AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 13, 2006
REGISTRATION NO. ________
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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ELITE PHARMACEUTICALS, INC.
(Exact name of Registrant as specified in its charter)
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DELAWARE 2834 22-3542636
(State or other (Primary Standard Industrial (I.R.S. Employer
jurisdiction of Classification Code Number) Identification
incorporation or Number)
organization)
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BERNARD BERK, CHIEF EXECUTIVE OFFICER
ELITE PHARMACEUTICALS, INC.
165 LUDLOW AVENUE
NORTHVALE, NEW JERSEY 07647
(201) 750-2646
(Name, address, including zip
code, and telephone number, including area code,
of registrant's principal executive offices
and agent for service)
With copies to:
SCOTT H. ROSENBLATT, ESQ.
REITLER BROWN & ROSENBLATT, LLC
800 THIRD AVENUE, 21ST FLOOR
NEW YORK, NEW YORK 10022-4611
(212) 209-3050
Approximate date of commencement of proposed sale to the public: As soon
as practicable after the effective date of this Registration Statement.
If the only securities being registered on this form are being offered
pursuant to dividend or reinvestment plans, please check the following box. |_|
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, check the following box. |X|
If this Form is filed to register additional securities pursuant to Rule
462(b) under the Securities Act, please check the following box and list the
Securities Act Registration Statement number of the earlier effective
Registration Statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
Registration Statement number of the earlier effective Registration Statement
for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. |_| ___________
CALCULATION OF REGISTRATION FEE
PROPOSED PROPOSED
MAXIMUM MAXIMUM
OFFERING AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO BE PRICE PER OFFERING REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED SHARE PRICE FEE
Common Stock, $.01 par value 7,298,245(1) $2.22 $16,202,103.90 $1,733.63
Common Stock, $.01 par value 2,577,777(2) $3.62 $ 9,331,552.70 $ 998.48
(1) 4,444,444 shares which may be re-offered upon conversion of outstanding
shares of Series B 8% Convertible Preferred Stock (the "Series B
Preferred Stock") and 2,853,801 shares which may be received in
satisfaction of Series B Preferred Stock dividend obligations to accrue
during the first five years on the Series B Preferred Stock.
(2) shares to be offered following exercise of Warrants expiring March 15,
2011, issued in a private placement and including 355,555 warrants held
by the placement agent and its designees.
(3) Estimated solely for purposes of calculating the registration fee in
accordance with Rule 457(c) under the Securities Act of 1933, as
amended, and based on the
ii
average of the high and low sale price per share of shares of the Common
Stock on the American Stock Exchange on April 12, 2006 or with respect
to the shares described in footnote 2, the higher of the foregoing price
or 125% of the weighted average exercise price of the warrants which the
holders of the shares to be offered is required to pay to exercise such
warrants.
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The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Securities and Exchange Commission, acting
pursuant to Section 8(a), may determine.
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iii
The information in this prospectus is not complete and may be changed without
notice. The selling stockholders may not sell these securities until the
registration statement filed with the Securities and Exchange Commission is
effective. This prospectus is not an offer to sell these securities, and it is
not soliciting offers to buy these securities, in any state where the offer or
sale of these securities is not permitted.
PROSPECTUS SUBJECT TO COMPLETION
DATED APRIL 13, 2006
ELITE PHARMACEUTICALS
COMMON STOCK
------------------
This is an offering (the "OFFERING") of the following shares of Common
Stock, par value $.01 per share, of Elite Pharmaceuticals, Inc. (the "COMPANY"
or "ELITE"), by the selling stockholders named in this prospectus (the "SELLING
STOCKHOLDERS"):
(i) 7,298,245 shares acquired upon conversion of outstanding shares of the
Company's Series B 8% Convertible Preferred Stock, par value $.01 per
share (the "SERIES B PREFERRED STOCK") and shares of Common Stock
received in satisfaction of Series B Preferred Stock dividend
obligations;
(ii) 2,222,222 shares acquired upon exercise of warrants expiring on or
prior to March 15, 2011 by investors in a private placement (the
"INVESTOR WARRANTS"); and
(iii) 355,555 shares acquired by the Placement Agents and its designees upon
exercise of warrants expiring on or prior to March 15, 2011 (the
"PLACEMENT AGENT WARRANTS" and together with the Investor Warrants, the
"WARRANTS").
The Common Stock is listed on the American Stock Exchange under the
symbol "ELI." On April 12, 2006, the closing sales price of our Common Stock on
the American Stock Exchange was $___ per share.
SEE "RISK FACTORS" BEGINNING ON PAGE 5 FOR A DISCUSSION OF FACTORS THAT
YOU SHOULD CONSIDER BEFORE BUYING SHARES OF OUR COMMON STOCK.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
We will receive no proceeds from the sale of the shares of Common Stock
sold by the Selling Stockholders.
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The date of this prospectus is April 13, 2006.
TABLE OF CONTENTS
Page
WHERE YOU CAN FIND MORE INFORMATION ABOUT US...................................2
PROSPECTUS SUMMARY.............................................................3
CAUTIONARY STATEMENT REGARDING FORWARD LOOKING INFORMATION.....................5
RISK FACTORS...................................................................5
USE OF PROCEEDS...............................................................15
DESCRIPTION OF CAPITAL STOCK..................................................15
SELLING STOCKHOLDERS..........................................................19
PLAN OF DISTRIBUTION..........................................................25
LEGAL MATTERS.................................................................27
EXPERTS.......................................................................27
INCORPORATION BY REFERENCE....................................................27
INFORMATION NOT REQUIRED I N PROSPECTUS.....................................II-1
SIGNATURES..................................................................II-5
WHERE YOU CAN FIND MORE INFORMATION ABOUT US
We file reports, proxy statements, information statements and other
information with the Securities and Exchange Commission (the "SEC"). You may
read and copy this information, for a copying fee, at the SEC's Public Reference
Room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at
1-800-SEC-0330 for more information in its public reference rooms. Our SEC
filings are also available to the public from commercial document retrieval
services, from the American Stock Exchange and at the web site maintained by the
SEC at http://www.sec.gov.
Elite has not authorized anyone to give any information or make any
representation about the Offering that differs from, or adds to, the information
in this prospectus or in its documents that are publicly filed with the SEC and
that are incorporated in this prospectus. Therefore, if anyone does give you
different or additional information, you should not rely on it. The delivery of
this prospectus does not mean that there have not been any changes in Elite's
condition since the date of this prospectus. If you are in a jurisdiction where
it is unlawful to offer the securities offered by this prospectus, or if you are
a person to whom it is unlawful to direct such activities, then the offer
presented by this prospectus does not extend to you. This prospectus speaks only
as of its date except where it indicates that another date applies. Documents
that are incorporated by reference in this prospectus speak only as of their
date, except where they specify that other dates apply.
THIS PROSPECTUS IS NOT AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER
TO BUY NOR SHALL THERE BE ANY SALE OF SECURITIES IN ANY STATE IN WHICH SUCH
OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR
QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
2
PROSPECTUS SUMMARY
THE FOLLOWING SUMMARY HIGHLIGHTS SELECTED INFORMATION FROM, OR
INCORPORATED BY REFERENCE INTO, THIS PROSPECTUS AND MAY NOT CONTAIN ALL THE
INFORMATION THAT IS IMPORTANT TO YOU. TO UNDERSTAND OUR BUSINESS AND THIS
OFFERING FULLY, YOU SHOULD READ THIS ENTIRE PROSPECTUS CAREFULLY, INCLUDING THE
CONSOLIDATED FINANCIAL STATEMENTS AND THE RELATED NOTES AND THE DOCUMENTS
INCORPORATED BY REFERENCE INTO THIS PROSPECTUS. REFERENCES IN THIS PROSPECTUS TO
THE "COMPANY," "ELITE," "ELITE PHARMACEUTICALS," "WE," "OUR," AND "US" REFER TO
ELITE PHARMACEUTICALS, INC., A DELAWARE CORPORATION, TOGETHER WITH OUR
SUBSIDIARIES. PLEASE SEE "INCORPORATION BY REFERENCE" FOR A DESCRIPTION OF
PUBLIC FILINGS DEEMED INCORPORATED BY REFERENCE INTO THIS PROSPECTUS.
THE COMPANY
OVERVIEW
Elite is a specialty pharmaceutical company principally engaged in the
development and manufacture of oral, controlled release products. Elite 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. Elite's technology is applicable to develop delayed, sustained or
targeted release pellets, capsules, tablets, granules and powders. Elite has one
product currently being sold commercially and a pipeline of eight drug products
under development in the therapeutic areas that include cardiovascular, pain
management, allergy and infection. The addressable market for Elite's pipeline
of products exceeds $6 billion. Elite's facility in Northvale, New Jersey also
is a Good Manufacturing Practice (GMP) and DEA registered facility for research,
development and manufacturing.
We have concentrated on developing orally administered controlled
release drug products. These products include drugs that cover therapeutic areas
for pain, angina, hypertension, allergy and infection. One of our products,
Lodrane24(R), has been commercially developed and is being marketed by ECR
Pharmaceuticals, our partner for this product.
In an effort to reduce costs, improve focus and enhance efficiency, we
reduced the number of products that we are actively developing from fifteen to
nine. The nine products, one of which has been commercially developed and eight
that are in development, are deemed by us to be the most suitable for
development given our limited resources.
STRATEGY
We are focusing our efforts on the following areas: (i) manufacturing of
Lodrane 24(R) product, (ii) the development of the other products in our
pipeline, (iii) commercial exploitation of our products either by license and
the collection of royalties, or through the manufacture of tablets and capsules
using our formulations, and (iv) development of new products and the expansion
of our licensing agreements with other pharmaceutical companies, including
co-development projects, joint ventures and other collaborations.
