AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 23, 2004
REGISTRATION NO. 333-120531
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-----------
ELITE PHARMACEUTICALS, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 2834 22-3542636
(State or other (Primary Standard Industrial (I.R.S. Employer
jurisdiction of Classification Code Number) Identification Number)
incorporation or
organization)
-----------
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 AGGREGATE OFFERING
OFFERING PRICE (6) AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO BE PRICE PER REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED SHARE (6) FEE
Common Stock, $.01 par value 5,957,931 (1) $1.69 $10,068,903.39 $1,275.73
Common Stock, $.01 par value 2,582,790 (2) $1.84 $4,752,334 $602.12
Common Stock, $.01 par value 3,077,721 (3) $1.84 $5,663,007 $717.50
Common Stock, $.01 par value 1,362,200 (4) $1.69 $2,302,118 $291.68
Common Stock, $.01 par value 746,500 (5) $3.00 $2,239,500 $283.74
----------------- --------------
TOTAL 13,727,142 $3,165.99
ii
(1) Shares to be offered upon conversion of 516,558 shares of Series A
Preferred Stock issued in a private placement, 26,896 as the December 1,
2004 dividend on the Series A Preferred and 765,455 shares which may be
received in payment by the Registrant of the balance of its dividend
obligations for the first two years on the Series A Preferred Stock.
(2) Shares to be offered upon exercise of Common Stock Purchase Warrants
expiring December 31, 2005 issued in the private placement.
(3) Shares to be offered upon exercise of Common Stock Purchase Warrants
issued in the private placement expiring on or prior to a date five years
from the effective date of this Registration Statement.
(4) Shares acquired from the former Chief Executive Officer of the
Registrant.
(5) Shares to be offered by other security holders included herein pursuant
to registration obligations of Registrant other than those with respect
to shares described in notes (1) through (4) above.
(6) 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 average of the high and low sale price per share of
shares of the Common Stock on the American Stock Exchange on November 5,
2004 or with respect to the shares described in footnotes 2, 3 and 5, the
higher of the foregoing price or the highest exercise price of the
warrants or options which the holders of the shares to be offered is
required to pay to exercise such options or warrants.
-----------
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.
================================================================================
iii
PROSPECTUS
ELITE PHARMACEUTICALS
COMMON STOCK
------------------
This is an offering (the "Offering") of the following shares of Common
Stock, $.01 par value, of Elite Pharmaceuticals, Inc. (the "Company" or
"Elite"), by the selling stockholders named in this prospectus (the "Selling
Stockholders"):
(i) shares upon conversion of outstanding shares of Series A Preferred Stock,
par value $.01 per share acquired from the Company in a private placement
and shares of Common Stock issued as a dividend on the Series A Preferred
Shares;
(ii) shares upon exercise of Common Stock Purchase Warrants expiring on or
prior to December 31, 2005 (the "Short Term Warrants"), issued by the
Company in the private placement;
(iii) shares upon exercise of Common Stock Purchase Warrants expiring on or
prior to a date five years from the date of this Prospectus (the "Long
Term Warrants") issued by the Company in the private placement;
(iv) shares acquired from a former Chief Executive Officer of the Company; and
(v) other shares previously acquired from the Company or to be acquired upon
exercise of warrants or options acquired from the Company.
The Common Stock is listed on the American Stock Exchange under the
symbol "ELI." On December 20, 2004, the closing sales price of our Common Stock
on the American Stock Exchange was $3.45 per share.
SEE "RISK FACTORS" BEGINNING ON PAGE 4 FOR A DISCUSSION OF FACTORS THAT
YOU SHOULD CONSIDER BEFORE BUYING SHARES OF OUR COMMON STOCK.
---------------------
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.
---------------------
The date of this prospectus is December ___, 2004.
TABLE OF CONTENTS
Page
WHERE YOU CAN FIND MORE INFORMATION ABOUT US...................................1
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING INFORMATION....................1
PROSPECTUS SUMMARY.............................................................2
OUR BUSINESS...................................................................2
RISK FACTORS...................................................................4
USE OF PROCEEDS...............................................................13
DESCRIPTION OF CAPITAL STOCK..................................................13
PRICE RANGE OF OUR COMMON STOCK AND DIVIDEND POLICY...........................16
MANAGEMENT....................................................................17
SELLING STOCKHOLDERS..........................................................26
PLAN OF DISTRIBUTION..........................................................33
LEGAL MATTERS.................................................................35
EXPERTS.......................................................................35
INCORPORATION BY REFERENCE....................................................35
i
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 450 Fifth Street, N.W., 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.
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. We assume no obligation to update the matters discussed in this
prospectus.
1
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," "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.
OUR BUSINESS
Elite engages primarily in researching, developing and licensing
proprietary controlled release drug delivery systems and products. We are also
equipped to manufacture controlled release products on a contract basis for
third parties and for ourselves if, and when, our products are approved.
Controlled release drug delivery of a pharmaceutical compound offers a safer and
more effective means of administering drugs through releasing a drug into the
bloodstream or delivering it to a certain site in the body at predetermined
rates or predetermined times. The goal is to provide more effective drug therapy
while reducing or eliminating many of the side effects associated with
conventional drug therapy and/or to reduce the frequency of administration.
We have concentrated on developing orally administered controlled release
products. These products include drugs that cover therapeutic areas for pain,
angina, hypertension, allergy and infection. The Food and Drug Administration
("FDA") has not yet approved any of our products and, therefore, currently we do
not market any products. Our products are at various stages of development.
We are focusing our efforts on the following areas: (i) obtaining FDA
approval for one or more of six oral controlled release pharmaceutical products
already in development, either directly or through other companies; (ii)
commercial exploitation of these products either by license and the collection
of royalties, or through the manufacture of tablets and capsules using our
developed formulations, and (iii) development of new products and the expansion
of our licensing agreements with other pharmaceutical companies, including
contract research and development projects, joint ventures and other
collaborations.
In an effort to reduce costs and improve focus and efficiency, we have
reduced the number of products that we are actively developing from fifteen to
six. The six products that continue in development were deemed by us to be the
most suitable for continued development given our limited resources.
We are also focusing on the development of various types of drug products
including branded drug products (which require new drug applications ("NDAs"))
and generic drug products (which require abbreviated new drug applications
("ANDAs")).
We intend to continue to collaborate in the development of products with
our current partners. We also plan to seek additional collaborations to develop
more products.
We believe that our business strategy enables us to reduce our risk by:
2
o having a product portfolio that includes both branded and generic
products in various therapeutic categories; and
o building collaborations and establishing licensing agreements with
companies with greater resources thereby allowing us to share costs of
development and to improve cash-flow.
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 price 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.
3
RISK FACTORS
In addition to the other information contained in this prospectus, 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 A "GOING CONCERN" ANNUAL AUDIT REPORT.
We reported net losses of $3,364,411, $6,514,217, $4,061,422, $1,774,527
and $13,964,981 for the six months ended September 30, 2004 and fiscal years
ended March 31, 2004, 2003, 2002 and 2001, respectively. At September 30, 2004,
we had an accumulated deficit of approximately $38.5 million, consolidated
assets of approximately $5.3 million, stockholders' equity of approximately $1.7
million, and a negative working capital of approximately ($0.75) million
(without giving retroactive effect to the consummation of the private placement
of Series A Preferred Shares for gross proceeds of $6,600,000). 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 the fiscal years ended
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 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
4
incorporation in 1990. We incurred net losses of $3,364,411, $6,514,217,
$4,061,422, $1,774,527 and $13,964,981 for the six months ended September 30,
2004 and the years ended March 31, 2004, 2003, 2002 and 2001, respectively. 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.
As part of a settlement of a litigation initiated by Dr. Mehta in July
2003 for alleged breach of his employment agreement, the Company extended the
expiration date of options to purchase 770,000 shares of Common Stock (reduced
by a subsequent agreement to 670,000 shares) held by Dr. Mehta 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 holdings of securities of the
Company except for the foregoing options. The purchasers are offering the shares
acquired by means of this prospectus (see "Selling Stockholders").
WE HAVE NOT YET SUCCESSFULLY DEVELOPED A PRODUCT FOR COMMERCIAL USE, AND IF WE
ARE UNABLE TO DO SO OUR BUSINESS MAY NOT CONTINUE.
We have not yet developed a product to the stage of generating
commercial sales. 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. Of the products currently
under development and on which we are devoting substantial attention, two
products are in pilot Phase I studies, two products are in the pilot
bioequivalence stage and one product is in preclinical testing. One of the
products developed for a partner is in a pre-launch phase. Additional studies
including either pivotal bioequivalence or efficacy studies will be required for
the other products before commercialization.
