the Company issued five-year warrants to
purchase 50,000 shares of Common Stock at a price of $3.00 per
share to an individual in consideration of his agreement to
render financial consulting services. Stockholders at the Annual
Meeting held on April 15, 2005 ratified the issuance of the
warrants.
On July 8, 2004, a subsidiary, Elite Labs, to finance the
purchase of certain machinery and equipment, borrowed $400,000
and designees of the lender received 50,000 warrants, which
vested immediately, to purchase an aggregate of 50,000 shares of
the Company's Common Stock at $4.20 per share.
On June 3, 2004, the Company granted five-year warrants to
purchase 100,000 shares of Common Stock at a price of $2.50 per
share to a financial consultant.
The per share weighted-average fair value of the above mentioned
warrants ranged from $.83 - $1.50 using the Black-Scholes
warrant pricing model with the following weighted-average
assumptions: no dividend yield; expected volatility of 80.34%;
risk free interest rate of 3.0% and expected lives of 10 years.
The expiration date of the Company's Series B and Series C Stock
Purchase Warrants to purchase an aggregate of 2,402,181 shares
of Common Stock is November 30, 2005.
The stockholders of the Company approved the adoption by the
Board of Directors of the Company's 2004 Stock Option Plan (the
"2004 Plan") in June 2004 and an amendment to the Plan on April
15, 2005. The Plan, as amended, reserves 4,000,000 shares of
Common Stock for grant by the Board of Directors of incentive or
nonqualified stock options to officers, employees, or directors
of and consultants to the Company.
On July 14, 2005, the Company granted under its 2004 Stock
Option Plan, ten (10) year options to purchase at a price of
$2.80 per share an aggregate of 152,200 shares of Common Stock
to employees of the Company. Vesting periods range from
immediate to a period of five years from date of grant.
On the same date, the Company granted ten (10) year options to
purchase 20,000 shares of Common Stock at a price of $2.80 per
share to its Chief Financial Officer. The option will vest over
a three-year period.
On August 24, 2005, the Company granted ten (10) year options to
purchase in the aggregate 2,000 shares at a price of $2.81 per
share to employees of the Company under the 2004 Stock Option
Plan vesting over a three year period.
7
ELITE PHARMACEUTICALS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
(UNAUDITED)
NOTE 3 - STOCKHOLDERS' EQUITY (Continued)
WARRANTS AND OPTIONS (continued)
The stock options to purchase an aggregate of 174,200 shares of
Common Stock at prices ranging from $2.80 to $2.81 vest over
periods from immediate to five years. The per share
weighted-average value of the options ranged from $2.52 to $2.53
using the Black-Scholes options pricing model with the following
weighted-average assumptions: no dividend yield; expected
volatility of 97.84%, risk free interest of 4.18% and expected
lives of ten years.
On August 30, 2005, the Company granted under its 2004 Stock
Option Plan options to purchase an aggregate of 120,000 shares
of Common Stock to the Directors. The 120,000 options granted
under the 2004 Plan to the Directors expire ten years from the
issuance, have an exercise price of $2.75 per share and vest
over a three year period. The per share weighted-average fair
value of the 120,000 options amounted to $2.48 using the
Black-Scholes options pricing model with the following weighted
average assumptions: no dividend yield; expected volatility of
97.84%; risk free interest rate of 4.18%; and expected lives of
ten years.
On September 2, 2005, the Chief Executive Officer waived his
rights to 75,000 of 300,000 options granted to him on July 23,
2003. The Company determined that the remaining 225,000 options
are fully vested.
On September 2, 2005, the Company granted under its 2004 Stock
Option Plan to the Chief Executive Officer ten (10) year options
to purchase an additional 600,000 shares of Common Stock at a
price of $2.69 per share with 100,000 options to vest on
September 2, 2006, 100,000 options to vest on September 2, 2007
and the remaining 400,000 options to vest as follows:
(a) 50,000 options upon the closing of each product license
or product sales transaction in which the Company
receives an aggregate of at least $5,000,000 in net
cash;
(b) 10,000 options upon filing with FDA of either an
abbreviated new drug application (an "ANDA") or new drug
application (an "NDA"); and
(c) 40,000 options upon approval by the FDA of any ANDA or
NDA for a product not previously approved by the FDA.
The Company, in May 2005, revoked 180,000 of outstanding
unexercised options granted prior to the adoption of the 2004
Stock Option Plan originally earmarked to members of the
abandoned Scientific Advisory Board.
