Item 1.01 Entry into a Material Definitive Agreement.
On February 7, 2014, Elite Pharmaceuticals, Inc. (the "Company") and Elite
Laboratories, Inc., its wholly-owned subsidiary, amended the following
convertible promissory notes: (i) an August 1, 2013 Secured Convertible Note to
Mikah Pharma LLC ("Mikah") due August 1, 2016 in the principal amount of
$10,000,000 (the "Mikah Note"), and (ii) a November 21, 2013 Convertible Note to
Jerry Treppel due November 21, 2016 in the principal amount of $600,000 (the
"Treppel Note" and, together with the Mika Note, the "Notes"). Mikah is owned by
the Company's CEO and President and Mr. Treppel is a director of the Company.
Generally, the Notes were amended to make them convertible into shares of the
Company's newly created Series I Convertible Preferred Stock. For a description
of this new series of preferred stock, please see "Item 5.03" below. The Mikah
Note also was amended to make it immediately exercisable.
The foregoing description of the Amendments to the Notes is qualified in its
entirety by reference to the full text of the Amendments, copies of which are
attached hereto as Exhibits 10.1 and 10.2, respectively, and are incorporated
herein in their entirety by reference.
Item 3.02 Unregistered Sales of Equity Securities.
On February 7, 2014, Mikah converted the entire Mikah Note into 100 shares of I
Preferred Stock and Treppel converted the entire Treppel Note into 4.242 shares
of the Company's Series I Convertible Preferred Stock. Please see Item 5.03,
below. We relied on the exemption from registration provided by Section 4(a)(2)
of the Securities Act of 1933.
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal
On February 6, 2014, the Company filed a Certificate of Designations (the "COD")
with the Nevada Secretary of State designating a new series of convertible
preferred stock - Series I Preferred Stock (the "I Preferred Stock") and setting
forth the various rights, preferences, restrictions and other matters related to
the I Preferred Stock. 500 shares were designated as I Preferred Stock. Each
share of I Preferred Stock has a Stated Value of $100,000 and is convertible at
the option of the holder thereof (the "Holder") into such number of shares of
Common Stock determined by dividing the Stated Value of such share of I
Preferred Stock by the Conversion Price (currently $0.07, subject to adjustment
pursuant to the terms of the COD). Each share of I Preferred is entitled to vote
along with the holders of Common Stock and each share is entitled to votes equal
to the number of shares of Common Stock into which they are convertible. Holders
are entitled to dividends if and when declared in an amount equal to the
dividend he or she would have been entitled to receive upon conversion, in full,
of one share of Series I Preferred in to Common Stock. Upon any liquidation,
dissolution or winding-up of the Company, each Holder is entitled to receive,
pari passu and pro rata with the holders of Common Stock, out of the assets of
the Company an amount equal to the amount distributable with regard to the
number of shares of Common Stock into which the shares of Series I Preferred
Stock held by the Holder are convertible.
The foregoing description of the Certificate of Designations is qualified in its
entirety by reference to the full text of the Certificate of Designations, a
copy of which is attached hereto as Exhibit 4.1 and incorporated herein in its
entirety by reference.
Item 9.01. Financial Statements and Exhibits.
4.1 Certificate of Designations of the Series I Preferred Stock.
4.2 Form of Series I Preferred Stock Certificate.
10.1 February 7, 2014 Amendment to August 1, 2013 Secured Convertible Note
from the Company to Mikah Pharma LLC due August 1, 2016.
10.2 February 7, 2014 Amendment to November 21, 2013 Secured Convertible
Note from the Company to Jerry Treppel due November 21, 2016.