Successful completion of pivotal biostudies is required to file an ANDA
with the FDA, and successful completion of pivotal clinical trials is required
to file a NDA with the FDA. ANDAs are filed with respect to generic versions of
existing FDA approved products while NDAs are filed with respect to new
products. In order for any of the products to be commercialized, FDA approval is
required.
WE COULD EXPERIENCE DIFFICULTY IN DEVELOPING AND INTEGRATING STRATEGIC
ALLIANCES, CO-DEVELOPMENT OPPORTUNITIES AND OTHER RELATIONSHIPS.
If we develop a product that is available for commercial sale, we intend
to pursue product-specific licensing, marketing agreements, co-development
opportunities and other partnering arrangements in connection with the
distribution of the product. We cannot be sure
5
that we will be able to locate suitable partners for these transactions. 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 must 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.
6
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. 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 WE NEED ADDITIONAL FINANCING IN ORDER TO SATISFY OUR SIGNIFICANT CAPITAL
REQUIREMENTS, AND ARE UNABLE TO OBTAIN ADDITIONAL FINANCING, IT WOULD IMPAIR OUR
ABILITY TO CONTINUE TO DO BUSINESS.
We completed a private placement in October 2004 of (i) 516,558 shares
of our Series A Preferred Stock convertible into 5,165,580 of shares of Common
Stock, (ii) Short Term and Long Term Warrants to purchase at a price ranging
from $1.54 to $1.84 per share a like number of shares of Common Stock, and (iii)
Long Term Warrants issued to the Placement Agent to purchase 494,931 shares of
Common Stock at prices ranging from $1.23 to $1.47 per share. The private
placement resulted in gross proceeds of $6,600,000. We anticipate, based on our
currently proposed plans and assumptions relating to our operations, that we
have sufficient capital to satisfy our contemplated cash requirements through
March 31, 2006. After that time, we may require additional financing. In
particular, we expect to make substantial expenditures as we further develop and
seek to commercialize our products. As of October 31, 2004 we are currently
depleting our cash at the rate of $300,000 per month. We expect that our rate of
spending will accelerate as the result of increased costs and expenses
associated with seeking regulatory approval and commercialization of products
now in development. We have no current arrangements with respect to additional
financing other than the potential exercise of the Short Term and Long Term
Warrants issued in the October 2004 private placement and the warrants issued to
the Placement Agent and other warrants and options that are currently
outstanding. We have no way of knowing whether any of the options or warrants
will be
7
exercised. We do not currently have commitments for other financing, and so do
not know whether additional financing would be available to us on favorable
terms, or at all. Our inability to obtain additional financing when needed would
impair our ability to continue our business.
If any future financing involves the sale of our securities, our
then-existing stockholders' equity could be substantially diluted. On the other
hand, if we incurred debt, we 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.
If our plans change, or our assumptions change or prove to be inaccurate, or our
cash flow proves to be insufficient to fund our operations due to unanticipated
expenses or problems, we would be required to seek additional financing sooner
than anticipated.
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.
8
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. None of our
products has 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.
9
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 $1,000,000; however, a successful claim
against us in excess of the policy limits could be very expensive to us,
damaging our financial position. Our insurance coverage 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 September 30, 2004.
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 eighteen
months ended September 30, 2004, the closing sale price on the American Stock
Exchange of our Common Stock fluctuated from a high of $4.31 per share to a low
of $1.05 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.
10
THE OFFERING FOR SALE OF A SIGNIFICANT NUMBER OF RESTRICTED SHARES OF COMMON
STOCK ELIGIBLE FOR RESALE IN ADDITION TO THE SHARES OF COMMON STOCK WHICH MAY BE
OFFERED UPON CONVERSION OF SERIES A PREFERRED SHARES AND EXERCISE OF THE SHORT
TERM AND LONG TERM WARRANTS CAN HAVE A MATERIAL ADVERSE EFFECT ON THE MARKET
PRICE OF THE COMMON STOCK.
As of November 9, 2004, there were 12,130,926 shares of our Common Stock issued.
This prospectus relates to the offering by Selling Stockholders of up 1,362,200
shares acquired from the former Chief Executive Officer and up to an additional
10,826,091 shares which are registered for resale upon conversion of the shares
of Series A Preferred Stock outstanding (exclusive of shares of Common Stock
which may be issued as a dividend on outstanding shares of Series A Preferred
Stock) and exercise of the Short Term and Long Term Warrants. Sales of
substantial amounts of the Common Stock in the public market by these holders or
perceptions that such sales may take place 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.
One of the requirements for the continued listing of Common Stock on the
American Stock Exchange for a company that has net losses for its five most
recent fiscal years is that it have a stockholders' equity of at least
$6,000,000. The Company is expected to sustain a net loss for the year ending
March 31, 2005, and as a result will have sustained net losses in its five most
recent fiscal years. As of October 31, 2004, based on unaudited information, the
Company had stockholders equity of approximately $7,100,000 and we were
depleting our cash at the rate of $300,000 per month. The related provision of
the American Stock Exchange guide provides that the Exchange will not normally
consider removing a stock from listing if the total value of the Company's
market capitalization is at least $50,000,000 as well as satisfying other
conditions which the Company meets and expects to meet. No assurance can be
given that as of March 31, 2005 the Company's stockholder's equity will be at
least $6,000,000 and the value of its market capitalization will be at least
$50,000,000. The failure to maintain listing of the Common Stock on the Exchange
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.
11
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.
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
12
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.
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 6,330,511 shares of
Common Stock upon exercise of the Short Term and Long Term Warrants and options
and other warrants (a maximum of approximately $10,291,144) 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, including 660,000 shares of Series A Preferred Stock. As
of November 9, 2004, there were outstanding 12,130,926 shares of Common Stock,
516,558 shares of Series A Preferred Stock (the "Series A Preferred Shares")
convertible into 5,165,580 shares of Common Stock and options and warrants to
purchase a total of 10,891,800 shares of our Common Stock including the
6,330,511 shares issuable upon exercise of the Short Term Warrants, Long Term
Warrants and options held by the Selling Stockholders.
COMMON STOCK
SUBJECT TO THE RIGHTS OF THE HOLDERS OF THE SERIES A PREFERRED SHARES
AND OF ANY OTHER 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
13
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 thererof, including dividend
rights, conversion rights, voting rights, redemption terms, liquidation
preferences and the number of shares constituting each such series, without any
further vote or action by the Company's stockholders.
On October 6, 2004, pursuant to the authority of its Board of Directors,
Elite 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 (the Series A
Preferred Shares). THE FOLLOWING SUMMARY OF CERTAIN OF THE RIGHTS AND
LIMITATIONS OF THE SERIES A PREFERRED SHARES IS QUALIFIED BY THE FULL
DESCRIPTION OF THE RIGHTS AND LIMITATIONS SET FORTH IN THE SERIES A PREFERRED
CERTIFICATE.
The Series A Preferred Shares are to accrue dividends at the annual rate
of $0.984 per share (a rate of 8% per annum on the $12.30 per share paid for the
first tranche of the Series A Preferred Shares sold) payable at the Company's
option, in cash or shares of Common Stock with each share of Common Stock so
issued to be valued at its Current Market Price which is defined as the average
weighted (based on sale volume) closing price for the 30 consecutive trading day
period ending on the last trading day before the date of valuation. To the
extent not paid in cash within 10 days following the dividend payment date of
June 1 or December 1, the Company will be required to make the payment in shares
of Common Stock. Dividends may not be payable on Common Stock or any other
capital stock ranked junior to the Series A Preferred Shares prior to the
satisfaction of the dividend obligation on the Series A Preferred Shares.
Each Series A Preferred Share is entitled to a preference equal to
$12.30 per share subject to adjustment plus accrued but unpaid dividends upon
the liquidation, dissolution or winding-up of the Company, or a "Change of
Control Event", which preference is senior to the Common Stock. In addition,
each Series A Preferred Share participates on an as converted basis with the
Common Stock with respect to any remaining assets after the distribution on the
Series A Preferred Shares as described in the preceding sentence. A "Change in
Control Event", is defined to mean the first to occur of (i) a sale of all or
substantially all of the assets of the Company, (ii) an acquisition,
reorganization, merger, consolidation of the Company or a similar transaction
(except for a consolidation or merger where the holders of capital stock prior
to the merger or consolidation possess more than 50% of the voting power
immediately after the merger or consolidation), or (iii) a transaction or series
of transactions in which a person or group of persons as a group acquire 50% or
more of the Common Stock on a fully diluted basis or of the voting power of the
Company, unless the consideration paid for the Series A Preferred Shares (on an
as converted basis) in any such transactions is more than $3.69 per share
(subject to adjustment) or the event is approved by the holders of a majority of
the outstanding Series A Preferred Shares.