The Company took a charge of $331,277 for the six months ended
September 30, 2005 ($286,727 for the three months ended
September 30, 2005), which represents the fair value of the
vested options, utilizing the Black-Scholes options pricing
model on the grant date.
8
ELITE PHARMACEUTICALS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
(UNAUDITED)
NOTE 3 - STOCKHOLDERS' EQUITY (Continued)
WARRANTS AND OPTIONS (continued)
On June 22, 2004, the Company granted under the 2004 Plan
120,000 options to Directors and 123,300 options to employees to
purchase an aggregate of 243,300 shares of Common Stock at a
price of $2.34 per share. The options granted to employees were
in replacement of options containing exercise prices greater
than $2.34 per share granted prior to the adoption of the 2004
Plan. On the same date the stockholders approved amendments made
previously by the Board of Directors to outstanding warrants and
options including the repricing of options to purchase 420,000
shares, of which options to purchase 330,000 shares were held by
Directors of the Company.
Accordingly, during the six months ended September 30, 2004
options with respect to an aggregate of 543,300 options were
repriced (treating the options granted in lieu of outstanding
options as repriced options).
The options as repriced have exercise prices between $2.21 and
$2.34 per share. 162,300 options are vested and 381,000 options
are in various stages of three year vesting periods. The options
expire ten years from date of issuance. The per share
weighted-average fair value of options repriced during the six
months ended September 30, 2004, ranged from $1.51 - $1.91 using
the Black-Scholes options pricing model with the following
weighted-average assumptions: no dividend yield; expected
volatility of 76.69%; risk-free interest rate of 4.0%; and
expected lives of ten years. The Company took a charge of
$397,732 for the six months ended September 30, 2004, which
represents the fair value of the options vested, utilizing the
Black-Scholes options pricing model on each grant date.
The 120,000 options granted under the 2004 Plan to members of
the Board of Directors expire ten years from the date of
issuance; have an exercise price of $2.34 per share and are
fully vested. The per share weighted-average fair value of the
options amounted to $1.91 using the Black-Scholes options
pricing model with the following weighted-average assumptions:
no dividend yield; expected volatility of 76.69%; risk free
interest rate of 4.0%; and expected lives of ten years. The
Company took a charge of $229,632 for the six months ended
September 30, 2004, which represents the fair value of the
vested options, utilizing the Black-Scholes options pricing
model on the grant date.
The following table illustrates the effect on net loss and loss
per share as if the Company had applied the fair value
recognition provisions of SFAS No. 123 to all outstanding and
unvested awards in each period presented:
9
ELITE PHARMACEUTICALS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
(UNAUDITED)
NOTE 3 - STOCKHOLDERS' EQUITY
WARRANTS AND OPTIONS (continued)
THREE MONTHS ENDED SEPTEMBER SIX MONTHS ENDED SEPTEMBER
---------------------------- --------------------------
2005 2004 2005 2004
---- ---- ---- ----
Net loss as reported $(1,720,697) $(1,527,129) $(2,947,028) $(3,364,411)
Add: Stock-based compensation
expense included in reported net loss,
net of related tax effects 286,727 291,954 331,277 919,318
Deduct: Total stock-based
compensation expense determined
under fair value method for all awards
net of related tax effects 277,370) (305,711) (331,156) (946,832)
----------- ----------- ----------- -----------
Pro-forma net loss (1,711,340) (1,540,886) (2,946,907) (3,391,925)
Loss per share as reported (.09) (.13) (.16) (.28)
Pro-forma loss per share (.09) (.13) (.16) (.28)
At September 30, 2005, Elite had outstanding 2,896,250 options
with exercise prices ranging from $1.50 to $2.81 and 7,735,023
warrants with exercise prices ranging from $2.00 to $5.00; each
option and warrant representing the right to purchase one share
of Common Stock.
NOTE 4 - COMMITMENTS AND CONTINGENCIES
COLLABORATIVE AGREEMENTS
On June 21, 2005, the Company and Intelli PharmaCeutics Corp.,
entered into an agreement for the development and
commercialization of a controlled released generic drug for
certain gastric diseases by the parties. The Company is to share
in the profits, if any, from the sales of the drug.
On June 22, 2005, the Company and Pliva, Inc. ("Pliva") entered
into a Product Development and License Agreement, providing for
the development and license of a controlled released generic
anti-infective drug formulated by the Company. The Company is to
manufacture and Pliva is to market and sell the product. The
development costs are to be paid by Pliva and the Company and
the profits are to be shared equally. Pliva is to make milestone
payments to the Company.
