Attached files
| file | filename |
|---|---|
| EX-3.2 - ELITE PHARMACEUTICALS INC /NV/ | v189686_ex3-2.htm |
| EX-3.1 - ELITE PHARMACEUTICALS INC /NV/ | v189686_ex3-1.htm |
| EX-10.1 - ELITE PHARMACEUTICALS INC /NV/ | v189686_ex10-1.htm |
| EX-10.3 - ELITE PHARMACEUTICALS INC /NV/ | v189686_ex10-3.htm |
| EX-10.2 - ELITE PHARMACEUTICALS INC /NV/ | v189686_ex10-2.htm |
| EX-99.1 - ELITE PHARMACEUTICALS INC /NV/ | v189686_ex99-1.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM 8-K
Current
Report
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
June
25, 2010
Date of
Report (Date of earliest event reported)
ELITE
PHARMACEUTICALS, INC.
(Exact
name of registrant as specified in its charter)
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Delaware
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001-15697
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22-3542636
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(State
or other jurisdiction
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(Commission
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(IRS
Employer
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of
incorporation)
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File
Number)
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Identification
No.)
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165
Ludlow Avenue, Northvale, NJ 07647
(Address
of principal executive offices)
(201)
750-2646
(Company’s
telephone number, including area code)
(Former
name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2.
below):
o Written communications
pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material
pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))
o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c))
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Item
1.01
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Entry
into a Material Definitive Agreement
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Item
3.02
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Unregistered
Sale of Equity Securities
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Item
3.03
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Material
Modification to Rights of Security Holders
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Item
5.03
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Amendments
to Articles of Incorporation or Bylaws; Change in Fiscal
Year
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Item
8.01
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Other
Events
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On or
about September 22, 2009, Midsummer Investments, Ltd. (“Midsummer”) and
Bushido Capital Master Fund, LP (“Bushido”, and
together with Midsummer, the “Plaintiffs”) filed a
complaint against Elite Pharmaceuticals, Inc., a Delaware corporation (the
“Company”), in
the United States District Court, Southern District of New York (Case No. 09 CIV
8074) (the “Action”). The
Plaintiffs asserted claims for breach of contract (injunctive relief and
damages), anticipatory breach of contract (injunctive relief), conversion
(injunctive relief and damages), and attorneys’ fees, arising out of a
Securities Purchase Agreement, dated September 15, 2008, by and among the
Company and certain purchasers of the Company’s securities (including the
Plaintiffs) and the Certificate of Designation of Preferences, Rights and
Limitations of Series D 8% Convertible Preferred Stock, filed with the Secretary
of State of the State of Delaware on September 15, 2009 (the “Series D
Certificate”). Plaintiffs claimed that they were entitled to a
reduced conversion price for their Series D 8% Convertible Preferred Stock, par
value US$0.01 per share (the “Series D Preferred
Stock”), as a result of the Strategic Alliance Agreement, dated
March 18, 2009, as amended (the “Epic SAA”), by and
among the Company, on the one hand, and Epic Pharma, LLC (“Epic”) and Epic
Investments, LLC (“Epic Investments”,
and together with Epic, the “Epic
Parties”). With their complaint, the Plaintiffs
concurrently filed a request for preliminary injunction. Pursuant to
an order of the Court entered into on October 16, 2009, the Plaintiffs’ request
for a preliminary injunction was denied. Thereafter, Plaintiffs filed
an amended complaint (the “Complaint”),
asserting claims for breach of contract (injunctive relief and damages),
anticipatory breach of contract (injunctive relief), conversion (damages) and
attorneys’ fees, seeking compensatory damages of $7,455,363.00, delivery of
1,000,000 shares of the Company’s common stock, par value $0.001 per share (the
“Common Stock”), a declaration that all future conversions of the Series D
Preferred Stock, held by Plaintiffs is at a conversion price of $0.05,
attorneys’ fees, interest and costs.
The
Company disputed the claims in the Complaint, believing the lawsuit to be
without merit, and vigorously defended against them. The Company
moved for summary judgment on the Complaint and the judge in the case did not
issue an order on such motion. The Company proceeded with extensive,
time-consuming and costly discovery. The court scheduled the trial to
commence on June 28, 2010.
In order
to avoid the delays, expense and risks inherent in litigation, after extensive
negotiations, the Company entered into (i) a Stipulation of Settlement and
Release, dated June 25, 2010 (the “Settlement
Agreement”), with the Plaintiffs and the Epic Parties, (ii) an Amendment
Agreement, dated June 25, 2010 (the “Series D Amendment
Agreement”), with the Plaintiffs and (iii) an Amendment Agreement, dated
June 25, 2010 (the “Series E Amendment
Agreement”) with the Epic Parties. As part of the Settlement Agreement,
the Action will be dismissed with prejudice.
