ELITE PHARMACEUTICALS INC /NV/ (Form: 10-Q, Received: 11/14/2013 16:18:38)

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended

September 30, 2013

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period ended to

Commission File Number: 001-15697

ELITE PHARMACEUTICALS, INC.

(Exact name of registrant as specified in its charter)

Nevada		22-3542636
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

165 Ludlow Avenue, Northvale, New Jersey		07647
(Address of principal executive offices)		(Zip Code)

(201) 750-2646

(Registrant's telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T ( § 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated filer ¨

Accelerated Filer ¨

Non-Accelerated Filer ¨

Smaller Reporting Company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ¨ No x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. As of November 4, 2013, the issuer had outstanding 507,937,469 shares of common stock, $0.001 par value (exclusive of 100,000 shares held in treasury).

ELITE PHARMACEUTICALS, INC. AND SUBSIDIARIES

INDEX

		Page No.
	PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements

	Condensed Consolidated Balance Sheets as of September 30, 2013 (unaudited) and March 31, 2013 (audited)	F-1

	Condensed Consolidated Statements of Operations for the three and six months ended September 30, 2013 (unaudited) and September 30, 2012 (unaudited)	F-3

	Condensed Consolidated Statement of Changes in Stockholders’ Deficit for the six months ended September 30, 2013 (unaudited)	F-4

	Condensed Consolidated Statements of Cash Flows for the three months ended September 30, 2013 (unaudited) and September 30, 2012 (unaudited)	F-5

	Notes to Condensed Consolidated Financial Statements	F-6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	17

Item 4.	Controls and Procedures	17

	PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	17

Item 1A.	Risk Factors	17

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	18

Item 3.	Defaults upon Senior Securities	18

Item 4.	Mine Safety Disclosures	18

Item 5.	Other Information	18

Item 6.	Exhibits	18

SIGNATURES		24

ELITE PHARMACEUTICALS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

	September 30,		March 31,
	2013		2013
	(Unaudited)		(Audited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	766,201	$	369,023
Accounts receivable (net of allowance for doubtful accounts of -0-)		635,959		665,154
Inventories (net of reserve of -0- and $93,338, respectively)		1,719,673		1,358,146
Prepaid expenses and other current assets		156,916		151,051

Total Current Assets		3,278,749		2,543,374

PROPERTY AND EQUIPMENT , net of accumulated depreciation of $5,283,619 and $5,068,522, respectively		3,940,211		4,028,943

INTANGIBLE ASSETS – net of accumulated amortization of $-0-		6,314,004		694,426

OTHER ASSETS
Investment in Novel Laboratories, Inc.		3,329,322		3,329,322
Security deposits		14,314		14,314
Restricted cash – debt service for EDA bonds		295,462		267,820
EDA bond offering costs, net of accumulated amortization of $114,608 and $107,519, respectively		239,845		246,934

Total Other Assets		3,878,943		3,858,390

TOTAL ASSETS	$	17,411,907	$	11,125,133

The accompanying notes are an integral part of the condensed consolidated financial statements

	F-1

ELITE PHARMACEUTICALS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

	September 30,		March 31,
	2013		2013
	(Unaudited)		(Audited)
LIABILITIES AND STOCKHOLDERS’ DEFICIT
CURRENT LIABILITIES
EDA bonds payable	$	3,385,000	$	3,385,000
Short term loans and current portion of long-term debt		2,916		6,296
Convertible Note Payable (net of debt discount of $4,219,292 and -0-, respectively)		5,780,708		-0-
Related Party Line of Credit		600,000		600,000
Accounts payable and accrued expenses		1,925,375		1,325,126
Deferred revenues		13,333		13,333
Preferred share derivative interest payable		16,365		27,500

Total Current Liabilities		11,723,697		5,357,255

LONG TERM LIABILITIES
Deferred revenues		145,556		152,223
Other long term liabilities		96,078		91,571
Derivative liability – preferred shares		203,008		6,334,621
Derivative liability – warrants		11,095,970		7,862,848

Total Long Term Liabilities		11,540,612		14,441,263

TOTAL LIABILITIES		23,264,309		19,798,518

STOCKHOLDERS’ DEFICIT
Common stock – par value $0.001, Authorized 690,000,000 shares. Issued 494,811,263 shares and 374,493,959 shares, respectively. Outstanding 494,711,263 shares and 374,393,959 shares, respectively		494,812		374,495

Additional paid-in-capital		131,106,847		119,690,336

Accumulated deficit		(137,147,220)		(128,431,375)

Treasury stock at cost (100,000 common shares)		(306,841)		(306,841)

TOTAL STOCKHOLDERS’ DEFICIT		(5,852,402)		(8,673,385)

TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	17,411,907	$	11,125,133

The accompanying notes are an integral part of the condensed consolidated financial statements

	F-2

ELITE PHARMACEUTICALS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	THREE MONTHS ENDED				SIX MONTHS ENDED
	September 30,				September 30,
	2013		2012		2013		2012
REVENUES
Manufacturing Fees	$	921,347	$	466,020	$	1,464,780	$	845,716
Royalties & Profit Splits		231,578		154,168		404,833		282,663
Lab Fee Revenues		5,972		14,329		10,972		84,693

Total Revenues		1,158,897		634,517		1,880,585		1,213,072

COSTS OF REVENUES		616,635		479,631		1,195,647		933,995

Gross Profit		542,262		154,886		684,938		279,077

OPERATING EXPENSES
Research and Development		854,777		228,475		1,424,268		425,357
General and Administrative		272,561		401,174		649,018		766,135
Non-cash compensation through issuance of stock options		18,937		15,133		28,424		21,246
Depreciation and Amortization		82,567		25,372		245,399		67,370

Total Operating Expenses		1,228,842		670,154		2,347,109		1,280,108

(LOSS) FROM OPERATIONS		(686,580)		(515,268)		(1,662,171)		(1,001,031)

OTHER INCOME / (EXPENSES)
Interest expense, net		(255,945)		(61,247)		(330,723)		(119,784)
Change in fair value of warrant derivatives		(6,129,579)		2,093,653		(3,233,122)		(2,995,081)
Change in fair value of preferred share derivatives		(2,565,495)		(187,383)		(3,466,332)		(4,830,866)
Interest expense attributable to preferred share derivatives		(17,476)		(28,823)		(41,060)		(83,901)
Discount in Series E issuance attributable to beneficial conversion features		—		(250,000)		—		(437,500)
Other Income		19,831		—		19,831		—

Total Other Income / (Expense)		(8,948,664)		1,566,200		(7,051,406)		(8,467,132)

INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES		(9,635,244)		1,050,932		(8,713,577)		(9,468,163)

PROVISION FOR INCOME TAXES		(2,269)		(1,023)		(2,269)		(4,023)

NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	(9,637,513)	$	1,049,909	$	(8,715,846)	$	(9,472,186)

NET (LOSS) PER SHARE
Basic	$	(0.02)	$	0.00	$	(0.02)	$	(0.03)
Diluted	$	(0.02)	$	0.00	$	(0.02)	$	(0.03)

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
Basic		421,991,654		348,298,807		405,073,773		342,712,859
Diluted		421,991,654		505,759,554		405,073,773		342,712,859

The accompanying notes are an integral part of the condensed consolidated financial statements

	F-3

ELITE PHARMACEUTICALS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ DEFICIT

(Unaudited)

	Common Stock						Treasury Stock
					Additional
					Paid-In						Accumulated		Stockholders’
	Shares		Amount		Capital		Shares		Amount		Deficit		Deficit
Balance at March 31, 2013		374,493,959	$	374,495	$	119,690,336		100,000	$	(306,841)	$	(128,431,375)	$	(8,673,385)

Net Loss												(8,715,845)		(8,715,845)

Common shares sold pursuant to the Lincoln Park Capital purchase agreement		25,856,021		25,856		1,874,144								1,900,000

Common shares issued in lieu of cash in payment of preferred share derivative interest expense		724,714		725		51,471								52,196

Conversion of Series C, Series E and Series G Preferred Shares into Common Shares		90,150,920		90,150		9,507,795								9,597,945

Non-cash compensation through the issuance of stock options						28,424								28,424

Costs associated with raising capital						(47,987)								(47,987)

Common shares issued as commitment shares pursuant to the Lincoln Park Capital purchase agreement		3,485,649		3,486		(3,486)								—

Common shares issued pursuant to the exercise of cash warrants		100,000		100		6,150								6,250

Balance at September 30, 2013		494,811,263	$	494,812	$	131,106,847		100,000	$	(306,841)	$	(137,147,220)	$	(5,857,402)

The accompanying notes are an integral part of the condensed consolidated financial statements

	F-4

ELITE PHARMACEUTICALS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	SIX MONTHS ENDED SEPTEMBER 30
	2013		2012
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss	$	(8,715,845)	$	(9,472,186)
Adjustments to reconcile net loss to cash used in operating activities:
Depreciation and amortization		222,299		236,143
Change in fair value of warrant derivative liability		3,233,122		2,995,081
Change in fair value of preferred share derivative liability		3,466,332		4,830,866
Discount in Series E issuance attributable to embedded beneficial conversion feature		—		437,500
Preferred share derivative interest satisfied by the issuance of common stock		52,196		126,106
Non-cash compensation accrued		154,750		95,000
Non-Cash Interest Expense		183,391
Non-cash compensation satisfied by the issuance of common stock and options		28,424		21,246
Non-cash rent expense		3,799		4,809
Non-cash lease accretion		708		667

Changes in Assets and Liabilities
Accounts receivable		29,195		(166,096)
Inventories		(361,527)		(175,853)
Prepaid and other current assets		(5,865)		15,592
Accounts payable, accrued expenses and other current liabilities		442,119		(39,828)
Deferred revenues and Customer deposits		(6,667)		(6,669)
Derivative interest payable		(11,135)		(42,206)

NET CASH USED IN OPERATING ACTIVITIES		(1,284,704)		(1,139,828)

CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment		(120,396)		(96,156)
Cost of leasehold improvements		(6,082)		(20,082)
Costs incurred for intellectual property assets		(22,261)		(23,315)
Deposits to / (withdrawals from) restricted cash, net		(27,642)		6,554
NET CASH USED IN INVESTING ACTIVITIES		(176,381)		(132,999)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of Series E Convertible Preferred Stock		—		437,500
Proceeds from sale of common shares to Lincoln Park Capital		1,900,000		—
Proceeds from exercise of cash warrants		6,250		187,500
Proceeds from draws against Treppel credit line				200,000
Other loan payments		—		(3,381)
Costs associated with raising capital		(47,987)		(9,856)
NET CASH PROVIDED BY FINANCING ACTIVITIES		1,858,263		811,763

NET CHANGE IN CASH AND CASH EQUIVALENTS		397,178		(461,064)

CASH AND CASH EQUIVALENTS – beginning of period		369,023		668,407
CASH AND CASH EQUIVALENTS – end of period	$	766,201	$	207,343

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid for interest	$	146,624	$	115,826
Cash paid for taxes		—		4,023
Non-Cash Financing Transactions
Commitment shares issued to Lincoln Park Capital		260,538
Conversion of Preferred Shares to Common Shares		9,597,945
Acquisition of intellectual property		5,597,317
Convertible Note Payable		5,597,317

The accompanying notes are an integral part of the condensed consolidated financial statements

	F-5

ELITE PHARMACEUTICALS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2013 AND 2012

( UNAUDITED )

NOTE 1 - DEFINITIONS

“Cash Reserves” are equal to the amount listed in Note 2

“Current Balance Sheet Date” means September 30, 2013

“Current Bond Liability” is equal to the amount listed in Note 2

“Current Fiscal Year” means the twelve months ended March 31, 2014

“Current Quarter” means the three months ended September 30, 2013

“Current YTD” means the six months ended September 30, 2013

“Derivative Interest Liability Common Shares” means the following Common Shares issued in lieu of cash in payment of Derivative Interest due and owing as of the Current Balance Sheet Date:

Common Shares Issued

148,804

“ FDA ” means the U.S. Food and Drug Administration

“Hakim Credit Line Limit” equals $ 1,000,000

“Hakim Credit Line Balance” equals zero

“Hakim Credit Line Interest Due” equals zero

“ Outstanding Bond Principal Payments” means principal payments which were due and owing on the NJEDA Bonds on or before the Current Balance Sheet Date and not made, consisting of the following:

Payment Date	Amount
September 1, 2010		225,000
September 1, 2011		470,000
September 1, 2012		730,000
September 1, 2013		915,000

“ Prior Year Balance Sheet Date ” means September 30, 2012

“ Prior Fiscal Year ” means the twelve months ended March 31, 2013

“ Prior Year Quarter ” means the three months ended September 30, 2012

	F-6

“ Restricted Cash Interest Payments ” means the following withdrawal of funds from the debt service reserve, with such funds being used to make interest payments due to holders of the NJEDA Bonds:

Payment Date	Amount
March 1, 2009	$	120,775
September 1, 2009		120,775
March 1, 2010		113,075
September 1, 2010		113,075
March 1, 2011		113,075
September 1, 2011		113,075
March 1, 2012		113,075
September 1, 2012		113,075
March 1, 2013		113,075
September 1, 2013		113,075

“ Restricted Cash Principal Payments ” means the following withdrawal of funds from the debt service reserve, with such funds being used to make principal payments due to holders of the NJEDA Bonds:

Payment Date		Amount
September 1, 2009			210,000

“SEC” means the Securities and Exchange Commission

“Treppel Credit Line Balance” equals $ 600,000

“Treppel Credit Line Interest Due” equals $ 15,288

“Treppel Credit Line Limit” equals $ 1,000,000

“Working Capital Deficit” is equal to the amount listed in Note 2

NOTE 2 - BASIS OF PRESENTATION AND LIQUIDITY

The information in this quarterly report on Form 10-Q includes the results of operations of Elite Pharmaceuticals, Inc. and its consolidated subsidiaries (collectively the “Company” or “Elite”) for the Current Quarter and Prior Year Quarter. The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to rules and regulations of the Securities and Exchange Commission in accordance with accounting principles generally accepted for interim financial statement presentation. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America (“GAAP”) for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the condensed consolidated financial position, results of operations and cash flows of the Company for the periods presented have been included.

The financial results for the interim periods are not necessarily indicative of the results to be expected for the full year or future interim periods.

The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended March 31, 2013 and filed with the SEC on June 21, 2012. There have been no changes in significant accounting policies since March 31, 2013.

The Company does not anticipate being profitable for the Current Fiscal Year; therefore a current provision for income tax was not established for the Current Quarter. Only the minimum liability required for state corporation taxes was considered.

	F-7

The accompanying unaudited condensed consolidated financial statements were prepared on the assumption that the Company will continue as a going concern. As of the Current Balance Sheet Date, the Company had the following:

Cash reserves (“Cash Reserves”)	$	0.8 million
Working capital deficit (“Working Capital Deficit”)	$	8.4 million
Losses from operations for the Current Quarter	$	0.7 million
Other loss for the Current Quarter	$	8.9 million
Net loss for the Current Quarter	$	9.6 million
NJEDA Bonds Payable (“Current Bond Liability”)	$	3.4 million

The financial statements do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should the Company be unable to continue in operation.

In addition, the Company has received Notice of Default from the Trustee of the NJEDA Bonds as a result of the utilization of the debt service reserve being used to pay semi-annual interest payments due on September 1 ^st and March 1 ^st of each year. The debt service reserve was first used to make such semi-annual interest payments on March 1, 2009 and has been utilized for all semi-annual interest payments due since then, with the Restricted Cash Interest Payments constituting such payments.

The Company has replenished all amounts withdrawn from the debt service reserve for the payment of semi-annual interest payments, as required, and in accordance with the applicable terms and conditions of such replenishments.

The Company did not have sufficient funds available to make the Restricted Cash Principal Payments and the Outstanding Principal Payments.

The debt service reserve was utilized to make the Restricted Cash Principal Payments, with the Company replenishing such amounts withdrawn from the debt service reserve, as required and in accordance with the applicable terms and conditions of such replenishments.

The Company requested that the Trustee utilize the debt service reserve to pay the principal payment due on September 1, 2010. This request was denied and accordingly the principal payment due on September 1, 2010 was not made.

The Company did not have sufficient funds available to make the principal payments due on September 1, 2011, 2012 and 2013, with such amount due including principal payments due in the prior year but not paid. There were not sufficient funds available in the debt service reserve and the payment was not made.

Please refer to the definition of Outstanding Bond Principal Payments for details on the amounts of the principal payments which were due and not made.

Resolution of the Company’s default on the NJEDA Bonds and our request for postponement of principal payments will have a significant effect on our ability to operate in the future.

Please refer to Note 6 to our financial statements for a more detailed discussion of the NJEDA Bonds and Notice of Default.

Please also note that the Working Capital Deficit includes the Current Bond Liability. This amount was first classified as a current liability as of March 31, 2010, due to the Notice of Default received from the Trustee in relation to the NJEDA Bonds. Please refer to the balance sheet and note 6 to our financial statements for details on the Current Bond Liability.

	F-8

As of the Current Balance Sheet Date, we had Cash Reserves.

On June 12, 2012, Elite entered into a bridge loan agreement, as amended on December 5, 2012, and August 2, 2013, (the “Treppel Credit Line Agreement”) with Jerry Treppel, the Company’s Chairman. Under the terms of the Treppel Credit Line Agreement, Elite has the right, in its sole discretion to a line of credit (the “Treppel Credit Line”) in the maximum principal amount of up to the Treppel Credit Line Limit, at any one time. Mr. Treppel provided the Treppel Credit Line for the purpose of supporting the acceleration of Elite’s product development activities. The outstanding amount is evidenced by a promissory note which shall mature on July 31, 2014, at which time the entire unpaid principal balance, plus accrued interest thereon shall be due and payable in full. Elite may prepay any amounts owed without penalty. Any such prepayments shall first be due and owing and then to principal. Interest only shall be payable quarterly on July 1, October 1, January 1 and April 1 of each year. Prior to maturity or the occurrence of an Event of Default as defined in the Treppel Credit Line Agreement, the Company may borrow, repay and reborrow under the Treppel Credit Line through maturity. Amounts borrowed under the Treppel Credit Line bear interest at the rate of ten percent ( 10 %) per annum. For more detailed information, please refer to the Current Reports on Form 8-K filed with the SEC on June 13, 2012 December 10, 2012 and August 6, 2013, with such filings being herein incorporated by reference.

As of the Current Balance Sheet Date, the principal balance of the Treppel Credit Line was equal to the Treppel Credit Line Balance and the interest due was equal to the Treppel Credit Line Interest Due.

On October 15, 2013, subsequent to the Current Balance Sheet Date, Elite entered into a bridge loan agreement (the “Hakim Credit Line Agreement”) with Nasrat Hakim, the Company’s CEO and President. Under the terms of the Hakim Credit Line Agreement, Elite has the right, in its sole discretion to a line of credit (the “Hakim Credit Line”) in the maximum principal amount of up to the Hakim Credit Line Limit, at any one time. Mr. Hakim provided the Hakim Credit Line for the purpose of supporting the acceleration of Elite’s product development activities. The outstanding amount is evidenced by a promissory note which shall mature on June 30, 2015, at which time the entire unpaid principal balance, plus accrued interest thereon shall be due and payable in full. Elite may prepay any amounts owed without penalty. Any such prepayments shall first be due and owing and then to principal. Interest only shall be payable quarterly on July 1, October 1, January 1 and April 1 of each year. Prior to maturity or the occurrence of an Event of Default as defined in the Hakim Credit Line Agreement, the Company may borrow, repay and reborrow under the Hakim Credit Line through maturity. Amounts borrowed under the Hakim Credit Line bear interest at the rate of ten percent ( 10 %) per annum. For more detailed information, please refer to the Current Reports on Form 8-K filed with the SEC on October 16, 2013 and exhibit 10.16 to this quarterly report on Form 10-Q, with such filings being herein incorporated by reference.

As of the Current Balance Sheet Date, the principal balance of the Hakim Credit Line was equal to the Hakim Credit Line Balance and the interest due was equal to the Hakim Credit Line Interest Due.

On April 19, 2013, the Company entered into a purchase agreement (the “LPC Purchase Agreement”), together with a registration rights agreement (the “LPC Registration Rights Agreement”), with Lincoln Park Capital Fund, LLC (“LPC”).

Under the terms and subject to the conditions of the LPC Agreement, the Company has the right to sell to and LPC is obligated to purchase up to $ 10 million in shares of the Company’s Common Stock, subject to certain limitations, from time to time, over the 36 month period commencing on May 9, 2013, the date that the registration statement, which the Company agreed to file with the Securities and Exchange Commission (the “SEC”) pursuant to the LPC Registration Rights Agreement, was declared effective by the SEC. The Company may direct LPC, at its sole discretion and subject to certain conditions, to purchase stock in amounts of up to $ 80,000 on any single business day, so long as at least two business days have passed since the most recent purchase, increasing to up to $ 500,000 per purchase, depending upon the closing sale price of the Common Stock. The purchase price of the shares of Common Stock related to the future funding will be based on the prevailing market prices of such shares at the time of sales (or over a period of up to 12 business days leading up to such time), but in no event will shares be sold to LPC on a day the Common Stock closing price is less than the floor price of $ 0.07 per share, subject to adjustment. The Company’s sales of shares of Common Stock to LPC under the LPC Purchase Agreement are limited to no more than the number of shares that would result in the beneficial ownership by LPC and its affiliates, at any single point in time, of more than 9.99 % of the then outstanding shares of Common Stock.

	F-9

A Current Report on Form 8-K was filed with the SEC on April 22, 2013 with regards to the LPC Purchase Agreement and LPC Registration Rights Agreement with such filing being herein incorporated by reference. A Securities Registration Statement on Form S-1 was filed with the SEC on April 25, 2013 and declared effective by the SEC on May 9, 2013. A post-effective amendment to the Registration Statement was filed with the SEC and declared effective on June 26, 2013.

Shares issued pursuant to the LPC Purchase Agreement are summarized as follows:

	Three Months Ended				Six Months Ended
	September 30,				September 30,
	2013		2012		2013		2012
Initial commitment shares issued		—		—		2,929,115		—
Additional commitment shares issued		439,369		—		556,534		—
Purchased shares issued		19,982,403		—		25,856,021		—
Proceeds from purchased shares	$	1,500,000		—	$	1,900,000	$	—

Despite having entered into the Treppel Credit Line Agreement, the Hakim Credit Line Agreement and the LPC Purchase Agreement we still may be required to seek additional capital in the future and there can be no assurances that Elite will be able to obtain such additional capital on favorable terms, if at all.

Management has evaluated subsequent events or transactions occurring through the date the financial statements were issued (please see note 15).

Segment Reporting

FASB ASC 280-10-50, “Disclosure about Segments of an Enterprise and Related Information” requires use of the “management approach” model for segment reporting. The management approach is based on the way a company’s management organizes segments within the company for making operating decisions and assessing performance. Reportable segments are based on products and services, geography, legal structure, management structure, or any other manner in which management disaggregates a company. The Company operates in one segment for the three and six months ended September 30, 2013.

NOTE 3 - CASH AND CASH EQUIVALENTS

The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents consist of cash on deposit with banks and money market instruments. The Company places its cash and cash equivalents with high-quality, U.S. financial institutions and, to date, has not experienced losses on any of its balances.

NOTE 4 - INVENTORIES

Inventories consist of raw materials, work in process and finished goods and are stated at the lower of cost (first-in, first-out basis) or market (net realizable value), and summarized as follows:

	September 30, 2013		March 31, 2013
Raw Materials	$	910,187	$	774,758
Work-in-Process		809,486		676,726
Finished Goods		—		—
Less: Inventory Reserve		—		(93,338)
Total Inventory	$	1,719,673	$	1,358,146

	F-10

NOTE 5 - INTANGIBLE ASSETS

Costs to acquire intangible assets, such as asset purchases of Abbreviated New Drug Applications (“ANDAs”) which are approved by the FDA or costs incurred in the application of patents are capitalized and amortized on the straight-line method, based on their estimated useful lives ranging from five to fifteen years, commencing upon approval of the patent or site transfers required for commercialization of an acquired ANDA. Such costs are charged to expense if the patent application or ANDA site transfer is unsuccessful.