The Series A Preferred Shares as a class have the right to elect one
Director with the Placement Agent of the private placement in which the Series A
Preferred Shares were sold to make the first designation. The holders of Series
A Preferred Shares vote with the holders of shares of Common Stock as one class
with each Series A Preferred Share entitled to such number of votes equal to the
number of shares of Common Stock into which the share is then convertible.
14
So long as at least 20% of the Series A Preferred Shares issued by the
Company are outstanding certain actions may not be effected by the Company
without the prior consent of the holders of a majority of the then outstanding
Series A Preferred Shares, including a change in the terms of the Series A
Preferred Shares, issuance of equity security having a preference senior or pari
passu with the Series A Preferred Shares, certain changes to the Company's
Certificate of Incorporation or By-laws, incurrence of indebtedness for borrowed
money with certain exceptions, redemption of shares of Common Stock with certain
exceptions, loans other than in the ordinary course of business with certain
exceptions, certain insider transactions, and declaration or payment of
dividends other than (i) upon the Series A Preferred Shares, or (ii) in
connection with a split of the Common Stock.
Each Series A Preferred Shares is convertible into ten shares of Common
Stock. The conversion rate is 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
$1.23 (subject to adjustment). The Series A Preferred Shares are to be
automatically converted into shares of Common Stock in the event of (i) notice
from holders of a majority of the Series A Preferred Shares, or (ii) the Company
provides written notice to the holders that the Current Market Price of Common
Stock for the immediate prior 30 consecutive trading days at an average daily
trading volume of at least 50,000 shares per day on each such trading day
exceeded $3.69 (subject to adjustment), or (iii) the occurrence of a transaction
which values Series A Preferred Shares (on an as converted basis) at $3.69 per
share (subject to adjustment) or greater and the consideration to be paid to the
Series A Preferred Shareholders is cash or shares which are traded on a national
securities exchange or NASDAQ and are registered under the Securities Act of
1933 for resale or (iv) concurrently with a closing of a public offering of
shares of Common Stock at a price equal to at least $3.69 per share (subject to
adjustment) with proceeds to the Company of at least $20,000,000.
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.
15
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.
PRICE RANGE OF OUR COMMON STOCK AND DIVIDEND POLICY
Our Common Stock is quoted on the American Stock Exchange under the
symbol "ELI." The following table shows, for the periods indicated, the high and
low sales prices per share of our Common Stock as reported by the American Stock
Exchange.
COMMON STOCK
QUARTER ENDED: HIGH LOW
FISCAL YEAR
ENDING MARCH 31, 2005:
September 30, 2004 ...................................... $2.35 $1.05
June 30, 2004 ........................................... $4.31 $2.15
FISCAL YEAR
ENDING MARCH 31, 2004:
March 31, 2004 .......................................... $3.80 $2.40
December 31, 2003 ....................................... $3.30 $2.70
September 30, 2003 ...................................... $3.49 $2.05
June 30, 2003 ........................................... $3.45 $1.34
FISCAL YEAR
ENDING MARCH 31, 2003:
March 31, 2003 .......................................... $2.20 $1.45
December 31, 2002 ....................................... $3.15 $1.80
September 30, 2002 ...................................... $5.25 $2.41
June 30, 2002 ........................................... $7.75 $4.50
FISCAL YEAR
ENDING MARCH 31, 2002:
March 31, 2002 .......................................... $8.30 $5.65
December 31, 2001 ....................................... $7.75 $5.90
September 30, 2001 ...................................... $11.50 $5.10
June 30, 2001 ........................................... $11.45 $4.85
16
On November 9 2004, the last sale price of our Common Stock, as reported
by the American Stock Exchange, was $1.69 per share.
We have never paid cash dividends on our capital stock. No dividend may
be paid on our Common Stock without the approval of holders of a majority of the
outstanding shares of Series A Preferred Stock. We currently anticipate that we
will retain all available funds for use in the operation and expansion of our
business, and do not anticipate paying any cash dividends in the foreseeable
future.
See "Description of Capital Stock - Preferred" for the senior dividend
rights of the Series A Preferred Shares at the annual rate of $0.984 per share
and our option to pay such dividends in shares of Common Stock valued at "fair
market value" as defined.
MANAGEMENT
Board of Directors
The table below sets forth the names and ages, as of November 9,
2004, of each of the Directors and the period during which each such person has
served on the Board of Directors of the Company.
NAME AND BUSINESS ADDRESS AGE DIRECTOR SINCE
Bernard Berk (1) 55 2004
John A. Moore(1) 38 2002
Harmon Aronson 61 1999
26 Monterey Drive
Wayne, NJ 07470
Eric L. Sichel 44 2001
411 Highview Road
Engelwood, NJ 07631
(1) His address is c/o Elite Pharmaceuticals Inc., 165 Ludlow Avenue, Northvale,
NJ 07647
The principal occupation and employment of each such person during the
past five years is set forth below. In each instance in which dates are not
provided in connection with a nominee's business experience, such nominee has
held the position indicated for at least the past five years.
Bernard Berk was appointed the Chief Executive Officer of the Company in
June 2003, a Director in February 2004 and Chairman of the Board on May 12,
2004. Mr. Berk has been the President and Chief Executive Officer of Michael
Andrews Corporation, a pharmaceutical management consultant firm, since 1996.
Mr. Berk devotes and is to devote during his employment under his employment
agreement substantially all of his time to the operations of
17
the Company. From 1994 until 1996, Mr. Berk was President and Chief Executive
Officer of Nale Pharmaceutical Corporation. From 1989 until 1994, Mr. Berk was
Senior Vice President of Sales, Marketing and Business Development of Par
Pharmaceuticals, Inc. Mr. Berk holds a B.S. from New York University.
John A. Moore served as Chairman of the Board from June 2003 to May 12,
2004. He has been Chief Executive Officer and President of Edson Moore
Healthcare Ventures Inc., an investment entity, since July 2002. Mr. Moore had
been from 1994 through June 2002 Chief Executive Officer and President and since
1994 a director of Optimer, Inc., a research based polymer development company.
He is also a director and Chairman of ImaRx Therapeutics, Inc., a privately-held
company engaged in medical technology development and a director of Medi-Hut
Co., Inc., a publicly traded medical products company. Mr. Moore holds a B.A. in
history from Rutgers University.
Harmon Aronson, Ph.D. has been employed since 1997 as President of
Aronson Kaufman Associates, Inc., a New Jersey-based consulting firm that
provides manufacturing, FDA regulatory and compliance services to pharmaceutical
and biotechnology companies. Its clients include United States and international
firms manufacturing bulk drugs and finished pharmaceutical dosage products who
are seeking FDA approval for their products for the U.S. market. Prior to 1997,
Dr. Aronson was employed by Biocraft Laboratories, a leading generic drug
manufacturer, rising to the position of Vice President of Quality Management;
prior to that he held the position of Vice President of Non-Antibiotic
Operations, where he was responsible for the manufacturing of all the firm's
non-antibiotic products. Dr. Aronson holds a Ph.D. in Physics from the
University of Chicago.
Eric L. Sichel, M.D. has been since 1997, owner and President of Sichel
Medical Ventures, Inc., a company that provides biotechnology company
assessments and investment banking services. From 1995 through 1996, Dr. Sichel
was a senior analyst in the biotechnology field for Alex Brown & Sons, Inc.
Prior to that, Dr. Sichel was affiliated with Sandoz Pharmaceuticals Corp. in
various capacities, including associate director of transplantation/immunology.
Dr. Sichel holds an M.B.A. from Columbia University and an M.D. from UMDNJ--New
Jersey Medical School, and is licensed to practice medicine by the State of New
York.
The holders of the Series A Preferred Stockholders are entitled to elect
a director, but have not made their selection as of November 9, 2004
Each director holds office (subject to our By-Laws) until the next
annual meeting of stockholders and until such director's successor has been
elected and qualified.