3
We are focusing on the development of various types of drug products,
including, generic drug products (which require abbreviated new drug
applications ("ANDA")), as well as branded drug products (which require new drug
applications ("NDA") under Section 505(b)(1) or 505(b)(2) of the Drug Price
Competition an Patent Term Restoration Act of 1984 (the "DRUG PRICE ACT").
We intend to continue to collaborate in the development of additional
products with our current partners. We also plan to seek additional
collaborations to develop more drug products.
We believe that our business strategy enables us to reduce our risk by
having a diverse product portfolio that includes both branded and generic
products in various therapeutic categories; and build collaborations and
establish licensing agreements with companies with greater resources thereby
allowing us to share costs of development and to improve cash-flow.
CORPORATE INFORMATION
Elite Pharmaceuticals, Inc. was incorporated on October 1, 1997 under
the laws of Delaware, and our wholly-owned subsidiaries, Elite Laboratories,
Inc. ("ELITE LABS") and Elite Research, Inc. ("ELITE Research") were
incorporated on August 23, 1990 and December 20, 2002, respectively, under the
laws of Delaware.
On October 24, 1997, Elite Pharmaceuticals merged with and into our
predecessor company, Prologica International, Inc. ("PROLOGICA"), an inactive
publicly held corporation formed under the laws of Pennsylvania. At the same
time, Elite Labs merged with a wholly-owned subsidiary of Prologica. Following
these mergers, Elite Pharmaceuticals survived as the parent of its wholly-owned
subsidiary, Elite Labs.
On September 30, 2002, we acquired from Elan Corporation, plc and Elan
International Services, Ltd. (together "ELAN") Elan's 19.9% interest in Elite
Research, Ltd., a Bermuda corporation ("ERL"), a joint venture formed between
Elite and Elan in which our initial interest was 100% of the outstanding Common
Stock which represented 80.1% of the outstanding capital stock. As a result of
the termination of the joint venture, we owned 100% of ERL's capital stock. On
December 31, 2002, ERL was merged into Elite Research, our wholly-owned
subsidiary.
Our common stock is traded on the American Stock Exchange under the
symbol "ELI". The market for our stock has historically been characterized
generally by low volume and broad range of prices and volume volatility. We
cannot give any assurance that a stable trading market will develop for our
stock.
Our executive offices are located at 165 Ludlow Avenue, Northvale, New
Jersey 07647. Phone No.: (201) 750-2646; Facsimile No.: (201) 750-2755.
4
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING INFORMATION
Certain information contained in or incorporated by reference into this
prospectus includes forward-looking statements (as defined in Section 27A of the
Securities Act and Section 21E of the Securities Exchange Act) that reflect
Elite's current views with respect to future events and financial performance.
Certain factors, such as unanticipated technological difficulties, the volatile
and competitive environment for drug delivery products, changes in domestic and
foreign economic, market and regulatory conditions, the inherent uncertainty of
financial estimates and projections, the degree of success, if any, in
concluding business partnerships or licenses with viable pharmaceutical
companies, instabilities arising from terrorist actions and responses thereto,
and other considerations described as "RISK FACTORS" in this prospectus could
cause actual results to differ materially from those in the forward-looking
statements. When used in this Registration Statement, statements that are not
statements of current or historical fact may be deemed to be forward-looking
statements. Without limiting the foregoing, the words "plan", "intend", "may,"
"will," "expect," "believe", "could," "anticipate," "estimate," or "continue" or
similar expressions or other variations or comparable terminology are intended
to identify such forward-looking statements. Readers are cautioned not to place
undue reliance on these forward-looking statements, which speak only as of the
date hereof. Except as required by law, the Company undertakes no obligation to
update any forward-looking statements, whether as a result of new information,
future events or otherwise.
RISK FACTORS
IN ADDITION TO THE OTHER INFORMATION CONTAINED IN THIS PROSPECTUS,
INCLUDING THE OTHER DOCUMENTS INCORPORATED HEREIN BY REFERENCE AND REFERRED
BELOW, THE FOLLOWING RISK FACTORS SHOULD BE CONSIDERED CAREFULLY IN EVALUATING
AN INVESTMENT IN ELITE AND IN ANALYZING OUR FORWARD-LOOKING STATEMENTS.
OUR CONTINUING LOSSES ENDANGER OUR VIABILITY AS A GOING-CONCERN AND HAVE CAUSED
OUR AUDITORS TO ISSUE "GOING CONCERN" ANNUAL AUDIT REPORTS.
We reported net losses of $4,648,549, $5,906,890, $6,514,217 and
$4,061,422 for the nine months ended December 31, 2005 and for the years ended
March 31, 2005, 2004 and 2003, respectively. At December 31, 2005, we had an
accumulated deficit of approximately $45.8 million, consolidated assets of
approximately $8.3 million, stockholders' equity of approximately $3.0 million,
and working capital of approximately $2.0 million. Our products are in the
development and early deployment stage and have not generated any significant
revenue to date. Our independent auditors have issued a "going concern" audit
report for our financial statements for each of the fiscal years ended March 31,
2005, March 31, 2004 and March 31, 2003.
WE HAVE A RELATIVELY LIMITED OPERATING HISTORY, WHICH MAKES IT DIFFICULT TO
EVALUATE OUR FUTURE PROSPECTS.
Although we have been in operation since 1990, we have a relatively
short operating history and limited financial data upon which you may evaluate
our business and prospects. In addition, our business model is likely to
continue to evolve as we attempt to expand our product offerings and enter new
markets. As a result, our potential for future profitability must be considered
in light of the risks, uncertainties, expenses and difficulties frequently
encountered by
5
companies that are attempting to move into new markets and continuing to
innovate with new and unproven technologies. Some of these risks relate to our
potential inability to:
o develop new products;
o obtain regulatory approval of our products;
o manage our growth, control expenditures and align costs with
revenues;
o attract, retain and motivate qualified personnel; and
o respond to competitive developments.
If we do not effectively address the risks we face, our business model may
become unworkable and we may not achieve or sustain profitability or
successfully develop any products.
WE HAVE NOT BEEN PROFITABLE AND EXPECT FUTURE LOSSES.
To date, we have not been profitable, and since our inception in 1990,
we have not generated any significant revenues. We may never be profitable or,
if we become profitable, we may be unable to sustain profitability. We have
sustained losses in each year since our incorporation in 1990. We incurred net
losses of $4,648,549, $5,906,890, $6,514,217, $4,061,422, and $1,774,527 for the
nine months ended December 31, 2005 and for the years ended March 31, 2005,
2004, 2003 and 2002, respectively. We expect to realize significant losses for
the current year of operation. We expect to continue to incur losses until we
are able to generate sufficient revenues to support our operations and offset
operating costs.
OUR FOUNDER AND FORMER PRESIDENT AND CHIEF EXECUTIVE OFFICER RESIGNED IN JUNE
2003 ALL OF HIS POSITIONS WITH ELITE, WHICH MAY HAVE A MATERIAL ADVERSE EFFECT
ON US.
On June 3, 2003, Dr. Atul M. Mehta, our founder and former President and
Chief Executive Officer resigned from all of his positions with Elite. In the
past, we relied on Dr. Mehta's scientific expertise in developing our products.
There can be no assurance that we will successfully replace Dr. Mehta's
expertise. In addition, the loss of Dr. Mehta's services may adversely affect
our relationships with our contract partners.
Pursuant to an agreement in April 2004 and a related agreement in
October 2004, to settle a litigation initiated by Dr. Mehta in July 2003 for
alleged breach of his employment agreement, the Company extended the expiration
dates to November 30, 2007 of options to purchase 670,000 shares of Common Stock
held by Dr. Mehta and reduced the exercise price of certain of the options and
he relinquished any rights to the Company's intellectual property and agreed to
certain non-disclosure and non-competition covenants. The Company also provided
him with certain "piggyback" registration rights with respect to the shares
issuable upon exercise of the foregoing options granted by the Company. Dr.
Mehta and members of his family sold in October 2004 an aggregate of 1,362,200
shares of Common Stock representing all of his and his affiliates holdings of
securities of the Company except for the foregoing options.
6
OUR RESEARCH ACTIVITIES ARE CHARACTERIZED BY INHERENT RISK AND WE MAY NOT BE
ABLE TO SUCCESSFULLY DEVELOP PRODUCTS FOR COMMERCIAL USE THAT ARE IN OUR
PIPELINE.
Our research activities are characterized by the inherent risk that the
research will not yield results that will receive FDA approval or otherwise be
suitable for commercial exploitation.
As of December 31, 2005, we have entered into agreements with respect to
the marketing upon development of four drugs. Each agreement provides that we
are to commercially develop or co-develop with the partner the product and upon
securing by a partner or partners having FDA approval or other regulatory
approval, and if required, we are to manufacture the product and sell it to a
partner or marketing partner for distribution. The commercial development of one
of the four drugs has been completed and the three other drugs are under
development. No assurance can be given that sales, if any, by any marketing
partner will result in profit for Elite from the product.
We have also entered into two additional co-development agreements.
These products are currently in development. No assurance can be given that we
will be successful in developing these products, and, if successful, that an
agreement can be reached with a marketing partner for the sale of the products
or that any sales of the products will result in profit for Elite.
We are also developing three additional products on our own. Two are in
pilot Phase I studies and one is in the pilot bioequivalence stage. Additional
studies including either pivotal bioequivalence or efficacy studies will be
required for these products before commercialization.
In order for any of these products to be commercialized, the FDA
requires successful completion of pivotal biostudies to file an ANDA and
successful completion of pivotal clinical trials before filing a NDA. The FDA
next requires successful completion of comparative studies for drug listed
products. ANDAs are filed with respect to generic versions of existing FDA
approved products while NDAs are filed with respect to new products.