As of the Current Balance Sheet Date, the following costs were recorded as intangible assets on the Company’s balance sheet:

	Patent				Total
	Application		ANDA		Intangible
	Costs		Acquisitions		Assets
Intangible Assets as of March 31, 2013	$	244,424	$	450,000	$	694,424

Costs Capitalized During Current Fiscal Year
Three months ended June 30, 2013		18,498		—		18,498
Three months ended September 30, 2013		3,765		5,597,317		5,601,082

Total Costs Capitalized-six months ended September 30, 2013		22,263		5,597,317		5,619,580

Amortization of Intangible Assets During Current Fiscal Year
Three months ended June 30, 2013		—		—		—
Three months ended September 30, 2013		—		—		—

Total Amortization – three months ended September 30, 2013		—		—		—

Intangible Assets as of September 30, 2013	$	266,687	$	6,047,317	$	6,314,004

The costs incurred in patent applications for the Current YTD and Current Quarter, were related to our abuse resistant opioid product lines. Additional costs incurred in relation to such patent applications will be capitalized as intangible assets, with amortization of such costs to commence upon approval of the patents.

NOTE 6 - NJEDA BONDS

On August 31, 2005, the Company successfully completed a refinancing of a prior 1999 bond issue through the issuance of new tax-exempt bonds (the “Bonds”) via the issuance of the following:

	Principal
	Amount
	On	Interest
Description	Issue Date	Rate		Maturity
Series A Note	3,660,000	6.50	%	September 1, 2030
Series B Note	495,000	9.0	%	September 1, 2012

The net proceeds, after payment of issuance costs, were used (i) to redeem the outstanding tax-exempt Bonds originally issued by the Authority on September 2, 1999, (ii) refinance other equipment financing and (iii) for the purchase of certain equipment to be used in the manufacture of pharmaceutical products. As of the Current Balance Sheet Date, all of the proceeds were utilized by the Company for such stated purposes.

	F-11

Description	Amount
Series A Note Proceeds	$	366,000
Series B Note Proceeds		49,500
Total	$	415,500

The Debt Service Reserve is maintained in restricted cash accounts that are classified in Other Assets.

Bond issue costs were paid from the bond proceeds and are being amortized over the life of the bonds. These costs and amortization activity are summarized as follows:

					Balances
					As of
	Balances		Amortization		Current
	As of		Expense		Balance Sheet
Description	March 31, 2013		Current YTD		Date
Bond Issue Costs	$	354,453			$	354,453
Accumulated Amortization		(107,519)		(7,089)		(114,608)
Unamortized Balance	$	246,934			$	239,845

The NJEDA Bonds require the Company to make an annual principal payment on September 1 ^st of varying amounts as specified in the loan documents and semi-annual interest payments on March 1 ^st and September 1 ^st , equal to interest due on the outstanding principal at the applicable rate for the semi-annual period just ended.

Due to the Company not having sufficient funds, the following withdrawals were made from the debt service reserve, with the funds being used to make interest payments due to the holders of the NJEDA Bonds:

Payment Date	Amount
March 1, 2009	$	120,775
September 1, 2009		120,775
March 1, 2010		113,075
September 1, 2010		113,075
March 1, 2011		113,075
September 1, 2011		113,075
March 1, 2012		113,075
September 1, 2012		113,075
March 1, 2013		113,075
September 1, 2013		113,075

Due to the Company not having sufficient funds, the following withdrawal was made from the debt service reserve, with the funds being used to make a principal payment due to the holders of the NJEDA Bonds:

Payment Date		Amount
September 1, 2009		$	210,000

	F-12

Pursuant to the terms of the NJEDA Bonds, the Company is required to replenish any amounts withdrawn from the debt service reserve and used to make principal or interest payments in six monthly installments, each being equal to one-sixth of the amount withdrawn and with the first installment due on the 15 ^th of the month in which the withdrawal from debt service reserve occurred and the remaining five monthly payments being due on the 15 ^th of the five immediately subsequent months. The Company has, to date, made all payments required in relation to the withdrawals made from the debt service reserve in relation to the Restricted Cash Interest Payments and the Restricted Cash Principal Payment.

In addition, the Company did not have sufficient funds available to make the principal payments due on September 1, 2010, September 1, 2011, September 1, 2012 and September 1, 2013. These principal payments are summarized as follows:

Payment Date	Amount
September 1, 2010	$	225,000 ⁽¹⁾
September 1, 2011		470,000 ⁽²⁾
September 1, 2012		730,000 ⁽³⁾
September 1, 2013		915,000 ⁽⁴⁾

(1) The Company request to withdraw funds from the debt service reserve to pay the amount due on September 1, 2010 was denied by the Trustee and accordingly, the principal payment due on such date was not made.

(2) The principal payment due on September 1, 2011, included the amount due and September 1, 2010 and not paid. There were not sufficient funds available in the debt service reserve and the principal payment due on September 1, 2011 was not made.

(3) The principal payment due on September 1, 2012, included the amount due and September 1, 2011 and not paid. There were not sufficient funds available in the debt service reserve and the principal payment due on September 1, 2012 was not made.

(4) The principal payment due on September 1, 2013, included the amount due and September 1, 2012 and not paid. There were not sufficient funds available in the debt service reserve and the principal payment due on September 1, 2013 was not made.

The Company has received Notice of Default from the Trustee of the NJEDA Bonds in relation to the withdrawals from the debt service reserve, and no payment of scheduled principal amounts. Resolution of the Company’s default under the NJED Bonds will have a significant effect on our ability to operate in the future.

Due to issuance of a Notice of Default being received from the Trustee of the NJEDA Bonds, and until the event of default is waived or rescinded, the Company has classified the Current Bond Liability, as a current liability.

NOTE 7 - DERIVATIVE LIABILITIES

Accounting Standard Codification “ASC” 815 – Derivatives and Hedging , which provides guidance on determining what types of instruments or embedded features in an instrument issued by a reporting entity can be considered indexed to its own stock for the purpose of evaluating the first criteria of the scope exception in the pronouncement on accounting for derivatives. These requirements can affect the accounting for warrants and convertible preferred instruments issued by the Company. As the conversion features within, and the detachable warrants issued with the Company’s Series B, Series C, Series E and Series G Preferred Stock, do not have fixed settlement provisions because their conversion and exercise prices may be lowered if the Company issues securities at lower prices in the future, we have concluded that the instruments are not indexed to the Company’s stock and are to be treated as derivative liabilities.

	F-13

Preferred Stock Derivative Liabilities

Preferred Stock Derivative Liability as of Current Balance Sheet Date
	Series C		Series E		Series G		Total
Preferred Shares Authorized		3,200		4,000		1,375		8,575
Preferred shares Outstanding		24		—		158		182

Underlying common shares into which Preferred may convert		160,000		—		1,478,479		1,638,479

Closing price on valuation date	$	0.12	$	0.12	$	0.12	$	0.12

Preferred stock derivative liability at Current Balance Sheet Date	$	19,824		—	$	183,184	$	203,008

Preferred stock derivative liability at March 31, 2013	$	697,584	$	5,637,037		—	$	6,334,621

CHANGE IN VALUE OF PREFERRED STOCK DERIVATIVE LIABILITY
	Three months ended				Six months ended
	September 30,				September 30,
	2013		2012		2013		2012
Change in Preferred Stock Derivative Liability	$	(2,565,495)	$	(187,383)	$	(3,466,332)	$	(4,830,866)

Warrant Derivative Liabilities

The portion of derivative liabilities related to outstanding warrants was valued using the Black-Scholes option valuation model and the following assumptions on the following dates:

FAIR VALUE OF WARRANT DERIVATIVE LIABILITY
	March 31		June 30		September 30
	2013		2013		2013
Risk-Free interest rate		0.04% - 0.77%		0.02% - 1.41%		0.03% - 1.39%
Expected volatility		106% - 168%		35% - 97%		62% - 117%
Expected life (in years)		0.5 – 5.1		0.2 – 4.8		0.8 – 4.6
Expected dividend yield		—		—		—
Number of warrants		139,344,939		139,344,939		120,491,539

Fair Value of
Warrant Derivative Liability	$	7,862,848	$	4,966,391	$	11,095,970

CHANGE IN VALUE OF WARRANT DERIVATIVE LIABILITY
	Three months ended				Six months ended
	September 30				September 30
	2013		2012		2013		2012
Change in Warrant Derivative Liability	$	(6,129,579)	$	2,093,653	$	(3,233,122)	$	(2,995,081)

	F-14

The risk free interest rate was based on rates established by the U.S. Treasury Department. The expected volatility was based on the historical volatility of the Company’s share price for periods equal to the expected life of the outstanding warrants at each valuation date. The expected dividend rate was based on the fact that the Company has not historically paid dividends on common stock and does not expect to pay dividends on common stock in the future.

NOTE 8 - PREFERRED SHARE DERIVATIVE INTEREST PAYABLE

Preferred share derivative interest payable as of the Current Balance Sheet Date consisted of the amount reported on the liability section of the balance sheet and titled “Preferred Share Derivative Interest Payable”. This amount was paid via the issuance of the Derivative Interest Liability Common Shares in October 2013.

NOTE 9 - OPERATING LEASES

The Company entered into a lease for a portion of a one-story warehouse, located at 135 Ludlow Avenue, Northvale, New Jersey, consisting of approximately 15,000 square feet of floor space. The lease term began on July 1, 2010 and is classified as an operating lease. The lease includes an initial term of 5 years and 6 months and the Company has the option to renew the lease for two additional terms, each of 5 years . The property related to this lease will be used for the storage of pharmaceutical finished goods, raw materials, equipment and documents as well as engaging in manufacturing, packaging and distribution activities.

This property required significant leasehold improvements and qualification as a prerequisite to achieving suitability for such intended future use and in January 2013, the Company began using the facility at 135 Ludlow Avenue for commercial production and commenced shipping packaged products from the facility.

Minimum 5 year payments* for the leasing of 15,000 square feet at 135 Ludlow are as follows:

Fiscal year ended March 31, 2014		83,259
Fiscal year ended March 31, 2015		85,344
Fiscal year ended March 31, 2016		87,363
Fiscal year ended March 31, 2017		89,112
Fiscal year ended March 31, 2018		90,894
Total Minimum 5 year lease payments	$	435,972

* Minimum lease payments are exclusive of additional expenses related to certain expenses incurred in the operation and maintenance of the premises, including, without limitation, real estate taxes and common area charges which may be due under the terms and conditions of the lease, but which are not quantifiable at the time of filing of this quarterly report on Form 10-Q.

Rent expense relating to the operating lease is recorded using the straight line method, and is summarized as follows:

RENT EXPENSE
	Three months ended				Six months ended
	September 30,				September 30,
	2013		2012		2013		2012
Rent Expense	$	22,584	$	22,584	$	45,169	$	45,169

Change in deferred rent liability	$	1,899	$	2,403	$	3,799	$	4,807

	F-15

DEFERRED RENT LIABILITY (LONG-TERM LIABILITY)
	March 31		June 30		September 30
	2013		2013		2013
Balance of Deferred Rent Liability	$	68,260	$	70,160	$	72,062

NOTE 10 - DEFERRED REVENUES

Deferred revenues are summarized as follows:

Advance payment received	$	200,000
Total revenue recognized as of March 31, 2013		(34,444)
Revenue recognized six months ended June 30, 2013		(6,667)
Total Deferred Revenues as of Current Balance Sheet Date	$	158,889

Current Portion of Deferred Revenues as of Current Balance Sheet Date	$	13,333
Non-Current Portion of Deferred Revenues as of Current Balance Sheet Date	$	145,556

Deferred revenues represents the unamortized amount of an advance payment received from Precision Dose Inc. for a licensing agreement with a fifteen year term beginning in September 2010 and ending in August 2025. The advance payment was recorded as deferred revenue when received and is earned, on a straight line basis over the fifteen year life of the license. The current portion of deferred revenues, represents the revenue that will be recognized over the 12 months immediately subsequent to Current Balance Sheet Date. The long term portion of deferred revenues, represents the revenue that will be recognized during the period that begins more than twelve months subsequent to the Current Balance Sheet Date. Please refer to exhibit 10.9 of the quarterly report on form 10-Q filed on November 15, 2010 for further details on the Precision Dose Manufacturing Agreement, with such exhibit being herein incorporated by this reference.

NOTE 11 - STOCKHOLDERS’ EQUITY

Common Stock

During the Current YTD, the Company issued shares of Common Stock, as follows:

	Shares
	Of
Description	Common Stock
Common Shares issued in lieu of cash in payment of Preferred Share Derivative Interest		724,714

Common Shares issued pursuant to the conversion of Series C, Series E and Series G Preferred Share derivatives		90,150,920

Common shares sold pursuant to the LPC Purchase Agreement		25,856,021

Common shares issued as commitment shares pursuant to the LPC Purchase Agreement		3,485,649

Common shares issued pursuant to the exercise of cash warrants		100,000

Total Common Shares issued during the Current YTD		120,317,304

	F-16

Options

Options issued and outstanding as of the Current Balance Sheet Date are summarized as follows:

	Number of Options	Range of Exercise Prices
Vested Options	2,552,332	$0.06 to $2.80
Non-Vested Options	4,156,668	$0.07 to $2.25

Each option represents the right to purchase one share of common stock. The non-vested options are scheduled to vest in various increments during dates that are within the period beginning on January 18, 2013 and through August 15, 2016, or upon the occurrence of certain defined events and require that employees awarded such options be employed by the Company on the vesting date.

NOTE 12 - PER SHARE INFORMATION

Basic earnings per share of common stock (“Basic EPS”) is computed by dividing the net (loss) income by the weighted-average number of shares of common stock outstanding. Diluted earnings per share of common stock (“Diluted EPS”) are computed by dividing the net (loss) income by the weighted-average number of shares of common stock, and dilutive common stock equivalents and convertible securities then outstanding. GAAP requires the presentation of both Basic and Diluted EPS, if such Diluted EPS is not anti-dilutive, on the face of Company’s Condensed Statements of Operations.

The calculation of Basic EPS and Diluted EPS is summarized as follows:

	For the Three Months				For the Six Months
	Ended September 30,				Ended September 30
	2013		2012		2013		2012
Numerator
Net Income (loss) attributable to common shareholders - Basic	$	(9,637,513)	$	1,049,909	$	(8,715,846)	$	(9,472,186)

Net Income attributable to common shareholders - Diluted		n/a		1,078,733		n/a		n/a

Denominator
Weighted-average shares of common stock outstanding		421,991,654		348,298,807		405,073,773		342,712,859

Dilutive effect of stock options, warrants and convertible securities		n/a		157,460,747		n/a		n/a

Net (loss) income per share
Basic	$	(0.02)	$	(0.00)	$	(0.02)	$	(0.03)
Diluted	$	(0.02)	$	(0.00)	$	(0.02)	$	(0.03)

NOTE 13 - RELATED PARTY TRANSACTION - BORROWING AGAINST TREPPEL CREDIT LINE

As of the Current Balance Sheet Date, Elite owed the Treppel Credit Line Balance and the Treppel Credit Line Interest Due in relation to the Treppel Credit Line. Both amounts were recorded as current liabilities on Elite’s balance and included in the line item titled “Short term loans and current portion of long-term debt”.

For further details on the Treppel Credit Line, please refer to Note 2 of these financial statements and the Current Reports on Form 8-K filed with the SEC on June 13, 2012 and December 10, 2012, with such filings being herein incorporated by reference.

	F-17

NOTE 14 - RELATED PARTY TRANSACTION – MIKAH PURCHASE AGREEMENT AND NOTE PAYABLE; HAKIM EMPLOYMENT AGREEMENT

On August 1, 2013, Elite Laboratories Inc. (“Elite Labs”), a wholly owned subsidiary of the Company, executed an asset purchase agreement (the “Mikah Purchase Agreement”) with Mikah Pharma LLC (“Mikah”), an entity that is wholly owned by Mr. Nasrat Hakim, who, in conjunction with this transaction, was appointed as Elite’s CEO, President and a Director on August 2, 2012, and acquired from Mikah a total of 13 Abbreviated New Drug Applications (“ANDAs”) consisting of 12 ANDAs approved by the FDA and one ANDA under active review with the FDA, and all amendments thereto (the “Acquisition”) for aggregate consideration of $ 10,000,000 , inclusive of imputed interest payable pursuant to a non-interest bearing, secured convertible note due in August 2016 (the “Mikah Note”).

Elite previously purchased two ANDA products and has a development agreement with Mikah (please see the relevant disclosure in the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2013 and filed with the SEC on June 21, 2013).

The products referenced in the approved ANDAs require site transfer approval with the FDA. The Company believes that the site transfers qualify for a CBE 30 review with one exception, which would allow for the product manufacturing transfer on an expedited basis. However, the Company can give no assurances that the site transfers will qualify for a CBE 30 review, or on the timing of these transfers and the timing is dependent on the FDA reviews. The approved ANDAs include pain, antipsychotic, hypertension, antihistamine, bariatric and muscle relaxant products. Of the thirteen products, two products are in markets where there is only one other generic competitor.

Please note that on October 2, 2013, subsequent to the Current Balance Sheet Date, Elite executed a manufacturing and licensing agreement with Epic Pharma LLC (“Epic”) to manufacture, market and sell in the United States and Puerto Rico twelve of the thirteen products. Of the 12 products, Epic will have the exclusive right to market six, and a non-exclusive right to market six products. Please refer to the applicable section of Note 15 of these financial statements, Exhibit 10.17 of this Quarterly Report on Form 10-Q and the Current Report on Form 8-K filed with the SEC on October 2, 2013, with all such filings being herein incorporated by reference.

The Mikah Note is interest free and due and payable on the third anniversary of its issuance. Subject to certain limitations, the principal amount of the Mikah Note is convertible at the option of Mikah on and after the first anniversary of the date of the Mikah Note into shares of Common Stock at a rate of $ 0.07 (approximately 14,286 shares per $ 1,000 in principal amount), the closing market price of the Company’s Common Stock on the date that the asset purchase agreement and Note were executed. The conversion rate is adjustable for customary corporate actions such as stock splits and, subject to certain exclusions, includes weighted average anti-dilution for common stock transactions at prices below the then applicable conversion rate. Pursuant to a security agreement (the “Security Agreement”), repayment of the Mikah Note is secured by the ANDAs acquired in the Acquisition.

In accordance with GAAP, an imputed interest rate was estimated by management, with factors considered in such estimation including, without limitation, rates paid by the Company on loans owed at the date of the transaction, yields on current debt obligations, the credit standing of the Company and management’s estimation of rates which other debtors of similar credit standing can obtain financing of a similar nature from other sources at the date of the transaction.

The Mikah Note is classified as a current liability on the balance sheet, due to the conversion option being exercisable on the first anniversary of the date of the Mikah Note, at the option of the holder.

The difference between the face value of the Mikah Note and the net present value of the Mikah Note, inclusive of discount for imputed interest at the date of issuance of the Note was recorded as a debt discount and the ANDA’s assigned an aggregate cost equal to the net present value of the Note. The cost assigned to the ANDA’s was evaluated for fairness, summarized as follows:

	F-18

Face value of Note	$	10,000,000
Net present value of Note at date of issuance		5,597,317
Aggregate cost of ANDA’s acquired		5,597,317
Debt discount at date of Note issuance		4,140,018

Management has determined, based on the evaluation conducted, that the fair value exceeds the cost of the ANDA’s acquired.

The foregoing descriptions of the Purchase Agreement, Mikah Note and Security Agreement are qualified in their entirety by reference to the full text of the Purchase Agreement, Note and Security Agreement, copies of which are attached as Exhibit 10.1 10.2 and 10.3, respectively to the Current Report on Form 8-K filed with the SEC on August 5, 2013, with the exhibits and current report being herein incorporated by reference. The representations, warranties and covenants contained in such agreements were made only for purposes of such agreements and as of specific dates, were solely for the benefit of the parties to such agreements, and may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures exchanged between the parties in connection with execution of the agreements.

The debt discount is being amortized to interest expense over the life of the Mikah Note, using the interest method, with such amortization being summarized as follows:

	For the Three Months				For the Six Months
	Ended September 30,				Ended September 30
	2013		2012		2013		2012

Interest expense on note payable to Mikah Pharma LLC	$	183,391		—	$	183,391		—

On August 1, 2013, the Company hired Nasrat Hakim as its President and Chief Executive Officer, effective August 2, 2013, pursuant to an executive employment agreement (the “Hakim Employment Agreement”). Pursuant to the Hakim Employment Agreement, Mr. Hakim will receive an annual salary of $ 350,000 per year (the “Hakim Salary”). The Hakim Salary will be paid in shares of the Common Stock pursuant to the Company’s current procedures for paying Company executives in Common Stock. He also will be entitled to an annual bonus equal to up to 100 % of his annual salary (also payable in Common Stock) based upon his ability to meet certain Company milestones to be determined by the Company’s Board of Directors (the “Board”). The Board may also award discretionary bonuses in its sole discretion. Mr. Hakim is entitled to employee benefits (e.g. health insurance, vacation, employee benefit plans and programs) consistent with other Company employees of his seniority and a car allowance. The Hakim Employment Agreement contains confidentiality, non-competition and other standard restrictive covenants.

Mr. Hakim’s employment is terminable by the Company for cause (as defined in the Hakim Employment Agreement). The Hakim Employment Agreement also may be terminated by the Company upon at least 30 days written notice due to disability (as defined in the Hakim Employment Agreement) or without cause. Mr. Hakim can terminate the Hakim Employment Agreement by resigning, provided he give notice of at least 60 days prior to the effective resignation date. If Mr. Hakim is terminated for cause or he resigns, he only is entitled to accrued and unpaid salary, accrued vacation time and any reasonable and necessary business expenses, all through the date of termination and payable in Common Stock (“Basic Termination Benefits”). If Mr. Hakim is terminated because of disability or death, in addition to Basic Termination Benefits, he is entitled to his pro rata annual bonus through the date of termination (payable in Common Stock). If the Company terminates Mr. Hakim without cause, in addition to Basic Termination Benefits, Mr. Hakim is entitled to his pro rata annual bonus through the date of termination and an amount equal to two years’ annual salary (all payable in Common Stock).

	F-19

Upon a Change of Control (as defined in the Hakim Employment Agreement), Mr. Hakim is entitled to a payment in an amount equal to two years base annual salary in effect upon the Date of Termination, less applicable deductions and withholdings, payable in Common Stock computed in the same manner as set forth as the Hakim Salary.

The foregoing description of the Hakim Employment Agreement is qualified in its entirety by reference to the full text of the Hakim Employment Agreement, a copy of which is attached as Exhibit 10.4 to the Current Report on Form 8-K filed with the SEC on August 5, 2013, with such filing being herein incorporated by reference.

NOTE 15 - SUBSEQUENT EVENTS

Common shares issued in lieu of cash in payment of derivative interest expense

The Derivative Interest Liability Common Shares were issued during October 2013 in payment of those amounts listed as a current liability as of September 30, 2013 under the line item “Preferred Share Derivative Interest Payable”.

Common Stock sold pursuant to the LPC Purchase Agreement

Subsequent to the Current Balance Sheet Date and up to November 4, 2013 (the latest practicable date), a total of 9,066,051 shares of Common Stock were sold pursuant to the LPC Purchase Agreement inclusive of purchase and commitment shares.

For further details on the LPC Agreement and LPC Registration Rights Agreement, please refer to the Current Report on Form 8-K filed with the SEC on April 22, 2013, with such filing being herein incorporated by reference. A Registration Statement on Form S-1 was filed with the SEC on April 25, 2013 and declared effective by the SEC on May 9, 2013. A post-effective amendment to the Registration Statement was filed with the SEC and declared effective on June 26, 2013.

Establishment of Hakim Credit Line

On October 15, 2013 (the “Hakim Credit Line Effective Date”), Elite Pharmaceuticals, Inc. (the “Company”) entered into a bridge loan agreement (the “Hakim Loan Agreement”) with Nasrat Hakim, the Company’s President and CEO. Under the terms of the Loan Agreement, the Company has the right, in its sole discretion, to a line of credit (“Hakim Credit Line”) in the maximum principal amount of up to $ 1,000,000 at any one time. Mr. Hakim provided the Credit Line for the purpose of supporting the acceleration of the Company’s product development activities. The outstanding amount will be evidenced by a promissory note which shall mature on June 30, 2015, at which time the entire unpaid principal balance plus accrued interest thereon shall be due and payable in full. The Company may prepay any amounts owed without penalty. Any such prepayments shall first be attributable to interest due and owing and then to principal. Interest only shall be payable quarterly on January 1, April 1, July 1 and October 1 of each year. Prior to maturity or the occurrence of an Event of Default as defined in the Loan Agreement, the Company may borrow, repay, and reborrow under the Credit Line through maturity. Amounts borrowed under the Credit Line will bear interest at the rate of ten percent ( 10 %) per annum.