COMMITTEES
The Board of Directors has an Audit Committee and, since March 2004, a
Nominating Committee. The Board has no other standing committees. The Audit
Committee members are John A. Moore, Harmon Aronson and Eric L. Sichel. The
Company's Board of Directors has adopted a written charter for the Audit
Committee, a copy of which was included as an appendix to the Company's proxy
statement sent to stockholders in connection with the annual meeting of
stockholders held October 11, 2001.
18
The Company deems the members of its Audit Committee to be independent
as independence is defined in Section 121(A) of the American Stock Exchange
Listing Standards, as amended effective December 1, 2003. The Board determined
that Mr. Sichel, an independent director, qualifies as the audit committee
financial expert within the meaning of that term under the applicable
regulations under the Securities Exchange Act of 1934.
The Nominating Committee is authorized to select the nominees of the
Board of Directors for election as directors. The members are John A. Moore,
Harmon Aronson and Bernard Berk.
COMPENSATION OF DIRECTORS
Each non-affiliated director receives $2,000 as compensation for each
meeting of the Board of Directors attended.
Pursuant to an authorization by the Board of Directors, Mr. Moore
received $46,875 as compensation for the period from January 1, 2004 through May
12, 2004, the date of his resignation as Chairman of the Board, for his services
as Chairman in assisting the Chief Executive Officer in the management of the
Company's operations.
EXECUTIVE OFFICERS
Our executive officers of the Company are Bernard Berk and Mark I.
Gittelman. Our executive officers, except for Mr. Berk who has a long term
employment agreement, will serve until the next annual meeting of directors and
until their successors have been duly elected and qualified. There are no family
relationships between any of our directors and executive officers.
Bernard Berk, age 55, was appointed Chief Executive Officer in June 2003
and a director in February 2004 and Chairman of the Board on May 12, 2004. See
"Management - Board of Directors" for his business background.
Mark I. Gittelman, age 44, CPA, the Chief Financial Officer, Secretary
and Treasurer of the Company, is the President of Gittelman & Co., P.C., an
accounting firm in Clifton, NJ. Prior to forming Gittelman & Co., P.C. in 1984,
he worked as a certified public accountant with the international accounting
firm of KPMG Peat Marwick, LLP. Mr. Gittelman holds a B.S. in accounting from
New York University and a Masters of Science in Taxation from Farleigh Dickinson
University. He is a Certified Public Accountant licensed in New Jersey and New
York, and is a member of the American Institute of Certified Public Accountants
("AICPA"), and the New Jersey State and New York States Societies of CPAs. Other
than Elite Labs, no company with which Mr. Gittelman was affiliated in the past
was a parent, subsidiary or other affiliate of the Company.
The Company entered into a three-year employment agreement effective
July 23, 2003 with Mr. Berk providing for (i) his full time employment as Chief
Executive Officer at an annual base salary of $200,000, (ii) the grant to him of
options which vest immediately to purchase 300,000 shares of Common Stock at a
price of $2.01 per share, the closing share price on the American Stock Exchange
on the date of grant and (iii) the grant of options to purchase an additional
300,000 shares at the $2.01 per share to vest on consummation of a "strategic
transaction" while he is employed as Chief Executive Officer. The consummation
of such
19
transaction will result in the increase of his base annual salary to $310,140
effective with the consummation. A strategic transaction is defined as any one
of the following transactions provided that the net value of the consideration
to the Company or its stockholders determined in good faith by the Board of
Directors is at least $10,000,000: (i) the sale of all or substantially all of
the assets of the Company, (ii) a merger or consolidation or business
combination, or (iii) the sale by the Company of debt or equity securities.
Either party upon notice may terminate Mr. Berk's employment except that
a termination by the Company without cause or because of his permanent
disability or a termination by him for cause will result in severance pay in the
form of the continuation of his base salary for the balance of the term or two
years, whichever is longer, less in the event of termination for permanent
disability the amount of payments under a disability insurance policy maintained
by the Company. The Company is also to continue to pay during the foregoing
period the premiums for life and disability insurance policies. Furthermore, in
the event that Mr. Berk terminates his employment following a "change of
control" event he is to receive, payable in 24 monthly installments, an amount
which will depend on the fair value of the consideration determined in good
faith by the Board of Directors received by the Company or stockholders from the
"change of control" event less related expenses ("Net Fair Value") -- $500,000
if the Net Fair Value is $10 million or less; the greater of $500,000 or twice
his then base annual salary, if the Net Fair Value is greater than $10,000,000
but not more than $20 million, or $1,000,000 if the Net Fair Value is greater
than $20,000,000. A "change of control" event is (i) a merger or consolidation
in which securities possessing more than 50% of the voting power is issued to
persons other than the holders of voting securities of the Company immediately
prior to the event, (ii) the sale, transfer or disposition of all or
substantially all the assets of the Company, or (iii) the sale by the Company of
securities to a third party.
The agreement contains Mr. Berk's non-competition covenant for a period
of one year from termination.
20
EXECUTIVE OFFICER COMPENSATION
The following table sets forth the annual and Long Term compensation for
services in all capacities to the Company for the three years ended March 31,
2004, awarded or paid to, or earned by Bernard Berk, the Company's President and
Chief Executive Officer since June 2003 and Dr. Atul M. Mehta, our former
President and Chief Executive Officer. No other executive officer of the Company
received compensation exceeding $100,000 during those periods. See "Certain
Relationships and Related Transactions" for fees paid to an affiliate of Mark I.
Gittelman, the Company's Chief Financial Officer, Treasurer and Secretary.
SUMMARY COMPENSATION TABLE
---------------------------------------------------------------------- ----------------------------------------------------------
ANNUAL COMPENSATION LONG TERM COMPENSATION
---------------------------------------------------------------------- ----------------------------------------------------------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Name and Fiscal Salary Bonus Other Annual Restricted Securities LTIP All Other
Principal Year(1) Compensation(5) Stock Awards Underlying Payouts Compensation
Position Options
----------------- ------------ ------------ ---------- --------------- -------------- -------------- ------------ ---------------
Bernard Berk, 2003-04 $166,667 -- -- -- 300,000(6) -- --
President and
Chief Executive
Officer
----------------- ------------ ------------ ---------- --------------- -------------- -------------- ------------ ---------------
Atul M. Mehta, 2003-04 $ 53,684 -- $ 3,040 -- --(3) -- --
Ph.D. former
President and 2002-03 $330,140 -- $ 3,040 -- -- -- --
Chief executive
Officer(2) 2001-02 $272,855 -- $83,856 -- 50,000(4) -- --
----------------- ------------ ------------ ---------- --------------- -------------- -------------- ------------ ---------------
(1) The Company's fiscal year begins on April 1 and ends on March 31.
The information is provided for each fiscal year beginning April 1.
(2) Dr. Mehta resigned as an employee and as a director of Elite as of
June 3, 2003.
(3) As part of a settlement of a litigation between Dr. Mehta and the
Company the expiration dates of options granted to him prior to April 1, 2001 to
purchase 770,000 shares were extended in April 2004 to June 30, 2005
(subsequently by agreement reduced to 670,000 options with the expiration date
extended to December 31, 2007).
(4) By action on February 21, 2002, our Board of Directors corrected a
clerical error in options for 425,000 shares of our Common Stock granted to Dr.
Mehta. This correction did not result in any additional shares being subject to
options held by Dr. Mehta, any change in the exercise price or a change in any
other material terms.
(5) Other Annual Compensation represents use of a Company car, premiums
paid by the Company for life insurance on Dr. Mehta's life for the benefit of
his wife and the purchase price
21
of $80,856 for options acquired from Dr. Mehta.
(6) Does not include 300,000 options which are exercisable only upon
occurrence of a "strategic event".
OPTION GRANTS TO AND EXERCISED BY EXECUTIVE OFFICERS IN LAST FISCAL YEAR
Options granted to executive officers of the Company named in the
Summary Compensation Table during the fiscal year ended March 31, 2004 were as
follows:
POTENTIAL REALIZED
NUMBER OF % OF TOTAL VALUE AT ASSUMED
SHARES OPTIONS ANNUAL RATES
UNDERLYING GRANTED TO OF STOCK PRICE
OPTIONS EMPLOYEES IN EXERCISE EXPIRATION APPRECIATION FOR
NAME GRANTED FISCAL YEAR PRICE DATE OPTION TERM
---------------- ---------- ------------ -------- ---------- -----------------------
5% 10%
-------- ----------
Bernard Berk 300,000(1) 41.4% $2.01 6/2/13 $982,223 $1,564,027
Atul M. Mehta(2) -- -- -- -- -- --
(1) Does not include grant of options to purchase 300,000 shares at $2.01
per share which are exercisable only upon occurrence of a "strategic event". See
"Executive Officers".
