Elite Pharmaceuticals, Inc. : ELITE PHARMACEUTICALS SECURES $5 MILLION FUNDING COMMITMENT
January 03, 2012 at 09:17 am EST
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Elite Pharmaceuticals Press Release for: Tuesday, January
03, 2012
ELITE PHARMACEUTICALS SECURES $5 MILLION FUNDING
COMMITMENT
Northvale, New Jersey, Tuesday, January 03, 2012: Elite
Pharmaceuticals, Inc. ("Elite") (OTCBB: ELTP)
announced today that it has entered into a securities
purchase agreement with Socius CG II, Ltd., a
subsidiary of Socius Capital Group ("Socius").
Socius, based in New York and Los Angeles, has an
impressive record of making investments in emerging
life sciences companies. Under the agreement, Elite may
sell up to $5 million of non-convertible Series F
Preferred Stock to Socius over a two-year period.
Proceeds will be used for product development,
including the scale-up of products using Elite's abuse
deterrent technology, as well as other corporate
purposes that management may deem necessary and
appropriate.
"With the completion of this transaction, for the first
time in a long time, management believes that it can
focus its time on growing the company and enhancing
shareholder value without having to expend an
inordinate amount of time contemplating where the
capital required for growth will come from", said
Elite's Chief Executive Officer, Jerry Treppel. "We
believe this financing arrangement will help resolve
that issue."
Pursuant to the agreement, Elite has the right over a
term of two years, subject to certain conditions which
include the filing and effectiveness of a registration
statement, to require Socius to purchase up to $5
million of redeemable, non-convertible Series F
Preferred Stock (the "Series F Preferred Stock"), with
such purchases payable in tranches at the election of
Elite. The Series F Preferred Stock is non-voting, not
convertible into common stock and is redeemable at the
option of Elite. It carries an annual dividend rate of
10%, with such dividends to be paid via the issuance of
Series F Preferred Stock. Additionally, Elite may not
deliver a tranche notice to Socius if the closing bid
price of Elite's common stock is less than $0.07.
In addition, with each purchase of Series F Preferred
Stock, a portion of the warrant to purchase shares of
Elite's common stock issued to Socius, with an exercise
price of $0.07, will vest and be automatically
exercised in an amount equal to 35% of the dollar
amount of the Series F Preferred Stock being purchased
and an additional investment right to purchase Elite's
common stock, at a price of $0.07 per share, will be
automatically exercised in an amount equal to 100% of
the dollar amount of the Series F Preferred Stock being
purchased.
Upon automatic exercise of the warrant and additional
investment right, Socius must pay for the underlying
shares, at its option, in cash or by delivering a
full-recourse secured promissory note. In connection
with a redemption of the Series F Preferred Stock, at
the option of either Elite or Socius, all outstanding
promissory notes may be offset, exchanged and cancelled
for all outstanding shares of Series F Preferred Stock
held by Socius such that following such offset,
exchange and cancellation, no further amounts shall be
due or payable with respect to such shares of Series F
Preferred Stock or such promissory notes and all of
such shares of Series F Preferred Stock and promissory
notes shall no longer be outstanding.
Elite expects the closing to the agreement to occur
within 5 business days of the execution of the
agreement.
Additional details regarding the financing, including
the terms and conditions upon which the Preferred Stock
may be sold to Socius, will be included in a Current
Report on Form 8-K which will be filed with the
Securities and Exchange Commission.
About Elite Pharmaceuticals, Inc.
Elite Pharmaceuticals, Inc. develops oral sustained and
controlled release products. Elite's strategy
includes assisting partner companies in the life cycle
management of products, to improve off-patent drug
products, and developing generic versions of controlled
release drug products with high barriers to entry.
Elite has four ANDA products partnered with TAGI
Pharma; one ANDA has launched, two ANDAs are in the
process of a manufacturing site transfer and an
additional ANDA is currently under review by the FDA.
Elite also manufactures Lodrane D® and receives
royalties for Lodrane D®, an allergy product partnered
with ECR Pharmaceuticals ("ECR"), a wholly owned
subsidiary of Hi-Tech Pharmacal ("Hi-Tech"). Elite's
lead pipeline products, ELI-216, a once-daily abuse
resistant oxycodone, and ELI-154, a once-daily
oxycodone, are novel sustained release oral
formulations of opioids for the treatment of chronic
pain, which address two of the limitations of existing
oral opioids: the provision of consistent relief of
baseline pain levels and deterrence of potential abuse.
Elite also has partnered with MikahPharma to develop a
new product and with Hi-Tech Pharmacal to develop an
intermediate for a generic product. Elite operates a
GMP and DEA registered facility for research,
development, and manufacturing located in Northvale,
NJ.
Contact:
Elite Pharmaceuticals, Inc.
Dianne Will, Investor Relations, 518-398-6222
Dianne@elitepharma.com
This news release contains forward-looking statements,
including those related to the preliminary nature of
the clinical program results and the potential for
further product development, that involve known and
unknown risks, delays, uncertainties and other factors
not under the control of Elite, which may cause actual
results, performance or achievements of the companies
to be materially different from the results,
performance or other expectations implied by these
forward-looking statements. In particular, because
substantial future testing will be required prior to
approval, the results described above may not be
supported by additional data or by the results of
subsequent trials. These risks and other factors,
including the timing or results of pending and future
clinical trials, regulatory reviews and approvals by
the Food and Drug Administration and other regulatory
authorities, and intellectual property protections and
defenses, are discussed in Elite's filings with the
Securities and Exchange Commission such as the 10K, 10Q
and 8K reports. Elite undertakes no obligation to
update any forward-looking statements.
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Elite Pharmaceuticals, Inc. is a specialty pharmaceutical company that develops and distributes niche generic products. The Company specializes in developing and manufacturing oral, controlled-release drug products. It owns multiple generic products which has been licensed to Prasco, LLC and TAGI Pharma. The Companyâs segments include Abbreviated New Drug Applications (ANDA) and New Drug Application (NDA). The Companyâs products include Phentermine HCl 37.5mg tablets, Loxapine Succinate 5mg, 10mg, 25mg and 50gm capsules, Phentermine HCl 15mg and 30mg capsules, Naltrexone HCl 50mg tablets, Dantrolene Sodium Capsules 25mg, 50mg and 100mg, Dextroamphetamine Saccharate, Amphetamine Aspartate, Dextroamphetamine Sulfate, Amphetamine Sulfate Immediate Release 5mg, 7.5mg, 10mg, 12.5mg, 15mg, 20mg and 30mg tablets, Dextroamphetamine Saccharate, Amphetamine Aspartate, Dextroamphetamine Sulfate, Amphetamine Sulfate Extended Release 5mg, 10mg, 15mg, 20mg, 25mg, and 30mg capsules and others.