On March 30, 2005, the Company entered into a product,
development, manufacturing and distribution agreement with
Harris Pharmaceutical, Inc. ("Harris") and Tish Technologies LLC
("Tish") with respect to a controlled release generic
anti-infective drug. The product is a generic equivalent to a
branded drug. The agreement provides for (i) the drug
development by Elite with costs of development to be shared by
Elite and Harris, (ii) the manufacture of the product by Elite
and its sale to Harris for distribution, and (iii) Tish to be
responsible for any requisite submissions to the FDA relating to
the product. Elite is to share in the profits, if any, generated
from the sale of the product.
The aforementioned agreements are in their infancy stages.
10
ELITE PHARMACEUTICALS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
(UNAUDITED)
NOTE 4 - COMMITMENTS AND CONTINGENCIES (Continued)
COLLABORATIVE AGREEMENTS (continued)
In May, 2004, Elite granted Purdue Pharma, L.P. ("Purdue") the
right to evaluate certain abuse resistance drug formulation
technology of the Company and an option to negotiate an
exclusive license to develop and commercialize Oxycodone
products under the Company's technology pursuant to which the
Company received $150,000, which was recognized as revenue
during the six months ended September 30, 2004. The agreement
expired pursuant to its own terms and the Company will not
receive any further revenue with respect to such agreement.
CONSULTING AGREEMENTS
The Company entered into one year consulting agreements with
each of Saggi Capital Corp. and Bridge Ventures Inc. on November
4, 2003 which have been extended through the period ending
November 4, 2005. Each of the consultant's services include
advice with respect to overall strategic planning, financing
opportunities, acquisition policy, commercial and investment
banking relationships and stockholder matters. The Company pays
each consultant a fee of $75,000 per annum in monthly
installments of $6,250. In addition, the Company issued to each
consultant a five (5) year warrant to purchase 100,000 shares of
the Company's Common Stock at a price of $2.00 per share.
On June 3, 2004, the Company agreed to issue a five-year warrant
to purchase 100,000 shares of Common Stock at a price of $2.50
per share to a company in consideration of its agreement to
provide consulting services.
On July 20, 2004, the Company issued to an individual, in
consideration of his agreement to provide financial consulting
services, a three-year warrant to purchase 50,000 shares of
Common Stock at a price of $3.00 per share. The issuance was
ratified by stockholders on April 15, 2005.
For the three and six months ended September 30, 2005,
consulting expenses under these agreements amounted to an
aggregate of $15,000 and $60,000, respectively. For the three
and six months ended September 30, 2004, consulting expenses
under these agreements amounted to an aggregate of $45,000 and
$90,000, respectively.
EMPLOYMENT AGREEMENT
On September 2, 2005, the Company entered into an amended and
restated Employment Agreement with Bernard J. Berk, providing
for Mr. Berk to continue to serve as the Company's Chief
Executive Officer through August 31, 2009. The Employment
Agreement also provides for an annual bonus as determined by the
Compensation Committee of the Company's Board of Directors.
Pursuant to the agreement:
- Mr. Berk waived his rights to 75,000 of 300,000 options
granted to him on July 23, 2003. The Company determined
that the remaining 225,000 options are fully vested.
11
ELITE PHARMACEUTICALS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2005 AND 2004
(UNAUDITED)
NOTE 4 - COMMITMENTS AND CONTINGENCIES (Continued)
EMPLOYMENT AGREEMENT (Continued)
- Mr. Berk's salary was increased to $330,140. Such
increase became effective May 1, 2005 and will accrue
but not be payable until November 1, 2005.
- Mr. Berk was granted under the Company's 2004 Stock
Option Plan, ten year options to purchase 600,000 shares
of Common Stock at $2.69, the fair market value of
Common Stock as of the time of grant. See Note 3 as to
the vesting of these options.
- Mr. Berk will be entitled to receive severance in
accordance with the employment agreement if he is
terminated without cause or because of his death or
permanent disability or if he terminates his employment
for good reason or as a result of a "change of control"
(as defined in the employment agreement). The severance
will be payable in accordance with the terms of his
employment agreement.
LEASE
On July 15, 2005, the Company entered into a lease for two years
commencing on July 1, 2005 for part of a one-story warehouse for
the storage of finished and raw material of pharmaceutical
products and equipment. The lease has a renewal option for a
five-year period.