For further details, please refer to exhibit 10.16 of this Quarterly Report on Form 10-Q, and the Current Report on Form 8-K filed with the SEC on August 16, 2013, both filings being herein incorporated by this reference.

	F-20

Manufacturing and Licensing Agreement with EPIC Pharma LLC

On October 2, 2013, the Company executed a Manufacturing and License Agreement (the “Epic Agreement”) with Epic Pharma LLC. (“Epic”), to manufacture, market and sell in the United States and Puerto Rico 12 generic products owned by Elite. Of the 12 products, Epic will have the exclusive right to market six products, and a non-exclusive right to market six. Epic is responsible for all regulatory and pharmacovigilance matters related to the products and for all costs related to the site transfer for all products. Pursuant to the Epic Agreement, Elite will receive a license fee and milestone payments. The license fee will be computed as a percentage of the gross profit, as defined in the Epic Agreement, earned by Epic as a result of sales of the products. The manufacturing cost used for the calculation of the license fee is a predetermined amount per unit plus the cost of the drug substance (API) and the sales cost for the calculation is predetermined based on net sales. If Elite manufactures any product for sale by Epic, then Epic shall pay that same predetermined manufacturing cost per unit plus the cost of the API. The license fee is payable monthly for the term of the Epic Agreement. Epic shall pay to Elite certain milestone payments as defined by the Epic Agreement. The first milestone payment is due on or before November 15, 2013. Subsequent milestone payments are due upon the filing of each product’s supplement with the FDA and the FDA approval of site transfer for each product as specifically itemized in the Epic Agreement. The term of the Epic Agreement is five years and may be extended for an additional five years upon mutual agreement of the parties. Twelve months following the launch of a product covered by the Epic Agreement, Elite may terminate the marketing rights for any product if the license fee paid by Epic falls below a designated amount for a six month period of that product. Elite may also terminate the exclusive marketing rights if Epic is unable to meet the annual unit volume forecast for a designated Product group for any year, subject to the ability of Epic, during the succeeding six month period, to achieve at least one-half of the prior year’s minimum annual unit volume forecast. The Epic Agreement may be terminated by mutual agreement of Elite and Epic, as a result of a breach by either party that is not cured within 60 days’ notice of the breach or by Elite as a result of Epic becoming a party to a bankruptcy, reorganization or other insolvency proceeding that continues for a period of 30 days or more.

For further details, please refer to exhibit 10.17 of this Quarterly Report on Form 10-Q and the Current Report on Form 8-K filed with the SEC on October 8, 2013, both filings being herein incorporated by reference.

Conversion of Series G to Common

On October 1, 2013, pursuant to the Certificate of Designations of the Company’s Series G Preferred Stock, an automatic conversion of all outstanding shares of the Series G Preferred Stock occurred. A total of 1,478,017 shares of Common Stock were issued pursuant to the automatic conversion of a total of 158 shares of Series G Preferred Stock. After this automatic conversion, there were no outstanding shares of Series G Preferred Stock.

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ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

THREE AND SIX MONTH PERIODS ENDED SEPTEMBER 30, 2013

COMPARED TO THE

THREE AND SIX MONTH PERIODS ENDED SEPTEMBER 30, 2012

(UNAUDITED)

The following discussion and analysis should be read with the financial statements and accompanying notes included elsewhere in this Form 10-Q and in the Annual Report on Form 10-K for the year ended March 31, 2013. It is intended to assist the reader in understanding and evaluating our financial position.

This Quarterly Report on Form 10-Q and the documents incorporated herein contain “forward-looking statements”. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. When used in this Form 10-Q, statements that are not statements of current or historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, the words “plan”, “intend”, “may,” “will,” “expect,” “believe”, “could,” “anticipate,” “estimate,” or “continue” or similar expressions or other variations or comparable terminology are intended to identify such forward-looking statements. All statements other than statements of historical fact included in this Form 10-Q regarding our financial position, business strategy and plans or objectives for future operations are forward-looking statements. Without limiting the broader description of forward-looking statements above, we specifically note, without limitation, that statements regarding 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 our control, the requirement of substantial future testing, clinical trials, regulatory reviews and approvals by the Food and Drug Administration and other regulatory authorities prior to the commercialization of products under development, and our ability to manufacture and sell any products, gain market acceptance, earn a profit from sales or licenses of any drugs or our ability to discover new drugs in the future, are all forward-looking in nature. These risks and other factors are discussed in our filings with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Except as required by law, the Company undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

Any reference to “Elite”, the “Company”, “we”, “us”, “our” or the “Registrant” refers to Elite Pharmaceuticals Inc. and its subsidiaries.

Overview

We are a specialty pharmaceutical company principally engaged in the development and manufacture of oral, controlled-release products, using proprietary know-how and technology, particularly as it relates to abuse resistant products. Our strategy includes improving off-patent drug products for life cycle management and developing generic versions of controlled-release drug products with high barriers to entry.

We own, license or contract manufacture eight products currently being sold commercially, as follows:

· Phentermine 37.5mg tablets (“Phentermine 37.5mg”)

· Lodrane D® Immediate Release capsules (“Lodrane D”)

· Methadone 10mg tablets (“Methadone 10mg”)

· Hydromorphone Hydrochloride 8mg tablets (“Hydromorphone 8mg”)

· Phendimetrazine tartrate 35mg tablets (“Phendimetrazine 35mg”)

· Phentermine 15mg capsules (“Phentermine 15mg”)

· Phentermine 30mg capsules (“Phentermine 30mg”)

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· Naltrexone HCl 50mg tablets (“Naltrexone 50mg”)

We also recently acquired approved Abbreviated New Drug Applications (“ANDAs”) for 12 products (the “Mikah Approved ANDAs”) and one ANDA that is under active review with the FDA (the “Mikah ANDA Application Product”) that were acquired pursuant to the asset purchase agreement with Mikah Pharma dated August 1, 2013 (the “Mikah Asset Purchase Agreement”). On October 2, 2013, we executed a Manufacturing and License Agreement (the “Epic Agreement”) with Epic Pharma LLC. (“Epic”), to manufacture, market and sell in the United States and Puerto Rico 12 generic products owned by Elite. Of the 12 products, Epic will have the exclusive right to market six products as listed in Schedule A of the Epic Agreement, and a non-exclusive right to market six products as listed in Schedule D of the Epic Agreement. Epic is responsible for all regulatory and pharmacovigilance matters related to the products and for all costs related to the site transfer for all products. Pursuant to the Epic Agreement, Elite will receive a license fee and milestone payments. The license fee will be computed as a percentage of the gross profit, as defined in the Epic Agreement, earned by Epic as a result of sales of the products. The manufacturing cost used for the calculation of the license fee is a predetermined amount per unit plus the cost of the drug substance (API) and the sales cost for the calculation is predetermined based on net sales. If Elite manufactures any product for sale by Epic, then Epic shall pay that same predetermined manufacturing cost per unit plus the cost of the API. The license fee is payable monthly for the term of the Epic Agreement. Epic shall pay to Elite certain milestone payments as defined by the Epic Agreement. The first milestone payment is due on or before November 15, 2013. Subsequent milestone payments are due upon the filing of each product’s supplement with the FDA and the FDA approval of site transfer for each product as specifically itemized in the Epic Agreement. The term of the Epic Agreement is five years and may be extended for an additional five years upon mutual agreement of the parties. Twelve months following the launch of a product covered by the Epic Agreement, Elite may terminate the marketing rights for any product if the license fee paid by Epic falls below a designated amount for a six month period of that product. Elite may also terminate the exclusive marketing rights if Epic is unable to meet the annual unit volume forecast for a designated Product group for any year, subject to the ability of Epic, during the succeeding six month period, to achieve at least one-half of the prior year’s minimum annual unit volume forecast. The Epic Agreement may be terminated by mutual agreement of Elite and Epic, as a result of a breach by either party that is not cured within 60 days notice of the breach or by Elite as a result of Epic becoming a party to a bankruptcy, reorganization or other insolvency proceeding that continues for a period of 30 days or more.

For further details on the Mikah Asset Purchase Agreement, Mikah Approved ANDAs and Mikah ANDA Application Product, please refer to the Current Report on Form 8-K filed with the SEC on August 5, 2013 and herein incorporated by reference. For further details on the Epic Agreement, please refer to exhibit 10.17 of this Quarterly Report on Form 10-Q and the Current Report on Form 8-K filed with the SEC on October 8, 2013, both filings being herein incorporated by reference.

Elite has executed a license agreement with Precision Dose, Inc. (the “Precision Dose License Agreement”) and a manufacturing agreement with The PharmaNetwork LLC (the “TPN Agreement”). The PharmaNetwork LLC was recently purchased by Alkem Laboratories Ltd (“Alkem”). The PharmaNetwork now goes by the name Ascend Laboratories LLC (“Ascend”) and is a wholly owned subsidiary of Alkem.

The Precision Dose License Agreement provides for the marketing and distribution, in the United States, Puerto Rico and Canada, of Phentermine 37.5mg, Phentermine Capsules, Hydromorphone 8mg, Naltrexone Generic, and certain additional products that require approval from the FDA. Phentermine 37.5mg tablets were launched in April 2011. Hydromorphone 8mg was launched in March 2012. Phentermine 15mg and Phentermine 30mg were launched in April 2013. Naltrexone 50mg was launched in September 2013.

The TPN Agreement, executed on June 23, 2011, and amended on September 24, 2012, provides for the manufacture and packaging by the Company of Ascend’s methadone hydrochloride, 10mg tablets (“Methadone 10mg”), with the Methadone 10mg to be marketed by Ascend. The FDA has approved the manufacturing of Methadone 10mg at the Northvale Facility and the initial shipment of Methadone 10mg occurred during January 2012.

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In addition, Elite also has an undisclosed generic product filed with the FDA that is awaiting review and for which Elite retains all rights.

The Company also has a pipeline of additional generic drug candidates under active development.

Additionally, the Company is developing abuse resistant opioid products, and once-daily opioid products.

On May 22, 2012, the United States Patent and Trademark Office (“USPTO”) issued U.S. Patent No. 8,182,836, entitled “Abuse-Resistant Oral Dosage Forms and Method of Use Thereof, with such patent providing further protection for the Company’s Abuse Resistant Technology.

On April 23, 2013, the USPTO issued U.S. Patent No. 8,425,933, entitled “Abuse-Resistant Oral Dosage Forms and Method of User Thereof”, with such patent providing further protection for the Company’s Abuse Resistant Technology.

The Northvale Facility operates under Current Good Manufacturing Practice (“cGMP”) and is a United States Drug Enforcement Agency (“DEA”) registered facility for research, development and manufacturing.

Strategy

Elite is focusing its efforts on the following areas: (i) development of Elite’s pain management products; (ii) manufacturing of a line of generic pharmaceutical products with approved ANDAs; (iii) development of additional generic pharmaceutical products; (iv) development of the other products in our pipeline including the products with our partners; (v) commercial exploitation of our products either by license and the collection of royalties, or through the manufacture of our formulations; and (vi) development of new products and the expansion of our licensing agreements with other pharmaceutical companies, including co-development projects, joint ventures and other collaborations.

Elite is focusing on the development of various types of drug products, including branded drug products which require new drug applications (“NDAs”) under Section 505(b)(1) or 505(b)(2) of the Drug Price Competition and Patent Term Restoration Act of 1984 (the “ Drug Price Competition Act ”) as well as generic drug products which require ANDAs.

Elite believes that its business strategy enables it to reduce its risk by having a diverse product portfolio that includes both branded and generic products in various therapeutic categories and to build collaborations and establish licensing agreements with companies with greater resources thereby allowing us to share costs of development and improve cash-flow.

Commercial Products

Phentermine

On April 7 , 2 011, E lit e m a de t he i n i t i a l sh i p m e nt o f ph e n t e r m i n e H C l 37 . 5 mg tablets to TA G I. T h i s t r i gg e r e d a mil e s t one p a y m e nt und e r t he Precision Dose License Agreement . Phentermine 15mg and Phentermine 30mg were launched in April 2013. P h e n t e r mi n e 37.5mg t a b l e t s and Phentermine 15mg and 30mg capsules are n o w a c o mm e r c i a l p r od u c t b e i ng d i s t r i b u t e d b y o ur p a r t n e r , T AG I.

Lodrane D® Immediate Release capsules

On September 27, 2011, the Company, along with ECR Pharmaceuticals (“ECR”), a wholly owned subsidiary of Hi-Tech Pharmacal (“Hi-Tech”) launched Lodrane D®, an immediate release formulation of brompheniramine maleate and pseudoephedrine HCl, an effective, low-sedating antihistamine combined with a decongestant.

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Lodrane D® is promoted and distributed in the U.S. by ECR, Hi-Tech’s branded division. Lodrane D® is available over-the-counter but also has physician promotion. Lodrane D® is the one of the only adult brompheniramine containing products available to the consumer at this time.

Lodrane D® is marketed under the Over-the-Counter Monograph (the “OTC Monograph”) and accordingly, under the Code of Federal Regulations can be lawfully marketed in the US without prior approval. Under the Federal Food Drug and Cosmetic Act (“FDCA”), FDA regulations and statements of FDA policy, certain drug products are permitted to be marketed in the U.S. without prior approval. Within the past few years, the FDA has revised its enforcement policies, significantly limiting the circumstances under which these unapproved products may be marketed. If the FDA determines that a company is distributing an unapproved product that requires approval, the FDA may take enforcement action in a variety of ways, including, without limitation, product seizures and seeking a judicial injunction against distribution.

Elite is manufacturing the product for ECR and will receive revenues for the manufacturing, packaging and laboratory stability study services for the product, as well as royalties on sales. The current U.S. allergy market exceeds $3.5 billion.

Methadone 10mg tablets

On January 17, 2012, Elite commenced shipping Methadone 10mg tablets to Ascend Laboratories, LLC. (“Ascend”) pursuant to a commercial manufacturing and supply agreement dated June 23, 2011 between Elite and Ascend (the “Methadone Manufacturing and Supply Agreement”). Under the terms of the Methadone Manufacturing and Supply Agreement, Elite performs manufacturing and packaging of Methadone 10mg for Ascend.

Hydromorphone 8mg tablets

On March 13, 2012, Elite commenced shipping Hydromorphone 8mg to TAGI Pharma. This triggered a milestone payment under the License, Manufacturing and Supply Agreement with Precision Dose. Hydromorphone 8mg is now a commercial product being distributed by our partner, TAGI Pharma.

Phendimetrazine Tartrate 35 mg tablets

On November 13, 2012, the Company made the initial shipment of Phendimetrazine Tartrate 35mg tablets, the generic equivalent of Bontril PDM® 35mg tablets under a previously announced manufacturing and supply agreement with Mikah Pharma (“Mikah”).

As part of the Mikah Asset Purchase Agreement, the ANDA for Phendimetrazine Tartrate 35mg tablets was acquired by the Company.

The Company is currently assessing various options with regards to the commercial marketing and distribution of this product.

Bontril PDM® and its generic equivalents had total U.S. sales of approximately $3.5 million for the twelve months ended September 2012, based on IMS Health Data. The Company will be compensated at an agreed upon price for the manufacturing and packaging of this product.

Naltrexone HCl 50mg tablets

On September 18, 2013, the Company made the initial shipment of naltrexone hydrochloride 50 mg tablets under the License, Manufacturing and Supply Agreement with its sales and marketing partner, triggering a milestone payment. Elite’s sales and marketing partner will distribute the product as part of a multi-product distribution agreement.

Naltrexone is an opioid receptor antagonist used primarily in the management of alcohol dependence and opioid dependence. For the calendar year 2012, Revia (naltrexone hydrochloride tablets) and its generic equivalents had total U.S. sales of approximately $16 million according to IMS Health Data.

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A current report on Form 8-K was filed with the SEC on September 18, 2013, such filing being herein incorporated by reference.

Approved Products

Elite is the owner of the following approved Abbreviated New Drug Applications (“ANDA’s”):

· Phentermine HCl 37.5mg tablets (“Phentermine 37.5mg”)

· Hydromorphone HCl 8mg tablets (“Hydromorphone 8mg”)

· Naltrexone HCl 50mg tablets (“Naltrexone 50mg”)

· Phentermine HCl 15mg capsules (“Phentermine 15mg”)

· Phentermine HCl 30mg capsules (“Phentermine 30mg”)

· Phendimetrazine Tartrate 35mg tablets (“Phendimetrazine 35mg”)

In addition, Elite is the owner of the Mikah Approved ANDA’s that were acquired pursuant to the Mikah Asset Purchase Agreement. Each ANDA included in the Mikah Approved ANDA’s requires site transfer approval with the FDA for the commencement of commercial manufacturing. The Company believes that the site transfers qualify for a CBE 30 review, with one exception, which would allow for the product manufacturing transfer on an expedited basis. However, the Company can give no assurances that the site transfers will qualify for a CBE 30 review, or on the timing of these transfers and the timing is dependent on the FDA reviews. The Mikah Approved ANDA’s include pain, antipsychotic, hypertension, antihistamine, bariatric and muscle relaxant products. Included in the Mikah Approved ANDA’s are two products for which there is currently only one other generic competitor.

Phentermine HCl 37.5mg tablets

The ANDA for Phentermine 37.5mg was acquired pursuant to an asset purchase agreement with Epic Pharma LLC (“Epic”) dated September 10, 2010 (the “Phentermine Purchase Agreement”).

Hydromorphone HCl 8mg tablets

The ANDA for Hydromorphone 8mg was acquired pursuant to an asset purchase agreement with Mikah Pharma LLC (the “Hydromorphone Purchase Agreement”).

Transfer of the manufacturing process of Hydromorphone 8mg to the Northvale Facility, a prerequisite of the Company’s commercial launch of the product, was approved by the FDA on January 23, 2012. However, please note that the completion of such transfer had been significantly delayed as a result of the FDA’s reclassification of the Company’s CBE-30 supplement filing to a prior approval supplement filing. As a result of the delays caused by this reclassification, the Company recorded an impairment of the Hydromorphone 8mg ANDA in an amount equal to the entire purchase price of the acquisition. This impairment was recorded and is included in the Company’s audited financial statements as of March 31, 2011.

Naltrexone HCl 50mg tablets

The ANDA for Naltrexone 50mg was acquired pursuant to an asset purchase agreement with Mikah Pharma LLC (the “Naltrexone Purchase Agreement”).

Transfer of the manufacturing process of Naltrexone 50mg to the Northvale Facility is a prerequisite of the Company’s commercial launch of the product. The completion of such transfer had been significantly delayed as a result of the FDA’s reclassification of the Company’s CBE-30 supplement filing to a prior approval supplement filing. However, on January 31, 2013, the FDA approved the Company’s supplemental application for the manufacturing and packaging of naltrexone hydrochloride 50mg tablets. This approval will allow the Company to commence the commercial manufacturing and packaging of this product for its sales and marketing partner, which will distribute the product as part of a multi-product distribution agreement. As a result of the prior delays caused by this reclassification, the Company has recorded an impairment of the Naltrexone 50mg ANDA in an amount equal to the entire purchase price of the acquisition. This impairment was recorded and is included in the Company’s audited financial statements as of March 31, 2011.

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Phentermine 15mg and Phentermine 30mg

Elite received approval as of September 28, 2012 from the US-FDA for Phentermine 15mg and Phentermine 30mg. These products were developed by Elite. The commercial launch of Phentermine 15mg and Phentermine 30mg had been delayed due to the sole supplier of the API approved for these products restricting the amount of such API available to Elite. We resolved this issue and the Phentermine 15mg and Phentermine 30mg products were launched in April 2013. The resolution of this issue related to the supply of API, however, required us to pay substantially higher prices than previously paid for the Phentermine API. Elite anticipates that some of the increase in API pricing could be offset with increase manufacturing efficiencies, but also that volumes and profits from these products will be impaired.

Phendimetrazine 35mg

The ANDA for Phendimetrazine 35mg was included as one of the 13 products acquired pursuant to the Mikah Asset Purchase Agreement.

The Northvale Facility had previously been approved as a manufacturing site for this product, with commercial production commencing in 2012 and initial shipment of this product being made in November 2012, pursuant to a manufacturing and supply agreement between the Company and Mikah dated June 1, 2011.

The Company is now the owner of this ANDA and is assessing various marketing and distribution options.

Contract Manufacturing of Isradipine and Phendimetrazine

On June 1, 2011, Elite executed a Manufacturing and Supply Agreement (the “Phendimetrazine Agreement”) with Mikah Pharma, LLC (“Mikah”) to undertake and perform certain services relating to two generic products: Isradipine Capsules USP, 2.5 mg and 5 mg (“Isradipine”) and Phendimetrazine Tartrate Tablets USP, 35 mg (“Phendimetrazine”).

On September 21, 2012, the Phendimetrazine Agreement was amended to remove Isradipine from the agreement, due to the discontinuance of development activities related to Isradipine.

On August 9, 2013, the Isradipine/Phendimetrazine Agreement was terminated by the written agreement of both parties, as a result of the Mikah Asset Purchase Agreement making the Phendimetrazine Agreement not relevant.

Development and License Agreement with Hong Kong based company

On March 16, 2012, Elite executed a Development and License Agreement (“D&L Agreement”) with a private Hong Kong-based company (the “Hong Kong-based Customer”) for Elite to develop for the Hong Kong-based Customer a branded prescription pharmaceutical product in the United States. The Hong Kong-based Customer has informed us that it has been in business for more than five years and it has multiple FDA approved manufacturing sites outside of the United States.

Pursuant to the D&L Agreement, the Hong Kong-based Customer has engaged Elite to develop and manufacture a prescription pharmaceutical product (the “Prescription Product”). Elite agrees to be the Preferred Manufacturer and supplier of the Prescription Product pursuant to the D&L Agreement and perform maintenance activities such as stability or annual report filings for the Prescription Product. The Hong Kong-based Customer, or its designees, shall prepare all applications necessary to obtain any Prescription Product registration and permits required to file the Prescription Product in the Territories required to market the Prescription Product. All Registrations shall be solely owned by the Hong Kong-based Customer including any NDA filed with the FDA for the Prescription Product. Elite shall provide the Hong Kong-based Customer with all pharmaceutical, technical, and clinical data and information in support of the NDA application by the Hong Kong-based Customer for the approval of the Prescription Product. In consideration of Elite’s performance in accordance with the terms and conditions of the D&L Agreement, the Hong Kong-based Customer shall pay Elite milestone for the Development Program and shall pay Elite for the manufacturing of the Prescription Product. Maintenance activities will be paid separately on a quarterly basis.

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The Hong Kong-based Customer shall own and market the Prescription Product under its own Trademark. The term of this D&L Agreement shall be effective from the date consummated and shall continue for a five (5) year term after the commercial launch of the Prescription Product. Upon the expiration of the initial term or any renewal term, this D&L Agreement will automatically renew for an additional one (1) year term, unless one Party gives at least six (6) months notice in writing in advance of its intent not to renew.

Discontinued Products - Lodrane 24® and Lodrane 24D®

On March 3, 2011, the FDA announced its intention to remove approximately 500 cough/cold and allergy related products from the U.S. market. The once daily allergy products manufactured by Elite, Lodrane 24® and Lodrane 24D® (the “Lodrane® Extended Release Products”), were included in the FDA list of 500 products. After this announcement by the FDA, the Company’s customer for the Lodrane® Extended Release Products cancelled all outstanding orders and manufacturing of the Lodrane® Extended Release Products has ceased. The shipments made during the quarter ended June 30, 2011 consisted solely of quantities that were in production at the time ECR cancelled all outstanding orders. There were no shipments of the Lodrane Extended Release Products subsequent to those that were made during the quarter ended June 30, 2011.

ECR (the owner and marketer of the Lodrane® Extended Release Products) initiated a formal approval process with the FDA in 2010 regarding the Lodrane® Extended Release Products and issued a press release on March 3, 2011 stating that they will continue to actively pursue approval for the Lodrane® Extended Release Products. In addition, on April 29, 2011, ECR filed a Petition for Review with the United States Court of Appeals for the District of Columbia, petitioning such court to review and set aside the final order of the FDA with relation to the Lodrane® Extended Release Products. The Company has received no further information from ECR with regards to the status of the Petition filed.

The Lodrane® Extended Release Products were co-developed with our partner, ECR, and the Company was receiving revenues from the manufacture of the Lodrane® Products and laboratory stability study services, as well as royalties on in-market sales. Contracts relating to the manufacture and sale of the Lodrane® Extended Release Products were formally terminated on April 26, 2013.