(2) Pursuant to a settlement which closed in April 2004 of a litigation with
the Company and a subsequent agreement, the expiration dates of options to
purchase 670,000 shares granted prior to year ended March 31, 2002 while he was
an executive officer were extended to December 31, 2007.
No options were exercised by executive officers during the fiscal year
ended March 31, 2004.
NUMBER OF SHARES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
NAME OPTIONS AT YEAR-END* OPTIONS AT YEAR-END(1)
---- ---------------------------- ---------------------------
EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
----------- ------------- ----------- -------------
Atul M. Mehta(2) 270,000* -0- $0 --
100,000 -0- $0 --
100,000 -0- $48,000 --
100,000 -0- $98,000 --
100,000 -0- $148,000 --
100,000 -0- $198,000 --
Bernard Berk(3) 300,000 300,000 $291,000 $291,000
----------
*Giving retroactive effect to a litigation settlement which became effective in
April 2004. An October 21, 2004 agreement reduced by 100,000 the 270,000 options
and reduced their exercise price from $10.00 to $2.34 per share.
22
(1) The dollar values are calculated by determining the difference between
$2.98 per share, the closing sale share price of the Common Stock on March 31,
2004 on the American Stock Exchange and the exercise price of the respective
options.
(2) Dr. Mehta resigned as an officer/employee and director as of June 3,
2003.
(3) Mr. Berk entered the employ of the Company in June 2003
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company is a party to an agreement dated February 26, 1998 whereby
fees are paid to Gittelman & Co., P.C., a firm wholly owned by Mark I.
Gittelman, the Company's Chief Financial Officer, Secretary and Treasurer, in
consideration for services rendered by the firm as internal accountant and
financial and management consultant. The firm's services include the services
rendered by Mr. Gittelman in his capacity as Chief Financial Officer, Treasurer
and Secretary. For the fiscal years ended March 31, 2004, 2003 and 2002, the
fees paid by the Company under the agreement were $168,750, $167,544 and
$91,260, respectively. The services rendered by the firm to the Company averaged
128, 127 and 69 hours per month, respectively, of which an average of 30 hours
per month were services rendered by him in his capacity as an officer of the
Company.
We also had a contractual relationship with Donald Pearson, then a
Director of the Company, which expired on November 30, 2003, providing for Mr.
Pearson to: (i) refer potential customers who will license or collaborate in the
development or purchase of the technology of the Company and (ii) render
financial consulting services to the Company. Under the arrangement, Mr. Pearson
received consulting fees aggregating $25,600, $38,400 and $12,800 for fiscal
years ended March 31, 2004, 2003 and 2002, respectively. The referral fees were
to be a percentage ranging from 5% to 1% of the first $5,000,000 of revenues
generated by his referrals after deducting expenses and a credit for the
consulting fees. No revenues were generated under the arrangement. The Company
also has a similar customer referral arrangement with Mr. Harmon Aronson, a
Director, to pay him a percentage of net revenues generated by customers
referred by him. No fees have been earned under his arrangement.
See "Executive Officers" for information as to an employment agreement
with Bernard Berk.
23
SECURITY OWNERSHIP OF OUR DIRECTORS,
EXECUTIVE OFFICERS AND PRINCIPAL STOCKHOLDERS
The following table sets forth certain information regarding beneficial
ownership of our Common Stock and our Series A Preferred Stock as of November 9,
2004 by (i) each director and named executive officer, (ii) each beneficial
holder of at least 5% of the outstanding shares of Common Stock or of Series A
Preferred Stock, and (iii) all executive officers and directors as a group. The
Series A Preferred Stockholders are entitled to elect one Director and on
matters submitted to Common Stockholders they are entitled to vote on an as
converted basis with the Common Stock as one class. On November 9, 2004 there
were outstanding 12,130,926 shares of Common Stock and 516,558 shares of Series
A Preferred Stock convertible into 5,165,580 shares of Common Stock.
Shares not outstanding but deemed beneficially owned by virtue of the
right of any individual to acquire shares within 60 days are treated as
outstanding only when determining the amount and percentage of the class owned
by such individual. Each person has sole voting and investment power with
respect to the shares shown, except as noted. Unless otherwise indicated, the
address of the person named is c/o Elite Pharmaceuticals, Inc., 165 Ludlow
Avenue, Northvale, New Jersey 07647.
PERCENTAGE
NAME AND ADDRESS NUMBER OF SHARES OF CLASS
---------------- ---------------- ----------
DIRECTORS AND NAMED EXECUTIVE OFFICERS
Harmon Aronson, Director* 70,000 Common(1) **
Eric L. Sichel, Director* 60,000 Common(2) **
John A. Moore, Director* 905,109 Common(3) 7.2%
Mark I. Gittelman, CFO, 10,000 Common(4) **
Treasurer and Secretary
300 Colfax Avenue
Clifton, New Jersey 07013
Bernard Berk, Chairman of the Board 465,300 Common(5) 3.7%
and Chief Executive Officer*
5% BENEFICIAL OWNERS
Dr. Atul Mehta 670,000 Common(6) 5.2%
c/o Andrew Giles Freda, Esq
Edwards & Caldwell LLC
1600 Route 208
North Hawthorne, NJ 07647
Jerome Belson 969,000 Common(7) 7.8%
495 Broadway
New York, New York 10012
Marlin Fund, LP *** 30,894 Preferred 6.0%
617,880 Common(8) 4.8%
Marlin Fund Offshore, LTD *** 40,651 Preferred 7.9%
813,020 Common(8) 6.3%
24
Valor Capital Management LP *** 60,976 Preferred 12.4%
1,219,520 Common(8) 9.1%
S.A.C. Capital Associates LLC *** 81,301 Preferred 16.3%
1,626,020 Common(8) 11.8%
Little Wing LP *** 33,600 Preferred 6.7%
672,000 Common(8) 5.2%
Jess S. Morgan & Co. Inc *** 80,143 Preferred 16.1%
1,602,860 Common(8) 11.7%
All Directors and Officers as a group 1,510,709 Common(9) 11.6%
* See "Management - Board of Directors" for his address
** Less than 1% of outstanding shares
*** See "Selling Stockholders" for address
(1) Comprised of options to purchase 70,000 shares.
(2) Represents options to purchase 40,000 shares and 20,000 shares owned as
co-tenant with Dana Cernea.
(3) Includes (i) options held by Mr. Moore to purchase 360,000 shares and (ii)
110,000 shares of Common Stock beneficially owned by Edson Moore Healthcare
Ventures, Inc. ("Edson Moore"), of which he is president and a 50% stockholder,
including 100,000 shares issuable upon exercise of a warrant with an exercise
price of $18.00 per share.
(4) Comprised of options to purchase 10,000 shares.
(5) Includes options to purchase 330,000 shares.
(6) Comprised of options to purchase 670,000 shares..
(7) Includes (i) warrants to purchase 281,000 shares of Common Stock, (ii)
53,900 shares held by Maxine Belson, wife of Jerome Belson, (iii) 63,300 held by
other members of his family, and (iv) 50,000 shares held by the Jerome Belson
Foundation.
(8) 50% of the shares are shares issuable upon conversion of the Series A
Preferred and 50% of the shares are shares issuable upon exercise of the Short
Term and Long Term Warrants. The Short Term and Long Term Warrants provide that
they are not exercisable if the exercise would result in the holder and the
holder's affiliates beneficially owning (as determined in accordance with
Section 13(d) of the Securities Exchange Act) in aggregate more than 9.99% of
the outstanding shares of Common Stock. The percentages shown do not give effect
to such limitation.
(9) Includes options and warrants to purchase an aggregate of 910,000 shares.
Except as otherwise set forth, information as to the stock ownership of
each person was provided to the Company by such person.
Other than the Stock Option Plan, the Company does not have any
compensation plans or arrangements benefiting employees or non-employees under
which equity securities of the Company are authorized for issuance in exchange
for consideration in the form of goods or services.