WE COULD EXPERIENCE DIFFICULTY IN DEVELOPING AND INTEGRATING STRATEGIC
ALLIANCES, CO-DEVELOPMENT OPPORTUNITIES AND OTHER RELATIONSHIPS.
With respect to products that are being developed and are available for
partnering, we intend to pursue product-specific licensing, marketing
agreements, co-development opportunities and other partnering arrangements in
connection with the products. We have entered into partnership arrangements as
to six products but no assurance can be given that we will be able to locate
partners for our other products or that any arrangement is or will be suitable.
In addition, assuming we identify suitable partners, the process of effectively
entering into these arrangements involves risks such that our management's
attention may be diverted from other business concerns and that we may have
difficulty integrating the new arrangements into our existing business.
OUR LIMITED EXPERIENCE IN CONDUCTING CLINICAL TRIALS AND SUBMITTING NDAS AND THE
UNCERTAINTIES INHERENT IN CLINICAL TRIALS COULD RESULT IN DELAYS IN PRODUCT
DEVELOPMENT AND COMMERCIALIZATION.
Prior to seeking FDA approval for the commercial sale of any drug we
develop, which does not qualify for the FDA's abbreviated application
procedures, we or our partner must
7
demonstrate through clinical trials that these products are safe and effective
for use. We have limited experience in conducting and supervising clinical
trials. The process of completing clinical trials and preparing an NDA may take
several years and requires substantial resources. Our studies and filings may
not result in FDA approval to market our new drug products and, if the FDA
grants approval, we cannot predict the timing of any approval.
IF OUR CLINICAL TRIALS ARE NOT SUCCESSFUL OR TAKE LONGER TO COMPLETE THAN WE
EXPECT, WE MAY NOT BE ABLE TO DEVELOP AND COMMERCIALIZE OUR PRODUCTS.
In order to obtain regulatory approvals for the commercial sale of our
potential products, we will be required to complete clinical trials in humans to
demonstrate the safety and efficacy of the products. We may not be able to
obtain authority from the FDA or other regulatory agencies to commence or
complete these clinical trials.
The results from preclinical testing of a product that is under
development may not be predictive of results that will be obtained in human
clinical trials. In addition, the results of early human clinical trials may not
be predictive of results that will be obtained in larger scale advanced stage
clinical trials. Furthermore, we or the FDA may suspend clinical trials at any
time if the subjects participating in such trials are being exposed to
unacceptable health risks, or for other reasons.
The rate of completion of clinical trials is dependent in part upon the
rate of enrollment of subjects. A favorable clinical trial result is a function
of many factors including the size of the subject population, the proximity of
subjects to clinical sites, the eligibility criteria for the study and the
existence of competitive clinical trials. Delays in planned subject enrollment
may result in increased costs and program delays.
We may not be able to successfully complete any clinical trial of a
potential product within any specified time period. In some cases, we may not be
able to complete the trial at all. Moreover, clinical trials may not show any
potential product to be safe or efficacious. Thus, the FDA and other regulatory
authorities may not approve any of our potential products for any indication.
Our business, financial condition, or results of operations could be
materially adversely affected if:
o we are unable to complete a clinical trial of one of our potential
products;
o the results of any clinical trial are unfavorable; or
o the time or cost of completing the trial exceeds our expectations.
WE ARE DEPENDENT ON A SMALL NUMBER OF SUPPLIERS FOR OUR RAW MATERIALS, AND ANY
DELAY OR UNAVAILABILITY OF RAW MATERIALS CAN MATERIALLY ADVERSELY AFFECT OUR
ABILITY TO PRODUCE PRODUCTS.
The FDA requires identification of raw material suppliers in
applications for approval of drug products. If raw materials were unavailable
from a specified supplier, FDA approval of a new supplier could delay the
manufacture of the drug involved. In addition, some materials used in our
products are currently available from only one supplier or a limited number of
suppliers.
8
Further, a significant portion of our raw materials may be available only from
foreign sources. Foreign sources can be subject to the special risks of doing
business abroad, including:
o greater possibility for disruption due to transportation or
communication problems;
o the relative instability of some foreign governments and economies;
o interim price volatility based on labor unrest, materials or equipment
shortages, export duties, restrictions on the transfer of funds, or
fluctuations in currency exchange rates; and
o uncertainty regarding recourse to a dependable legal system for the
enforcement of contracts and other rights.
In addition, recent changes in patent laws in certain foreign
jurisdictions (primarily in Europe) may make it increasingly difficult to obtain
raw materials for research and development prior to expiration of applicable
United States or foreign patents. Any inability to obtain raw materials on a
timely basis, or any significant price increases that cannot be passed on to
customers, could have a material adverse effect on us.
The delay or unavailability of raw materials can materially adversely
affect our ability to produce products. This can materially adversely affect our
business and operations.
IF THE COMPANY IS UNABLE TO OBTAIN ADDITIONAL FINANCING NEEDED FOR THE
EXPENDITURES FOR THE DEVELOPMENT AND COMMERCIALIZATION OF THE COMPANY'S DRUG
PRODUCTS, IT WOULD IMPAIR THE COMPANY'S ABILITY TO CONTINUE TO MEET ITS BUSINESS
OBJECTIVES.
On March 15, 2006, the Company completed a private placement, for
aggregate gross proceeds of $10,000,000, of 10,000 shares of its Series B
Preferred Stock convertible into 4,444,444 shares of Common Stock and warrants
to purchase an aggregate of 2,222,222 shares of Common Stock, 50% of such
warrants having an exercise price of $2.75 and the remaining 50% having an
exercise price of $3.25. Additionally, the placement agent received warrants to
purchase 355,555 shares of Common Stock with an exercise price of $2.25. As of
March 31, 2006, the Company had aggregate cash and cash equivalents of
approximately $10,500,000, which the Company anticipates is adequate to finance
its operations through the next 12 to 18 months. Thereafter, the Company will
require additional financing to insure that the Company will be able to meet the
expenditures to develop and commercialize its products for which the Company has
no current arrangements. Other possible sources of the required financing are
the cash exercise of the Long Term Warrants issued in the October 2004 private
placement, the Replacement Warrants issued in the December 2005 private
placement and other warrants and options that are currently outstanding. No
representation can be made that the Company will be able to obtain additional
financing or if obtained it will be on favorable terms, or at all. 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's inability to
obtain additional financing when needed would impair its ability to continue its
business.
If any future financing involves the further sale of the Company's
securities, the Company's then-existing stockholders' equity could be
substantially diluted. On the other hand, if the Company incurred debt, the
Company would be subject to risks associated with indebtedness, including the
risk that interest rates might fluctuate and cash flow would be insufficient to
pay principal and interest on such indebtedness.
9
IF WE ARE UNABLE TO PROTECT OUR INTELLECTUAL PROPERTY RIGHTS AND AVOID CLAIMS
THAT WE INFRINGED ON THE INTELLECTUAL PROPERTY RIGHTS OF OTHERS, OUR ABILITY TO
CONDUCT BUSINESS MAY BE IMPAIRED.
Our success, competitive position and amount of royalty income, if any,
will depend in part on our ability to obtain patent protection in various
jurisdictions related to our technologies, processes and products. We intend to
file patent applications seeking such protection, but we cannot be certain that
these applications will result in the issuance of patents. If patents are
issued, third parties may sue us to challenge such patent protection, and
although we know of no reason why they should prevail, it is possible that they
could. It is likewise possible that our patents may not prevent third parties
from developing similar or competing products. In addition, although we are not
aware of any threatened or pending actions by third parties asserting that we
have infringed on their patents, and are not aware of any actions we have taken
that would lead to such a claim, it is possible that we might be sued for
infringement. The cost involved in bringing suits against others for
infringement of our patents, or in defending any suits brought against us, can
be substantial. We may not possess sufficient funds to prosecute or defend such
suits. If our products were found to infringe upon patents issued to others, we
would be prohibited from manufacturing or selling such products and we could be
required to pay substantial damages.
In addition, we may be required to obtain licenses to patents, or other
proprietary rights of third parties, in connection with the development and use
of our products and technologies as they relate to other persons' technologies.
At such time as we discover a need to obtain any such license, we will need to
establish whether we will be able to obtain such a license on favorable terms.
The failure to obtain the necessary licenses or other rights could preclude the
sale, manufacture or distribution of our products.
We also rely upon trade secrets and proprietary know-how. We seek to
protect this know-how in part by confidentiality agreements. We consistently
require our employees and potential business partners to execute confidentiality
agreements prior to doing business with us. However, it is possible that an
employee would disclose confidential information in violation of his or her
agreement, or that our trade secrets would otherwise become known or be
independently developed in such a manner that we will have no practical
recourse.
We are not engaged in any litigation, nor contemplating any, with regard
to a claim that someone has infringed one of our patents, revealed any of our
trade secrets, or otherwise misused our confidential information.
THE PHARMACEUTICAL INDUSTRY IS SUBJECT TO EXTENSIVE FDA REGULATION AND FOREIGN
REGULATION, WHICH PRESENTS NUMEROUS RISKS TO US.
The manufacturing and marketing of pharmaceutical products in the United
States and abroad are subject to stringent governmental regulation. The sale of
any of our products for use in humans in the United States will require the
approval of the FDA. Similar approvals by comparable agencies are required in
most foreign countries. The FDA has established mandatory procedures and safety
standards that apply to the clinical testing, manufacture and marketing of
pharmaceutical products. Obtaining FDA approval for a new therapeutic product
may take several years and involve substantial expenditures. The eight products
currently under
10
development have not yet been approved for sale or use in humans in the United
States or elsewhere.
If we or our licensees fail to obtain or maintain requisite governmental
approvals or fail to obtain or maintain approvals of the scope requested, it
will delay or preclude us or our licensees or marketing partners from marketing
our products. It could also limit the commercial use of our products.