During the three months ended June 30, 2011, Elite made its final shipments of the Lodrane® Extended Release Products. In addition, the Company sold to ECR, at cost without markup, all raw materials related to the manufacture of the Lodrane® Extended Release Products which remained in stock subsequent to the final shipment of the Lodrane® Extended Release Products. As manufacturing of the Lodrane® Extended Release Products has ceased, there will be no further manufacturing revenues derived from the Lodrane® Extended Release Products unless and until such products receive the necessary approvals from the FDA.

Please note that there can be no assurances that such approvals will be granted or that future manufacturing revenues will be earned by the Company from the manufacture of the Lodrane® Extended Release Products, should such approvals be granted by the FDA. Furthermore, the Company has been advised that ECR has decided not to proceed with the development of the extended release formulations marketed under the Lodrane® brand. The company has received FDA feedback on clinical protocols for the extended release brompheniramine product. The Company may proceed with the development of these formulations and may seek partners in conjunction with such activities, but there can be no assurances that the Company will pursue the development of these formulations, or that such development activities, if pursued, will result in approvals from the FDA. Please also note that the Company does not have ownership of the Lodrane® brand name, and that if any products containing the formulations associated with the Lodrane® brand name are approved and marketed, such would be done under a different brand name.

While Elite’s manufacturing of the Lodrane® Extended Release Products has ceased, the sale of such products in the US market was still permitted by the FDA until August 30, 2011. The Company earned royalties on any in-market sales that occurred up to that date.

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Contract laboratory services for the Lodrane® Extended Products will continue, on a residual basis, as such services consist of stability studies that must be performed over certain defined time periods. These revenues are expected to be significantly less than laboratory service revenues earned in periods prior to the removal of the Extended Release Lodrane products from the market.

Products Under Development

It is our general policy not to disclose products in our development pipeline or the status of such products until a product reaches a stage that we determine, for competitive reasons, in our discretion, to be appropriate for disclosure and because the disclosure of such information might suggest the occurrence of future matters or events that may not occur.

Abuse Resistant and Sustained Release Opioids

A once-daily oxycodone formulation was developed by Elite, using its proprietary technology. An investigational new drug application, or IND, has been filed. Elite has completed two pharmacokinetic studies in healthy subjects and has scaled up the product. We are looking for a partner for this product.

The abuse resistant opioid products utilize our patented abuse-deterrent technology that is based on a pharmacological approach. These products are combinations of a narcotic agonist, in a sustained-release formulation intended for use in patients with moderate to severe chronic pain, and an antagonist, formulated to deter abuse of the drug. Both, agonist and antagonist have been on the market for a number of years and sold separately in various dose strengths. Elite has filed an IND for the product and has tested the product in a series of pharmacokinetic studies. The Company expects their first commercially scaled-up, abuse-resistant opioid product to enter human pilot studies later this year. Work has also been conducted on another abuse-resistant opioid product. Products utilizing the pharmacological approach to deter abuse such as Suboxone®, a product marketed in the United States by Reckitt Benckiser Pharmaceuticals, Inc., and Embeda®, a product marketed in the United States by Pfizer, Inc., has been approved by the FDA and is being marketed in the United States.

Elite has developed, and retains the rights to these abuse resistant and sustained release opioid products. Elite may license these products at a later date to a third party who could provide funding for the remaining clinical studies and who could provide sales and distribution for the product. The drug delivery technology development underlying the sustained release products was initiated under a joint venture with Elan which terminated in 2002.

According to the Elan Termination Agreement, Elite acquired all proprietary, development and commercial rights for the worldwide markets for the products developed by the joint venture, including the sustained release opioid products. Upon licensing or commercialization of a once daily oxycodone product, Elite will pay a royalty to Elan pursuant to the Termination Agreement. If Elite were to sell the product itself, Elite will pay a 1% royalty to Elan based on the product’s net sales, and if Elite enters into an agreement with another party to sell the product, Elite will pay a 9% royalty to Elan based on Elite’s net revenues from this product. (Elite’s net product revenues would include license fees, royalties, manufacturing profits and milestones) Elite is allowed to recoup all development costs including research, process development, analytical development, clinical development and regulatory costs before payment of any royalties to Elan.

Epic Strategic Alliance Agreement

On March 18, 2009, Elite and Epic Pharma, LLC and Epic Investments, LLC, a subsidiary of Epic Pharma LLC (collectively, “Epic”) entered into the Epic Strategic Alliance Agreement (amended on April 30, 2009, June 1, 2009 and July 28, 2009). The Epic Strategic Alliance Agreement expired on June 4, 2012. Epic is a pharmaceutical company that operates a business synergistic to that of Elite in the research and development, manufacturing and sales and marketing of oral immediate release and controlled-release drug products.

Product Development Agreements

Elite is currently performing services pursuant to product development agreements with the following:

· Mikah Pharma LLC (the “Mikah Development Agreement”)

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· Hi-Tech Pharmacal Co. (the “Hi-Tech Development Agreement”)

· A Private Hong Kong based company (the “Hong Kong D&L Agreement”)

For further details on the Mikah Development Agreement, please refer to the current report on Form 8-K filed with the SEC on September 1, 2010 and exhibit 10.63 of our Annual Report on Form 10-K for the fiscal year ended March 31, 2011, such filings being herein incorporated by reference.

For further details on the Hi-Tech Development Agreement, please refer to the current report on Form 8-K filed with the SEC on January 4, 2011 and exhibit 10.68 of our Annual Report on Form 10-K for the fiscal year ended March 31, 2011, such filings being herein incorporated by reference.

For further details on the Hong Kong D&L Agreement, please refer to the current report on Form 8-K filed with the SEC on March 22, 2012, our amended Annual Report on Form 10-K/A for the fiscal year ended March 31, 2012 (filed with the SEC on September 14, 2012), and exhibit 10.77 of our Annual Report on Form 10-K for the fiscal year ended March 31, 2012, such filings being herein incorporated by reference.

Novel Labs Investment

At the end of 2006, Elite entered into a joint venture with VGS Pharma, LLC (“VGS”) and created Novel Laboratories, Inc. (“Novel”), a privately-held company specializing in pharmaceutical research, development, manufacturing, licensing, acquisition and marketing of specialty generic pharmaceuticals. Novel's business strategy is to focus on its core strength in identifying and timely executing niche business opportunities in the generic pharmaceutical area. Elite owns less than 10% of the outstanding shares of Class A Voting Common Stock of Novel. To date, Elite has received no distributions or dividends from this investment.

Critical Accounting Policies and Estimates

Management’s discussion addresses our Consolidated Financial Statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, management evaluates its estimates and judgment, including those related to bad debts, intangible assets, income taxes, workers compensation, and contingencies and litigation. Management bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Management believes the following critical accounting policies, among others, affect its more significant judgments and estimates used in the preparation of its Consolidated Financial Statements. Our most critical accounting policies include the recognition of revenue upon completion of certain phases of projects under research and development contracts. We also assess a need for an allowance to reduce our deferred tax assets to the amount that we believe are more likely than not to be realized. We assess a need for allowances relating to the valuation of inventories. We assess the recoverability of long-lived assets and intangible assets whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. We assess our exposure to current commitments and contingencies. It should be noted that actual results may differ from these estimates under different assumptions or conditions.

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Results of Consolidated Operations

Three Months Ended September 30, 2013 Compared to Three Months Ended September 30, 2012

Our revenues for the three months ended September 30, 2013 were $1,159k, an increase of $524k or approximately 83% over revenues for the comparable period of the prior year, and consisted of $921k in manufacturing fees, $6k in lab and product development fees and $232k in royalties and license fees. Revenues for the three months ended September 30, 2012, consisted of $466k in manufacturing fees, $14k in lab and product development fees, and $154k in royalties and license fees. Manufacturing fees increased by approximately 98% as a result of the launch in September 2013 of Naltrexone 50mg tablets, growth in the two products launched in April 2013, Phentermine 15mg and 30mg capsules and the strong year-on-year growth of Elite’s Phentermine 37.5mg tablets, Hydromorphone 8mg tablets and contract manufactured Methadone 10mg product lines. Please note that the profit margins earned on the Phentermine 37.5mg tablets, and the Phentermine 15mg and 30mg capsules have been adversely effected by significant increases in the price of raw materials required for the manufacture of these products. Lab and product development fees decreased by approximately 58% due to the decreased lab stability study revenues relating to the discontinuance of the Lodrane® Extended Release Products and also development fees being earned in the prior year in relation to the Hi-Tech Development Agreement. Royalties and license fees increased by approximately 50% due to the strong growth in sales from the Phentermine and Hydromorphone product lines and the launch in September 2013 of Naltrexone 50mg, with such triggering a milestone payment which is included in the September 2013 quarterly revenues. Please see the discussion above in “Overview; Approved Products” concerning certain delays related to Phentermine due to issues with the sole supplier that have been resolved.

Research and development costs for the three months ended September 30, 2013 were $855k, an increase of $626k or approximately 274% from $228k of such costs for the comparable period of the prior year. The increase was primarily due to increased activities related to the development of Elite’s abuse resistant opioid products, for which a second patent was granted in May 2013.

General and administrative expenses for the three months ended September 30, 2013, were $273k, a decrease of $129k, or approximately 32% from $401k of general and administrative expenses for the comparable period of the prior year. The decrease was primarily due to increased overheads absorbed in relation to the growing commercial production and product development activities. Please also note that significant increases in regulatory costs, including, without limitation, increased fees paid to the US-FDA and the hiring of additional staff to support regulatory compliance activities are being incurred, and expected to continue, as are recent and significant increases in legal fees, insurance, and employee benefits.

Depreciation and amortization for the three months ended September 30, 2013 was $83k, an increase of $57k, or approximately 225%, from $25k for the comparable period of the prior year. The increase was primarily due to the commissioning, for commercial operations, of the new facility at 135 Ludlow in January of 2013, with the cost related assets and capital investments being placed in service and absorbed into manufacturing operations through depreciation expenses.

Non-cash compensation through the issuance of stock options and warrants for the three months ended September 30, 2013 was $19k, an increase of $4k, or approximately 25% from $15k for the comparable period of the prior year. The increase is due to the issuance of employee stock options in June of 2012 and August 2013. For further details on such employee stock options, please see Note 11 of the financial statements filed with this Current Report on Form 10-Q.

As a result of the foregoing, our loss from operations for the three months ended September 30, 2013 was $687k, compared to a loss from operations of $515k for the three months ended September 30, 2012.

Other income/expenses for the three months ended September 30, 2013 were a net expense of $8.9 million, a decrease in other income of $10.5 million from the net other income of $1.6 million for the comparable period of the prior year. The decrease in other income/expense was due to derivative income relating to changes in the fair value of our preferred shares and outstanding warrants during the quarter ended September 30, 2013 totaling an expense of $8.7 million, as compared to a net derivative income of $1.9 million for the comparable period of the prior year. Please note that derivative income/(expenses) are most significantly determined by the number of preferred shares and warrants outstanding and the change in the closing price of the Company’s Common Stock as of the end of the period, as compared to the closing price at the beginning of the period, with a strong inverse correlation between derivative revenues and increases in the closing price of the Company’s Common Stock. As of September 30, 2013, there were an aggregate of 182 shares of Preferred Series C, Preferred Series E and Preferred Series G outstanding, as compared to an aggregate of 3,625.5 shares of Preferred Series B, Preferred Series C and Preferred Series E outstanding as of September 30, 2012. As of September 30, 2013, there were approximately 120 million warrants outstanding as compared to approximately 145 million warrants outstanding as of September 30, 2012. During the quarter ended September 30, 2013, the closing price of the Company’s Common Stock rose from $0.07 at the beginning of the quarter to $0.12 at the end of the quarter, as compared to a decrease in the closing price of the Company Common’s from $0.13 to $0.12 occurring in the comparable period of the prior year.

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As a result of the foregoing, our net loss for the three months ended September 30, 2013 was $9.6 million, compared to a net income of $1.0 million for the three months ended September 30, 2012.

Six Months Ended September 30, 2013 Compared to Six Months Ended September 30, 2012

Our revenues for the six months ended September 30, 2013 were $1,881k an increase of $668k or approximately 55% over revenues for the comparable period of the prior year, and consisted of $1,465k in manufacturing fees, $11k in lab and product development fees and $405k in royalties and license fees. Revenues for the six months ended September 30, 2012, consisted of $846k in manufacturing fees, $85k in lab and product development fees, and $283k in royalties and license fees. Manufacturing fees increased by approximately 73% as a result of the launch of new products in April 2013 (Phentermine 15mg and 30mg capsules) and in September 2013 (Naltrexone 50mg tablets) and the strong year-on-year growth of Elite’s Phentermine 37.5mg tablets, Hydromorphone 8mg tablets and contract manufactured Methadone 10mg product lines. Please note that the profit margins earned on the Phentermine 37.5mg tablets, and the Phentermine 15mg and 30mg capsules have been adversely effected by significant increases in the price of raw materials required for the manufacture of these products. Lab and product development fees decreased by approximately 87% due to the decreased lab stability study revenues relating to the discontinuance of the Lodrane® Extended Release Products and also development fees being earned in the prior year in relation to the Hi-Tech Development Agreement. Royalties and license fees increased by approximately 43% due to the strong growth in sales from the Phentermine and Hydromorphone product lines and the launch in April 2013 of Phentermine 15mg and 30mg capsules and September 2013 of Naltrexone 50mg, with such launches triggering milestone payments which are included in the September 2013 six month revenues. Please see the discussion above in “Overview; Approved Products” concerning certain delays related to Phentermine due to issues with the sole supplier that have been resolved.

Research and development costs for the six months ended September 30, 2013 were $1,424k, an increase of $999k or approximately 235% from $425k of such costs for the comparable period of the prior year. The increase was primarily due to increased activities related to the development of Elite’s abuse resistant opioid products, for which a second patent was granted in May 2013.

General and administrative expenses for the six months ended September 30, 2013, were $649k, a decrease of $118k, or approximately 15% from $766k of general and administrative expenses for the comparable period of the prior year. The decrease was primarily due to increased overheads absorbed in relation to the growing commercial production and product development activities. Please also note that significant increases in regulatory costs, including, without limitation, increased fees paid to the U.S. Food and Drug Administration (“FDA”) and the hiring of additional staff to support regulatory compliance activities are being incurred, and expected to continue, as are recent and significant increases in legal fees, insurance, and employee benefits.

Depreciation and amortization for the six months ended September 30, 2013 was $245k, an increase of $178k, or approximately 264%, from $67k for the comparable period of the prior year. The increase was primarily due to the commissioning, for commercial operations, of the new facility at 135 Ludlow in January of 2013, with the cost related assets and capital investments being placed in service and absorbed into manufacturing operations through depreciation expenses.

Non-cash compensation through the issuance of stock options and warrants for the six months ended September 30, 2013 was $28k, an increase of $7k, or approximately 34% from $21k for the comparable period of the prior year. The increase is due to the issuance of employee stock options in June of 2012 and August 2013. For further details on such employee stock options, please see Note 11 of the financial statements filed with this Current Report on Form 10-Q.

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As a result of the foregoing, our loss from operations for the six months ended September 30, 2013 was $1,662k, compared to a loss from operations of $1,001k for the six months ended September 30, 2012.

Other income/expenses for the six months ended September 30, 2013 were a net expense of $7.1 million, an increase in other income of $1.4 million from the net other expense of $8.5 million for the comparable period of the prior year. The increase in other income/expense was due to derivative income relating to changes in the fair value of our preferred shares and outstanding warrants during the quarter ended September 30, 2013 totaling an expense of $6.7 million, as compared to a net derivative expense of $7.8 million for the comparable period of the prior year. Please note that derivative income/(expenses) are most significantly determined by the number of preferred shares and warrants outstanding and the change in the closing price of the Company’s Common Stock as of the end of the period, as compared to the closing price at the beginning of the period, with a strong inverse correlation between derivative revenues and increases in the closing price of the Company’s Common Stock. As of September 30, 2013, there were an aggregate of 182 shares of Preferred Series C, Preferred Series E and Preferred Series G outstanding, as compared to an aggregate of 3,625.5 shares of Preferred Series B, Preferred Series C and Preferred Series E outstanding as of September 30, 2012. As of September 30, 2013, there were approximately 120 million warrants outstanding as compared to approximately 145 million warrants outstanding as of September 30, 2012. During the six months ended September 30, 2013, the closing price of the Company’s Common Stock rose from $0.08 at the beginning of the period to $0.12 at the end of the quarter, as compared to an increase in the closing price of the Company Common’s from $0.09 to $0.12 occurring in the comparable period of the prior year.

As a result of the foregoing, our net loss for the six months ended September 30, 2013 was $8.7 million, compared to a net loss of $9.5 million for the six months ended September 30, 2012.

Material Changes in Financial Condition

Our working capital (total current assets less total current liabilities), decreased to a deficit of $8.4 million as of September 30, 2013 from a working capital deficit of $2.8 million as of March 31, 2013, primarily due to our net loss from operations, exclusive of non-cash charges. In addition, it should be noted that current liabilities includes the entire principal amount due on the Company’s NJEDA Bonds Payable (“NJEDA Bonds”) and the liability recorded for the note payable the Mikah Note (as defined below) to Mikah Pharma LLC issued in conjunction with the Mikah Asset Purchase Agreement (see “Liquidity and Capital Resources; Convertible Note Payable to Mikah Pharma LLC” below). The NJEDA Bonds, totaling $3.4 million, have been classified as a current liability as a result of the Company receiving a notice of default from the Trustee of the NJ-EDA Bonds. Please refer to Note 6 to our financial statements and Item 3 of this quarterly report on Form 10-Q for further details.

The Mikah Note, with a net liability of $5.8 million, is classified as a current liability because the note includes an option to convert into shares of Common Stock after the first anniversary of the issue date. The foregoing descriptions of the Mikah Note is qualified in its entirety by reference to the full text of the Purchase Agreement, Note and Security Agreement, copies of which are attached as Exhibit 10.1 10.2 and 10.3, respectively, to the Current Report on Form 8-K filed with the SEC on August 5, 2013, with the exhibits and current report being herein incorporated by reference. The representations, warranties and covenants contained in such agreements were made only for purposes of such agreements and as of specific dates, were solely for the benefit of the parties to such agreements, and may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures exchanged between the parties in connection with execution of the agreements.

Net cash used by operations was $1.3 million for the six months ended September 30, 2013, primarily due to our net loss from continuing operations of $8.7 million, offset by non-cash charges totaling $7.1 million, which included, without limitation, depreciation and amortization of $0.2 million and net income from the change in fair value of derivative liabilities of $6.6 million. In addition, net cash used by operations was effected by changes in the balances of assets and liabilities, including, without limitation, increases in inventories of $0.4, resulting in a net outflow of cash.

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LIQUIDITY AND CAPITAL RESOURCES

Going concern considerations

As of September 30, 2013, the Company had a working capital deficit of $8.4 million, losses from operations totaling $1.7 million for the six months then ended, net other expenses totaling $7.0 million for the six months then ended and a net loss of $8.7 million for the six months ended September 30, 2013. Please note that the Company’s other income/(expenses) are significantly influenced by the fluctuations in the fair value of outstanding preferred share and warrant derivatives, and that such fair values strongly correlate to and vary inversely with the market share price of the Company’s Common Stock.

The Company does not anticipate being profitable for the fiscal year ending March 31, 2014. In addition, the Company has received Notice of Default from the Trustee of the NJEDA Bonds as a result of the utilization of the debt service reserve being used to pay interest payments as well as the company’s failure to make scheduled principal payments. See “NJEDA Bonds” below.

Lincoln Park Capital Purchase Agreement

Under the terms and subject to the conditions of the LPC Agreement, the Company has the right to sell to and LPC is obligated to purchase up to $10 million in shares of the Company’s Common Stock, subject to certain limitations, from time to time, over the 36 month period commencing on May 9, 2013, the date that the registration statement, which the Company agreed to file with the Securities and Exchange Commission (the “SEC”) pursuant to the LPC Registration Rights Agreement, was declared effective by the SEC. The Company may direct LPC, at its sole discretion and subject to certain conditions, to purchase stock in amounts of up to $80,000 on any single business day, so long as at least two business days have passed since the most recent purchase, increasing to up to $500,000 per purchase, depending upon the closing sale price of the Common Stock. The purchase price of the shares of Common Stock related to the future funding will be based on the prevailing market prices of such shares at the time of sales (or over a period of up to 12 business days leading up to such time), but in no event will shares be sold to LPC on a day the Common Stock closing price is less than the floor price of $0.07 per share, subject to adjustment. The Company’s sales of shares of Common Stock to LPC under the LPC Purchase Agreement are limited to no more than the number of shares that would result in the beneficial ownership by LPC and its affiliates, at any single point in time, of more than 9.99% of the then outstanding shares of Common Stock. As of November 4, 2013 (the latest practicable date), a total of 38,407,721 shares have been sold pursuant to the LPC Purchase Agreement, inclusive of purchase and commitment shares, with total proceeds totaling $2,960,000.

Treppel $1,000,000 Bridge Revolving Credit Line

On June 12, 2012 (the “Effective Date”), we entered into a bridge loan agreement (the “Loan Agreement”) with Jerry Treppel, our Chairman and CEO. Under the terms of the Loan Agreement, we have the right, in our sole discretion, to a line of credit (the “Credit Line”) in the maximum principal amount of up to $500,000 at any one time. By amendments, the maximum principal amount was increased to $1,000,000 and the maturity date was amended and extended Mr. Treppel provided the Credit Line for the purpose of supporting the acceleration of our product development activities. The current term of the Loan Agreement ends on July 31, 2014, at which time the entire unpaid principal balance plus accrued interest thereon shall be due and payable in full. We may prepay any amounts owed without penalty. Any such prepayments shall first be attributable to interest due and owing and then to principal. Interest only shall be payable quarterly on July 1, October 1, January 1 and April 1 of each year. Prior to maturity or the occurrence of an Event of Default as defined in the Loan Agreement, we may borrow, repay, and reborrow under the Credit Line through maturity. Amounts borrowed under the Credit Line will bear interest at the rate of ten percent (10%) per annum. As of June 30, 2013, the principal balance owed under the Credit Line was $600,000 with an additional $15,123 in accrued interest being also owed, in accordance with the terms and conditions of the Credit Line. For more detailed information, please see the Loan Agreement filed as an exhibit to our Current Report on Form 8-K filed with the SEC on June 13, 2012, and the amendments thereto filed as an exhibit to our Current Reports on Form 8-K filed with the SEC on December 10, 2012 and August 6, 2013 which forms 8-K and exhibits are incorporated by reference herein.

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Hakim $1,000,000 Bridge Revolving Credit Line

On October 15, 2013 (the “Hakim Credit Line Effective Date”), we entered into a bridge loan agreement (the “Hakim Loan Agreement”) with Nasrat Hakim, our President and CEO. Under the terms of the Hakim Loan Agreement, we have the right, in our sole discretion, to a line of credit (“Hakim Credit Line”) in the maximum principal amount of up to $1,000,000 at any one time. Mr. Hakim provided the Credit Line for the purpose of supporting the acceleration of our product development activities. The outstanding amount will be evidenced by a promissory note which shall mature on June 30, 2015, at which time the entire unpaid principal balance plus accrued interest thereon shall be due and payable in full. We may prepay any amounts owed without penalty. Any such prepayments shall first be attributable to interest due and owing and then to principal. Interest only shall be payable quarterly on January 1, April 1, July 1 and October 1 of each year. Prior to maturity or the occurrence of an Event of Default as defined in the Hakim Loan Agreement, we may borrow, repay, and reborrow under the Hakim Credit Line through maturity. Amounts borrowed under the Hakim Credit Line will bear interest at the rate of ten percent (10%) per annum.

Convertible Note Payable to Mikah Pharma LLC

On August 1, 2013, Elite Laboratories Inc. (“Elite Labs”), a wholly owned subsidiary of the Company, executed an asset purchase agreement (the “Mikah Purchase Agreement”) with Mikah Pharma LLC (“Mikah”), an entity that is wholly owned by Mr. Nasrat Hakim, who, in conjunction with this transaction, was appointed as Elite’s CEO, President and a Director on August 2, 2012, and acquired from Mikah a total of 13 Abbreviated New Drug Applications (“ANDAs”) consisting of 12 ANDAs approved by the FDA and one ANDA under active review with the FDA, and all amendments thereto (the “Acquisition”) for aggregate consideration of $10,000,000, inclusive of imputed interest payable pursuant to a non-interest bearing, secured convertible note due in August 2016 (the “Mikah Note”). Please see “Overview; Commercial Products; Approved Products” above for more information on the Acquisition.