Future minimum lease payments for the periods ending September
30, are:
2006 $27,923
2007 $20,942
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
THREE AND SIX MONTH PERIODS ENDED SEPTEMBER 30, 2005 COMPARED TO
THE THREE AND SIX MONTH PERIODS ENDED SEPTEMBER 30, 2004 (UNAUDITED)
The following discussion and analysis should be read in conjunction
with the Consolidated Financial Statements, the related Notes to Consolidated
Financial Statements and Management's Discussion and Analysis of Financial
Condition and Results of Operations included in the Company's Annual Report on
Form 10-K for the fiscal year ended March 31, 2005 (the "10-K") and the
Unaudited Consolidated Financial Statements and related Notes to Consolidated
Financial Statements included in Item 1 of Part I of this Quarterly Report on
Form 10-Q.
The Company has included in this Quarterly Report certain
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995 concerning the Company's business, operations and
financial condition. "Forward-looking statements" consist of all non-historical
information, and the analysis of historical information, including the
references in this Quarterly Report to future revenue growth, future expense
growth, future credit exposure, earnings before interest, taxes, depreciation
and amortization, future profitability, anticipated cash resources, anticipated
capital expenditures, capital requirements, and the Company's plans for future
periods. In addition, the words "could", "expects", "anticipates", "objective",
"plan", "may affect", "may depend", "believes", "estimates", "projects" and
similar words and phrases are also intended to identify such forward-looking
statements.
Actual results could differ materially from those projected in the
Company's forward-looking statements due to numerous known and unknown risks and
uncertainties, including, among other things, unanticipated technological
difficulties, the volatile and competitive environment for drug delivery
products, changes in domestic and foreign economic, market and regulatory
conditions, the results of development agreements with pharmaceutical companies,
the inherent uncertainty of financial estimates and projections, the
uncertainties involved in certain legal proceedings, instabilities arising from
terrorist actions and responses thereto, and other considerations described as
"Risk Factors" in other filings by the Company with the SEC including its Annual
Report on Form 10-K. Such factors may also cause substantial volatility in the
market price of the Company's Common Stock. All such forward-looking statements
are current only as of the date on which such statements were made. The Company
does not undertake any obligation to publicly update any forward-looking
statement to reflect events or circumstances after the date on which any such
statement is made or to reflect the occurrence of unanticipated events.
OVERVIEW
The Company is a specialty pharmaceutical company principally engaged
in the development and manufacture of oral controlled-release products. The
Company develops controlled release products using proprietary technology and
licenses these products. The Company's strategy includes developing generic
versions of controlled release drug products with high barriers to entry and
assisting partner companies in the life cycle management of products to improve
off-patent drug products. The Company's technology is applicable to develop
delayed, sustained or targeted release pellets, capsules, tablets, granules and
powders. The Company has one product currently being sold commercially and a
pipeline of six drug products under development in the therapeutic areas that
include cardiovascular, pain management, allergy and infection. The addressable
market for the Company's pipeline of products exceeds $6 billion. The Company's
current facility in Northvale, New Jersey also is a GMP and DEA registered
facility for research, development, and manufacturing.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Management's discussion addresses the Company's 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 long-lived assets, intangible assets, income taxes, equity-based
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.
13
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.
The Company's most critical accounting policies include the recognition
of revenue upon completion of certain phases of projects under research and
development contracts. Revenues from these contracts are recognized when
management determines the Company has completed its obligation under each phase.
The Company also assesses a need for an allowance to reduce its deferred tax
assets to the amount that it believes are more likely than not to be realized.
Management estimates its net operating losses will probably not be utilized in
the near future, and has not recognized a tax benefit from this deferred tax
asset. If management anticipated being profitable, a deferred tax benefit would
be recognized and such estimate would reduce net loss and net loss per share
accordingly. The Company assesses the recoverability of long-lived assets and
intangible assets whenever events or changes in circumstances indicate that the
carrying value of the assets may not be recoverable. Management estimates the
Company's patents and property and equipment are not impaired. If these assets
were considered impaired, the Company would recognize an impairment loss which
would increase the Company's net loss and net loss per share accordingly. It
should be noted that actual results may differ from these estimates under
different assumptions or conditions.
During the fiscal year ended March 31, 2003, the Company elected to
prospectively recognize the fair value of stock options granted to employees and
members of the Board of Directors, effective as of the beginning of the fiscal
year. The prospective method allowed by the Financial Accounting Standards Board
affects the Company's results of operations for the three and six month periods
ended September 30, 2005 and 2004 as options were granted or repriced during
these periods which either vested immediately or vest over three to five years.