THE PHARMACEUTICAL INDUSTRY IS HIGHLY COMPETITIVE AND SUBJECT TO RAPID AND
SIGNIFICANT TECHNOLOGICAL CHANGE, WHICH COULD IMPAIR OUR ABILITY TO IMPLEMENT
OUR BUSINESS MODEL.
The pharmaceutical industry is highly competitive, and we may be unable
to compete effectively. In addition, it is undergoing rapid and significant
technological change, and we expect competition to intensify as technical
advances in each field are made and become more widely known. An increasing
number of pharmaceutical companies have been or are becoming interested in the
development and commercialization of products incorporating advanced or novel
drug delivery systems. We expect that competition in the field of drug delivery
will increase in the future as other specialized research and development
companies begin to concentrate on this aspect of the business. Some of the major
pharmaceutical companies have invested and are continuing to invest significant
resources in the development of their own drug delivery systems and technologies
and some have invested funds in such specialized drug delivery companies. Many
of our competitors have longer operating histories and greater financial,
research and development, marketing and other resources than we do. Such
companies may develop new formulations and products, or may improve existing
ones, more efficiently than we can. Our success, if any, will depend in part on
our ability to keep pace with the changing technology in the fields in which we
operate.
IF KEY PERSONNEL WERE TO LEAVE ELITE OR IF WE ARE UNSUCCESSFUL IN ATTRACTING
QUALIFIED PERSONNEL, OUR ABILITY TO DEVELOP PRODUCTS COULD BE MATERIALLY HARMED.
Our success depends in large part on our ability to attract and retain
highly qualified scientific, technical and business personnel experienced in the
development, manufacture and marketing of controlled release drug delivery
systems and products. Our business and financial results could be materially
harmed by the inability to attract or retain qualified personnel.
IF WE WERE SUED ON A PRODUCT LIABILITY CLAIM, AN AWARD COULD EXCEED OUR
INSURANCE COVERAGE AND COST US SIGNIFICANTLY.
The design, development and manufacture of our products involve an
inherent risk of product liability claims. We have procured product liability
insurance having a maximum limit of $5,000,000; however, a successful claim
against us in excess of the policy limits could be very expensive to us,
damaging our financial position. The amount of our insurance coverage, which has
been limited due to our limited financial resources, may be materially below the
coverage maintained by many of the other companies engaged in similar
activities. To the best of our knowledge, no product liability claim has been
made against us as of March 31, 2006.
11
OUR STOCK PRICE HAS BEEN VOLATILE AND MAY FLUCTUATE IN THE FUTURE.
There has been significant volatility in the market prices for publicly
traded shares of pharmaceutical companies, including ours. For the twelve months
ended March 31, 2006, the closing sale price on the American Stock Exchange of
our Common Stock fluctuated from a high of $4.42 per share to a low of $1.68 per
share. The per share price of our Common Stock may not remain at or exceed
current levels. The market price for our Common Stock, and for the stock of
pharmaceutical companies generally, has been highly volatile. The market price
of our Common Stock may be affected by:
o Results of our clinical trials;
o Approval or disapproval of abbreviated new drug applications or new drug
applications;
o Announcements of innovations, new products or new patents by us or by
our competitors;
o Governmental regulation;
o Patent or proprietary rights developments;
o Proxy contests or litigation;
o News regarding the efficacy of, safety of or demand for drugs or drug
technologies;
o Economic and market conditions, generally and related to the
pharmaceutical industry;
o Healthcare legislation;
o Changes in third-party reimbursement policies for drugs; and
o Fluctuations in our operating results.
As of this date sales of substantial amounts of the Common Stock in the public
market are eligible for sale by these holders pursuant to exemption or
registration under the Securities Act. Perceptions that substantial sales may
take place in the future may lower the Common Stock's market price.
THE FAILURE TO MAINTAIN THE AMERICAN STOCK EXCHANGE LISTING OF THE COMMON STOCK
WOULD HAVE A MATERIAL ADVERSE EFFECT ON THE MARKET FOR THE COMMON STOCK AND ITS
MARKET PRICE.
On January 4, 2006, the Company received a letter from the American
Stock Exchange ("AMEX") notifying it that, based on the Company's unaudited
financial statements as of September 30, 2005, the Company is not in compliance
with the continued listing standards set forth in the AMEX Company Guide in that
under one listing standard its shareholders' equity is less than $4,000,000 and
it had losses from continuing operations and/or net losses in three of its four
most recent fiscal years and under another listing standard its shareholders'
equity is less than $6,000,000 and it had losses from continuing operations
and/or net losses in its five most recent fiscal years. The Company, at the
request of AMEX, submitted a plan on February 3,
12
2006 advising AMEX of action, it has taken, and will take, to bring it in
compliance with the continued listing standards within a maximum of 18 months
from January 4, 2006. On March 15, 2006, the Company completed a private
placement of its Series B Preferred Stock and warrants to purchase Common Stock.
The Company received $10,000,000 in gross proceeds from the private placement.
On March 21, 2006, the Company submitted an update to the plan it had previously
submitted on February 6, 2006. Upon notice of the recent private placement and
the acceptance of the updated plan, AMEX provided the Company with an extension
until July 3, 2007 to regain compliance with the continued listing standards.
AMEX will allow the Company to maintain its AMEX listing through the plan
period, subject to periodic review of the Company's progress by the AMEX staff.
If the Company is not in compliance with the continued listing standards or does
not make progress consistent with such plan during the plan period, AMEX may
then initiate delisting proceedings. The failure to maintain listing of the
Common Stock on AMEX will have an adverse effect on the market and the market
price for the Common Stock.
THE ISSUANCE OF ADDITIONAL SHARES OF OUR COMMON STOCK OR OUR PREFERRED STOCK
COULD MAKE A CHANGE OF CONTROL MORE DIFFICULT TO ACHIEVE.
The issuance of additional shares of the Company's Common Stock or the
issuance of shares of an additional series of Preferred Stock could be used to
make a change of control of the Company more difficult and expensive. Under
certain circumstances, such shares could be used to create impediments to or
frustrate persons seeking to cause a takeover or to gain control of the Company.
Such shares could be sold to purchasers who might side with the Board in
opposing a takeover bid that the Board determines not to be in the best
interests of its stockholders. It might also have the effect of discouraging an
attempt by another person or entity through the acquisition of a substantial
number of shares of the Company's Common Stock to acquire control of the Company
with a view to consummating a merger, sale of all or part of the Company's
assets, or a similar transaction, since the issuance of new shares could be used
to dilute the stock ownership of such person or entity.
IF PENNY STOCK REGULATIONS BECOME APPLICABLE TO OUR COMMON STOCK THEY WILL
IMPOSE RESTRICTIONS ON THE MARKETABILITY OF OUR COMMON STOCK AND THE ABILITY OF
OUR STOCKHOLDERS TO SELL SHARES OF OUR STOCK COULD BE IMPAIRED.
The SEC has adopted regulations that generally define a "penny stock" to
be an equity security that has a market price of less than $5.00 per share or an
exercise price of less than $5.00 per share subject to certain exceptions.
Exceptions include equity securities issued by an issuer that has (i) net
tangible assets of at least $2,000,000, if such issuer has been in continuous
operation for more than three years, or (ii) net tangible assets of at least
$5,000,000, if such issuer has been in continuous operation for less than three
years, or (iii) average revenue of at least $6,000,000 for the preceding three
years. Unless an exception is available, the regulations require that prior to
any transaction involving a penny stock, a risk of disclosure schedule must be
delivered to the buyer explaining the penny stock market and its risks. Our
Common Stock is currently trading at under $5.00 per share. Although we
currently fall under one of the exceptions, if at a later time we fail to meet
one of the exceptions, our Common Stock will be considered a penny stock. As
such the market liquidity for our Common Stock will be limited to the ability of
broker-dealers to sell it in compliance with the above-mentioned disclosure
requirements.
13
You should be aware that, according to the SEC, the market for penny
stocks has suffered in recent years from patterns of fraud and abuse. Such
patterns include:
o Control of the market for the security by one or a few broker-dealers;
o "Boiler room" practices involving high-pressure sales tactics;
o Manipulation of prices through prearranged matching of purchases and
sales;
o The release of misleading information;
o Excessive and undisclosed bid-ask differentials and markups by selling
broker-dealers; and
o Dumping of securities by broker-dealers after prices have been
manipulated to a desired level, which hurts the price of the stock and
causes investors to suffer loss.
We are aware of the abuses that have occurred in the penny stock market.
Although we do not expect to be in a position to dictate the behavior of the
market or of broker-dealers who participate in the market, we will strive within
the confines of practical limitations to prevent such abuses with respect to our
Common Stock.
SECTION 203 OF THE DELAWARE GENERAL CORPORATION LAW MAY DETER A THIRD PARTY FROM
ACQUIRING US.
Section 203 of the Delaware General Corporation Law prohibits a merger
with a 15% shareholder within three years of the date such shareholder acquired
15%, unless the merger meets one of several exceptions. The exceptions include,
for example, approval by the holders of two-thirds of the outstanding shares
(not counting the 15% shareholder), or approval by the Board prior to the 15%
shareholder acquiring its 15% ownership. This provision makes it difficult for a
potential acquirer to force a merger with or takeover of the Company, and could
thus limit the price that certain investors might be willing to pay in the
future for shares of our Common Stock.
14
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of shares of
Common Stock by the Selling Stockholders by this prospectus. The proceeds of the
sale by the Company to the Selling Stockholders of up to 2,577,777 shares of
Common Stock upon exercise of the Warrants (a maximum of approximately
$7,466,665) will be used for working capital.