Series D Amendment
Agreement
Pursuant
to the Series D Amendment Agreement, the Company and Plaintiffs agreed to amend
the Series D Certificate. The holders of at least 50.1%, in the
aggregate, of the Company’s outstanding Series B Preferred 8% Convertible
Preferred Stock, par value US$0.01 per share, Series C 8% Convertible Preferred
Stock, par value US$0.01 per share, and Series D Preferred Stock, voting as one
class, consented to the filing of the Amended Certificate of Designations of the
Series D 8% Convertible Preferred Stock (the “Amended Series D
Certificate”) with the Secretary of State of the State of
Delaware. On June 29, 2010, pursuant to the authority of its Board of
Directors, the Company filed with the Secretary of State of the State of
Delaware the Amended Series D Certificate.
Pursuant
to the terms of the Amended Series D Certificate, the terms of the Series D
Preferred Stock have been amended as follows:
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·
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Dividends: The
Series D Preferred Stock will continue to accrue dividends at the rate of
8% per annum on their stated value of US$1,000 per share, payable
quarterly on January 1, April 1, July 1 and October 1 and such rate shall
not increase to 15% per annum as previously provided prior to giving
effect to the Series D Amendment Agreement. In addition to
being payable in cash and shares of Common Stock, as provided in the
Series D Certificate, such dividends may also be paid in shares of Series
D Preferred Stock (the “Dividend Payment
Preferred Stock”) or a combination of cash, Common Stock and
Dividend Payment Preferred Stock. Dividend Payment Preferred
Stock will have the same rights, privileges and preferences as the Series
D Preferred Stock, except that such Dividend Payment Preferred Stock will
not be entitled to, nor accrue, any dividends pursuant to the Amended
Series D Certificate.
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·
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Conversion
Price: The conversion price of the Series D Preferred
Stock shall be reduced from US$0.20 per share to US$0.07 per share
(subject to adjustment as provided in the Amended Series D
Certificate).
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·
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Automatic Monthly
Conversion: On each Monthly Conversion Date (as defined
below), a number of shares of Series D Preferred Stock equal to each
holder’s pro-rata portion (based on the shares of Series D Preferred Stock
held by each Holder on June 25, 2010) of the Monthly Conversion Amount (as
defined below) will automatically convert into shares of Common Stock at
the then-effective conversion price (each such conversion, a “Monthly
Conversion”). Notwithstanding the foregoing, the Company
will not be permitted to effect a Monthly Conversion on a Monthly
Conversion Date unless (i) the Common Stock shall be listed or quoted for
trading on a trading market, (ii) there is a sufficient number of
authorized shares of Common Stock for issuance of all Common Stock to be
issued upon such Monthly Conversion, (iii) as to any holder of Series D
Preferred Stock, the issuance of the shares will not cause a breach of the
beneficial ownership limitations set forth in the Amended Series D
Certificate, (iv) if requested by a holder of Series D Preferred Stock and
a customary Rule 144 representation letter relating to all shares of
Common Stock to be issued upon each Monthly Conversion is provided by such
holder after request from the Company, the shares of Common Stock issued
upon such Monthly Conversion are delivered electronically through the
Depository Trust Company or another established clearing corporation
performing similar functions (“DTC”), may be
resold by such holder pursuant to an exemption under the Securities Act
and are otherwise free of restrictive legends and trading restrictions on
such Holder, (v) there has been no public
announcement of a pending or proposed Fundamental Transaction or Change of
Control Transaction (as such terms are defined in the Amended Series D
Certificate) that has not been consummated, (vi) the applicable holder of
Series D Preferred Stock is not in possession of any information provided
to such holder by the Company that constitutes material non-public
information, and (vii) the average VWAP (as defined in the Amended
Series D Certificate) for the 20 trading days immediately prior to the
applicable Monthly Conversion Date equals or exceeds the then-effective
conversion price of the Series D Preferred Stock. Shares of the
Series D Preferred Stock issued to the holders of Series D Preferred Stock
as Dividend Payment Preferred Stock shall be the last shares of Series D
Preferred Stock to be subject to Monthly Conversion. As used
herein, the following terms have the following meanings: (i)
“Monthly
Conversion Date” means the first day of each month, commencing on
August 1, 2010, and terminating on the date the Series D Preferred Stock
is no longer outstanding; (ii) “Monthly Conversion
Amount” means an aggregate Stated Value of Series D Preferred Stock
among all Holders that is equal to 25% of aggregate dollar trading volume
of the Common Stock during the 20 trading days immediately prior to the
applicable Monthly Conversion Date (such 20 trading day period, the “Measurement
Period”), increasing to 35% of the aggregate dollar trading volume
during the Measurement Period if the average VWAP during such Measurement
Period equals or exceeds $0.12 (subject to adjustment for forward and
reverse stock splits and the like that occur after June 25, 2010) and
further increasing to 50% of the aggregate dollar trading volume during
such Measurement Period if the average VWAP during such Measurement Period
equals or exceeds $0.16 (subject to adjustment for forward and reverse
stock splits and the like that occur after June 25,
2010).