The Company does not know the future effect of options and warrants which may be
granted to employees and members of the Board of Directors. The Financial
Accounting Standards Board provided three transition alternatives for
recognizing stock-based compensation cost using the fair value method. If
management did not elect the prospective method during the three and six month
periods ended September 30, 2005 and 2004, net loss and net loss per share would
have been decreased. However, the two other methods would have required either
greater compensation cost to be recognized as an expense or retroactive
restatement of previously reported net loss.
RESULTS OF CONSOLIDATED OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 2005 COMPARED TO THREE MONTHS ENDED
SEPTEMBER 30, 2004
Revenues consisted of manufacturing fees of $254,392 and royalties of
$17,770, for the three months ended September 30, 2005 as compared with
$151,450, which primarily consisted of a non-refundable $150,000 payment
received from Purdue Pharma L.P. for the right to evaluate certain abuse
resistance drug formulation technology of the Company over the comparable period
of the prior year.
General and administrative expenses for the three months ended
September 30, 2005 were $434,685, a decrease of $206,461, or approximately
32.2%, from $641,146 for the comparable period of the prior year. The decrease
was substantially due to reductions in consulting and legal fees approximating
$130,000 and amounts paid and accrued in settlements of litigation totaling
$100,000, offset by increased allocated salaries of $20,000.
Research and development costs for the three months ended September 30,
2005 were $999,340, an increase of $433,950, or approximately 76.7%, from
$565,390 for the comparable period of the prior year, primarily the result of
increases in wages, raw materials, laboratory and manufacturing supplies. The
costs associated with the manufacturing of batches of Lodrane 24(R) have
contributed to this increase.
We are unable to provide a break-down of the specific costs associated
with the research and development of each product on which we devoted resources
because a significant portion of the costs are generally associated with
salaries, laboratory supplies, laboratory and manufacturing expenses, utilities
and similar expenses. We have not historically allocated these expenses to any
particular product. In addition, we cannot estimate the additional costs and
expenses that may be incurred in order to potentially complete the development
of any product, nor can we estimate the amount of time that might be involved in
such development because of the uncertainties associated with the development of
controlled release drug delivery products as described in this report.
Depreciation and amortization for the three months ended September 30,
2005 increased by $95,002 to $215,362 from $120,360 for the year earlier
comparable period due to the full write-off of financing costs associated with
the redemption of the tax exempt Bonds originally issued by the Authority on
September 2, 1999, offset by the
14
reduction in amortization and depreciation of certain assets which had been
fully depreciated and amortized.
Other expenses for the three months ended September 30, 2005 were
$343,472, a decrease of $8,211, or approximately 2.3%, from the comparable
period of the prior year. The decrease was primarily due to a decrease of $5,227
in charges related to issuance of stock options. Additional interest income, due
to higher compensating balances as a result of the private placement and EDA
refinancing, was somewhat offset by increased interest expense resulting from
the equipment financing.
As a result of the foregoing, the Company's net loss for the three
months ended September 30, 2005 increased to $1,720,697 from $1,527,129 or 12.7%
from the comparable period of the prior year.
SIX MONTHS ENDED SEPTEMBER 30, 2005 COMPARED TO SIX MONTHS ENDED
SEPTEMBER 30, 2004
The Company's revenues for the six months ended September 30, 2005 were
$386,943, consisting of manufacturing fees of $369,173 and royalties of $17,770.
Revenues for the six months ended September 30, 2004 were $151,450, which
primarily consisted of a non-refundable $150,000 payment received from Purdue
Pharma L.P. granting it the right to evaluate certain abuse resistance drug
formulation technology of the Company.
General and administrative expenses for the six months ended September
30, 2005 were $861,215, a decrease of $188,503 or 18.0% from $1,049,718 for the
comparable period of the prior year, substantially due to reductions in amounts
paid and accrued in settlements of litigation, consulting and legal fees offset
by modest increases in salaries and accounting fees.
Research and development costs for the six months ended September 30,
2005 were $1,738,327, an increase of $526,708, or approximately 43.5% from
$1,211,619 for the comparable period of the prior year, primarily the result of
increased wages, lab and manufacturing supplies and raw materials, largely due
to the manufacturing of commercial batches of Lodrane 24(R).