DESCRIPTION OF CAPITAL STOCK
Our authorized capital stock consists of 65,000,000 shares of Common
Stock, par value $.01 per share, and 5,000,000 shares of Preferred Stock, par
value $.01 per share (the "PREFERRED STOCK"), including shares of Series A
Preferred Stock consisting of 143,442 shares, none of which are outstanding, and
including shares of Series B 8% Convertible Preferred Stock (the "SERIES B
PREFERRED STOCK"), consisting of 10,000 shares, all of which are outstanding. As
of March 31, 2006, there were outstanding 19,258,141 shares of Common Stock,
10,000 shares of Series B Preferred Stock, options to purchase 2,971,250 shares
of our Common Stock and warrants to purchase 5,572,019 shares of Common Stock.
COMMON STOCK
SUBJECT TO THE RIGHTS OF THE HOLDERS OF ANY SERIES OF PREFERRED STOCK,
WHICH MAY BE ISSUED:
The holders of outstanding shares of Common Stock are entitled to
receive dividends out of assets legally available therefore at such times and in
such amounts as our Board of Directors may from time to time determine.
Each stockholder is entitled to one vote for each share of Common Stock
held on all matters submitted to a vote of stockholders.
The Common Stock is not entitled to preemptive rights and is not subject
to conversion or redemption. Upon liquidation, dissolution or winding up of
Elite, the remaining assets legally available for distribution to stockholders,
after payment of claims or creditors, are distributable ratably among the
holders of the Common Stock outstanding at that time. Each outstanding share of
Common Stock is fully paid and nonassessable.
See "PREFERRED STOCK" for senior rights of outstanding shares of Series
A Preferred Stock with respect to dividends and liquidation and their rights to
participate on as a converted basis with the Common Stock in liquidation
payments to Common Stock and voting
PREFERRED STOCK
The Company's Board of Directors has authority to issue up to 5,000,000
shares of Preferred Stock in one or more series and to fix the powers,
designations, rights, preferences and restrictions thereof, including dividend
rights, conversion rights, voting rights, redemption terms,
15
liquidation preferences and the number of shares constituting each such series,
without any further vote or action by the Company's stockholders.
SERIES A PREFERRED STOCK. On October 6, 2004, pursuant to the authority
of its Board of Directors, the Company filed with the Secretary of State of
Delaware the Certificate of Designations, Preferences and Rights of Series A
Preferred Stock (the "SERIES A PREFERRED CERTIFICATE") providing for 660,000
authorized shares. On March 10, 2006 the Company filed a Certificate of
Retirement with the Secretary of State of Delaware to retire 516,558 shares of
Series A Preferred Stock. No shares of Series A Preferred Stock are outstanding.
SERIES B PREFERRED STOCK. On March 15, 2006, pursuant to the authority
of its Board of Directors, the Company filed with the Secretary of State of
Delaware the Certificate of Designations, Preferences and Rights of Series B
Preferred Stock (the "SERIES B PREFERRED CERTIFICATE") providing for 10,000
authorized shares.
In March 2006, the Company in a private placement issued an aggregate of
10,000 shares of Series B Preferred Stock and warrants, expiring March 15, 2011,
to purchase 2,222,222 shares of Common Stock.
The Series B Preferred Stock accrue dividends at the rate of 8% per
annum on their purchase price of $1,000 per share (increasing to 15% per annum
after March 15, 2008) payable quarterly on January 1, April 1, July 1 and
October 1, in cash or shares of Common Stock (95% of the average of the volume
weighted average price ("VWAP") for the 20 consecutive trading days ending on
the trading day that is immediately prior to the dividend payment date) in
accordance with the terms of the Series B Preferred Certificate. Any dividends,
whether paid in cash or shares of Common Stock, that are not paid within 5
trading days, following a dividend payment date, shall continue to accrue and
shall entail a late fee, which must be paid in cash, at the rate of 18% per
annum or the lesser rate permitted by applicable law (such fees to accrue daily,
from the dividend payment date through and including the date of payment). The
first payment to be made on April 1, 2006. No payment or dividends may be
payable on Common Stock or any other capital stock ranked junior to the Series B
Preferred Stock prior to the satisfaction of the dividend obligation on the
Series B Preferred Stock.
Upon the liquidation, dissolution or winding-up of the Company, whether
voluntary or involuntary ("LIQUIDATION"), each share of Series B Preferred Stock
is to be entitled to a preference equal to the Stated Value (the per share
purchase price ($1,000 subject to adjustment)), plus any accrued but unpaid
dividends thereon and any other fees or liquidated damages owing thereon which
preference is prior to any other capital stock ranked junior to the Series B
Preferred Stock.
The holders of Series B Preferred Stock do not have any voting rights
except as specifically provided in the Series B Preferred Certificate or as
required by law. The Company may not without the prior affirmative vote of
holders of at least 70% of the then outstanding shares of Series B Preferred
Stock: (i) alter or change adversely the powers, preferences or rights given to
the Series B Preferred Stock or alter or amend the Series B Preferred
Certificate, (ii) authorize or create any class of stock ranking as to
dividends, redemption or distribution of assets upon a Liquidation senior to or
otherwise PARI PASSU with the Series B Preferred Stock, (iii) amend its
certificate of incorporation, bylaws or other charter documents in any manner
that adversely affects any rights of the holders of the Series B Preferred
Stock, (iv) increase the
16
authorized number of shares of Series B Preferred Stock, (v) enter into any
agreement with respect to any of the foregoing, (vi) other than Permitted
Indebtedness (as defined in the Preferred Certificate) prior to March 16, 2009
incur any indebtedness for borrowed money of any kind, (vii) other than
Permitted Liens (as defined in the Series B Preferred Certificate) prior to
March 16, 2009, incur any liens of any kind, (viii) other than as permitted by
the Series B Preferred Certificate, repay or repurchase other than more than a
de minimis number of shares of Common Stock or securities convertible or
exchangeable into Common Stock, (ix) pay cash dividends or distributions on any
of our securities junior to the Series B Preferred Stock or (x) enter into any
agreement or understanding with respect to clauses (iii), (vi), (vii), or
(viii). Notwithstanding the above, the Company may issue any security issued in
connection with a Strategic Transaction (as defined in the Series B Preferred
Certificate) that ranks as to dividends, redemption or distribution of assets
upon a Liquidation PARI PASSU with or junior to the Series B Preferred Stock
without the prior affirmative vote of holders of the then outstanding shares of
Series B Preferred Stock.
Each share of Series B Preferred Stock is initially convertible into
444.4444 shares of Common Stock at $2.25 initial conversion price, subject to
adjustment for certain events, including dividends, stock splits, combinations
and the sale of Common Stock or securities convertible into or exercisable for
Common Stock at a price less than the then applicable conversion price. If the
Company does not meet its share delivery requirements set forth in the Series B
Preferred Certificate, the holders of Preferred Stock shall be entitled to (i)
liquidated damages, payable in cash, and (ii) cash equal to the amount by which
such holder's total purchase price for the shares of Common Stock exceeds the
product of (1) the aggregate number of shares of Common Stock that such holder
was entitled to receive from the conversion at issue multiplied by (2) the
actual sale price at which the sell order giving rise to such purchase
obligation was executed.
The Company may force conversion of the Series B Preferred Stock in the
event the Company provides written notice to the holders of the Series B
Preferred Stock that the VWAP (as defined in the Series B Preferred Certificate)
for each 20 consecutive trading day period during a Threshold Period (as defined
in the Series B Preferred Certificate) of Common Stock exceeded $5.38 (subject
to adjustment) and the volume for each trading day during such Threshold Period
exceed 50,000 shares (subject to adjustment for forward and reverse stock
splits, recapitalizations, stock dividends and the like).
Upon the occurrence of certain Triggering Events (as defined in the
Preferred Certificate), each share of Series B Preferred Stock is to be redeemed
for cash in an amount equal to (i) 130% of the Stated Value, (ii) all accrued
but unpaid dividends thereon and (iii) all liquidated damages and other costs,
expenses or amounts due in respect of the Series B Preferred Stock (the
"TRIGGERING REDEMPTION AMOUNT"). If at any time the SEC, the Company's auditors,
American Stock Exchange (or similar trading exchange) or any other governmental
or regulatory authority having jurisdiction over the Company determines that a
Triggering Event for which a holder shall be entitled to a cash redemption
constitutes a condition for redemption which is not solely within the control of
the Company (as set forth in Item 28 of Rule 5-02 of Regulation S-X of the
Securities Exchange Act of 1934, as amended), or that as a result of any such
Triggering Event, the Series B Preferred Stock shall not be included in the
Company's balance sheet under the heading "stockholder equity", then the holders
of Series B Preferred Stock shall not be entitled to receive a cash payment, but
instead shall be entitled to receive shares of Common Stock in the manner
described in the next sentence. Upon the occurrence of certain other
17
Triggering Events, each share of Series B Preferred Stock is to be redeemed for
shares of Common Stock equal to the number of shares of Common Stock equal to
the Triggering Redemption Amount divided by 85% of the average of the VWAP for
the 10 consecutive trading days immediately prior to the date of the redemption.
The Company may redeem all of the Series B Preferred Stock outstanding,
at any time after March 15, 2008 for a redemption price, payable in cash, for
each share of Series B Preferred Stock equal to (i) 150% of the Stated Value,
(ii) accrued but unpaid dividends thereon and (iii) all liquidated damages and
other amounts due in respect of the Series B Preferred Stock.
ANTI-TAKEOVER PROVISIONS
We are subject to the provisions of Section 203 of the Delaware General
Corporation Law. Section 203 of the Delaware Law provides, subject to a number
of exceptions, that a Delaware corporation may not engage in any of a broad
range of business combinations with a person or an affiliate, or an associate of
an affiliate, who is an "interested stockholder" for a period of three years
from the date that person became an interested stockholder unless:
o the transaction resulting in a person becoming an interested
stockholder, or the business combination, is approved by the board
of directors of the corporation before the person becomes an
interested stockholder,
o the interested stockholder acquired 85% or more of the outstanding
voting stock of the corporation in the same transaction that makes
this person an interested stockholder, excluding shares owned by
persons who are both officers and directors of the corporation, and
the shares held by certain employee stock ownership plans, or
o on or after the date the person becomes an interested stockholder,
the business combination is approved by the corporation's board of
directors and by the holders of at least 66-2/3% of the corporations
outstanding voting stock at an annual or special meeting, excluding
the shares owned by the interested stockholder.