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·
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Change of Control
Transaction: Epic and its affiliates were expressly
excluded from any event which would otherwise constitute a “Change of
Control Transaction” due to the acquisition in excess of 40% of the
Company’s voting securities.
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Pursuant
to the Series D Amendment Agreement, the exercise price of the Warrants (the
“Series D
Warrants”) to purchase shares of Common Stock issued to the holders of
Series D Preferred Stock pursuant to the Securities Purchase Agreement, dated as
of September 15, 2008, by and among the Company and the purchasers of Series D
Preferred Stock will be reduced from $0.25 per share to US$0.125. In
addition, the exercise price of the Series D Warrants may be reduced as
follows:
(i) by
20%, if on September 15, 2011, the holder of such Warrant still beneficially
owns more than 50% of the Series D Preferred Stock beneficially owned by such
holder as of June 25, 2010 (“Base Ownership”);
and
(ii) by
20%, if (a) on September 15, 2011, such holder then beneficially owns more than
25% of the Base Ownership and 50% or less of the Base Ownership and (b) on
September 15, 2012, such holder then beneficially owns more than 25% of the Base
Ownership.
Notwithstanding
the foregoing, (x) in no event will the exercise price of the Series D Warrants
be reduced more than once as a result of the amendments to such Series D
Warrants, and (y) in the event that on September 15, 2011 or, if the condition
of clause (ii)(a) above is met, on September 15, 2012, the Holder beneficially
owns 25% or less of the Base Ownership, then no adjustment shall occur pursuant
to the Series D Warrants, as amended by the Series D Amendment
Agreement. Additionally, there will be no corresponding increase in
the number of shares of Common Stock issuable upon exercise of the Warrants
solely as a result of the foregoing adjustments.
To the
extent such issuance does not cause the breach of the beneficial ownership
limitations set forth in the Amended Series D Certificate (any excess shares
will be issued to the affected holder of Series D Preferred Stock upon written
notice from such holder when such holder’s beneficial ownership is below 9.9% to
the extent that such issuance does not cause such holder to exceed such amount),
the Company agreed to issue certain shares of Common Stock to the Plaintiffs and
their respective affiliates in satisfaction of the Company’s obligation to pay
certain previously accrued but unpaid dividends through March 31, 2010 owing to
the Plaintiffs and their respective affiliates.
Series E Amendment
Agreement
Pursuant
to the Series E Amendment Agreement, the Company agreed to amend the Certificate
of Designation of Preferences, Rights and Limitations of the Series E
Convertible Preferred Stock, filed with Secretary of State of the State of
Delaware on June 3, 2009 (the “Series E
Certificate”). The Epic Parties, constituting all holders of
Series E Preferred Stock, consented to the filing of the Amended Certificate of
Designations of the Series E Convertible Preferred Stock (the “Amended Series E
Certificate”) with the Secretary of State of the State of
Delaware. On June 29, 2010, pursuant to the authority of its Board of
Directors, Company filed with the Secretary of State of the State of Delaware
the Amended Series E Certificate. Pursuant to the terms of the
Amended Series E Certificate, the conversion price of the Series E Preferred
Stock will be adjusted downward to reflect, on a pro rata basis, the reduction
in the conversion price of the Series D Preferred Stock as the result of the
Series D Amendment Agreement, to the extent shares of Series D Preferred Stock
are converted at the reduced conversion price set forth in the Amended Series D
Certificate.
Pursuant
to the Series E Amendment Agreement, the Epic SAA was amended so that the
purchase of the 750 Additional Shares of Series E Preferred Stock described
therein for an aggregate purchase price of $750,000 would occur in 12
installments of 62.5 shares (for a purchase price of $62,500) (i) on or prior to
November 1, 2009 (which has been satisfied) and (ii) within 10 business days
following the last day of each calendar quarter, beginning with the first
calendar quarter ending on September 30, 2010 and continuing for each of the 10
calendar quarters thereafter.
In
addition, under the Series E Amendment Agreement, the third closing date is
scheduled to occur on or before December 31, 2010, subject to certain conditions
set forth in the Epic SAA (as amended by the Series E Amendment
Agreement).