Other expenses for the six months ended September 30, 2005 were
$424,317, a decrease of $603,487, or approximately 58.7% from $1,027,804 for the
comparable period of the prior year, due primarily to a reduction of $588,041 in
non-cash compensation through issuance of stock options and warrants, including
a charge of $397,732 during the six months ended September 30, 2004 related to
repricing of stock options. Additional interest income was due to higher
compensating balances as a result of a private placement and EDA refinancing,
somewhat offset by an increase in interest expense resulting from the equipment
financing.
The Company's net loss for the six months ended September 30, 2005 was
$2,947,028 compared to $3,364,411 for the comparable period of the prior year,
primarily due to the revenues generated and reduction in other expenses in the
current year.
MATERIAL CHANGES IN FINANCIAL CONDITION
The Company's working capital (total current assets less total current
liabilities), decreased to $2,277,786 as of September 30, 2005 from $3,328,583
as of March 31, 2005, primarily due to the net loss of $2,521,711 from
operations. Cash was used to fund the net loss.
The Company experienced negative cash flow from operations of
$2,044,807 for the six months ended September 30, 2005, primarily due to the
Company's net loss from operations offset by non-cash charges of $640,389, which
included $331,277 in connection with the issuance of stock options and $309,112
of depreciation and amortization.
On November 15, 2004, Elite's partner, ECR, launched Lodrane 24(R),
once a day allergy product, utilizing Elite's extended release technology to
provide for once daily dosing. Under its agreement with ECR, Elite is currently
manufacturing commercial batches of Lodrane 24(R) in exchange for manufacturing
margin and royalties on product revenues. Royalty income earned for the six
months ended September 30, 2005 was $17,770. The Company expects the royalties
to provide additional cash to help fund its operations.
On March 30, 2005, the Company entered into a product, development,
manufacturing and distribution agreement with Harris Pharmaceutical, Inc.
("Harris") and Tish Technologies LLC ("Tish") with respect to a controlled
release generic anti-infective drug. The product is a generic equivalent to a
branded drug which the Company estimates
15
has addressable market revenues of approximately $80 million per year. The
agreement provides for (1) the development of the drug by Elite with costs of
development to be shared by Elite and Harris, (2) the manufacture by Elite and
its sale to Harris for distribution and (3) Tish to be responsible for any
requisite submissions to the FDA relating to the product. Elite is to share in
the profits generated from the sale of the product.
On June 21, 2005, the Company and IntelliPharmaCeutics Corp., entered
into an agreement for the development and commercialization of a controlled
released generic drug for certain anti-infective diseases by the parties. The
Company estimates that the product had an addressable market in the U.S. of
approximately $4 billion in 2004. The Company is to share in the profits, if
any, from the sales of the drug.
On June 22, 2005, the Company and Pliva, Inc. ("Pliva") entered into a
Product Development and License Agreement providing for the development and
license of a controlled released generic anti-infective drug formulated by the
Company. The Company estimates that the product had an estimated U.S. generic
market size of approximately $90 million in 2004. The Company is to manufacture
and Pliva will market and sell the product. Under the agreement, the partner is
to make milestone payments to the Company. The development costs are to be paid
by Pliva and the Company, and the profits are to be shared equally.
No assurance can be given that the Company will consummate any of the
transactions contemplated above or that they will generate any material revenues
for the Company.
LIQUIDITY AND CAPITAL RESOURCES
For the six months ended September 30, 2005, the Company recorded
negative cash flow and financed its operations primarily through utilization of
its existing cash. As of September 30, 2005, the Company had approximately $1.9
million of cash and cash equivalents, an increase of approximately $1.7 million
from the $.2 million at September 30, 2004 and had working capital of
approximately $2.3 million.
Net cash used in operating activities was $2,044,807 during the six
months ended September 30, 2005, compared to $2,305,538 for the six months ended
September 30, 2004. Net cash used in operating activities during the six months
ended September 30, 2005 included the Company's net loss of $2,947,028 and
increases in prepaid expenses and other current assets, offset in part by
non-cash charges of $331,277 in stock option charges and $309,112 in
depreciation and amortization expense. Net cash used in operating activities
during the six months ended September 30, 2004 included the Company's net loss
of $3,364,411 offset in part by non-cash charges of $919,318 in stock option and
warrant charges and $225,720 in depreciation and amortization expense.
Investing activities used net cash of $1,378,923 during the six months
ended September 30, 2005, which resulted primarily from an increase in
restricted cash requirements as a result of the EDA refinancing. For the six
months ended September 30, 2004, restricted cash decreased due to a principal
and interest payment on its outstanding EDA Bonds.