Under Section 203 of the Delaware Law, an "interested stockholder" is
defined as any person who is either the owner of 15% or more of the outstanding
voting stock of the corporation or an affiliate or associate of the corporation
and who was the owner of 15% or more of the outstanding voting stock of the
corporation at any time within the three-year period immediately prior to the
date on which it is sought to be determined whether such person is an interested
stockholder.
A corporation may, at its option, exclude itself from coverage of
Section 203 of the Delaware Law by amending its certificate of incorporation or
by-laws, by action of its stockholders, to exempt itself from coverage, provided
that the amendment to the certificate of incorporation or by-laws does not
become effective until 12 months after the date it is adopted.
18
SELLING STOCKHOLDERS
The Selling Stockholders are offering shares of our Common Stock which
may be acquired upon conversion of the 10,000 shares of Series B Preferred
Stock, shares of Common Stock which may be received in satisfaction of dividend
obligations on the shares of Series B Preferred Stock and shares of Common Stock
which may be acquired upon exercise of Warrants, including the warrants to
purchase 355,555 shares of Common Stock held by the Placement Agent and its
designees. The Series B Preferred Stock and Warrants were issued to the Selling
Stockholders in a private placement transaction. We paid Indigo Securities, LLC,
the Placement Agent, and selected dealers cash commissions aggregating $800,000
and expenses in an amount equal to $200,000.
We have agreed to file, at our expense, the Registration Statement of
which this prospectus is a part to register for reoffering the shares of Common
Stock being offered hereby.
The following table details the name of each Selling Stockholder, the
number of shares of our Common Stock owned by each Selling Stockholder and the
number of shares of our Common Stock that may be offered for resale under this
prospectus. To the extent permitted by law, those Selling Stockholders which are
not natural persons may distribute shares from time to time, to one or more of
their respective affiliates, which may sell shares pursuant to this prospectus.
We have registered the shares to permit the Selling Stockholders and their
respective permitted transferees or other successors in interest that receive
their shares from Selling Stockholders after the date of this prospectus to
resell the shares. Because each Selling Stockholder may offer all, some or none
of the shares it holds, and because there are currently no agreements,
arrangements or understandings with respect to the sale of any of the shares, no
definitive as to the number of shares that will be held by each Selling
Stockholder after the offering can be provided, only an estimate. The Selling
Stockholders may from time to time offer all or some of the shares pursuant to
this offering. Pursuant to Rule 416 under the Securities Act of 1933, the
Registration Statement of which this prospectus is a part also covers any
additional shares of our Common Stock which become issuable in connection with
such shares because of any stock dividend, stock split, recapitalization or
other similar transaction effected without the receipt of consideration which
results in an increase in the number of outstanding shares of our Common Stock.
The following table has been prepared on the assumption that all shares
offered under this prospectus will be sold to parties unaffiliated with the
Selling Stockholders. Except as indicated below the Selling Stockholders have
sole voting and investment power with their respective shares. Percentages in
the table below are based on 19,258,141 shares of our Common Stock outstanding
as of March 31, 2006 and assumes that, except for the shares issuable to a
Selling Stockholders upon conversion or exercise, none of the shares of Series B
Preferred Stock will be converted and none of the Warrants or other outstanding
warrants or options will have been exercised after the offering.
Except as described below, none of the Selling Stockholders within the
past three years has had any material relationship with us or any of our
affiliates:
Indigo Securities, LLC has acted as a placement agent in prior
financings and as a financial advisor to the Company. Edward Neugeboren, one of
the Company's directors, is an
19
employee of Indigo Securities, LLC. William Williams is an employee of Indigo
Securities, LLC.
No Selling Stockholders are broker-dealers or affiliates or employees of
broker-dealers other than Sunrise Equity Partners, L.P., Indigo Securities, LLC
and William Williams.
Shares Shares
Shares Number of Owned Owned
Beneficially Shares After After
Owned Prior Which May Offering Offering
Name and Address to Offering* Be Sold* Number Percent**
------------------------------ -------------- ----------- ----------- ----------
Bushido Capital Master 952,046(1) 952,046 0 **
Fund, LP.
c/o Bushido Capital
Partners, Ltd.
275 Seventh Avenue,
Suite 2000
New York, NY 10001
------------------------------ -------------- ----------- ----------- ----------
Chad Comiteau 292,750(2) 46,645 246,100 1.28%
237 Park Avenue
Suite 900
New York, NY 10017
------------------------------ -------------- ----------- ----------- ----------
Mark Fain 262,603(3) 47,603 215,000 1.12%
237 Park Avenue
Suite 900
New York, NY 10017
------------------------------ -------------- ----------- ----------- ----------
First Mirage, Inc. 285,613(4) 285,613 0 **
333 Sandy Springs Circle
Suite 230
Atlanta, GA 30328
------------------------------ -------------- ----------- ----------- ----------
Leon Frenkel 238,012(5) 238,012 0 **
1600 Flat Rock Road
Penn Valley, PA 19072
------------------------------ -------------- ----------- ----------- ----------
Gamma Opportunity Capital 476,024(6) 476,024 0 **
Partners, LP
1967 Longwood Lake Mary Road
Longwood, FL 32750
------------------------------ -------------- ----------- ----------- ----------
Gryphon Master Fund, L.P. 952,046(7) 952,046 0 **
c/o E.B. Lyon, IV
100 Crescent Court
Suite 490
Dallas, TX 75201
------------------------------ -------------- ----------- ----------- ----------
GSSF Master Fund, LP 476,024(8) 476,024 0 **
c/o E.B. Lyon, IV
100 Crescent Court
Suite 490
Dallas, TX 75201
------------------------------ -------------- ----------- ----------- ----------
MHJ Holdings Co. 142,808(9) 142,808 0 **
1357 Prospect Road
Pittsburgh, PA 15227
------------------------------ -------------- ----------- ----------- ----------
20
Shares Shares
Shares Number of Owned Owned
Beneficially Shares After After
Owned Prior Which May Offering Offering
Name and Address to Offering* Be Sold* Number Percent**
------------------------------ -------------- ----------- ----------- ----------
Midsummer Investment, Ltd. 2,690,484(10) 2,690,484 0 **
c/o Midsummer Capital, LLC
485 Madison Avenue
23rd Floor
New York, NY 10019
------------------------------ -------------- ----------- ----------- ----------
Professional Offshore 380,818(11) 380,818 0 **
Opportunity Fund, Ltd.
1400 Old Country Road
Suite 206
Westbury, NY 11590
------------------------------ -------------- ----------- ----------- ----------
Professional Traders Fund, LLC 142,808(12) 142,808 0 **
1400 Old Country Road
Suite 206
Westbury, NY 11590
------------------------------ -------------- ----------- ----------- ----------
Stratford Partners, L.P 964,211(13) 214,211 750,000 3.89%
237 Park Avenue
Suite 900
New York, NY 10017
------------------------------ -------------- ----------- ----------- ----------
Sunrise Equity Partners, L.P. 313,207(14) 238,012 75,195 **
c/o Level Counter, LLC
641 Lexington Avenue
25th Floor
New York, NY 10022
------------------------------ -------------- ----------- ----------- ----------
Trellus Partners, LP 2,900,493(15) 1,904,093 996,400 5.17%
350 Madison Avenue
9th Floor
New York, NY 10017
------------------------------ -------------- ----------- ----------- ----------
William Williams 906,204(16) 246,901 659,300 3.42%
35 Geiger Lane
Warren, NJ 17059
------------------------------ -------------- ----------- ----------- ----------
Henry M. Zachs 95,204(17) 95,204 0 **
40 Woodland St.
Hartford, CT 06105
------------------------------ -------------- ----------- ----------- ----------
Indigo Securities, LLC 319,899(18) 294,426 25,473 **
780 Third Avenue
New York, NY 10017
------------------------------ -------------- ----------- ----------- ----------
Oppenheimer & Co. Inc. 50,240(19) 50,240 0 **
125 Broad Street
New York, New York 10004
------------------------------ -------------- ----------- ----------- ----------
* The shares which may be acquired upon conversion of the Series B
Preferred Stock, shares issued in receipt of Series B Preferred Stock
dividend obligations and shares acquired exercise of the Warrants are
included in the beneficial ownership of the Selling Stockholder prior to
offering.
** Less than 1%
(1) Includes 285,380 dividend shares, 444,444 shares of Common Stock upon
conversion of 1,000 shares of Series B Preferred Stock and 222,222
shares of Common Stock upon exercise of warrants.
21
(2) Includes 246,100 shares of Common Stock, 13,984 dividend shares, 21,778
shares of Common Stock upon conversion of 49 shares of Series B
Preferred Stock and 10,888 shares of Common Stock upon exercise of
warrants.
(3) Includes 215,100 shares of Common Stock, 14,269 dividend shares, 22,222
shares of Common Stock upon conversion of 50 shares of Series B
Preferred Stock and 11,112 shares of Common Stock upon exercise of
warrants.
(4) Includes 85,614 dividend shares, 133,333 shares of Common Stock upon
conversion of 300 shares of Series B Preferred Stock and 66,666 shares
of Common Stock upon exercise of warrants.
(5) Includes 71,345 dividend shares, 111,111 shares of Common Stock upon
conversion of 250 shares of Series B Preferred Stock and 55,556 shares
of Common Stock upon exercise of warrants.