25
SELLING STOCKHOLDERS
The Selling Stockholders are offering (A) shares of our Common Stock
which may be acquired upon conversion of the Series A Preferred Shares, shares
of Common Stock which may be received as dividends on the Series A Preferred
Shares and shares of Common Stock which may be acquired upon exercise of Short
Term and Long Term Warrants; (B) shares of Common Stock acquired from Dr. Atul
Mehta, the former Chief Executive Officer of the Company and members of his
family (the "Mehta Sale"); and (C) other shares of Common Stock which we have
agreed to register at our expense including shares which may be acquired upon
exercise of outstanding options held by Dr. Mehta. The Series A Preferred Shares
and the Short Term and Long Term Warrants were acquired in a private placement
effected in three tranches, the first involving the sale of 379,122 Series A
Preferred Shares at a price of $12.30 per share convertible into 3,791,220
shares of Common Stock and the issuance of Short Term and Long Term Warrants to
purchase an aggregate of 3,791,220 shares at a price of $1.54 per share, the
second tranche involving the sale of 119,286 Series A Preferred Shares at a
price of $14.00 per share convertible into 1,192,860 shares of Common Stock and
the issuance of Short Term and Long Term Warrants to purchase an aggregate of
1,192,860 shares of Common Stock at a price of $1.75 per share, and the third
involving the sale of 18,150 Series A Preferred Shares at a price of $14.70 per
share convertible into 181,500 shares of Common Stock and the issuance of Short
Term and Long Term Warrants to purchase an aggregate of 181,500 shares of Common
Stock at a price of $1.84 per share. We paid Indigo Securities Inc., the
Placement Agent, and selected dealers cash commissions aggregating $633,510.70
and issued to them Long Term Warrants to purchase 357,495 shares of Common Stock
at a price of $1.23 per share, 119,286 shares of Common Stock at a price of
$1.40 per share and 18,150 shares of Common Stock at a price of $1.47 per share.
We have granted the purchasers in the private placement certain demand
and piggy-back registration rights under the Securities Act of 1933, as amended,
at our expense with respect to the offering of shares of Common Stock acquired
upon conversion of the Series A Preferred Shares and exercise of the Long Term
Warrants and Short Term Warrants.
We have agreed also to file the Registration Statement of which this
prospectus is a part to register for reoffering the (A) shares of Common Stock
acquired upon conversion of the Series A Preferred Shares and exercise of the
Short Term and Long Term Warrants and shares issued as dividends on the Series A
Preferred Shares and (B) the shares of Common Stock acquired in the Mehta Sale.
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, the 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 estimate as to the number of shares that will be held by each Selling
Stockholder after the offering can be provided. 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,
26
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.
In addition to the shares shown below being offered by the Private Placement
Selling Stockholders, the Registration Statement also covers shares of Common
Stock which may be issued as a dividend on the Series A Preferred Shares
acquired in the private placement.
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 by footnote, none of the Selling
Stockholders has had a significant relationship with us within the past three
years, other than as a result of the ownership of our shares or other
securities. Except as indicated by footnote, the Selling Stockholders have sole
voting and investment power with their respective shares. Percentages in the
table below are based on 12,130,926 shares of our Common Stock outstanding as of
November 9, 2004 and assumes that, except for the shares issuable to a Selling
Stockholders upon conversion or exercise, none of the Series A Preferred Shares
will be converted and none of the Short Term Warrants or Long Term Warrants or
outstanding warrants or options will have been exercised after the offering.
Shares Number of Shares
Beneficially Shares Owned After
Owned Prior to Which May Offering***
Name and Address Offering* Be Sold(*) Number Percent
PRIVATE PLACEMENT SELLING STOCKHOLDERS:
Chris Dick and Hedy E. Rogers 92,608(1) 32,608 60,000(1)**
2067 Leedoms Drive,
Newton, PA 18940
---------------------------------------- --------------------- ------------------- -----------------------
Shirley Rae Sullivan 40,770 40,770 0
42 Liberty Common,
Rye, NH 03870
---------------------------------------- --------------------- ------------------- -----------------------
Periscope Partners LP 244,560 244,560 0
1600 Flat Rock Rd.
Penn Valley, PA 19072
---------------------------------------- --------------------- ------------------- -----------------------
Little Wing LP 673,817 673,817 0
153 East 53rd Street, Ste. 2600,
New York, NY 10022
---------------------------------------- --------------------- ------------------- -----------------------
Tradewinds Fund Ltd. 141,381 141,381 0
153 East 53rd Street, Ste. 2600,
New York, NY 10022
---------------------------------------- --------------------- ------------------- -----------------------
S.A.C. Capital Associates, LLC 1,630,417 1,630,417 0
PO. Box 58, Victoria House,
The Valley, Anguilla, BVI
---------------------------------------- --------------------- ------------------- -----------------------
Marlin Fund II, LP 114,128 114,128 0
PO Box 224229,
Christiansted, VI 00822
---------------------------------------- --------------------- ------------------- -----------------------
27
Shares Number of Shares
Beneficially Shares Owned After
Owned Prior to Which May Offering***
Name and Address Offering* Be Sold(*) Number Percent
---------------------------------------- --------------------- ------------------- -----------------------
Marlin Fund Offshore, LDC 81,520 81,520 0
PO Box 224229,
Christiansted, VI 00822
---------------------------------------- --------------------- ------------------- -----------------------
Marlin Fund Offshore, Ltd. 815,219 815,219 0
PO Box 224229,
Christiansted, VI 00822
---------------------------------------- --------------------- ------------------- -----------------------
Marlin Fund, LP 619,551 619,551 0
PO Box 224229,
Christiansted, VI 00822
---------------------------------------- --------------------- ------------------- -----------------------
Jerry Teppel 407,599 407,599 0
13 Lucille Court,
Edson, NJ 08820
---------------------------------------- --------------------- ------------------- -----------------------
Wheaten HealthCare Partners LP 407,599 407,599 0
212 Durham Avenue, Building 1, Suite 201,
Metuchen, NJ 08840
---------------------------------------- --------------------- ------------------- -----------------------
Charan R. Behl, Ph.D. 401,082 401,082 0
658 Veterans Memorial HWY,
Apt. 1A, Hanppange, NY 11788
---------------------------------------- --------------------- ------------------- -----------------------
Eric Brachfeld 20,054 20,054 0
890 West End Ave., Apt. 16D,
New York, NY 10025
---------------------------------------- --------------------- ------------------- -----------------------
Gregory Osborn 20,054 20,054 0
202 Mountain Ave.,
Ridgewood, NJ 07450
---------------------------------------- --------------------- ------------------- -----------------------
William A. Lewis IV 200,541 200,541 0
201 East 87th Street, Apt. 9J,
New York, NY 10128
---------------------------------------- --------------------- ------------------- -----------------------
Myron Neugeboren 81,520 81,520 0
199 Wells Hill Road,
Lakeville, CT 06039
---------------------------------------- --------------------- ------------------- -----------------------
Bushido Capital Master Fund, LP. 407,599 407,599 0
Bushido Capital Partners, Ltd.,
275 Seventh Avenue, Suite 2000,
New York, NY 10001
---------------------------------------- --------------------- ------------------- -----------------------
Valor Capital Management 1,222,818 1,222,818 0
137 Rowagton Ave.
Rowagton, CT 06853
---------------------------------------- --------------------- ------------------- -----------------------