During the six months ended September 30, 2005, financing activities
provided net cash of $1,377,989 derived from proceeds of $196,502 from the
exercise of stock options and warrants and net proceeds of $1,455,548 from the
refinancing of EDA Bonds , offset by $274,061 used to repay indebtedness. For
the six months ended September 30, 2004, $43,334 were used to repay
indebtedness.
The Company's capital expenditures in the six months ended September
30, 2005 were $117,613. Capital expenditures in the six months ended September
30, 2004 amounted to $399,656, which was financed through an equipment loan.
The Company anticipates that its capital expenditures for the 12
months ending September 30, 2006 will be limited to expenditures that can be
funded entirely by development contracts that include provisions for such
funding. The Company refinanced its current EDA Bonds to enable it to expand its
manufacturing facility with the net proceeds. While the Company's cash as of
September 30, 2005 may prove adequate to finance its operations through
September 30, 2006, no assurance can be given that additional funds will not be
required. Accordingly, the Company may seek additional funds through the sale of
additional debt or equity. No assurance can be given that any offering if
undertaken will be successfully concluded or that if concluded the proceeds will
be material.
The Company had outstanding, as of September 30, 2005, bonds in the
aggregate amount of $4,155,000, consisting of $3,660,000 of 6.5% tax exempt
Bonds with an outside maturing of September 1, 2030 and $495,000 of 9%
16
Bonds with an outside maturity of September 1, 2012. The bonds are secured by a
first lien on the Company's facility in Northvale, New Jersey. Pursuant to the
terms of the bonds, several restricted cash accounts have been established for
the payment of bond principal and interest. Bond proceeds were utilized for the
redemption of previously issued tax exempt bonds issued by the Authority in
September 1999 and to refinance equipment financing, as well as provide
approximately $1,000,000 of capital for the purchase of additional equipment for
the manufacture and development at the Company's facility of pharmaceutical
products and the maintenance of a $415,500 debt service reserve. All of the
restricted cash, other than the debt service reserve, is expected to be expended
within twelve months and is therefore categorized as a current asset on the
Company's consolidated balance sheet as of September 30, 2005. Pursuant to the
terms of the related bond indenture agreement, the Company is required to
observe certain covenants, including covenants relating to the incurrence of
additional indebtedness, the granting of liens and the maintenance of certain
financial covenants. As of September 30, 2005, the Company was in compliance
with the bond covenants.
On July 8, 2004, Elite Labs entered into a loan and financing agreement
to finance the purchase of certain machinery and equipment. Elite Labs borrowed
$400,000 payable in 36 monthly installments of $13,671 each, including principal
and interest at 14% per annum. The first four and the last three months of
scheduled payments were held by the lender and were applied to the principal
balance when due. The loan was secured by two pieces of equipment and the
guaranty of the Company. In addition, the Company issued to designees of the
lender 50,000 warrants, which vested immediately, to purchase 50,000 shares of
the Company's Common Stock at $4.20 per share. A charge of $41,252 for the cost
of these warrants was reflected in the six months ended September 30,2004.
Proceeds from the refinancing of the Company's EDA Bonds were used to pay-off
this loan.
The Company from time to time will consider potential strategic
transactions including acquisitions, strategic alliances, joint ventures and
licensing arrangements with other pharmaceutical companies. The Company retained
an investment banking firm to assist with its efforts. There can be no assurance
that any such transaction will be available or consummated.
As of September 30, 2005, the Company's principal source of liquidity
was approximately $1,856,262 of cash and cash equivalents. The Company also may
have access to funds through the exercise of outstanding stock options and
warrants in addition to funds that may be generated from the potential sale of
New Jersey tax losses. There can be no assurance that proceeds from the sale of
tax losses and from the exercise, if any, of outstanding warrants or options
will be material.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company had no investments in marketable securities as of September
30, 2005 or assets and liabilities which are denominated in a currency other
than U.S. dollars or involve commodity price risks.
ITEM 4. CONTROLS AND PROCEDURES
As of the end of the period covered by this report, based on an
evaluation of the Company's disclosure controls and procedures (as defined in
Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934), the
Chief Executive and Chief Financial Officer of the Company concluded that the
Company's disclosure controls and procedures are effective to ensure that
information required to be disclosed by the Company in its Exchange Act reports
is recorded, processed, summarized and reported within the applicable time
periods specified by the SEC's rules and forms.