The Mikah Note is interest free and due and payable on the third anniversary of its issuance. Subject to certain limitations, the principal amount of the Mikah Note is convertible at the option of Mikah on and after the first anniversary of the date of the Mikah Note into shares of Common Stock at a rate of $0.07 (approximately 14,286 shares per $1,000 in principal amount), the closing market price of the Company’s Common Stock on the date that the asset purchase agreement and Note were executed. The conversion rate is adjustable for customary corporate actions such as stock splits and, subject to certain exclusions, includes weighted average anti-dilution for common stock transactions at prices below the then applicable conversion rate. Pursuant to a security agreement (the “Security Agreement”), repayment of the Mikah Note is secured by the ANDAs acquired in the Acquisition.

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Completion of Epic Strategic Alliance Payments

We have successfully completed the initial, second and third closings of the Epic Strategic Alliance Agreement and the twelve quarterly payments, with each such quarterly payment being equal to the Epic Quarterly Payment Amount and have accordingly received the full investment from Epic, exclusive of warrant exercise, as provided for in the Epic Strategic Alliance Agreement. For additional information regarding the Epic Strategic Alliance Agreement, please see our disclosures under “Epic Strategic Alliance Agreement” in Item 7 of Part II of our Annual Report on Form 10-K, and in our Current Reports on Form 8-K, filed with the SEC on March 23, 2009, May 6, 2009, June 5, 2009, July 1, 2010 and June 29, 2011, such disclosures being herein incorporated by reference.

Despite having received the full investment from Epic Investments LLC, exclusive of warrant exercise, as provided for in the Epic Strategic Alliance Agreement, entered into the Treppel Credit Line Agreement, entered into the Hakim Credit Line Agreement and entered into the LPC Purchase Agreement we still may be required to seek additional capital in the future and there can be no assurances that Elite will be able to obtain such additional capital on favorable terms, if at all.

Based upon our current cash position, management has undertaken a review of our operations and implemented cost-cutting measures in an effort to eliminate any expenses which are not deemed critical to our current strategic objectives. We will continue this process without impeding our ability to proceed with our critical strategic goals, which, as noted above, include developing our pain management and other products and manufacturing our current products.

Cash and cash equivalents at September 30, 2013, were approximately $0.8 million, an increase of approximately $0.6 million from the approximately $0.2 million balance of cash and cash equivalents at September 30, 2012.

As of September 30, 2013, our principal source of liquidity was approximately $0.8 million of cash and cash equivalents. Additionally, we may have access to funds through the exercise of outstanding stock options and warrants and, as mentioned above, from the LPC Purchase Agreement, the Treppel Credit Line and the Hakim Credit Line. There can be no assurance that any of these sources will generate or provide sufficient cash.

NJEDA Bonds

On August 31, 2005, the Company successfully completed a refinancing of a prior 1999 bond issue through the issuance of new tax-exempt bonds (the “Bonds”). The refinancing involved borrowing $4,155,000, evidenced by a 6.5% Series A Note in the principal amount of $3,660,000 maturing on September 1, 2030 and a 9% Series B Note in the principal amount of $495,000 maturing on September 1, 2012. The net proceeds, after payment of issuance costs, were used (i) to redeem the outstanding tax-exempt Bonds originally issued by the Authority on September 2, 1999, (ii) refinance other equipment financing and (iii) for the purchase of certain equipment to be used in the manufacture of pharmaceutical products. As of March 31, 2013, all of the proceeds were utilized by the Company for such stated purposes.

Interest is payable semiannually on March 1 and September 1 of each year. The Bonds are collateralized by a first lien on the Company’s facility and equipment acquired with the proceeds of the original and refinanced Bonds. The related Indenture requires the maintenance of a $415,500 Debt Service Reserve Fund consisting of $366,000 from the Series A Notes proceeds and $49,500 from the Series B Notes proceeds. The Debt Service Reserve is maintained in restricted cash accounts that are classified in Other Assets. $1,274,311 of the proceeds had been deposited in a short-term restricted cash account to fund the purchase of manufacturing equipment and development of the Company’s facility.

Bond issue costs of $354,000 were paid from the bond proceeds and are being amortized over the life of the bonds. Amortization of bond issuance costs amounted to $7,089 for the six months ended September 30, 2013.

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The NJEDA Bonds require the Company to make an annual principal payment on September 1st of varying amounts as specified in the loan documents and semi-annual interest payments on March 1st and September 1st, equal to interest due on the outstanding principal at the applicable rate for the semi-annual period just ended.

The interest payments due on March 1st and September 1st of 2009, 2010 2011, 2012 and 2013, totaling $1,146,150 for all ten payments, were paid from the debt service reserved held in the restricted cash account, due to the Company not having sufficient funds to make such payments when they were due.

The principal payment due on September 1, 2009, totaling $210,000 was paid from the debt service reserve held in the restricted cash account, due to the Company not having sufficient funds to make the payment when due.

The Company did not have sufficient funds available to make the principal payments due on September 1, 2010, totaling $225,000 and requested that the Trustee withdraw such funds from the debt service reserve. The Company’s request was denied and accordingly the principal payment due on September 1, 2010, totaling $225,000 was not made.

The Company did not have sufficient funds available to make the principal payments due on September 1, 2011, totaling $470,000, with such amount including the principal payments due on September 1, 2010 and not paid. There were not sufficient funds available in the debt service reserve and accordingly, the principal payment totaling $470,000 was not made.

The Company did not have sufficient funds available to make the principal payments due on September 1, 2012, totaling $730,000, with such amount including the principal payments due on September 1, 2011 and not paid. There were not sufficient funds available in the debt service reserve and accordingly, the principal payment totaling $730,000 was not made.

The Company did not have sufficient funds available to make the principal payments due on September 1, 2013, totaling $915,000, with such amount including the principal payments due on September 1, 2012 and not paid. There were not sufficient funds available in the debt service reserve and accordingly, the principal payment totaling $915,000 was not made.

Pursuant to the terms of the NJEDA Bonds, the Company is required to replenish any amounts withdrawn from the debt service reserve and used to make principal or interest payments in six monthly installments, each being equal to one-sixth of the amount withdrawn and with the first installment due on the 15th of the month in which the withdrawal from debt service reserve occurred and the remaining five monthly payments being due on the 15th of the five immediately subsequent months. The Company has, to date, made all payments required in relation to the withdrawals made from the debt service reserve on March 1, 2009, September 1, 2009, March 1, 2010, September 1, 2010, March 1, 2011, September 1, 2011, March 1, 2012, September 1, 2012, March 1, 2013 and September 1, 2013.

The Company does not expect to have sufficient available funds as of September 1, 2014, to make principal payments, totaling $1,110,000, and consisting of $195,000 due on September 1, 2014, plus scheduled principal payments totaling $915,000, consisting of $185,000 due on September 1, 2013, and not paid, plus $260,000 due on September 1, 2012, and not paid, plus $245,000 due on September 1, 2011 and not paid plus $225,000 due on September 1, 2010 and not paid.

Due to issuance of a Notice of Default being received from the Trustee of the NJEDA Bonds, and until the event of default is waived or rescinded, the Company has classified the entire principal due, an amount aggregating $3.385 million, as a current liability.

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Off-Balance Sheet Arrangements

We have not entered into any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources that would be considered material to investors.

Effects of Inflation

We are subject to price risks arising from price fluctuations in the market prices of the products that we sell. Management does not believe that inflation risk is material to our business or our consolidated financial position, results of operations, or cash flows.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including the Chief Executive and Chief Financial Officers, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”), as of the end of the period covered by this Quarterly Report on Form 10-Q. Based upon that evaluation, our Chief Executive and Chief Financial Officers concluded that our disclosure controls and procedures as of the end of the period covered by this report were not effective so that that the information required to be disclosed by us in reports filed under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our management in order to allow for timely decisions regarding disclosure. A controls system cannot provide absolute assurance, however, that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

Changes in Internal Controls

There have been no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15 (f) under the Exchange Act) during the six months ended September 30, 2013 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

In the ordinary course of business we may be subject to litigation from time to time. There is no past, pending or, to our knowledge, threatened litigation or administrative action to which we are a party or of which our property is the subject (including litigation or actions involving our officers, directors, affiliates, or other key personnel, or holders of record or beneficially of more than 5% of any class of our voting securities, or any associate of any such party) which in our opinion has, or is expected to have, a material adverse effect upon our business, prospects, financial condition or operations.

ITEM 1A. RISK FACTORS

There have been no material changes from the Risk Factors described in our Annual Report on Form 10-K for the fiscal year ended March 31, 2013.

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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

During the six months ended September 30, 2013, we issued 90,975,634 shares of Common Stock that were unregistered. Of this amount, a total of 90,974,634 shares of Common Stock were issued to the holders of our Series C, Series E and Series G Preferred Stock, with such consisting of 724,714 shares issued in satisfaction of our obligation to pay a total of $52,196 in dividends earned and/or owing during the three months ended March 31, 2013, and the three months ended June 30, 2013 and 90,150,920 shares were issued pursuant to the conversion of Series E, and Series G Preferred Share derivatives, with such derivative liabilities being valued at an aggregate of $9,597,945 at the time of their conversion. In addition, we issued 100,000 shares pursuant to the exercise of cash warrants, with proceeds received totaling $6,250. We relied on the exemption provided by Section 4(a)(2) of the Securities Act of 1933 to issue the common stock The securities were offered and sold without any form of general solicitation or general advertising and the offerees made representations that they were accredited investors.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Please see the discussion in Note 5 to our financial statements titled “NJEDA Bonds” which is incorporated herein by this reference.

ITEM 4. Mine Safety Disclosures.

Not applicable.

ITEM 5. Other Information

None.

Item 6. Exhibits

The exhibits listed in the index below are filed as part of this report.

Exhibit Number		Description
2.1		Agreement and Plan of Merger between Elite Pharmaceuticals, Inc., a Delaware corporation (“Elite-Delaware”) and Elite Pharmaceuticals, Inc., a Nevada corporation (“Elite-Nevada”), incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed with the SEC on January 9, 2012.

3.1(a)		Articles of Incorporation of Elite-Nevada, incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the SEC on January 9, 2012.

3.1(b)		Certificate of Incorporation of Elite-Delaware, together with all other amendments thereto, as filed with the Secretary of State of the State of Delaware, incorporated by reference to (a) Exhibit 4.1 to the Registration Statement on Form S-4 (Reg. No. 333-101686), filed with the SEC on December 6, 2002 (the “Form S-4”), (b) Exhibit 3.1 to the Company’s Current Report on Form 8-K dated July 28, 2004 and filed with the SEC on July 29, 2004, (c) Exhibit 3.1 to the Company’s Current Report on Form 8-K dated June 26, 2008 and filed with the SEC on July 2, 2008, and (d) Exhibit 3.1 to the Company’s Current Report on Form 8-K dated December 19, 2008 and filed with the SEC on December 23, 2008.*

3.1(c)		Certificate of Designations, Preferences and Rights of Series A Preferred Stock, as filed with the Secretary of the State of Delaware, incorporated by reference to Exhibit 4.5 to the Current Report on Form 8-K dated October 6, 2004, and filed with the SEC on October 12, 2004.*

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3.1(d)		Certificate of Retirement with the Secretary of the State of the Delaware to retire 516,558 shares of the Series A Preferred Stock, as filed with the Secretary of State of Delaware, incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K dated March 10, 2006, and filed with the SEC on March 14, 2006.*

3.1(e)		Certificate of Designations, Preferences and Rights of Series B 8% Convertible Preferred Stock, as filed with the Secretary of the State of Delaware, incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K dated March 15, 2006, and filed with the SEC on March 16, 2006.*

3.1(f)		Amended Certificate of Designations of Preferences, Rights and Limitations of Series B 8% Convertible Preferred Stock, as filed with the Secretary of State of the State of Delaware, incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K dated April 24, 2007, and filed with the SEC on April 25, 2007.*

3.1(g)		Certificate of Designations, Preferences and Rights of Series C 8% Convertible Preferred Stock, as filed with the Secretary of the State of Delaware, incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K dated April 24, 2007, and filed with the SEC on April 25, 2007.*

3.1(h)		Amended Certificate of Designations, Preferences and Rights of Series C 8% Convertible Preferred Stock, as filed with the Secretary of the State of Delaware, incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K dated April 24, 2007, and filed with the SEC on April 25, 2007.*

3.1(i)		Amended Certificate of Designations of Preferences, Rights and Limitations of Series B 8% Convertible Preferred Stock, as filed with the Secretary of State of the State of Delaware, incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K dated September 15, 2008, and filed with the SEC on September 16, 2008.*

3.1(j)		Amended Certificate of Designations, Preferences and Rights of Series C 8% Convertible Preferred Stock, as filed with the Secretary of the State of Delaware, incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K dated September 15, 2008, and filed with the SEC on September 16, 2008.*

3.1(k)		Amended Certificate of Designations of Preferences, Rights and Limitations of Series D 8% Convertible Preferred Stock, as filed with the Secretary of State of the State of Delaware, incorporated by reference to Exhibit 3.3 to the Current Report on Form 8-K dated September 15, 2008, and filed with the SEC on September 16, 2008.*

3.1(l)		Certificate of Designation of Preferences, Rights and Limitations of Series E Convertible Preferred Stock, as filed with the Secretary of State of the State of Delaware, incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K dated June 1, 2009, and filed with the SEC on June 5, 2009.*

3.1(m)		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, incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K, dated July 1, 2010 and filed with the SEC on July 1, 2010*

3.1(n)		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, incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K, dated July 1, 2010 and filed with the SEC on July 1, 2010.*

3.1 (o)		Certificate of Designations of the Series G Convertible Preferred Stock as filed with the Secretary of State of the State of Nevada on April 18, 2013, incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K, dated April 18, 2013 and filed with the SEC on April 22, 2013.*

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3.2(a)		By-Laws of Elite-Nevada, incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K filed with the SEC on January 9, 2012.

3.2(b)		By-Laws of Elite-Delaware, as amended, incorporated by reference to Exhibit 3.2 to the Company’s Registration Statement on Form SB-2 (Reg. No. 333-90633) made effective on February 28, 2000 (the “Form SB-2”).*

4.1		Socius Warrant to Purchase Common Stock, incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the SEC on January 5, 2012.

4.2		Form of specimen certificate for Common Stock of the Company, incorporated by reference to Exhibit 4.1 to the Form SB-2.

4.3		Form of specimen certificate for Series B 8% Convertible Preferred Stock of the Company, incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K, dated March 15, 2006 and filed with the SEC on March 16, 2006.*

4.4		Form of specimen certificate for Series C 8% Convertible Preferred Stock of the Company, incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K, dated April 24, 2007 and filed with the SEC on April 25, 2007.*

4.5		Form of specimen certificate for Series G 8% Convertible Preferred Stock of the Company, incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K, dated April 18, 2013 and filed with the SEC on April 22, 2013.
4.4		Warrant to purchase 100,000 shares of Common Stock issued to DH Blair Investment Banking Corp., incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q for the period ended September 30, 2004.*

4.7		Warrant to purchase 50,000 shares of Common Stock issued to Jason Lyons incorporated by reference to Exhibit 10.3 to the Quarterly Report on Form 10-Q for the period ended June 30, 2004.*

4.8		Form of Warrant to purchase shares of Common Stock issued to designees of lender with respect to financing of an equipment loan incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q for the period ended June 30, 2004.*

4.9		Form of Short Term Warrant to purchase shares of Common Stock issued to purchasers in the private placement which initially closed on October 6, 2004 (the “Series A Financing”), incorporated by reference to Exhibit 4.6 to the Current Report on Form 8-K, dated October 6, 2004, and filed with the SEC on October 12, 2004.*

4.10		Form of Long Term Warrant to purchase shares of Common Stock issued to purchasers in the Series A Financing, incorporated by reference to Exhibit 4.7 to the Current Report on Form 8-K, dated October 6, 2004, and filed with the SEC on October 12, 2004.*

4.11		Form of Warrant to purchase shares of Common Stock issued to the Placement Agent, in connection with the Series A Financing, incorporated by reference to Exhibit 4.8 to the Current Report on Form 8-K, dated October 6, 2004, and filed with the SEC on October 12, 2004.*

4.12		Form of Replacement Warrant to purchase shares of Common Stock in connection with the offer to holders of Warrants in the Series A Financing (the “Warrant Exchange”), incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K, dated December 14, 2005, and filed with the SEC on December 20, 2005.*

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4.13		Form of Warrant to purchase shares of Common Stock to the Placement Agent, in connection with the Warrant Exchange, incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K, dated December 14, 2005, and filed with the SEC on December 20, 2005.*

4.14		Form of Warrant to purchase shares of Common Stock issued to purchasers in the private placement which closed on March 15, 2006 (the “Series B Financing”), incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K, dated March 15, 2006 and filed with the SEC on March 16, 2006.*

4.15		Form of Warrant to purchase shares of Common Stock issued to purchasers in the Series B Financing, incorporated by reference to Exhibit 4.3 to the Current Report on Form 8-K, dated March 15, 2006 and filed with the SEC on March 16, 2006.*

4.16		Form of Warrant to purchase shares of Common Stock issued to the Placement Agent, in connection with the Series B Financing, incorporated by reference to Exhibit 4.4 to the Current Report on Form 8-K, dated March 15, 2006 and filed with the SEC on March 16, 2006.*

4.17		Form of Warrant to purchase 600,000 shares of Common Stock issued to Indigo Ventures, LLC, incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K, dated July 12, 2006 and filed with the SEC on July 18, 2006.*

4.18		Form of Warrant to purchase up to 478,698 shares of Common Stock issued to VGS PHARMA, LLC, incorporated by reference to Exhibit 3(a) to the Current Report on Form 8-K, dated December 6, 2006 and filed with the SEC on December 12, 2006.*

4.19		Form of Non-Qualified Stock Option Agreement for 1,750,000 shares of Common Stock granted to Veerappan Subramanian, incorporated by reference to Exhibit 3(b) to the Current Report on Form 8-K, dated December 6, 2006 and filed with the SEC on December 12, 2006.*

4.20		Form of Warrant to purchase shares of Common Stock issued to purchasers in the private placement which closed on April 24, 2007 (the “Series C Financing”), incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K, dated April 24, 2007 and filed with the SEC on April 25, 2007.*

4.21		Form of Warrant to purchase shares of Common Stock issued to the placement agent in the Series C Financing, incorporated by reference to Exhibit 4.3 to the Current Report on Form 8-K, dated April 24, 2007 and filed with the SEC on April 25, 2007.*

4.22		Form of specimen certificate for Series D 8% Convertible Preferred Stock of the Company, incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K, dated September 15, 2008 and filed with the SEC on September 16, 2008.*

4.23		Form of Warrant to purchase shares of Common Stock issued to purchasers in the private placement which closed on September 15, 2008 (the “Series D Financing”), incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K, dated September 15, 2008 and filed with the SEC on September 16, 2008.*

4.24		Form of Warrant to purchase shares of Common Stock issued to the placement agent in the Series D Financing, incorporated by reference to Exhibit 4.3 to the Current Report on Form 8-K, dated September 15, 2008 and filed with the SEC on September 16, 2008.*

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4.25		Form of specimen certificate for Series E Convertible Preferred Stock of the Company, incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K, dated June 1, 2009, and filed with the SEC on June 5, 2009.*

4.26		Warrant to purchase shares of Common Stock issued to Epic Investments, LLC in the initial closing of the Strategic Alliance Agreement, dated as of March 18, 2009, by and among the Company, Epic Pharma, LLC and Epic Investments, LLC, incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K, dated June 1, 2009, and filed with the SEC on June 5, 2009.*

10.1		Amendment, dated as of November 1, 2011, to the Master Development and License Agreement, dated as of August 27, 2010, by and amount Mikah Pharma LLC and the Company. (Confidential Treatment granted with respect to portions of the Agreement).

10.2		Securities Purchase Agreement with Socius dated December 30, 2011, incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on January 5, 2012.

10.3		Form of Lock-Up Agreement (included as Exhibit D to the Securities Purchase Agreement with Socius mentioned in 10.2 above), incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed with the SEC on January 5, 2012.

10.4		Treppel Bridge Loan Agreement dated June 12, 2012, incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on June 13, 2012.

10.5		December 5, 2012 amendment to the Treppel Bridge Loan Agreement incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on December 10, 2012.

10.6		Development And License Agreement between the Company and a Hong Kong-based client dated March 16, 2012 incorporated by reference to Exhibit 10.77 to the Annual Report on Form 10-K filed with the SEC on June 29, 2012. (Confidential Treatment granted with respect to portions of the Agreement).

10.7		Letter Agreement between the Company and ThePharmaNetwork LLC, dated September 21, 2012, incorporated by reference to Exhibit 10.6 to the Quarterly Report on Form 10-Q filed with the SEC on November 14, 2012. (Confidential Treatment granted with respect to portions of the Agreement)

10.8		Purchase Agreement between the Company and Lincoln Park Capital LLC dated April 19, 2013 , incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, dated April 18, 2013 and filed with the SEC on April 22, 2013.

10.9		Registration Rights Agreement between the Company and Lincoln Park Capital LLC dated April 19, 2013 , incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K, dated April 18, 2013 and filed with the SEC on April 22, 2013.

10.10		August 1, 2013 Employment Agreement with Nasrat Hakim, incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K, dated August 1, 2013 and filed with the SEC on August 5, 2013.

10.11		August 1, 2013 Mikah LLC Asset Purchase Agreement, incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, dated August 1, 2013 and filed with the SEC on August 5, 2013. (Confidential Treatment granted with respect to portions of the Agreement).

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10.12		Revised Schedule 1 to the August 1, 2013 Mikah LLC Asset Purchase Agreement (revised to remove confidential treatment with regard to one item set forth thereon)

10.13		August 1, 2013 Secured Convertible Note from the Company to Mikah Pharma LLC., incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K, dated August 1, 2013 and filed with the SEC on August 5, 2013.

10.14		August 1, 2013 Security Agreement from the Company to Mikah Pharma LLC., incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K, dated August 1, 2013 and filed with the SEC on August 5, 2013.

10.15		Termination of June 2011, Manufacturing and Supply Agreement between Mikah Pharma LLC and the Company.

10.16		October 15, 2013 Hakim Credit Line Agreement. **

10.17		October 2, 2013 Manufacturing and Licensing Agreement with Epic Pharma LLC. Confidential portions of this exhibit have been redacted and filed separately with the Commission pursuant to a confidential treatment request in accordance with Rule 24b-2 of the Securities Exchange Act of 1934, as amended. **

10.18		August 19, 2013, Master Services Agreement with Camargo Pharmaceutical Services, LLC.**

31.1		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1		Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2		Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101		The following materials from Elite Pharmaceuticals’ Quarterly Report on Form 10-Q for the period ended September 30, 2013, formatted in eXtensible Business Reporting Language (“XBRL”): (i) the Condensed Consolidated Statements of Income; (ii) the Condensed Consolidated Balance Sheets; (iii) the Condensed Consolidated Statements of Cash Flows; and (iv) Notes to Condensed Consolidated Financial Statements.

* On January 5, 2011, the Company changed its domicile from Delaware to Nevada. All corporate documents from Delaware have been superseded by Nevada corporate documents filed or incorporated by reference herein. All outstanding Delaware securities certificates are now outstanding Nevada securities certificates.

** Filed herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		ELITE PHARMACEUTICALS, INC.

Date:	November 14, 2013	/s/ Nasrat Hakim
		Nasrat Hakim
		Chief Executive Officer
		(Principal Executive Officer)

Date:	November 14, 2013	/s/ Carter J. Ward
		Carter J. Ward
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

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Exhibit 10.16

LOAN AGREEMENT

This Loan Agreement (the “Agreement”) is made this 15 ^th day of October, 2013 by and between NASRAT HAKIM, a resident of New Jersey (“Lender”), and: Elite Pharmaceuticals, Inc., a Nevada corporation (“Borrower”), having its executive office in Northvale, New Jersey.