Keith Barksdale 40,108 40,108 0
95 Wildwood Rd.
Ridgewood, NJ 07450
---------------------------------------- --------------------- ------------------- -----------------------
Indigo Securities, LLC 494,931 (2) 494 ,931 0
780 Third Avenue
New York, NY 10017
---------------------------------------- --------------------- ------------------- -----------------------
28
Shares Number of Shares
Beneficially Shares Owned After
Owned Prior to Which May Offering***
Name and Address Offering* Be Sold(*) Number Percent
---------------------------------------- --------------------- ------------------- -----------------------
Neil V. Moody Revocable Trust 189,035 189,035 0
c/o Neil V. Moody
100 Sands Point Road, #305
Longboat Key, Fl 34228
---------------------------------------- --------------------- ------------------- -----------------------
Jess S. Morgan & Co. Inc. 1,606,667 1,606,667 0
5750 Wilshire Blvd. Suite 590
Los Angeles, CA 90036
---------------------------------------- --------------------- ------------------- -----------------------
Fineman Revocable Trust 143,205 143,205 0
c/o David Fineman
40 Lincoln Avenue
Piedmont, CA 94611
---------------------------------------- --------------------- ------------------- -----------------------
RC II Ltd. 214,797 214,797 0
The Metropole
Roseville Street
St. Helier Jersey
Channel Islands, UK JEI 4HE
---------------------------------------- --------------------- ------------------- -----------------------
Amy Daly 143,205 143,205 0
PO Box 882890
Steamboat Springs, CO 80488
---------------------------------------- --------------------- ------------------- -----------------------
Peter J. O'Gorman 94,508 94,508 0
Rosemary A. O'Gorman
31 Old Chimney Road
Upper Saddle River, NJ 07458
---------------------------------------- --------------------- ------------------- -----------------------
Sunrise Equity Partners, LP 363,631 363,631 0
641 Lexington Avenue, 25th Floor
New York, NY 10022
---------------------------------------- --------------------- ------------------- -----------------------
TOTAL 10,912,987* 10,852,987 60,000 **
---------------------------------------- --------------------- ------------------- -----------------------
MEHTA SALE SELLING STOCKHOLDERS:
David Altschuler/ 62,000 20,000 42,000 **
David Kamlet T/C
20 Crossways Park Dr., North
Suite 406
Woodbury, NY 11797
---------------------------------------- --------------------- ------------------- -----------------------
Jerome Belson 969,000 (3) 200,000 769,000 6.2%
495 Broadway
New York, NY 10012
---------------------------------------- --------------------- ------------------- -----------------------
Bernard Berk 465,300 (4) 70,800 394,500 3.2%
c/o Elite Pharmaceuticals, Inc
165 Ludlow Avenue
Northvale, NJ 07647
---------------------------------------- --------------------- ------------------- -----------------------
Harvey Blitz 80,000 50,000 30,000 **
72-19 137th Street
Flushing, NY 11367
---------------------------------------- --------------------- ------------------- -----------------------
29
Shares Number of Shares
Beneficially Shares Owned After
Owned Prior to Which May Offering***
Name and Address Offering* Be Sold(*) Number Percent
---------------------------------------- --------------------- ------------------- -----------------------
The Gerald Brauser 594,000 400,000 194,000 1.6%
Irrevocable Trust
820 SW 10th Avenue
Bay 8R
Pompano Beach, Fl 33069
---------------------------------------- --------------------- ------------------- -----------------------
Susan Brauser 119,584 (5) 25,000 94,584 **
200 West 79th Street, Apt 15R
New York, NY 10024
---------------------------------------- --------------------- ------------------- -----------------------
Robert Cantor 25,000 25,000 0
215 E 68th St., Apt. 15P
New York, NY 10001
---------------------------------------- --------------------- ------------------- -----------------------
Leonard Cohen 37,000 20,000 17,000 **
750 Broad Street
Shrewsbury, NJ 07702
---------------------------------------- --------------------- ------------------- -----------------------
Dennis Connors 15,050 8,000 7,050 **
461 Stonehenge Cr.
Rockledge, Fl 33014
---------------------------------------- --------------------- ------------------- -----------------------
Stephen Dachs Revocable Trust, 31,300 10,000 21,300 **
Steve Dachs Trustee
16035 W. Prestwick Place
Miami Lakes, FL 33014
---------------------------------------- --------------------- ------------------- -----------------------
Lindsay Dart 45,000 25,000 20,000 **
11661 San Vincent Blvd., Rm 701
Los Angeles, CA 90049
---------------------------------------- --------------------- ------------------- -----------------------
David and Roberta Friedman 63,500 25,000 38,500 **
2574 Eagle Run Lane
Weston, FL 33327
---------------------------------------- --------------------- ------------------- -----------------------
F&M 18 Investment Partnership 40,000 20,000 20,000 **
c/o John Moroney
P.O. Box 699
Spring Lake, NJ 07762
---------------------------------------- --------------------- ------------------- -----------------------
Joseph Giamanco 350,000 200,000 150,000 1.2%
4 White Rock Terrace
Holmdel, NJ 07733
---------------------------------------- --------------------- ------------------- -----------------------
Howard Gordon 73,000 30,000 43,000 **
6000 SW 21st St.
Plantation, FL 33317
---------------------------------------- --------------------- ------------------- -----------------------
Robert Karsten 193,840 30,000 163,840 1.3%
121 East 60th, 9A
New York, NY 10022
---------------------------------------- --------------------- ------------------- -----------------------
Frank Lagano 107,500 70,000 37,500 **
147 Buckingham Rd.
Tenafly, NJ 07670
---------------------------------------- --------------------- ------------------- -----------------------
Dorand Nichols 24,700 10,000 14,700 **
2440 SW 102nd Dr.
Davie, FL 33324
---------------------------------------- --------------------- ------------------- -----------------------
30
Shares Number of Shares
Beneficially Shares Owned After
Owned Prior to Which May Offering***
Name and Address Offering* Be Sold(*) Number Percent
---------------------------------------- --------------------- ------------------- -----------------------
Linda and Stephen Posner, Trustees for 170,600 (6) 30,000 140,600(6) 1.1%
the Stephen J. Posner Trust
18 Ursula Dr.
Roslyn, NY 11576
---------------------------------------- --------------------- ------------------- -----------------------
Reitler Brown Holdings II, LLC (7) 3,400 3,400 0
800 Third Avenue, 21st Floor
New York, NY 10002
---------------------------------------- --------------------- ------------------- -----------------------
Richard Rimer 50,000 50,000 0
17 Chemin De La Sapinere
1253 Vanooeuvres
Geneva Switzerland
---------------------------------------- --------------------- ------------------- -----------------------
Joe Roselle 20,000 20,000 0
56 Gillespie Ave.
Fair Haven, NJ 07704
---------------------------------------- --------------------- ------------------- -----------------------
Philip C. Wiener 5,000 5,000 0
511 Pearl Street
Oceanside, NY 11572
---------------------------------------- --------------------- ------------------- -----------------------
Stanley Zaslow 5,000 5,000 0
12331 Rockledge Circle
Boca Raton, FL 33428
---------------------------------------- --------------------- ------------------- -----------------------
Bruce and Eva Zwigard 11,500 10,000 1,500 **
8935 Arvida Dr.
Coral Gables, FL 33156
---------------------------------------- --------------------- ------------------- -----------------------
TOTAL FOR MEHTA SALE 3,561,274 1,362,200 2,199,074
SELLING STOCKHOLDERS
---------------------------------------- --------------------- ------------------- -----------------------
OTHER SELLING STOCKHOLDERS:
---------------------------------------- --------------------- ------------------- -----------------------
Atul Mehta, Ph.D 670,000(8) 670,000(8) 0
76 Walsh Drive
Mahwah, NJ 07430
---------------------------------------- --------------------- ------------------- -----------------------
CEOcast, Inc. 26,500 26,500 0
55 John Street, 11th Floor
New York, NY 10038
---------------------------------------- --------------------- ------------------- -----------------------
Jason Lyons 50,000(9) 50,000(9) 0
7239 San Salvador Drive
Boca Raton, Florida 33433
---------------------------------------- --------------------- ------------------- -----------------------
TOTAL FOR OTHER 746,500 746,500 0
SELLING STOCKHOLDERS
---------------------------------------- --------------------- ------------------- -----------------------
* The shares offered by the Private Placement Selling Stockholders are the
shares (i) which may be acquired by them upon conversion of Series A
Preferred Shares and upon exercise of Short Term and Long Term Warrants,
and (ii) shares received in satisfaction of the Company's December 1, 2004
dividend obligation to the holders of its Series A Preferred Shares.
Additional shares which may be issued by the Company in satisfaction of
future dividend obligations on the Series A Preferred Stock may be offered
by the Private Placement Selling Stockholders. The shares which may be
acquired upon conversion of the Series A Preferred Stock and upon exercise
of Warrants such shares are included in the beneficial ownership of the
Selling Stockholder prior to offering.
** Less than 1%
*** Giving effect to the 26,896 shares issued as the December 1, 2004 dividend
on the Series A Preferred.
31
(1) Includes 60,000 shares issuable upon exercise of options held by Mr. Dick.
(2) Shares which may be acquired upon exercise of Warrants received for
services of the Placement Agent.
(3) Includes (i) warrants to purchase 281,000 shares of Common Stock, (ii)
53,900 shares held by Maxine Belson, wife of Jerome Belson, (iii) 63,300
held by other members of his family, and (iv) 50,000 shares held by the
Jerome Belson Foundation.
(4) Chief Executive Officer and Director of the Company and includes 330,000
shares issuable upon exercise of options.
(5) Includes 60,000 shares held by a trust in which she is a beneficiary, but
does not include the 594,000 shares held by the Gerald Brauser Irrevocable
Trust
(6) Includes 135,600 issuable upon exercise of warrants
(7) Counsel to the Company.
(8) Shares which may be acquired upon exercise of options.
(9) Shares which may be acquired upon exercise of warrants.