(6) Includes 142,690 dividend shares, 222,222 shares of Common Stock upon
conversion of 500 shares of Series B Preferred Stock and 111,112 shares
of Common Stock upon exercise of warrants.
(7) Includes 285,380 dividend shares, 444,444 shares of Common Stock upon
conversion of 1,000 shares of Series B Preferred Stock and 222,222
shares of Common Stock upon exercise of warrants.
(8) Includes 142,690 dividend shares, 222,222 shares of Common Stock upon
conversion of 500 shares of Series B Preferred Stock and 111,112 shares
of Common Stock upon exercise of warrants.
(9) Includes 42,807 dividend shares, 66,667 shares of Common Stock upon
conversion of 150 shares of Series B Preferred Stock and 33,334 shares
of Common Stock upon exercise of warrants.
(10) Includes 806,484 dividend shares, 1,256,000 shares of Common Stock upon
conversion of 2,826 shares of Series B Preferred Stock and 628,000
shares of Common Stock upon exercise of warrants.
(11) Includes 114,152 dividend shares, 177,778 shares of Common Stock upon
conversion of 400 shares of Series B Preferred Stock and 88,888 shares
of Common Stock upon exercise of warrants.
(12) Includes 42,807 dividend shares, 66,667 shares of Common Stock upon
conversion of 150 shares of Series B Preferred Stock and 33,334 shares
of Common Stock upon exercise of warrants.
(13) Includes 750,000 shares of Common Stock, 64,211 dividend shares, 100,000
shares of Common Stock upon conversion of 225 shares of Series B
Preferred Stock and 50,000 shares of Common Stock upon exercise of
warrants.
(14) Includes 75,195 shares of Common Stock, 71,345 dividend shares, 111,111
shares of Common Stock upon conversion of 250 shares of Series B
Preferred Stock and 55,556 shares of Common Stock upon exercise of
warrants.
(15) Includes 996,400 shares of Common Stock, 570,760 dividend shares,
888,889 shares of Common Stock upon conversion of 2,000 shares of Series
B Preferred Stock and 444,444 shares of Common Stock upon exercise of
warrants.
(16) Includes 659,300 shares of Common Stock, 71,345 dividend shares, 111,111
shares of Common Stock upon conversion of 250 shares of Series B
Preferred Stock and 64,445 shares of Common Stock upon exercise of
warrants.
(17) Includes 28,538 dividend shares, 44,444 shares of common Stock upon
conversion of 100 shares of Series B Preferred Stock and 22,222 shares
of Common Stock upon exercise of warrants.
(18) Includes 319,899 shares of Common Stock upon exercise of warrants.
(19) Includes 50,240 shares of Common Stock upon exercise of warrants.
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PLAN OF DISTRIBUTION
OFFER AND SALE OF SHARES
Each Selling Stockholder has or its pledgees, assignees and
successors-in-interest may, from time to time, sell any or all of their shares
of Common Stock on the American Stock Exchange or any other stock exchange,
market or trading facility on which the shares are traded or in private
transactions. These sales may be at fixed or negotiated prices. A Selling
Stockholder may use any one or more of the following methods when selling
shares:
o ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;
o block trades in which the broker-dealer will attempt to sell the
shares as agent but may position and resell a portion of the
block as principal to facilitate the transaction;
o purchases by a broker-dealer as principal and resale by the
broker-dealer for its account;
o an exchange distribution in accordance with the rules of the
applicable exchange;
o privately negotiated transactions;
o settlement of short sales entered into after the effective date
of the registration statement of which this prospectus is a
part;
o broker-dealers may agree with the Selling Stockholders to sell a
specified number of such shares at a stipulated price per share;
o through the writing or settlement of options or other hedging
transactions, whether through an options exchange or otherwise;
o a combination of any such methods of sale; or
o any other method permitted pursuant to applicable law.
The Selling Stockholders may also sell shares under Rule 144 under the
Securities Act of 1933, as amended (the "SECURITIES ACT"), if available, rather
than under this prospectus.
Broker-dealers engaged by the Selling Stockholders may arrange for other
brokers-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from the Selling Stockholders (or, if any broker-dealer acts as
agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated, but, except as set forth in a supplement to this Prospectus, in the
case of an agency transaction not in excess of a customary brokerage commission
in compliance with NASDR Rule 2440; and in the case of a principal transaction a
markup or markdown in compliance with NASDR IM-2440.
In connection with the sale of the shares of Common Stock or interests
therein, the Selling Stockholders may enter into hedging transactions with
broker-dealers or other financial
23
institutions, which may in turn engage in short sales of the Common Stock in the
course of hedging the positions they assume. The Selling Stockholders may also
sell shares of the Common Stock short and deliver these securities to close out
their short positions, or loan or pledge the Common Stock to broker-dealers that
in turn may sell these securities. The Selling Stockholders may also enter into
option or other transactions with broker-dealers or other financial institutions
or the creation of one or more derivative securities which require the delivery
to such broker-dealer or other financial institution of shares offered by this
prospectus, which shares such broker-dealer or other financial institution may
resell pursuant to this prospectus (as supplemented or amended to reflect such
transaction).
The Selling Stockholders and any broker-dealers or agents involved in
selling the shares may be deemed to be "underwriters" within the meaning of the
Securities Act in connection with such sales. In such event, any commissions
received by such broker-dealers or agents and any profit on the resale of the
shares purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act. Each Selling Stockholder has informed the
Company that it does not have any written or oral agreement or understanding,
directly or indirectly, with any person to distribute the Common Stock. In no
event shall any broker-dealer receive fees, commissions and markups which, in
the aggregate, would exceed eight percent (8%).
The Company is required to pay certain fees and expenses incurred by the
Company incident to the registration of the shares. The Company has agreed to
indemnify the Selling Stockholders against certain losses, claims, damages and
liabilities, including liabilities under the Securities Act.
Because Selling Stockholders may be deemed to be "underwriters" within
the meaning of the Securities Act, they will be subject to the prospectus
delivery requirements of the Securities Act including Rule 172 thereunder. In
addition, any securities covered by this prospectus which qualify for sale
pursuant to Rule 144 under the Securities Act may be sold under Rule 144 rather
than under this prospectus. There is no underwriter or coordinating broker
acting in connection with the proposed sale of the resale shares by the Selling
Stockholders.
We agreed to keep this prospectus effective until the earlier of (i) the
date on which the shares may be sold by the Selling Stockholders without
registration and without regard to any volume limitations by reason of Rule
144(k) under the Securities Act or any other rule of similar effect or (ii) all
of the shares have been sold pursuant to this prospectus or Rule 144 under the
Securities Act or any other rule of similar effect. The shares will be sold only
through registered or licensed brokers or dealers if required under applicable
state securities laws. In addition, in certain states, the shares may not be
sold unless they have been registered or qualified for sale in the applicable
state or an exemption from the registration or qualification requirement is
available and is complied with.
Under applicable rules and regulations under the Exchange Act, any
person engaged in the distribution of the shares may not simultaneously engage
in market making activities with respect to the Common Stock for the applicable
restricted period, as defined in Regulation M, prior to the commencement of the
distribution. In addition, the Selling Stockholders will be subject to
applicable provisions of the Exchange Act and the rules and regulations
thereunder, including Regulation M, which may limit the timing of purchases and
sales of shares of the Common Stock by the Selling Stockholders or any other
person. We will make copies of this prospectus available to the Selling
Stockholders and have informed them of the need to deliver a
24
copy of this prospectus to each purchaser at or prior to the time of the sale
(including by compliance with Rule 172 under the Securities Act).
LEGAL MATTERS
Reitler Brown & Rosenblatt LLC, New York, New York, as counsel to the
Company will pass upon whether the shares of Common Stock which are being
registered under the Securities Act of 1933, as amended, by the Registration
Statement of which this prospectus is a part are fully paid, nonassessable and
validly issued.
EXPERTS
Our consolidated financial statements as of March 31, 2005, March 31,
2004 and March 31, 2003 and for the years ended March 31, 2005, March 31, 2004
and March 31, 2003, incorporated by reference in this prospectus, have been
audited by Miller, Ellin & Company, LLP, New York, New York, independent
certified public accountants, as indicated in its report with respect thereto,
and is incorporated by reference in this prospectus in reliance upon its report
given upon the authority of said firm as experts in accounting and auditing.
INCORPORATION BY REFERENCE
The Securities and Exchange Commission allows us to incorporate by
reference the information that we file with it, which means that we can disclose
important information to you by referring you to those documents. The
information incorporated by reference into this registration statement is
considered to be part of this registration statement, and information that we
file later with the Commission will automatically update and supersede this
information. We incorporate by reference the documents listed below and any
future filings (including those filed by us prior to the termination of the
offering) we make with the Commission under Sections 13(a), 13(c), 14, or 15(d)
of the Exchange Act:
a. our annual report on Form 10-K for the year ended March 31, 2005,
filed with the Commission on June 29, 2005;
b. our quarterly report on Form 10-Q for the quarter ended June 30,
2005, filed with the Commission on August 15, 2005;
c. our quarterly report on Form 10-Q for the quarter ended September
30, 2005, filed with the Commission on November 14, 2005;
d. our quarterly report on Form 10-Q for the quarter ended December 31,
2005, filed with the Commission on February 14, 2005; and
e. our current reports on Form 8-K dated January 4, 2006, January 10,
2006, January 31, 2006, March 9, 2006, March 10, 2006, March 15,
2006, March 22, 2006 and March 29, 2006.
25
You may request a copy of these filings, at no cost, by written or oral
request to us at the following address:
Mark I. Gittelman
Corporate Secretary
Elite Pharmaceuticals, Inc.