The Borrower has applied to Lender for and the Lender has agreed to make, subject to the terms of this Agreement, the following loan(s) (hereinafter referred to, singularly or collectively, if more than one, as “Loan”):

A Line of Credit (“Line of Credit”) in the maximum principal amount not to exceed $1,000,000 (one million dollars) at any one time outstanding which shall be evidenced by the Borrower’s Promissory Note dated on or after the date hereof which shall mature on December 31, 2014, when the entire unpaid principal balance then outstanding plus accrued interest thereon shall be paid in full. Borrower may prepay any amounts of the Loan without penalty. Any such prepayments shall first be attributable to interest due and owing. Interest only shall be payable quarterly on July 1, October 1, January 1 and April 1 of each year. Prior to maturity or the occurrence of any Event of Default hereunder and subject to any availability limitations, as applicable, the Borrower may borrow, repay, and reborrow under the Line of Credit through maturity. The outstanding balance on the Line of Credit shall bear interest at the rate of ten percent (10%) per annum as shall be set forth in any such Note evidencing all or any portion of the Line of Credit, the terms of which are incorporated herein by reference.

The promissory note evidencing the Line of Credit is referred to herein as the “Note” and shall include all extensions, renewals, modifications and substitutions thereof.

I. CONDITIONS PRECEDENT

The Lender shall not be obligated to make any disbursement of Loan proceeds until all of the following conditions have been satisfied by proper evidence, execution, and/or delivery to the Lender of the following items in addition to this Agreement, all in form and substance satisfactory to the Lender in Lender’s sole discretion:

Note(s) : The Note(s) evidencing the Loans(s) duly executed by the Borrower.

Corporate Resolution : A Corporate Resolution duly adopted by the Board of Directors of the Borrower authorizing the execution, delivery, and performance of the Loan Documents on or in a form provided by or acceptable to Lender.

Additional Documents : Receipt by the Lender of other approvals, opinions, or documents as the Lender may reasonably request.

II. REPRESENTATIONS AND WARRANTIES

The Borrower represents and warrants to Lender that:

Confidential

2.1 Financial Statements . The financial statements contained in the Borrower’s periodic reports (the “SEC Reports”) filed with the Securities and Exchange Commission (the “Commission”), are true and correct and fairly reflect the financial condition of the Borrower and its subsidiaries as of the respective dates thereof, including all contingent liabilities of every type, and the financial condition of the Borrower and its subsidiaries as stated therein has not changed materially and adversely since the date thereof.

2.2 Name, Capacity and Standing . The Borrower’s exact legal name is correctly stated in the initial paragraph of the Agreement. The Borrower warrants and represents that it is duly organized and validly existing under the laws of its state of incorporation; that it and/or its subsidiaries are duly qualified and in good standing in every other state in which the nature of their business shall require such qualification, and are each duly authorized by their board of directors to enter into and perform the obligations under the Loan Documents.

2.3 No Violation of Other Agreements . The execution of the Loan Documents, and the performance by the Borrower, will not violate any provision, as applicable, of its articles of incorporation, by-laws or of any law, other agreement, indenture, note, or other instrument binding upon the Borrower, or give cause for the acceleration of any of the obligations of the Borrower.

2.4 Authority . All authority from and approval by any federal, state, or local governmental body, commission or agency necessary to the making, validity, or enforceability of this Agreement and the other Loan Documents has been obtained.

2.5 Asset Ownership . The Borrower has good and marketable title to all of the properties and assets reflected on the balance sheets and financial statements contained in the SEC reports, and all such properties and assets are free and clear of mortgages, deeds of trust, pledges, liens, and all other encumbrances, except as otherwise disclosed in such SEC Reports.

2.6 Discharge of Liens and Taxes . The Borrower and its subsidiaries have filed, paid, and/or discharged all taxes or other claims which may become a lien on any of their respective properties or assets, excepting to the extent that such items are being appropriately contested in good faith and for which an adequate reserve (in an amount acceptable to Lender) for the payment thereof is being maintained.

2.7 Litigation . Except as disclosed in the SEC reports, there is no claim, action, suit or proceeding pending, threatened or reasonably anticipated before any court, commission, administrative agency, whether State or Federal, or arbitration which will materially adversely affect the financial condition, operations, properties, or business of the Borrower or its subsidiaries, or the ability of the Borrower to perform its obligations under the Loan Documents.

2.8 Other Agreements . The representations and warranties made by Borrower to Lender in the other Loan Documents are true and correct in all respects on the date hereof.

2.9 Binding and Enforceable . The Loan Documents, when executed, shall constitute valid and binding obligations of the Borrower, the execution of such Loan Documents has been duly authorized by the Borrower, and are enforceable in accordance with their terms, except as may be limited by bankruptcy, insolvency, moratorium, or similar laws affecting creditors’ rights generally.

Confidential

III. AFFIRMATIVE COVENANTS

The Borrower covenants and agrees that from the date hereof and until payment in fall of all indebtedness and performance of all obligations owed under the Loan Documents, Borrower shall:

3.1 Maintain Existence and Current Legal Form of Business . (a) Maintain its existence and good standing in the state of its incorporation, (b) maintain its current legal form of business indicated above, and, (b) qualify and remain qualified as a foreign corporation in each jurisdiction in which such qualification is required.

3.2 Maintain Records . Keep adequate records and books of account, in which complete entries will be made in accordance with GAAP consistently applied, reflecting all financial transactions of the Borrower.

3.3 Conduct of Business . Continue to engage in an efficient, prudent, and economical manner in a business of the same general type as now conducted.

3.4 Maintain Insurance . Maintain insurance with financially sound and reputable insurance companies or associations in such amounts and covering such risks as are usually carried by companies engaged in the same or a similar business, and business interruption insurance if required by Lender, which insurance may provide for reasonable deductible(s).

3.5 Comply With Laws . Comply in all respects with all applicable laws, rules, regulations, and orders including, without limitation, paying before the delinquency of all taxes, assessments, and governmental charges imposed upon it or upon its property.

3.6 Right of Inspection . Permit the Lender and his authorized agents, at any reasonable time or times in the Lender’s sole discretion, to examine and make copies of the records and books of account of, to visit the properties of the Borrower, and to discuss such matters with any officers or directors of the Borrower, and the Borrower’s independent accountant as the Lender deems necessary and proper.

3.7 Reporting Requirements . Furnish to the Lender:

Financial Statements : The Borrower will timely file all reports on Forms’ 10-Q and 10-K with the Commission, which reports will contain all financial and other information required to be included in such reports.

Notice of Litigation : Promptly after the receipt by the Borrower of notice or complaint of any action, suit, and proceeding before any court or administrative agency of any type which, if determined adversely, could have a material adverse effect on the financial condition, properties, or operations of the Borrower.

Notice of Default : Promptly upon discovery or knowledge thereof, notice of the existence of any event of default under this Agreement or any other Loan Documents.

Other Information : Such other information as the Lender may from time to time reasonably request.

Confidential

IV. NEGATIVE COVENANTS

The Borrower covenants and agrees that from the date hereof and until payment in full of all indebtedness and performance of all obligations under the Loan Documents, the Borrower shall not, without the prior written consent of the Lender:

4.1 Liens . Create, incur, assume, or suffer to exist any lien upon or with respect to any of Borrower’s properties now owned or hereafter acquired, except:

(a) Liens and security interests in favor of the Lender;

(b) Liens for taxes not yet due and payable or otherwise being contested in good faith and for which appropriate reserves are maintained;

(c) Other liens imposed by law not yet due and payable, or otherwise being contested in good faith and for which appropriate reserves are maintained;

(d) purchase money security interests on any property hereafter acquired, provided that such lien shall attach only to the property acquired.

4.2 Debt . Create, incur, assume, or suffer to exist any debt, except:

(a) Debt to the Lender;

(b) Debt outstanding on the date hereof and shown in the financial statements contained in the Borrower’s most recent Form 10-Q;

4.3 Leases . Create, incur, assume, or suffer to exist any leases, except:

(a) Leases outstanding on the date hereof and showing on the financial statements contained in the Borrower’s most recent Form 10-Q;

(b) Operating Leases with a duration of more than one (1) year for machinery and equipment which do not in the aggregate require payments in excess of $500,000 in any fiscal year of the Borrower.

4.4 Guaranties . Assume, guarantee, endorse, or otherwise be or become directly or contingently liable for obligations of any Person, except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business.

4.5 Disposition of Assets . Sell, lease, or otherwise dispose of any of its assets or properties except in the ordinary and usual course of its business.

Confidential

V. EVENTS OF DEFAULT

The following shall be “Events of Default” by Borrower:

5.1 The failure to make prompt payment of any installment of principal or interest on any of the Note(s) when due or payable.

5.2 Should any representation or warranty made in the Loan Documents prove to be false or misleading in any material respect.

5.3 Should any report, certificate, financial statement, or other document furnished prior to the execution of or pursuant to the terms of this Agreement prove to be false or misleading in any material respect.

5.4 Should the Borrower default on the performance of any other obligation of indebtedness when due or in the performance of any obligation incurred in connection with money borrowed, except with regard to the New Jersey Economic Development Authority Bonds issued in 2005.

5.5 Should the Borrower breach any covenant, condition, or agreement made under any of the Loan Documents.

5.6 Should a custodian be appointed for or take possession of any or all of the assets of the Borrower, or should the Borrower either voluntarily or involuntarily become subject to any insolvency proceeding, including becoming a debtor under the United States Bankruptcy Code, any proceeding to dissolve the Borrower, any proceeding to have a receiver appointed, or should the Borrower make an assignment for the benefit of creditors, or should there be an attachment, execution, or other judicial seizure of all or any portion of the Borrower’s assets, and such seizure is not discharged within 30 days.

5.7 Should final judgment for the payment of money be rendered against the Borrower which is not covered by insurance and shall remain undischarged for a period of 30 days unless such judgment or execution thereon be effectively stayed.

5.8 Upon the termination of existence of, or dissolution of the Borrower.

VI. REMEDIES UPON DEFAULT

Upon the occurrence of any of the above listed Events of Default, the Lender may at any time thereafter, at its option, take any or all of the following actions, at the same or at different times:

6.1 Declare the balance(s) of the Note(s) to be immediately due and payable, both as to principal and interest, late fees, and all other amounts/expenditures without presentment, demand, protest, or notice of any kind, all of which are hereby expressly waived by Borrower, and such balance(s) shall accrue interest at the Default Rate as provided herein until paid in full;

6.2 Exercise any and all other rights and remedies available to the Lender under the terms of the Loan Documents and applicable law;

Confidential

6.3 Any obligation of the Lender to advance funds to the Borrower or any other Person under the terms of under the Note(s) and all other obligations, if any, of the Lender under the Loan Documents shall immediately cease and terminate unless and until Lender shall reinstate such obligation in writing.

VII. MISCELLANEOUS PROVISIONS

7.1 Definitions .

“ Default Rate ” shall mean fifteen percent (15%) per annum (not to exceed the legal maximum rate) from and after the date of an Event of Default hereunder which shall apply, in the Lender’s sole discretion, to all sums owing, including principal and interest, on such date.

“ Loan Documents ” shall mean this Agreement including any schedule attached hereto, and all other documents, certificates, and instruments executed in connection therewith, and all renewals, extensions, modifications, substitutions, and replacements thereto and therefore.

“ Person ” shall mean an individual, partnership, corporation, trust, unincorporated organization, limited liability company, limited liability partnership, association, joint venture, or a government agency or political subdivision thereof.

“ GAAP ” shall mean generally accepted accounting principles as established by the Financial Accounting Standards Board or the American Institute of Certified Public Accountants, as amended and supplemented from time to time.

7.2 Non-impairment . If any one or more provisions contained in the Loan Documents shall be held invalid, illegal, or unenforceable in any respect, the validity, legality, and enforceability of the remaining provisions contained therein shall not in any way be affected or impaired thereby and shall otherwise remain in full force and effect. If it shall be found that any interest or other amount deemed interest due hereunder violates the applicable law governing usury or interest rate caps, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum rate of interest permitted under applicable law.

7.3 Applicable Law . This Agreement shall be governed by and construed in accordance with the laws of New Jersey, United States of America, without reference to conflicts of laws, rules or principles.

7.4 Waiver . Neither the failure or any delay on the part of the Lender in exercising any right, power or privilege granted in the Loan Documents shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise of any other right, power, or privilege which may be provided by law.

7.5 Modification . No modification, amendment, or waiver of any provision of any of the Loan Documents shall be effective unless in writing and signed by the Borrower and Lender.

7.6 Legal Counsel; No Presumption Against Drafting Party . The Parties each acknowledge that they each have read this Agreement in its entirety and understand and appreciate its contents and significance, and each executes this Agreement and makes the agreements contained herein knowingly, voluntarily and of his or its own free will, having first had the opportunity to consult with counsel. This Agreement and the provisions contained herein shall not be construed or interpreted for or against any Party hereto because said Party drafted or caused the Party’s legal representative to draft any of its provisions. This Agreement shall be construed without reference to the identity of the Party or Parties preparing same, it being expressly understood and agreed that the Parties participated equally or had equal opportunity to participate in the drafting hereof.

Confidential

7.7 Stamps and Fees . The Borrower shall pay all federal or state stamps, taxes, or other fees or charges, if any are payable or are determined to be payable by reason of the execution, delivery, or issuance of the Loan Documents; and the Borrower agrees to indemnify and hold harmless the Lender against any and all liability in respect thereof.

7.8 Attorneys’ Fees . In the event the Borrower shall default in any of its obligations hereunder and the Lender believes it necessary to employ an attorney to assist in the enforcement or collection of the indebtedness of the Borrower to the Lender, to enforce the terms and provisions of the Loan Documents, to modify the Loan Documents, or in the event the Lender voluntarily or otherwise should become a party to any suit or legal proceeding (including a proceeding conducted under the Bankruptcy Code), the Borrower agrees to pay the reasonable attorneys’ fees of the Lender and all related costs of collection or enforcement that may be incurred by the Lender. The Borrower shall be liable for such attorneys’ fees and costs whether or not any suit or proceeding is actually commenced.

7.9 Right of Offset . Any indebtedness owing from Lender to Borrower may be set off and applied by Lender on any indebtedness or liability of Borrower to Lender, at any time and from time to time after maturity, whether by acceleration or otherwise, and without demand or notice to Borrower.

7.10 Conflicting Provisions . If provisions of this Agreement shall conflict with any terms or provisions of any of the Note(s), the provisions of such Note(s) shall take priority over any provisions in this Agreement.

7.11 Notices . Any notice, request or other communication required to be given pursuant to the provisions of this Agreement shall be in writing and shall be deemed to be given when delivered in person or by courier (return receipt requested) or five days after being deposited in the United States mail, postage prepaid, certified, return receipt requested to the Parties addressed as follows:

If to Borrower, to:

Elite Laboratories, Inc.

165 Ludlow Avenue Northvale

New Jersey 07647

Attn: Carter J. Ward, Chief Financial Officer

If to Lender to:

Nasrat Hakim

__________________

7.12 Consent to Jurisdiction . Borrower hereby irrevocably agrees that any legal action or proceeding arising out of or relating to this Agreement may be instituted in any New Jersey state court or federal court sitting in the State of New Jersey, or in such other appropriate court and venue as Lender may choose in its sole discretion. Borrower consents to the jurisdiction of such courts and waives any objection relating to the basis for personal or in rem jurisdiction or to venue which Borrower may now or hereafter have in any such legal action or proceedings.

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7.13 Counterparts; Facsimile, Electronic Signatures . This Agreement may be executed in counterparts, each of which shall be deemed an original, and all of which together shall constitute a single agreement. This Agreement may be executed by facsimile signatures or by a pdf (or other similar format) copy of the signature delivered by e-mail, which signatures shall have the same force and effect as original signatures.

7.14 Entire Agreement . The Loan Documents embody the entire agreement between Borrower and Lender with respect to the Loans, and there are no oral or parol agreements existing between Lender and Borrower with respect to the Loans which are not expressly set forth in the Loan Documents.

7.15 Indemnification . The Borrower hereby agrees to and does hereby indemnify and defend the Lender, his agents and representatives, successors and assigns, and does hereby hold each of them harmless from and against, any loss, liability, lawsuit, proceeding, cost expense or damage (including reasonable counsel fees, whether suit is brought or not) arising from or otherwise relating to the closing, disbursement, administration, or repayment of the Loans, including without limitation: (i) the failure to make any payment to the Lender promptly when due, whether under the Notes evidencing the Loans or otherwise; (ii) the breach of any representations or warranties to the Lender contained in this agreement or in any other loan documents now or hereafter executed in connection with the Loans; or (iii) the violation of any covenants or agreements made for the benefit of the Lender and contained in any of the loan documents; provided, however, that the foregoing indemnification shall not be deemed to cover any loss which is finally determined by a court of competent jurisdiction to result solely from the Lender’s gross negligence or willful misconduct.

7.16 Notice and Cure Period . Notwithstanding any provision in this Loan Agreement, the Note or Loan Documents to the contrary, an event of default shall not be deemed to have occurred hereunder as to a non-monetary provision of this Loan Agreement unless and until the Borrower shall fail to cure and remedy said non-monetary breach or default within forty five (45) days after the Borrower has received written notice thereof from the Lender, and an event of default shall not be deemed to have occurred hereunder as to a monetary provision of the Loan Agreement unless and until the Borrower shall fail to cure and remedy said monetary breach or default within ten (10) days after the Borrower has received written notice thereof from the Lender.

7.17 WAIVER OF JURY TRIAL. UNLESS EXPRESSLY PROHIBITED BY APPLICABLE LAW, THE UNDERSIGNED HEREBY WAIVE THE RIGHT TO TRIAL BY JURY OF ANY MATTERS OR CLAIMS ARISING OUT OF THIS AGREEMENT OR ANY OF THE LOAN DOCUMENTS EXECUTED IN CONNECTION HEREWITH OR OUT OF THE CONDUCT OF THE RELATIONSHIP BETWEEN THE UNDERSIGNED AND LENDER THIS PROVISION IS A MATERIAL INDUCEMENT FOR LENDER TO MAKE THE LOAN AND ENTER INTO THIS AGREEMENT. FURTHER, THE UNDERSIGNED HEREBY CERTIFY THAT NO REPRESENTATIVE OR AGENT OF LENDER, HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT LENDER WOULD NOT SEEK TO ENFORCE THIS WAIVER OR RIGHT TO JURY TRIAL PROVISION. NO REPRESENTATIVE OR AGENT OF LENDER HAS THE AUTHORITY TO WAIVE, CONDITION OR MODIFY THIS PROVISION.

Signature Page to follow

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SIGNATURE PAGE

IN WITNESS WHEREOF, the Lender and Borrower have caused this Agreement to be duly executed under seal all as of the date first above written.

ELITE PHARMACEUTICALS, INC.




By:	s/ Jerry Treppel	s/ Nasrat Hakim
	Jerry Treppel, Chairman	Nasrat Hakim

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Redacted Version

Exhibit 10.17

MANUFACTURING AND LICENSE AGREEMENT

Between

Elite Pharmaceuticals, Inc.

and

Epic Pharma LLC

{***} Confidential portions of this exhibit have been redacted and filed separately with the Commission pursuant to a confidential treatment request in accordance with Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

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MANUFACTURING AND LICENSE AGREEMENT

This License Agreement (“Agreement”) is entered into as of the 1 ^st day of October, 2013 by and between EPIC PHARMA LLC, a Delaware limited liability company (“EPIC”), and ELITE PHARMACEUTICALS, INC., a Nevada corporation and ELITE LABORATORIES, INC. (a subsidiary of Elite Pharmaceuticals, Inc.), a Delaware corporation (collectively, “ELITE”).

WHEREAS, ELITE has ownership rights to products/ANDAs specified on Schedule A (the “Exclusive Products”) and Schedule D (the “Non-Exclusive Products”), together (the “Products”) as of October 1, 2013, and EPIC wishes to license from ELITE the right to manufacture, market and sell the Products on the terms and conditions set forth in this Agreement;

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth in this Agreement, and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto agree as follows:

GRANT OF LICENSE

Article 1

1.1 Exclusive Product License . ELITE hereby grants to EPIC a license (“License” or “Licensing Rights”) without the right to further sublicense, to manufacture, market and sell the Exclusive Products as listed in Schedule A in the United States, including the right to reference the ANDA Number, where appropriate, for approval to market the Products in the United States.

1.2 Non-Exclusive Products License. ELITE hereby grants to EPIC a non-exclusive license (“Non-Exclusive License” or “Non-Exclusive Licensing Rights”) without the right to further sublicense, to manufacture, market and sell the Non-Exclusive Products as listed in Schedule D in the United States, including the right to reference the ANDA Number, where appropriate, for approval to market the Non-Exclusive Products in the United States. ELITE shall be the only other company allowed to manufacture, market and sell the Non-Exclusive Products and ELITE shall only sell to clinics. EPIC shall not share in any profits from Non-Exclusive Products sold by ELITE.

1.3 Marketing Rights. ELITE hereby grants to EPIC exclusive marketing rights (“Marketing Rights”) to market and sell the Products in the United States, and Puerto Rico). ELITE agrees that it shall not (and it shall not authorize, permit or suffer any of its affiliates to), directly or indirectly, sell or distribute a Product in United States at any time during the term of this agreement unless specifically authorized or excluded under the terms of this Agreement

1.4 Trademarks. EPIC agrees and acknowledges that it shall not acquire by virtue of this Agreement any interest in any trademarks or trade names of ELITE.

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1.5 Manufacturing. ELITE hereby grants to EPIC rights to manufacture the Products for marketing and sales of the Products by EPIC in the United States and Puerto Rico.

1.6 Regulatory and Pharmacovigilance. EPIC shall be responsible for all regulatory and pharmacovigilance matters related to these Products.

1.7 Licensed Trade Secrets. The information exchanged between ELITE and EPIC pursuant to this Agreement is expressly subject to the Mutual Confidentiality and Non-Disclosure Agreement entered into by the parties and dated October 8, 2008 (the “Confidentiality Agreement”) and whose term is hereby made coterminous with this Agreement.

1.8 Improvements . Any new information, developments, or improvements relating to the Products subject to this Agreement, and any patent or copyright rights arising from or related thereto (collectively, “Improvements”) will be owned solely by ELITE but shall be automatically included in the License, and if EPIC develops an Improvement that may be used beyond the Products which are the subject of this Agreement, then ELITE does now automatically grant a worldwide, non-exclusive, irrevocable, royalty-free right for EPIC to use the Improvement.

1.9 Quality Agreement . In conjunction with the execution of this Agreement, the parties shall execute a Quality Agreement.

1.10 Site Transfer. EPIC shall be responsible for all costs related to the site transfer for all Products.

COMPENSATION

2.1. License Fee, Milestone, and Transfer Cost Payments . In return for the Licensing Rights described in this Agreement, EPIC shall pay to ELITE the milestone payments (“Milestone Payments”) and a license fee (“License Fee”) compensation specified in Schedule B. If ELITE manufactures any product for sale by EPIC, then the transfer cost for the Product shall be $ {***} per 1000 units in any configuration required by marketing plus the cost of the API at cost (as documented by invoices for the API)

2.2. Records . EPIC shall keep complete and accurate records of all manufacture and sales of the Products and the calculation of product costs, net sales and gross profit of the Products. EPIC shall also provide a detailed summary of the Cost of Goods for each product on Schedule A. ELITE shall have the right, at ELITE’s expense and after thirty (30) days’ prior written notice to EPIC, through an independent certified public accountant, on a mutually agreeable date, to examine such records at any time within one (1) year after the due date of the License Fee payments to which such records relate, during regular business hours, during the life of this Agreement and for twelve (12) months after expiration of the last production lot of Product sold by EPIC, in order to verify the accuracy of the reports to be made under this Agreement. If the accountant determines that EPIC has under-compensated ELITE, the findings shall be shared with EPIC. If EPIC agrees that EPIC has not paid ELITE all of the compensation ELITE was entitled to receive, or it is later determined that EPIC did not pay all of the compensation due to ELITE, then EPIC shall pay the proper amount of compensation and all costs and expenses incurred by ELITE to hire the accountant and all of the accountant’s expenses, and all legal expenses, to obtain the appropriate compensation. If EPIC disputes in good faith the accuracy of the results of such examination, the parties will retain a second independent certified public accountant whose examination will be binding upon both parties. The losing party will pay all of the expenses of both independent certified public accountant examinations.

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2.3. Reports . EPIC will provide Reports as stipulated in Schedule B.

2.4. Payments by EPIC.

(a)

All Milestone Payments will be made by check and mailed to ELITE within ten (10) days after the payment becomes due.