32
PLAN OF DISTRIBUTION
Offer and Sale of Shares
A Selling Stockholder, including in such definition in this section, the
Placement Agent and its associates, or a pledgee, donee, transferee or other
successor-in-interest who receives shares offered by the prospectus from a
Selling Stockholder as a gift, pledge, partnership distribution or other
non-sale related transfer, may offer and sell shares in the following manner:
o on the American Stock Exchange ("Amex") or otherwise at prices and
at terms then prevailing or at prices related to the then current
market price;
o at fixed prices, which may be changed; or
o in privately-negotiated transactions.
A Selling Stockholder or a pledgee, donee, transferee or other
successor-in-interest who receives shares offered by this prospectus from a
Selling Stockholder, may sell the shares in one or more of the following types
of transactions at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at negotiated prices:
o a block trade in which a broker-dealer engaged to sell shares may
sell all of such shares in one or more blocks as agent;
o a broker-dealer may purchase as principal and resell shares for its
own account pursuant to this prospectus;
o an exchange distribution in accordance with the rules of the Amex or
a quotation system;
o upon the exercise of options written relating to the shares;
o ordinary brokerage transactions or transactions in which the broker
solicits purchasers;
o a privately-negotiated transaction; and
o any combination of the foregoing or any other available means
allowable under law.
From time to time, a Selling Stockholder may transfer, pledge, donate or
assign its shares to lenders or others and each of those persons will be deemed
to be a "Selling Stockholder" for purposes of this prospectus. The number of
shares beneficially owned by a Selling Stockholder may decrease as, when and if
he takes such actions. The plan of distribution for the Selling Stockholder's
shares sold under this prospectus will otherwise remain unchanged, except that
the transferees, pledges, donees or other successors will be a Selling
Stockholder under this prospectus.
A Selling Stockholder may enter into hedging, derivative or short sale
transactions with broker-dealers in connection with sales or distributions of
the shares being offered by this prospectus or otherwise. In these transactions,
broker-dealers may engage in short sales of the
33
shares in the course of hedging the positions they assume with the Selling
Stockholder. A Selling Stockholder also may sell shares short and redeliver the
shares to close out short positions and engage in derivative or hedging
transactions. A Selling Stockholder may enter into option or other transactions
with broker-dealers which require the delivery to the broker-dealer of the
shares. The broker-dealer may then resell or otherwise transfer the shares under
this prospectus. A Selling Stockholder also may loan or pledge the shares to a
broker-dealer. The broker-dealer may sell the loaned shares or upon a default
the broker-dealer may sell the pledged shares under this prospectus.
Selling through Broker-Dealers
A Selling Stockholder may select broker-dealers to sell its shares.
Usual and customary or specifically negotiated brokerage fees or commissions may
be paid by the Selling Stockholders. Broker-dealers so engaged may arrange for
other broker-dealers, commissions or discounts or concessions in amounts to be
negotiated immediately before any sale. In connection with such sales, these
broker-dealers, any other participating broker-dealers, and a Selling
Stockholder and certain pledges, donees, transferees and other
successors-in-interest, may be deemed to be "underwriters" within the meaning of
Section 2(11) of the Securities Act of 1933, as amended (the "Securities Act")
in connection with the sale of the shares. Accordingly, any such commission,
discount or concession received by them and any profit on the resale of the
shares purchased by them may be deemed to be underwriting discounts or
commissions under the Securities Act. Because a Selling Stockholder may be
deemed to be an "underwriter" within the meaning of Section 2(11) of the
Securities Act, the Selling Stockholder will be subject to the prospectus
delivery requirements of the Securities Act.
Any securities covered by this prospectus which qualify for sale
pursuant to Rule 144 under the Securities Act or other exemption from
registration may be sold under Rule 144 or such other exemption from
registration rather than under this prospectus. There is no underwriter or
coordinating broker acting in connection with the proposed sales of the shares
covered by this prospectus.
Under current applicable rules and regulations of the Securities
Exchange Act of 1934, any person engaged in the distribution of the shares may
not simultaneously engage in market making activities with respect to our Common
Stock for a period of two business days prior to the commencement of such
distribution. In addition, each Selling Stockholder will be subject to
applicable provisions of the Securities Exchange Act of 1934 and the associated
rules and regulations under the Securities Exchange Act of 1934, including
Regulation M, which provisions may limit the timing of purchases and sales of
shares of our Common Stock by the Selling Stockholders. We will make copies of
this prospectus available to the Selling Stockholders and inform them of the
need for delivery of copies of this prospectus to purchasers at or prior to the
time of any sale of the shares being offered pursuant to this prospectus.
The Selling Stockholders are not obligated to, and there is no assurance
that the Selling Stockholders will, sell any or all of the shares.
We will bear all costs, expenses and fees in connection with the
registration of the resale of the shares covered by this prospectus. The Selling
Stockholders will pay any applicable underwriters' commissions and expenses,
brokerage fees or transfer taxes.
34
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
legally issued. Reitler Brown Holdings II LLC, an affiliate of Reitler Brown &
Rosenblatt LLC is a Selling Stockholder.
EXPERTS
Our consolidated financial statements as of March 31, 2004 and March 31,
2003 and for the years ended March 31, 2004, March 31, 2003 and March 31, 2002,
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, 2004,
filed with the Commission on July 15, 2003;
b. our quarterly report on Form 10-Q for the quarter ended June 30,
2004, filed with the Commission on August 13, 2004;
c. our quarterly report on Form 10-Q for the quarter ended September
30, 2004, filed with the Commission on November 12, 2004;
d. our current reports on Form 8-K filed with the Commission on July
29, 2004, August 5, 2004, August 9, 2004, October 12, 2004, October
18, 2004 and November 1, 2004.
35
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.
36
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 .................... $ 3,221.83
Legal Fees and Expenses ................. $19,500.00
Accounting Fees and Expenses ............ $ 1,000.00
Printing Expenses ....................... $ 2,000.00
Miscellaneous ........................... $ 2,000.00
----------
Total ................................... $27,721.83
* 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
37
indemnify our directors and officers to the fullest extent permitted by law, as
the law may be amended from time to time.
Elite in its subscription agreement with each of the purchasers in the
private placement of the Series A 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
4.1 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*.
4.2 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.
4.3 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.
4.4 Form of Series A Preferred Stock certificate. Incorporated by reference
to Exhibit 4.5 to Elite's Current Report on Form 8-K*.
4.5 Form of Short Term Common Stock Purchase Warrant. Incorporated by
reference to Exhibit 4.6 to Elite's Current Report on Form 8-K*.
4.6 Form of Long Term Common Stock Purchase Warrant. Incorporated by
reference to Exhibit 4.7 to Registrant's Current Report on Form 8-K*.
4.7 Form of Common Stock Purchase Warrant issued to Indigo Securities Inc.,
and its associates. Incorporated by reference to Exhibit 4.8 to Elite's
Current Report on Form 8-K*.
4.8 Form of subscription agreement with investors with registration rights
as an exhibit. Incorporated by reference to Exhibit 10.11 to Elite's
Current Report on Form 8-K*.
4.9 Amended and Restated Option to Purchase Shares to Dr. Atul Mehta.
5.1 Opinion of Reitler Brown & Rosenblatt LLC.**
23.1 Consent of Miller, Ellin & Company LLP.**
23.2 Consent of KPMG.**
23.3 Consent of Reitler Brown & Rosenblatt LLC (included in Exhibit 5.1
above)
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24.1 Power of Attorney (included on Signature page).
---------------
* Dated October 6, 2004 and filed with the Commission on October 12, 2004.
** Filed with Amendment No.1
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 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
II-3
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.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has
duly caused this amendment to the registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the Borough of
Northvale, State of New Jersey, on December 23, 2004.
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 amendment to
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
Dated: December 23, 2004 /s/ Bernard Berk
--------------------------------------------
Bernard Berk
Chief Executive Officer and
Chairman of the Board of Directors
Dated: December 23, 2004 /s/ Mark I. Gittelman
--------------------------------------------
Mark I. Gittelman
Chief Financial Officer
(Principal Financial and Accounting Officer)
Dated: December 23, 2004 /s/ John A. Moore*
--------------------------------------------
John A. Moore
Director
Dated: December __, 2004 --------------------------------------------
Eric L. Sichel
Director
Dated: December 23, 2004 /s/ Harmon Aronson*
--------------------------------------------
Harmon Aronson
Director
* Executed as attorney in fact by Mr. Berk pursuant to authority provided in
Registration Statement.
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