165 Ludlow Avenue
Northvale, New Jersey 07647
(201) 750-2646
No person has been authorized to give any information or to make any
representation other than those contained in this prospectus in connection with
the offering of the shares of our Common Stock by the Selling Stockholders. If
information or representations other than those contained in this prospectus are
given or made, you must not rely on it as if we authorized it. Neither the
delivery of this prospectus nor any sale made hereunder shall, under any
circumstances, create an implication that the information contained or
incorporated by reference herein is correct as of any time subsequent to its
date or that there has been no change in our affairs since such date. This
prospectus does not constitute an offer to sell or a solicitation of an offer to
buy any securities offered hereby in any jurisdiction in which such offer or
solicitation is not permitted, or to anyone whom it is unlawful to make such
offer or solicitation. The information in this prospectus is not complete and
may be changed.
26
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following is a statement of the estimated expenses incurred by Elite
Pharmaceuticals, Inc. in connection with the distribution of the securities
registered under this registration statement:
AMOUNT
TO BE PAID *
----------
SEC Registration Fee ........... $ [_______]
Legal Fees and Expenses ........ $15,000.00*
Accounting Fees and Expenses ... $ 1,000.00
Printing Expenses .............. $ 2,000.00*
Miscellaneous .................. $ 2,000.00*
----------
Total .......................... $ [_______]*
* Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Pursuant to authority conferred by Section 102 of the Delaware General
Corporation Law (the "DGCL"), Elite's Certificate of Incorporation, as amended,
contains a provision providing that the personal liability of a director is
eliminated to the fullest extent provided by the DGCL. The effect of this
provision is that no director of Elite is personally liable to Elite or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability for (i) any breach of the director's duty of loyalty to
Elite or its stockholders, (ii) acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, (iii) unlawful
payment of dividends as provided in Section 174 of the DGCL and (iv) any
transaction from which the director derived an improper personal benefit. This
provision is intended to eliminate the risk that a director might incur personal
liability to Elite or its stockholders for breach of duty of care. The
Certificate of Incorporation, as amended, also provides that if the Delaware Law
is amended to eliminate or limit further the liability of directors, then the
liability of a director of Elite shall be eliminated or limited, without further
stockholder action.
Section 145 of the DGCL contains provisions permitting and, in some
situations, requiring Delaware corporations, such as Elite, to provide
indemnification to their officers and directors for losses and litigation
expenses incurred in connection with their service to the corporation in those
capacities. The by-laws of Elite contain such a provision requiring that we
indemnify our directors and officers to the fullest extent permitted by law, as
the law may be
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amended from time to time.
Elite in its registration rights agreement with each of the purchasers
in the private placement of the Series B Preferred Stock has agreed to indemnify
the purchaser against damages or losses and expenses arising from any losses or
expenses incurred in connection with a loss or alleged loss arising from a
material misstatement in or a material omission from the Registration Statement
except for a material misstatement or omission based on written information
provided to Elite by the purchaser.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of Elite
pursuant to the foregoing provisions or otherwise, it has been advised that, in
the opinion of the Securities and Exchange Commission, such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable.
ITEM 16. EXHIBITS
3.1 Certificate of Incorporation, together with all amendments thereto,
incorporated by reference to Exhibit 4.1 to the Registration Statement
on Form S-4, Registration No. 333-101686 filed with the Commission on
December 6, 2002 and Exhibit 3.1 to Registrant's Current Report on Form
8-K dated October 6, 2004 and filed with the Commission on October 12,
2004 and Exhibit 3.1 to the Registrant's Current Report on Form 8-K
dated March 10, 2006 and filed with the Commission on March 13, 2006.
3.1(a) Certificate of Designations, Preferences and Rights of Series B
Preferred Stock as filed with the Secretary of State of Delaware,
incorporated by reference to Exhibit 3.1 to the Current Report on Form
8-K dated March 15, 2006 and filed with the Commission on March 16,
2006.
3.2 By-laws of Elite, as amended. Incorporated by reference to Exhibit 3.1
to Elite's Registration Statement on Form SB-2, Registration No.
333-90633, made effective on February 28, 2000.
4.1 Form of Common Stock certificate. Incorporated by reference to Exhibit
4.1 to Elite's Registration Statement on Form SB-2, Registration No.
333-90633, made effective on February 28, 2000.
4.2 Form of Series B Preferred Stock certificate. Incorporated by reference
to Exhibit 4.1 to Elite's Current Report on Form 8-K dated March 15,
2006 and filed with the Commission on March 16, 2006.
4.3 Form of Series A Warrant. Incorporated by reference to Exhibit 4.2 to
Elite's Current Report on Form 8-K dated March 15, 2006 and filed with
the Commission on March 16, 2006.
4.4 Form of Series B Warrant. Incorporated by reference to Exhibit 4.3 to
Elite's Current Report on Form 8-K dated March 15, 2006 and filed with
the Commission on March 16, 2006.
4.5 Form of Warrant issued to the Placement Agent. Incorporated by reference
to Exhibit 4.4
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to Elite's Current Report on Form 8-K dated March 15, 2006 and filed
with the Commission on March 16, 2006.
10.1 Form of Securities Purchase Agreement between the Registrant and
purchasers listed as signatories thereto. Incorporated by reference to
Exhibit 10.1 to Elite's Current Report on Form 8-K dated March 15, 2006
and filed with the Commission on March 16, 2006.
10.2 Form of Registration Rights Agreement. Incorporated by reference to
Exhibit 10.2 to Elite's Current Report on Form 8-K dated March 15, 2006
and filed with the Commission on March 16, 2006.
10.3 Placement Agent Agreement between Indigo Securities, LLC and the
Registrant. Incorporated by reference to Exhibit 10.3 to Elite's Current
Report on Form 8-K dated March 15, 2006 and filed with the Commission on
March 16, 2006.
5.1 Opinion of Reitler Brown & Rosenblatt LLC.
23.1 Consent of Miller, Ellin & Company LLP.
23.2 Consent of Reitler Brown & Rosenblatt LLC (included in Exhibit 5.1
above)
24.1 Power of Attorney (included on Signature page).
---------------
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(a)(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement; notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of the securities offered would
not exceed that which was registered) may be reflected in the form of prospectus
filed with the Securities and Exchange Commission pursuant to Rule 424(b) if the
change in volume represents no more than a 20 percent change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information
II-3
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Securities and
Exchange Commission by the Registrant pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in this
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the Registrant's annual report pursuant
to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and where
applicable, each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by
reference in this registration statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(b) INSOFAR AS INDEMNIFICATION FOR LIABILITIES ARISING UNDER THE
SECURITIES ACT OF 1933 MAY BE PERMITTED TO DIRECTORS, OFFICERS AND CONTROLLING
PERSONS OF THE REGISTRANT PURSUANT TO THE FOREGOING PROVISIONS, OR OTHERWISE,
THE REGISTRANT HAS BEEN ADVISED THAT IN THE OPINION OF THE SECURITIES AND
EXCHANGE COMMISSION SUCH INDEMNIFICATION IS AGAINST PUBLIC POLICY AS EXPRESSED
IN THE SECURITIES ACT OF 1933 AND IS, THEREFORE, UNENFORCEABLE. IN THE EVENT
THAT A CLAIM FOR INDEMNIFICATION AGAINST SUCH LIABILITIES (OTHER THAN THE
PAYMENT BY THE REGISTRANT OF EXPENSES INCURRED OR PAID BY A DIRECTOR, OFFICER OR
CONTROLLING PERSON OF THE REGISTRANT IN THE SUCCESSFUL DEFENSE OF ANY ACTION,
SUIT OR PROCEEDING) IS ASSERTED AGAINST THE REGISTRANT BY SUCH DIRECTOR, OFFICER
OR CONTROLLING PERSON IN CONNECTION WITH THE SECURITIES BEING REGISTERED, THE
REGISTRANT WILL, UNLESS IN THE OPINION OF ITS COUNSEL THE MATTER HAS BEEN
SETTLED BY CONTROLLING PRECEDENT, SUBMIT TO A COURT OF APPROPRIATE JURISDICTION
THE QUESTION WHETHER SUCH INDEMNIFICATION BY IT IS AGAINST PUBLIC POLICY AS
EXPRESSED IN THE SECURITIES ACT OF 1933 AND WILL BE GOVERNED BY THE FINAL
ADJUDICATION OF SUCH ISSUE.
(c)(1) For purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(b) under the Securities Act of 1933 shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
II-4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has
duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the Borough of Northvale, State of
New Jersey, on April 12, 2006.
ELITE PHARMACEUTICALS, INC.
/s/ BERNARD BERK
----------------------------------------
Bernard Berk
President and Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below
constitutes and appoints Bernard Berk and Mark I. Gittelman as his
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him and in his name, place, and stead, in any and all capacities, to sign
and file Registration Statement(s) and any and all pre- or post-effective
amendments to such Registration Statement(s), with all exhibits thereto and
hereto, and other documents with the Securities and Exchange Commission,
granting unto said attorney-in-fact and agent, and each of them, full power and
authority to do and perform each and every act and thing requisite or necessary
to be done in and about the premises, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his substitutes, may
lawfully do or cause to be done by virtue hereof.
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Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
Dated: April 12, 2006 /s/ Bernard Berk
--------------------------------------------
Bernard Berk
Chief Executive Officer and
Chairman of the Board of Directors
Dated: April 12, 2006 /s/ Mark I. Gittelman
--------------------------------------------
Mark I. Gittelman
Chief Financial Officer
(Principal Financial and Accounting Officer)
Dated: April 12, 2006 /s/ Edward Neugeboren
--------------------------------------------
Edward Neugeboren
Director
Dated: April 12, 2006 /s/ Barry Dash
--------------------------------------------
Barry Dash
Director
Dated: April 12, 2006 /s/ Melvin Van Woert
--------------------------------------------
Melvin Van Woert
Director
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