(b)

The License Fee shall be paid to ELITE in monthly payments based upon the previous month’s Products that EPIC shipped to its customers. All License Fee payments shall be made by check and mailed to ELITE within thirty (30) days after the end of each calendar month. A copy of the Report for the prior month will accompany the check.

(c)

A late fee of 1% per month will be accrued for all payments which EPIC fails to pay when due.

TERM AND TERMINATION

3.1. Term . This Agreement shall become effective as of the date hereof and shall continue until five (5) years from such date (the “Initial Term”), unless terminated earlier by mutual agreement of the parties or by one of the parties in accordance with this Article 3; provided further that the parties shall have the option, by mutual agreement, to extend the Initial Term of this Agreement for an additional five (5) years (a “Renewal Term” and collectively with the Initial Term, the “Term”) by the parties exchanging written notice of such election not less than six (6) months prior to the expiration of the Initial Term.

3.2. Modification for Lack of Licensing Fees and Minimum Unit Volumes.

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(a)

EPIC hereby agrees to exert commercially reasonable efforts and shall devote the same efforts to marketing the Products that EPIC exerts for its other major pharmaceutical products being marketed in the United States.

(b)

If after twelve (12) months of a Product’s launch, the Gross Profit declines for any Product to the point that the License Fee paid to ELITE is less than $ {***} for a six (6) month period for that Product, then ELITE may terminate the Marketing Rights granted hereunder to EPIC as it relates to that individual Product. If ELITE desires to terminate the Marketing Rights granted hereunder, then ELITE shall give EPIC ninety (90) days written notice that it will no longer have the Marketing Rights to sell the particular Product.

If EPIC’s unit volume sales of an API specific group of Products (“ Product Group”), (initially defined as Isradipine, Dantrolene, or Loxapine Product Groups), does not meet its minimum annual unit volume forecast for that Product Group in the initial launch year, or does not meet its subsequent minimum annual unit volume forecast (as defined in Schedule C) for a Product Group, then EPIC shall have the following six (6) months to achieve one-half of the prior year’s minimum annual unit volume forecast and if EPIC still fails to meet such volume minimum during the six months described, then EPIC shall lose its Marketing Rights of such Product Group.

3.3. Termination by Mutual Agreement . The parties may terminate this Agreement any time by mutual written agreement.

3.4. Termination by Breach . Upon the breach or default in the performance or observance of any of the material provisions of this Agreement by either Party, when such breach or default is not cured by the responsible Party within sixty (60) days after written notice by the other Party, the other Party may terminate this Agreement upon an additional thirty (30) days written notice to the other Party. Termination will be without prejudice to either Party to recover any and all damages to which it may be entitled, or to exercise any other remedies.

3.5. Termination by ELITE Upon Bankruptcy or Reorganization of EPIC . If EPIC enters into any proceeding (whether voluntary or otherwise) in bankruptcy, reorganization or arrangement for the appointment of a receiver or trustee to take possession of its assets, or any other proceeding under any law for the relief of creditors or makes an arrangement for the benefit of its creditors, and remains in such proceeding for 30 days, then ELITE shall retain its rights to the Products and may terminate this Agreement without further payment to EPIC.

3.6. Licensing Rights upon Termination . Except as otherwise provided in this Agreement, upon termination of this Agreement: all rights, privileges, and licenses will terminate and revert to ELITE, and EPIC must not thereafter make any use whatsoever of any trade secrets, except that it is agreed that upon termination notwithstanding any other terms of this Agreement, EPIC may retain one archival copy to have sufficient information solely to respond to state and federal regulatory inquiries regarding the Products.

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3.7. Accrued Rights . Expiration or termination of this Agreement shall be without prejudice to the right of either Party to receive all payments accrued and unpaid at the effective date of such expiration or termination, without prejudice to the remedy of either Party in respect to any previous breach of the representations, warranties or covenants herein contained, without prejudice to any rights to indemnification set forth herein and without prejudice to any other provision hereof which expressly or necessarily calls for performance after such expiration or termination. EPIC expressly retains the right to sell Product on-hand after termination of this Agreement and shall remain bound to pay ELITE the Licensing Fee as provided in this Agreement.

3.8. Transition . If this Agreement is terminated for any reason or if EPIC loses its Marketing Rights for any or all Products, or if EPIC stops selling for any reasons, EPIC then shall be required to contract manufacture at cost plus {***} % for a three (3) year period from the date the termination occurs or the date the selling ends whichever comes first.

REPRESENTATIONS, WARRANTIES AND COMPETITION, COOPERATION UPON BANKRUPTCY OF ELITE

4.1. EPIC Representations . EPIC hereby represents and warrants to ELITE that (a) it has obtained all necessary licenses, authorizations and approvals required by applicable Law, including those required by the FDA, DEA or any other applicable regulatory agency to enter into this Agreement and perform its obligations hereunder; (b) the execution, delivery and performance of this Agreement by EPIC does not conflict with or constitute a breach of any order, judgment, agreement, or instrument to which it is a party; (c) the execution, delivery and performance of this Agreement by EPIC does not require the consent of any person; and (d) none of its officers or directors has ever been convicted of a felony under the laws of the United States for conduct relating to the development or approval of a drug product or relating to the marketing or sale of a drug product

4.2. ELITE Representations . ELITE hereby represents and warrants to EPIC that (a) it has obtained all necessary licenses, authorizations and approvals required by applicable Law, including those required by the FDA, DEA or any other applicable regulatory agency to enter into this Agreement and perform its obligations hereunder; (b) the execution, delivery and performance of this Agreement by ELITE does not conflict with or constitute a breach of any order, judgment, agreement, or instrument to which it is a party; (c) the execution, delivery and performance of this Agreement by ELITE does not require the consent of any person; and (d) none of its officers or directors has ever been convicted of a felony under the laws of the United States for conduct relating to the development or approval of a drug product or relating to the marketing or sale of a drug product.

4.3. Non-competition by EPIC . EPIC hereby covenants and agrees that without the prior written consent of ELITE during the Term of this Agreement, and for 1 year after the last shipment of Product by EPIC if the agreement is terminated due to breach of the Agreement by EPIC, EPIC will not directly or indirectly market any of the Products Licensed to EPIC by ELITE pursuant to this Agreement. This section is not intended to prohibit EPIC from marketing and selling a product which addresses the same therapeutic indication as a Product, as long as that other product does not contain the same API as the Product(s) in this Agreement.

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4.4. Cooperation Upon Bankruptcy Event of ELITE . ELITE shall use, and cause its representatives and affiliates to use, best efforts to make all necessary arrangements and take all required actions to permit EPIC to retain all rights licensed hereunder with respect to the Products in the event that ELITE (i) is dissolved or liquidated, (ii) commences a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar law, (iii) is subject to an involuntary case or other proceeding seeking liquidation, reorganization or other relief with respect to ELITE and an order for relief entered or such proceeding has not be dismissed or discharged within sixty (60) days of commencement, (v) has made an assignment for the benefit of creditors, or (vi) otherwise ceases to conduct business during the Term (each, an “ Extraordinary Event ”).

INDEMNIFICATION AND INSURANCE

5.1. ELITE Indemnity . Subject to Sections 5.2 and 5.4, ELITE shall indemnify and hold harmless EPIC and its Affiliates against all third party claims, actions, costs, expenses, including court costs and legal fees or other third party liabilities (" Third Party Liabilities ") whatsoever in respect of:

(a)

any breach of any representation, warranty, covenant or similar promise made under this Agreement or arising out of this Agreement;

(b)

any negligence or willful misconduct by ELITE and/or any of its employees; and

(c)

any product liability in connection with the Products caused by ELITE or any third party acting on behalf of ELITE or its Affiliates;

5.2. EPIC Indemnity . Subject to Sections 5.1 and 5.4, EPIC shall indemnify and hold harmless ELITE and its Affiliates against all Third Party Liabilities whatsoever in respect of:

(a)

EPIC’s and/or it Affiliates’, subcontractors’ or suppliers’ failure to comply with the Product Specifications, cGMP or applicable Laws;

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(b)

the use, marketing, storage, distribution, handling or sale of the Product after the Effective Date by EPIC or any third party, other than a third party acting on behalf of ELITE or its Affiliates;

(c)

any product liability in connection with the Products caused by EPIC or any third party acting on behalf of EPIC or its Affiliates;

(d)

for any Product that is recalled or withdrawn from the market by reason of EPIC’s breach of any warranty or other covenant under this Agreement or any other agreement with ELITE, ELITE will be entitled to reimbursement of all costs associated with a recall or withdrawal, including reasonable costs associated with compliance with the recall or withdrawal (including penalties).

(e)

any liabilities arising out of the presence or actions of a EPIC employee at EPIC’s manufacturing and packaging facilities pursuant to this Agreement; and

(f)

any negligent or wrongful act by EPIC and any breach by EPIC of any representation or warranty, covenant or similar promise made under this Agreement or arising out of this Agreement.

5.3. Procedures for Indemnification . In the event that a party (the " Indemnified Party ") is seeking indemnification under Sections 5.1 or 5.2, the Indemnified Party shall inform the other party (the " Indemnifying Party ") of a claim as soon as reasonably practicable after the Indemnified Party receives notice of the claim, shall permit the Indemnifying Party to assume direction and control of the defense of the claim, and shall cooperate as requested by the Indemnifying Party (at the expense of the Indemnifying Party) in the defense of the claim; provided, however, if the defendants in any such action include both the Indemnified Party and the Indemnifying Party and the Indemnified Party shall have reasonably concluded that a conflict may arise between the positions of the Indemnifying Party and the Indemnified Party in conducting the defense of any such action or that there may be legal defenses available to it that are different from or additional to those available to the Indemnifying Party, the Indemnified Party shall have the right to select separate counsel to assume such legal defenses and to otherwise participate in the defense of such action or on behalf of the Indemnified Party. No Indemnifying Party shall, without the prior written consent of the Indemnified Party, settle or compromise or consent to the entry of judgment with respect to any pending or threatened action or claim whatsoever, in respect of which indemnification could be sought under Sections 6.1 or 6.2 (whether or not the Indemnified Party is an actual or potential party thereto), unless such settlement, compromise or consent (i) includes an unconditional release of the Indemnified Party in form and substance reasonably satisfactory to the Indemnified Party from all liability arising out of such action or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of the Indemnified Party. The Indemnifying Party shall not be liable for settlement of any pending or threatened action or any claim whatsoever that is effected without its written consent (which consent shall not be unreasonably withheld or delayed).

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5.4. Mitigation . In the event of any occurrence which may result in either party becoming liable under Section 5.1 or Section 5.2, each party shall use its best efforts to take such actions as may be reasonably necessary to mitigate the damages payable by the other party under Section 5.1 or Section 5.2, as the case may be.

5.5. Limitation of Liability . NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN, IN NO EVENT SHALL ANY PARTY, ITS DIRECTORS, OFFICERS, EMPLOYEES, AGENTS OR AFFILIATES BE LIABLE TO THE OTHER PARTIES FOR ANY CLAIMS RELATED TO LOST PROFITS AND GOODWILL, WHETHER BASED UPON A CLAIM OR ACTION OF CONTRACT, WARRANTY, NEGLIGENCE, STRICT LIABILITY OR OTHER TORT, OR OTHERWISE, ARISING OUT OF THIS AGREEMENT.

5.6. Insurance . Each party shall maintain commercial general liability insurance through the term of this Agreement upon launch of the first Product, which insurance shall afford limits of not less than $5,000,000 for each occurrence for personal injury or property damage liability. Furthermore, each party shall maintain product liability insurance, through the term of this Agreement upon launch of the first Product and for a period of three (3) years thereafter, which insurance shall afford limits of not less than $5,000,000 in the aggregate per annum with respect to product and completed operations liability. This insurance shall be written to cover claims incurred, discovered, manifested, or made during or after the expiration of this Agreement. Each party shall provide the other with a certificate of insurance evidencing the above and showing the name of the issuing company, the policy number, the effective date, the expiration date and the limits of liability. The insurance certificate shall further provide for a minimum of thirty (30) days' written notice to the insured of a cancellation of, or material change in, the insurance. If a party is unable to maintain the insurance policies required under this Agreement through no fault on the part of such party, then such party shall forthwith notify the other party in writing and the parties shall in good faith negotiate appropriate amendments to the insurance provision of this Agreement in order to provide adequate assurances. In the event that either a customer or an insurer of either party requires such party to increase its insurance limits above the $5,000,000 described above for any policy, then the other party to this Agreement must also match the required insurance increase, so that the parties to this Agreement are carrying the same insurance policy limits. It is the express intention of the parties that the parties shall endeavor to avoid insurance policy limits above $10,000,000.

MISCELLANEOUS

6.1. Waiver; Remedies and Amendment . Any waiver by any party hereto of a breach of any provisions of this Agreement will not be implied and will not be valid unless such waiver is recited in writing and signed by such party. Failure of any party to require, in one or more instances, performance by the other party or parties in strict accordance with the terms and conditions of this Agreement will not be deemed a waiver or relinquishment of the future performance of any such terms or conditions or of any other terms and conditions of this Agreement. A waiver by any party of any term or condition of this Agreement, including this Section 5.1, shall be valid only if in writing and will not be deemed or construed to be a waiver of such term or condition for any other term. All rights, remedies, undertakings, obligations and agreements contained in this Agreement will be cumulative and none of them will be a limitation of any other remedy, right, undertaking, obligation or agreement of any party. This Agreement may not be amended except in a writing signed by all parties.

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6.2. Affiliates, Assignment, No Inconsistent Agreements . EPIC may not assign its rights and obligations hereunder without the prior written consent of ELITE. Neither EPIC nor ELITE will enter into any agreement that is inconsistent with its obligations hereunder.

6.3. Counterparts . This Agreement may be executed in any number of counterparts, each of which when so executed will be deemed to be an original and all of which when taken together will constitute this Agreement.

6.4. Governing Law; Dispute Resolution; Venue . This Agreement will be governed by and construed in accordance with the laws of the state of New York without regard to conflict of law or choice of law rules. Any controversy or claim pursuant to this Agreement or the breach thereof shall be referred for decision forthwith to a senior executive of each Party not directly involved in the dispute. If no agreement is reached within thirty (30) days of the request by one Party to the other to refer the same to such senior executive, then such controversy or claim shall be settled by arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association; such arbitration to be held in Rockford, Illinois on an expedited basis. Judgment upon the award rendered by the Arbitrator(s) may be entered in any court having jurisdiction thereof.

6.5. Headings . The headings set forth at the beginning of the various sections of this Agreement are for convenience and form no part of the Agreement between the parties.

6.6. Notices . All notices, requests, instructions, consents and other communications to be given pursuant to this Agreement shall be in writing and shall be deemed received (a) on the same day if delivered in person, by same-day courier or by facsimile, electronic mail or other electronic transmission, (b) on the next day if delivered by overnight mail or courier, or (c) on the date indicated on the return receipt, or if there is no such receipt, on the third calendar day (excluding Sundays) if delivered by certified or registered mail, postage prepaid, to the party for whom intended to the following addresses:

If to EPIC:
EPIC 22715 North Conduit Avenue Laurelton, NY 11413 Attn: President

If to ELITE:
ELITE PHARMACEUTICALS, Inc. 165 Ludlow Avenue Northvale, New Jersey 07647 Attention: President and CEO

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6.7 Notice. Each party may by written notice given to the other in accordance with this Agreement change the address to which notices to such party are to be delivered.

6.8 Severability . If any provision of this Agreement is held by a court of competent jurisdiction to be invalid or unenforceable, it will be modified, if possible, to the minimum extent necessary to make it valid and enforceable or, if such modification is not possible, it will be stricken and the remaining provisions will remain in full force and effect.

6.9 Survival . The rights and obligations which accrue to a party during the term of this agreement shall survive the termination of this Agreement.

6.10 Force Majeure . No party to this Agreement will be liable for failure or delay in the performance of any of its obligations hereunder, if such failure or delay is due to causes beyond its reasonable control including, without limitation, acts of God, earthquakes, fires, strikes, acts of war, or intervention of any governmental authority, but any such delay or failure will be remedied by such party as soon as possible after the removal of the cause of such failure or delay.

6.11 Entire Understanding . This Agreement, including the schedules attached hereto, contains the entire understanding relative to the matters addressed herein, and supersedes all prior and collateral communications, reports, and understandings, if any, between the parties regarding the matters addressed herein.

6.12 Drafting. The parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement.

6.13 Not a Joint Venture . This Agreement does not constitute or create (and the Parties do not intend to create hereby) a joint venture, pooling arrangement, Partnership, or formal business organization of any kind between and among any of the Parties, and the rights and obligations of the Parties shall be only those expressly set forth herein. The relationship hereby established between EPIC and ELITE is solely that of licensee and licensor, each is an independent contractor engaged in the operation of its own respective business. Neither Party shall be considered to be an agent of the other for any purpose whatsoever. Each Party shall be responsible for providing its own personnel and workers compensation, medical coverage or similar benefits and shall be solely responsible for the payment of social security benefits, unemployment insurance, pension benefits, withholding any required amounts for income and other employment-related taxes and benefits of its own employees, and shall make its own arrangements for injury, illness or other insurance coverage to protect itself, its Affiliates, its subcontractors and personnel from any damages, loss and/or liability arising out of the performance of this Agreement. Neither Party has the power or authority to act for, represent or bind the other (or its Affiliates) in any manner.

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IN WITNESS WHEREOF, the parties have executed this Agreement on the date first set forth above.

ELITE PHARMACEUTICALS, INC.	EPIC PHARMA LLC



By: s/ Nasrat Hakim	By: s/ Jeenarine Narine
Name: Nasrat Hakim	Name: Jeenarine Narine
Title: CEO and President	Title: President

Date: __ October 2, 2013 _________________	Date: ___ October 2, 2013________________

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Redacted Version

SCHEDULE A

Exclusive Product List

Name	ANDA #
{*}	{*}
{*}	{*}
{*}	{*}
{*}	{*}
{*}	{*}
{*}	{*}

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Redacted Version

SCHEDULE B

Compensation for Licensing Rights

Milestone Payments

EPIC shall pay to ELITE Milestone Payments totaling $ {***} , according to the following schedule:

$ {***} shall be due to ELITE upon signing of this License Agreement and shall be paid no later than November 15 ^th , 2013.

$ {***} shall be paid to ELITE upon filing for each Product’s supplement with FDA as listed below:

{***}

$ {***} shall be paid to ELITE five business days after FDA’s approval of the site transfer or first product launch and/or shipment whichever comes first:

{***}

License Fee

EPIC will pay to ELITE a License Fee that is a percentage of the product gross profit (“Product Gross Profit”) of EPIC, as defined below, generated on Products sold and shipped to its customers by EPIC according to the following schedule:

{***} % of Product Gross Profit

Product Gross Profit is defined as:

Net Sales – Cost of Sale - Cost of Goods = Product Gross Profit.

Net Sales is defined as: Net Invoice Price less the following: Charge backs, Buying Groups/Wholesaler Administrative Fees/Rebates, Allowances, Medicaid and Returns.

Cost of Sales is defined as 3% of Net Sales

Cost of Goods is defined as $ {***} per 1000 units in any configuration required by marketing plus the cost of the API at cost (as documented by invoices for the API).

Confidential

EPIC shall also provide a detailed summary of the Cost of Goods for each product on Schedule B that shall be calculated based on GAAP.

The calculation of Product Gross Profit and the Licensing Fee shall be performed by Epic and presented to Elite as a report (“Report”) which shall include the following information:

REPORT ITEMS



Gross Invoice Sales		Total Sales for Month
Cash Discount		Cash Discount

Net Invoice Sales		Total Sales - Cash Discount

Deductions		Allowances (including; Medicaid rebate; state program rebates) price adjustments; returns; charge backs.
Net Sales		Net Invoice Sales – Deductions
Cost of Sales		3% of Net Sales
Cost of Goods		Total Units x Unit Cost


Gross Profit		Net Sales less Cost of Goods
Margin %		Margin Percentage (Gross Profit divided by Gross Invoice Sales)

Amount Due		Gross Profit $ x {*} %

Whenever possible, the Report will be made using actual sales, charge backs, administrative fees/rebates, price adjustments, and returns; however, in some cases estimated numbers may be required because of timing of CBs, fees, returns, etc. A true up Report will be completed and presented to ELITE within 60 days after the end of each calendar year.

Confidential

SCHEDULE C

Minimum Annual Unit Forecast for Each Product Group

	Year 1	Year 2	Year 3	Year 4	Year 5
(Percent of Market)
{*}
{*}
{*}

SCHEDULE D

Non-Exclusive Product List

Name	ANDA #
{*}	{*}
{*}	{*}
{*}	{*}
{*}	{*}
{*}	{*}
{*}	{*}

Confidential

Exhibit 10.18

CONFIDENTIAL

MASTER SERVICES AGREEMENT

This Master Services Agreement (hereinafter “this Agreement”) is entered into as of the ___ day of August 2013 (the “Effective Date”) by and between Camargo Pharmaceutical Services, LLC (herein called CPS) and Elite Pharmaceuticals, Inc. (hereinafter called "Sponsor").

WITNESSETH

WHEREAS, the Services (as defined below) to be provided by CPS to Sponsor pursuant to this Agreement are of mutual interest and benefit to CPS and to Sponsor, and will further CPS's instructional and research objectives in a manner consistent with its status as a research services provider;

WHEREAS, the Services to be provided by CPS to Sponsor will be provided pursuant to various separate “Statements of Work,” each of which will be attached hereto as an Appendix and incorporated herein by reference;

WHEREAS, each Statement of Work attached hereto as an Appendix shall describe the Services to be provided pursuant to the Statement of Work;

WHEREAS, each Statement of Work attached hereto as an Appendix shall contain the “Payment Terms” under which payments will be made by Sponsor to CPS pursuant to the Statement of Work;

WHEREAS, each Statement of Work attached hereto as an Appendix shall describe the “Timeline” and schedule for the provision of Services to be provided by CPS to Sponsor pursuant to the Statement of Work; and

WHEREAS, each Statement of Work attached hereto as an Appendix shall contain a preliminary, non-binding, estimate of “Pass-Through Costs” related to the Services to be provided by CPS to Sponsor pursuant to the Statement of Work.

NOW THEREFORE, the parties hereto agree as follows:

SCOPE OF WORK; AMENDMENTS

CPS shall exercise its reasonable efforts to carry out the Services set forth in the Statements of Work agreed to in writing between CPS and Sponsor, as amended from time to time in accordance with the terms of this Agreement and the Statements of Work.

As a “master” form of agreement, this Agreement allows the parties to contract for multiple projects through the issuance of multiple Statements of Work, without having to re-negotiate the basic terms and conditions herein.

CPS shall provide the services indicated in the Statements of Work (“Services”). The scope and assumptions regarding each particular Service to be provided by CPS are particularly described in each Statement of Work attached hereto, all of which form an integral part of this Agreement.

CPS represents and covenants that it has the experience, capability, and resources, including but not limited to sufficient personnel and equipment, to efficiently and expeditiously provide the Services hereunder in a professional and competent manner, and in compliance with the Statements of Work attached hereto.

If Sponsor wishes to either: (i) change the nature and/or scope of the Services to be provided under this Agreement pursuant to any Statement of Work, (ii) obtain additional services not provided for under this Agreement pursuant to any Statement of Work ; or (iii) obtain additional services which are inconsistent with the assumptions set forth in any Statement of Work, then Sponsor shall so advise CPS in writing and shall submit to CPS in writing proposed specifications for the changed or additional work. The proposed specifications shall be deemed to be proposed amendments to the applicable Statement of Work. Within five business days after CPS’s receipt of the proposed specifications, CPS shall, in writing, either accept or reject the proposed specifications. If CPS accepts the proposed specifications, CPS shall provide Sponsor, in writing, with a cost estimate for performing the changed or additional Services. The cost estimate shall be deemed to be proposed amendments to the Payment Terms included in the applicable Statement of Work. Within five business days after Sponsor’s receipt of the cost estimate, Sponsor, in writing, shall either accept or reject the proposed cost estimate. If Sponsor accepts the cost estimate, then the Scope of Work shall be amended as provided in the proposed specifications and the cost estimate and CPS shall perform the changed or additional Services. The changed or additional Services provided by CPS shall be governed by all of the terms and conditions of this Agreement and the applicable Statement of Work, as amended.

Selection of subcontractors. To the extent that the Statement of Work entails contracting or subcontracting (collectively, "Subcontracting") the performance of Services to any third party (any such person or entity a "Subcontractor"), the parties agree as follows.