Under
each of the Series D Amendment Agreement and the Series E Amendment Agreement,
the Company agreed that at its next meeting of shareholders it will seek
shareholder approval to amend its certificate of incorporation to increase the
number of authorized but unissued shares of Common Stock to at least
760,000,000.
Settlement
Agreement
Pursuant
to the Settlement Agreement, Elite and the Epic Parties, individually and on
behalf of each of their respective officers, directors, agents, representatives,
successors, affiliated entities, subsidiaries, heirs, employees, administrators
and assigns (the “Elite Releasors”)
agreed to release and discharge each of the Plaintiffs, BCMF Trustees LLC, an
affiliate of Bushido (“BCMF”), their
respective owners, officers, directors, investors, agents, representatives,
successors, affiliated entities, subsidiaries, heirs, employees, administrators
and assigns (the “Plaintiffs’
Releasees”) from any and all actions, causes of action, claims, liens,
suits, debts, accounts, liabilities, expenses, attorneys’ fees, agreements,
promises, charges, complaints and demands (collectively, “Loses”) which the
Elite Releasors have or may have against the Plaintiffs’ Releasees that could
have been asserted in the Action or any other court action, based upon any
conduct up to and including the date of the Settlement
Agreement. Notwithstanding the foregoing, the Elite Releasors will
not release any claim of breach of the terms of the Settlement Agreement, breach
of the terms of the Series D Amendment Agreement, or any cause of action arising
from future conduct by the Plaintiffs’ Releasees.
Pursuant
to the Settlement Agreement, the Plaintiffs and BCMF, individually and on behalf
of each of their respective owners, officers, directors, investors, agents,
representatives, successors, affiliated entities, subsidiaries, heirs,
employees, administrators and assigns (the “Plaintiffs’
Releasors”) agreed to release and discharge Elite and the Epic Parties
and each of their respective officers, directors, agents, representatives,
successors, affiliated entities, subsidiaries, heirs, employees, administrators
and assigns (the “Elite Releasees”),
from any and all Losses which the Plaintiffs’ Releasors have or may have against
the Elite Releasees that could have been asserted in the Action or any other
court action, based upon any conduct up to and including the date of the
Settlement Agreement. Notwithstanding the foregoing, the Plaintiffs’
Releasors did not release any claim of breach of the terms of the Settlement
Agreement, breach of the terms of the Series D Amendment Agreement or any cause
of action arising from future conduct by the Elite Releasees.
In
addition, concurrently with the execution of the Settlement Agreement, legal
counsel for both the Company and the Plaintiffs executed a Stipulation of
Discontinuance of the Action, which such counsel will file once all conditions
precedent to the effectiveness of the Settlement Agreement have been
satisfied.
The
foregoing description of the Amended Series D Certificate, Amended Series E
Certificate, Settlement Agreement, Series D Amendment Agreement and Series E
Amendment Agreement does not purport to be complete and is qualified
in its entirety by reference to the complete text of such documents which are
filed herewith and incorporated herein by reference.
On June
30, 2010, the Company issued a press release announcing the settlement of the
litigation with the Plaintiffs. A copy of such press release is
attached hereto as Exhibit 99.1.
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Item
9.01
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Financial
Statements and Exhibits
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a)
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Not
applicable.
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b)
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Not
applicable.
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c)
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Not
applicable.
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d)
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Exhibits
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Exhibit No.
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Exhibit Description
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3.1
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Amended
Certificate of Designations of the Series D 8% Convertible Preferred Stock
as filed with the Secretary of State of the State of Delaware on June 29,
2010
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3.2
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Amended
Certificate of Designations of the Series E Convertible Preferred Stock as
filed with the Secretary of State of the State of Delaware on June 29,
2010
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10.1
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Form
of Stipulation of Settlement and Release, dated as of June 25, 2010, by
and among the Company, Midsummer Investment, Ltd., Bushido Capital Master
Fund, LP, BCMF Trustees, LLC, Epic Pharma, LLC and Epic Investments,
LLC
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10.2
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Form
of Amendment Agreement, dated as of June 25, 2010, by and among the
Company, and the investors signatory thereto
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10.3
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Form
of Amendment Agreement, dated as of June 2010, by and among the Company,
Epic Pharma, LLC and Epic Investments, LLC
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99.1
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Press
Release dated June 30, 2010
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SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Company has duly
caused this report to be signed on its behalf by the undersigned hereunto duly
authorized.
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July
1, 2010
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ELITE
PHARMACEUTICALS, INC.
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By:
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/s/
Jerry Treppel
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Jerry
Treppel
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Chief
Executive Officer
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