There was no change in the Company's internal controls over financial
reporting that occurred during the fiscal quarter ended September 30, 2005 that
materially affected or is reasonably likely to materially affect the Company's
internal controls over financial reporting.
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
10.1 Product Development, Manufacturing and Distribution Agreement,
dated as of March 30, 2005, by and among Harris Pharmaceutical,
Inc., Tish Technologies, LLC and Elite Labs, incorporated by
reference to exhibit 10.1 to the Form 8-K filed April 5, 2005 as
amended by Form 8-K/A
17
filed July 20, 2005, as amended by Form 8-K/A filed August 23,
2005, as amended by Form 8-K/A filed September 27, 2005.*
10.2 Product Development and Commercialization Agreement, dated as of
June 21, 2005, by and among Intellepharmaceutics Corp., Elite
Labs and the Company, incorporate by reference to exhibit 10.1
to the Form 8-K filed June 27, 2005, as amended by Form 8-K/A
filed September 7, 2005.*
10.3 Product Development and License Agreement, dated as of June 22,
2005, between Pliva, Inc. and Elite Labs, incorporated by
reference to exhibit 10.1 to the Form 8-K filed June 28, 2005,
as amended by Form 8-K/A filed September 6, 2005.*
10.4 Loan Agreement, by and between New Jersey Economic Development
Authority and the Company, dated as of August 15, 2005,
incorporated by reference to exhibit 10.1 to the Form 8-K filed
September 6, 2005.
10.5 Copy of Series A Note, incorporated by reference to exhibit 10.2
to the Form 8-K filed September 6, 2005.
10.6 Copy of Series B Note, incorporated by reference to exhibit 10.3
to the Form 8-K filed September 6, 2005.
10.7 Mortgage from Company to New Jersey Economic Development
Authority, incorporated by reference to exhibit 10.4 to the Form
8-K filed September 6, 2005.
10.8 Indenture between New Jersey Economic Development Authority and
the Bank of New York as Trustee, dated as of August 15, 2005,
incorporated by reference to exhibit 10.5 to the Form 8-K filed
September 6, 2005.
10.9 Amended and Restated Employment Agreement, dated as of September
2, 2005, by and between the Company and Bernard Berk,
incorporated by reference to exhibit 10.1 to the Form 8-K filed
September 9, 2005.
10.10 Amendment, dated as of September 2, 2005, by and between the
Company and Bernard Berk, to the Stock Option Agreement, dated
as of July 23, 2003, incorporated by reference to exhibit 10.2
to the Form 8-K filed September 9, 2005.
10.11 Stock Option Agreement, dated as of September 2, 2005, by and
between the Company and Bernard Berk, incorporated by reference
to exhibit 10.3 to the Form 8-K filed September 9, 2005.
10.12 Stock Option Agreement, dated as of September 2, 2005, by and
between the Company and Bernard Berk, incorporated by reference
to exhibit 10.4 to the Form 8-K filed September 9, 2005.
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 by Chief Financial Officer pursuant to Section 906
of the Sarbanes-Oxley Act of 2002.
* The Company has requested confidential treatment with respect to the
referenced exhibits. In the event that the Securities and Exchange Commission
should deny such request in whole or in part, such exhibit or the relevant
portions thereof shall be filed by amendment to applicable Current Reports on
Form 8K.
(b) Reports on Form 8-K.
18
Since June 30, 2005 Company has filed current reports on Form
8-K with the Securities and Exchange Commission:
Form 8-K/A filed September 27, 2005 related to Form 8-K filed
April 5, 2005, Form 8-K/A filed July 20, 2005 and Form 8-K/A
filed August 23, 2005, relating to items 1.01 and 9.01.
Form 8-K filed September 6, 2005 and Form 8-K/A filed September
7, 2005 relating to items 2.03 and 9.01.
Form 8-K/A filed September 6, 2005 related to Form 8-K filed
June 28, 2005 relating to items 1.01 and 9.01.
Form 8-K/A filed September 7, 2005 related to Form 8-K filed
June 27, 2005 relating to items 1.01 and 9.01.
Form 8-K filed September 9, 2005 relating to items 1.01, 3.02
and 9.01.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
ELITE PHARMACEUTICALS, INC.
Date: November 11, 2005 By: /s/ Bernard Berk
----------------------------
Bernard Berk
Chief Executive Officer
(Principal Executive Officer)
Date: November 11, 2005 By: /s/ Mark I. Gittelman
----------------------------
Mark I. Gittelman
Chief Financial Officer and Treasurer
(Principal Financial and Accounting Officer)
20