1. Selection of Subcontractor by Sponsor. Notwithstanding anything to the contrary herein, if the Sponsor selects or otherwise directs CPS to use a particular Subcontractor ("Directed Subcontractors"), CPS shall not be responsible for any negligence, delay, failure or non-performance related to such Directed Subcontractor's performance of Services. All Directed Subcontractors shall be listed in the Statement of Work.

2. Selection of Subcontractor by CPS. If CPS selects the Subcontractor ("CPS Selected Subcontractor"), CPS shall (i) be responsible for the quality and timeliness of the CPS Selected Subcontractor to the same extent as if CPS itself performed or was to perform the Services provided by such CPS Selected Subcontractor; (ii)subcontract the Services to such CPS Selected Subcontractors whom CPS, after commercially reasonable investigation, believes, to its knowledge, to be competent, experienced and capable of performing such Services on a timely and professional basis; (iii) monitor the CPS Selected Subcontractor, as it deems necessary in its sole discretion, so as to allow for delivery of the Services as set forth in the Statement of Work; and (iv) CPS shall timely pay its CPS Selected Subcontractors as required by CPS' agreements with such persons.

3. CPS shall not disclose any of Sponsor's Confidential Information to Subcontractor until Subcontractor has executed a confidentiality agreement containing substantially similar obligations as those set forth in Section 5 below and CPS shall use commercially reasonable efforts to cause the CPS Selected Subcontractor to become a party to the Confidentiality and Assignment of Intellectual Property Agreement in the form set forth in Appendix B hereto and

CPS shall use commercially reasonable efforts to maintain the composition of the project team, and that such project team will not change except due to sickness, disability, termination of employment, performance issues, any circumstance beyond the control of CPS, or upon the prior request or approval of Sponsor.

COST AND PAYMENT

In consideration of CPS's provision of the Services, Sponsor shall pay CPS the amounts described in the Statements of Work, attached hereto as an Appendix, in the manner and at the times set forth in the Statements of Work.

CPS will use its best efforts to accomplish and complete the Services within the budget described on the Statements of Work, and will not commit to any material expenses in excess of budgeted amounts without Sponsor's prior written consent; provided, however, that this language is not intended to limit charges from CPS to Sponsor for necessary Pass-Through Expenses associated with any mutually agreed, written change.

All reasonable travel, food, lodging, printing (including CRF printing), photocopying, copyright fees, and shipping to those persons identified on the Statements of Work (collectively, “Pass-Through Expenses”) shall be billed by CPS to Sponsor with no mark-up. Such expenses shall be in addition to all other amounts described in the Statements of Work to be paid by Sponsor.

All invoices submitted by CPS to Sponsor shall be paid by Sponsor within thirty (30) days of date of invoice. The invoice shall detail the work performed by CPS in connection with the Services, milestones reached and a reasonable accounting of all reimbursable expenses or Pass-Through Expenses incurred since the last invoice, supporting documentation for all Pass-Through Expenses and reconciliation against any advance payments previously made by Sponsor related to reimbursable expenses or Pass-Through Expenses.

PERFORMANCE PERIOD

The effective period of this Agreement will be from the Effective Date through the completion of the Services to be provided under all of the Statements of Work attached hereto, unless sooner terminated pursuant to Article 9 hereof.

Each Statement of Work includes an estimated timeline for completion of the Services to be provided pursuant to such Statement of Work. CPS will use reasonable professional efforts to facilitate completion of the Services in accordance with the estimated timeline. In the event that CPS determines that the Services may not be completed in accordance with the estimated timeline, CPS will notify the Sponsor, in writing, of the cause for any possible delay, the anticipated duration of any possible delay and suggested actions, including changes to the applicable Statement of Work, to facilitate completion of the Services in a timely manner. The implementation of any changes to the applicable Statement of Work must be agreed to by the parties in writing as provided for in paragraph 1.D. above.

Sponsor shall review and respond to CPS’s reasonable requests for information and/or approval in a timely fashion (generally within five business days depending on the nature of the submission). Sponsor will provide other assistance as CPS may reasonably request in order to effectively perform the Services. Any delay by Sponsor in complying with Sponsor’s obligations under this Agreement and any Statement of Work (e.g., delays in review and comment by Sponsor on written work provided by CPS to Sponsor) which cause CPS to be unable to complete the Services in the time provided for by the Timeline shall relieve CPS from the provisions of the Timeline to the extent caused by Sponsor's delay and, in such event, Sponsor shall pay CPS in full for the Services when completed irrespective of any failure by CPS to complete the Services within the Timeline to the extent caused by Sponsor's delay.

RECORDKEEPING, REPORTING AND ACCESS

Sponsor’s authorized representatives and governmental and regulatory authorities, to the extent permitted by law, may, during regular business hours, arrange in writing in advance with CPS to inspect the facilities CPS will use to provide the Services.

If CPS or Sponsor becomes aware of the occurrence of any unexpected event which may have an effect on the validity of any of the Services provided by CPS under this Agreement, then the party becoming aware of the unexpected event shall notify the other party, in writing, of the occurrence of the unexpected event. The notice will be made within forty-eight (48) hours (or earlier if required by law) after the party learns of the occurrence the unexpected event. The party which becomes aware of the unexpected event shall document, to the best of its ability based on the information available to it, the nature and cause of the unexpected event and both parties shall document, in writing, any actions they may take as a result of the unexpected event.

During the term of this Agreement, CPS will promptly notify Sponsor by telephone and, subsequently, in writing, of any material changes that may effect the provision of Services by CPS under this Agreement, including, but not limited to, changes in personnel involved in providing the Services on behalf of CPS.

If any governmental or regulatory authority conducts or gives notice to CPS of its intent to conduct an inspection of CPS’s facilities and/or records or to take any other regulatory action with respect to the Services, then CPS will, to the extent permitted by applicable law and regulation: (i) promptly give Sponsor notice thereof; and (ii) send to Sponsor all information and copies of relevant documents received by CPS from the governmental or regulatory agency related thereto. To the extent required by law or applicable regulation, CPS shall permit inspection of CPS’s facilities and of such information, data and materials requested by the governmental or regulatory authority. To the extent permitted by law or applicable regulation, CPS shall: (1) make reasonable efforts to confer with Sponsor and to agree with Sponsor on a response to the governmental or regulatory agency; (2) provide Sponsor with copies of all notices and related correspondence from governmental and regulatory authorities and any regulatory inspection reports; and (3) permit Sponsor representatives to attend any inspections by governmental or regulatory authorities.

CPS shall perform the following recordkeeping and reporting obligations in a timely fashion: preparation and maintenance of complete, accurately written records, accounts, notes, reports and data, all in accordance with the Statements of Work and any federal, state and local laws and regulations which may apply to the Services.

During the term of this Agreement and until two (2) years after its expiration or termination, Sponsor may, during regular business hours, arrange in writing in advance with CPS to inspect and copy all data and work product related to the Services and to audit any financial records of CPS associated with this Agreement. Any inspections or copying shall be at Sponsor’s sole expense. Financial records may include invoice records, invoices from third parties, contracts with third parties and records of payments which relate to the Agreement. To the extent such records are not separable from other customer records, CPS shall give reasonable access to the records to an independent auditor selected by Sponsor and paid for by Sponsor who shall audit the records pertaining to the Services performed under this Agreement and may disclose the results of the audit to Sponsor only to the extent it relates to this Agreement. In no event shall other customer information be disclosed to Sponsor .

CONFIDENTIAL INFORMATION

Each party to this Agreement agrees to hold in strict confidence and not to disclose or to use for any purpose other than the performance of Services under this Agreement any and all trade secrets, privileged records or other confidential or proprietary information whether oral or written (collectively "Confidential Information") disclosed to the receiving party by the other party to this Agreement. The obligation of non-disclosure shall not apply to the following:

information at or after such time that it is or becomes publicly available through no fault of the receiving party;

ii.

information that is already independently known to the receiving party without violating any obligation of confidentiality;

iii.

information at or after such time as it is disclosed to the receiving party on a non-confidential basis by a third party with the legal right to do so;

iv.

information which the disclosing party has not identified as Confidential Information and which the receiving party reasonably believes is not Confidential Information.

Information which the receiving party is legally compelled to disclose, including, but not limited to information required to be disclosed by the receiving party to any governmental or regulatory authority or pursuant to any subpoena or discovery order or any other order of any court, may be disclosed to such authority or in accordance with such subpoena or discovery order to the extent legally required.

At any time upon written request by Sponsor, Confidential Information received by CPS from Sponsor (including any copies of the Confidential Information) and all documents, drawings, sketches, models, designs, data, memoranda, tapes, records, and any other materials whatsoever developed by CPS that include any of Sponsor’s Confidential Information (including all copies and/or any other form of reproduction and/or description thereof made by CPS) shall, at Sponsor’s option, either be returned to Sponsor or destroyed. If the materials containing Sponsor’s Confidential Information are destroyed, then CPS shall deliver to Sponsor a written statement certifying that the materials have been appropriately destroyed. The return and/or destruction of the Confidential Information shall not relieve CPS of its other confidentiality obligations under this Agreement.

The confidentiality obligations of CPS and Sponsor under this Article shall survive and continue for five (5) years after the termination of this Agreement.

In the event CPS finds it necessary to disclose Sponsor’s Confidential Information to any third party to permit CPS to defend its research against an allegation of fraud or otherwise, CPS shall first notify Sponsor and CPS and Sponsor shall agree to a mutually satisfactory way to disclose such Confidential Information as necessary for this limited purpose.

Each party agrees that any violation or threatened violation of this Section 5 will cause irreparable injury to the other party, entitling the other party to obtain injunctive relief, specific performance or other equitable relief in addition to all legal remedies, plus reasonable attorney's fees and costs incurred in obtaining any such relief.

OWNERSHIP OF RESULTS; PUBLICATION

Sponsor shall retain all right, title and interest in all products developed for Sponsor under this Agreement (the “Work Product”), and any intellectual property directly and primarily related to such Work Product, including but not limited to patents, copyrights, trade secrets, trademarks or other similar rights (collectively, the “Intellectual Property”); provided, however, that Sponsor hereby grants to CPS a non-exclusive, royalty-free license to use the Intellectual Property in order to fulfill its obligations under this Agreement. Additionally, Sponsor grants to CPS a non-exclusive, royalty-free license to use any “know-how” which CPS develops during the course of this Agreement.

Except as reserved in accordance with this Agreement, CPS hereby assigns, transfers and conveys to Sponsor all of its right, title and interest in and to any and all such Intellectual Property. Upon request of Sponsor, CPS agrees that it shall disclose fully, as soon as practicable and in writing, all material Work Product to Sponsor. At anytime and from time to time, upon the request of Sponsor, CPS shall execute and deliver to Sponsor any and all instruments, documents and papers, give evidence and do any and all other reasonable acts, at Sponsor's expense, that in the reasonable opinion of counsel for Sponsor, are or may be necessary or desirable to document such transfer or maintain and enforce any and all patents, trademark registrations or copyrights under United States or foreign law with respect to any such Intellectual Property or obtain any extension, validation, re-issue, continuance or renewal of any patent, trademark or copyright of such Intellectual Property.

Unless otherwise required by this Agreement or applicable law or regulations, any report which details and/or summarizes the Work Product will designate CPS as the developer of the Work Product. Sponsor will not remove such designation from the Work Product unless the removal: (i) is approved in writing by CPS; (ii) is permitted by the provisions of this Agreement; or (iii) is required by law or applicable regulation.

Sponsor may modify the Work Product for its own internal usage. If Sponsor modifies the Work Product, Sponsor shall provide a copy of the modified Work Product to CPS. Upon request from CPS, Sponsor will remove the designation that CPS developed the Work Product from any Work Product modified by Sponsor. Any Work Product modified by Sponsor shall be subject to the same restrictions concerning disclosure as apply to the original Work Product.

CPS may not submit or publish the Work Product in journals, periodicals or otherwise without the prior written consent of Sponsor. If Sponsor consents to such publication, CPS shall remove any of Sponsor’s Confidential Information from the Work Product and CPS shall provide a manuscript of the paper, abstract or other published materials (the “Published Materials”) to Sponsor for its review and approval prior to submission for publication. If, within five business days of Sponsor’s receipt of the Published Materials, Sponsor notifies CPS in writing that the Published Materials contain Confidential Information and specifically identifies the Confidential Information in the Published Materials, then CPS will remove the Confidential Information from the Published Materials before they are published.

USE OF CPS’S OR SPONSOR'S NAME (ADVERTISING)

CPS and Sponsor will obtain prior written permission from each other before using the name, symbols and/or marks of the other in any form of publicity. This shall not include documents or legally required disclosure by CPS or Sponsor that identifies the existence of the Agreement. Further, Sponsor agrees that its use of the name, symbols and/or marks of CPS, or names of CPS's employees, or names of independent contractors, shall be limited to identification of CPS as the provider of Services under this Agreement.

Sponsor will not use, nor authorize others to use, the name, symbols, or marks of CPS in any advertising or publicity material or make any form of representation or statement in relation to the Services which would constitute an express or implied endorsement by CPS of any commercial product or service without prior written approval from CPS.

8. INDEMNIFICATION

Sponsor covenants and agrees to defend, indemnify, reimburse and hold harmless CPS, and its directors, officers, agents, employees, interns, independent contractors, sub-contractors, vendors and affiliates: (collectively, the "CPS Indemnitees"), from and against any and all demands, claims, liabilities, obligations, actions, proceedings, judgments, damages, losses, costs and expenses (including court costs and reasonable attorney's fees) (collectively, the "Claims") relating to or alleged to have arisen out of the performance of the Services. This indemnity excludes, however, Claims against a CPS Indemnitee to the extent found by a court of competent jurisdiction to be caused by: i) material failure on the part of a CPS Indemnitee to conduct the Services in accordance with this Agreement or the Statements of Work; or ii) negligence or willful malfeasance by a CPS Indemnitee in connection with the administration of the Services or (iii) material deviation from any applicable governmental rule or regulation.

CPS shall promptly notify Sponsor of any complaints, Claims, or injuries relating to any loss subject to this indemnification. Sponsor shall have the right to select defense counsel and to direct the defense or settlement of any such claim or suit, provided the Sponsor shall not enter into a settlement attributing damages or liability to any CPS Indemnitee. Sponsor shall provide diligent defense against any claims brought or actions filed which are covered by the indemnity contained herein, whether such claims or actions are rightfully or wrongfully brought or filed.

Deviations from the terms of the Statements of Work that may arise out of necessity do not constitute negligence or willful malfeasance provided that CPS shall promptly notify the Sponsor in writing of any such deviations.

CPS shall reasonably cooperate with the Sponsor and its legal representatives in the investigation or defense of any claims or suits covered under this Agreement. In the event a claim or action is or may be asserted, CPS shall have the right to select and to obtain representation by separate legal counsel. If CPS exercises such right, all costs and expenses incurred by CPS for such separate counsel shall be borne by CPS.

CPS covenants and agrees to indemnify, reimburse and hold harmless Sponsor and its directors, officers, agents, employees, and affiliates (collectively the “Sponsor Indemnitees”) from and against any and all Claims with respect to which Sponsor is ultimately determined to not be obligated pursuant to clauses i. ii. and iii of Section A above. This indemnification excludes, however, Claims against a Sponsor Indemnitee to the extent found by a court of competent jurisdiction to have been caused in whole or in part by the Sponsor Indemnitee’s negligence or willful malfeasance.

Notwithstanding any of the foregoing indemnification provisions, neither Sponsor nor CPS shall be liable to the other for indirect, INCIDENTAL, EXEMPLARY, PUNITIVE, consequential or special damages or losses (including lost profits) (collectively “Speculative Damages”) resulting directly or indirectly from performance of or failure to perform or comply with this Agreement . UNDER NO CIRCUMSTANCES SHALL CPS' TOTAL LIABILITY OF ALL KINDS ARISING OUT OF OR RELATED TO THIS AGREEMENT, REGARDLESS OF THE FORUM AND REGARDLESS OF WHETHER ANY ACTION OR CLAIM IS BASED ON CONTRACT, STRICT LIABILITY, TORT OR OTHERWISE, EXCEED THE TOTAL VALUE OF THE SERVICES TO WHICH SUCH ACTION OR CLAIM RELATES (DETERMINED AS OF THE DATE OF ANY FINAL JUDGMENT IN SUCH ACTION. Such limitation on damages is expressly understood to be a bargained for and material term of this Agreement but shall not limit the obligations of either party to comply with Section 9 hereof upon any termination of this Agreement.

At all times during the term of this Agreement and for a period of one year thereafter, Sponsor and CPS shall each maintain a policy or policies of insurance (including general liability and product liability) at levels sufficient to support its indemnification obligations. Each party shall deliver to the other party evidence of such insurance within five (5) business days of the other party's request.

9. TERMINATION

This Agreement may be terminated by either party if such party notifies the other party to this Agreement of the non-notifying party’s failure to comply with the terms of this Agreement. If the non-notifying party fails to cure its non-compliance within thirty (30) days of receipt of such notice from the notifying party then this Agreement shall terminate at the end of such thirty (30) day cure period.

Notwithstanding any other provision of this Agreement, Sponsor may terminate this Agreement or any Statement of Work attached hereto at any time by providing notice to CPS. Such termination shall be effective on such date as specified by Sponsor in such notice.

Upon the effective date of termination, there shall be an accounting conducted by CPS, subject to verification and approval by Sponsor. Within thirty (30) days after receipt of adequate documentation therefore, Sponsor will make payment to CPS for:

Except in the case of Sponsor's termination of this Agreement due to CPS' material breach of its obligations hereunder, the reasonable cost to CPS (including, but not limited to salary and benefits) of its employees, contractors and sub-contractors for work which CPS has committed for any of them to complete under the Statement(s) of Work and for which CPS cannot reasonably substitute other revenue producing work from other sponsors. In such event, CPS will use its best efforts to substitute other revenue producing work. This provision is intended to make CPS whole for resources it has irrevocably committed to conduct the Services provided for under the Statement(s) of Work where those resources cannot be immediately re-deployed to revenue producing work for CPS for other sponsors.

ii.

all services properly rendered and monies properly expended by CPS until the date of termination and not yet paid for; and

iii.

reasonable non-cancelable obligations properly incurred for the Services by CPS prior to the effective date of receipt of notice of termination.

CPS will return within sixty (60) days to Sponsor any funds not earned or expended or irrevocably obligated by CPS prior to the effective termination date.

Termination of this Agreement by either party shall not affect the rights and obligations of the parties accrued prior to the effective date of the termination. The rights and duties provided for under Articles 4 through 10 shall survive the termination or expiration of this Agreement.

10. MISCELLANEOUS

Applicable Law – This Agreement shall be governed by the laws of the State of Delaware.

Notice – Any notice required or permitted hereunder shall be in writing and shall be deemed given as of the date (i) of delivery if delivered by hand, on the date sent by facsimile with automatic confirmation by the transmitting machine showing the proper number of pages were transmitted without error or (ii) the day after deposit with a reputable overnight carrier or (iii) three business days after mailing if sent by Registered or Certified Mail, postage prepaid, return receipt request, and addressed to the party to receive such notice at the address set forth below, or such other address as is subsequently specified in writing:

	If to Sponsor:	Nasrat Hakim, CEO
		Elite Pharmaceuticals, Inc.
		165 Ludlow Avenue
		Northvale, NJ 07647
		Fax No.: 201-750-2755

	If to CPS:
		Camargo Pharmaceutical Services, LLC
		9825 Kenwood Road
		Suite 203
		Cincinnati, OH 45242
		Fax No.: __________________________

Amendments – This Agreement and the Statements of Work attached hereto may only be extended, renewed or otherwise amended at any time by the mutual written consent of parties hereto.

Entire Agreement – This Agreement represents the entire understanding of the parties with respect to the subject matter hereof. In the event of any inconsistency between this Agreement and the Statements of Work, the terms of this Agreement shall govern.

Severability – The invalidity or unenforceability of any term or provision of this Agreement shall not affect the validity or enforceability of any other term or provision hereof.

Integration –The Statements of Work attached thereto are incorporated in this Agreement by reference. In the event of a conflict between the terms of this Agreement and the Statements of Work, the terms of this Agreement shall govern.

Assignment – Neither party hereto may assign, cede or transfer any of its rights or obligations under this Agreement without the written consent of the other party, which consent may not by unreasonably withheld; provided, however, without such consent Sponsor may assign this Agreement in connection with the transfer or sale of all or substantially all of its assets or business or its merger or consolidation with another company. Sponsor may assign this Agreement in whole or in part to any corporate affiliate without consent of CPS, but such assignment shall not release Sponsor from its obligations hereunder.

This Agreement shall inure to the benefit of and be binding upon each party signatory thereto, its successors and permitted assigns. No assignment shall relieve either party of the performance of any accrued obligation which such party may then have under this Agreement.

This provision shall not be deemed to prohibit CPS from employing independent contractors or sub-contractors to complete some or all of the Services required to be performed by CPS under this Agreement. The use of independent contractors and/or sub-contractors by CPS, except as provided in Section 1.E.1, shall not relieve CPS of any of its obligations under this Agreement.

Independent Contractor – In the performances of all services hereunder, CPS shall be deemed to be and shall be an independent contractor and, as such, shall not be entitled to any benefits applicable to employees of Sponsor.

Neither party is authorized nor empowered to act as agent for the other for any purpose and shall not, on behalf of the other, enter into any contract, warranty or representation as to any matter. Neither party shall be bound by the acts nor by the conduct of the other.

Waiver - No waiver of any term, provision or condition of this Agreement whether by conduct or otherwise in any one or more instances shall be deemed to be or construed as a further or continuing waiver of any such term, provision or condition, or of any other term, provision or condition of this Agreement.

Force Majeure – Neither party shall be liable for any failure to perform as required by this Agreement, to the extent such failure to perform is caused due to circumstances reasonably beyond such party's control, including without limitation contracting delays resulting from the action or inaction of third parties, delays in obtaining third party approvals (including authorizations from Sponsor under this Agreement), labor disturbances or labor disputes of any kind, failure of any governmental approval required for full performance, civil disorders or commotions, acts of aggression, acts of God, energy or other conservation measures, explosions, failure of utilities, mechanical breakdowns, material shortages, disease, or other such occurrences; provided, however, that in such event, the affected party gives the non-affected party prompt written notice of the occurrence of such circumstances and uses reasonable efforts to alleviate such circumstances, and resumes performance hereunder upon alleviation of such circumstances.

(Signature Page Follows)

IN WITNESS WHEREOF, the parties hereto have executed this Agreement in duplicate by proper persons thereunto duly authorized.

Sponsor

By:	s/ Nasrat Hakim
	(Signature)

	Nasrat Hakim
	(Print or type name)

	President & CEO
	(Title)

	August 19. 2013
	(Date)


Camargo Pharmaceutical Services, LLC

By:	s/ Kenneth V. Phelps
	(Signature)

	Kenneth V. Phelps
	(Print or type name)

	President & CEO
	(Title)

	August 19, 2013
	(Date)

Appendix X

STATEMENT OF WORK, COST, TIMELINE AND PAYMENT SCHEDULE

Exhibit 31.1

CERTIFICATION

I, Nasrat Hakim, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q for the quarter ended September 30, 2013 of Elite Pharmaceuticals, Inc. (the “Registrant”);

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting.

5.	The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date:	November 14, 2013	/s/ Nasrat Hakim
		Nasrat Hakim
		Chief Executive Officer
		(Principal Executive Officer)

Exhibit 31.2

CERTIFICATION

I, Carter J. Ward, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q for the quarter ended September 30, 2013 of Elite Pharmaceuticals, Inc. (the “Registrant”);

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

(a)

(b)

(c)

(d)

5.	The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

(a)

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date:	November 14, 2013	/s/ Carter J. Ward
		Carter J. Ward
		Chief Financial Officer
		(Principal Accounting and Financial Officer)

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Elite Pharmaceuticals, Inc. (the “Registrant”) on Form 10-Q for the quarter ended September 30, 2013 filed with the Securities and Exchange Commission (the “Report”), I, Nasrat Hakim, Chief Executive Officer of the Registrant, certify, pursuant to 18 U.S. C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and

(2) Information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

Date:	November 14, 2013	/s/ Nasrat Hakim
		Nasrat Hakim
		Chief Executive Officer
		of Elite Pharmaceuticals, Inc.
		(Principal Executive Officer)

This certification has been furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

A signed original of this written statement required by Section 906 has been provided to Elite Pharmaceuticals, Inc. and will be retained by Elite Pharmaceuticals, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Elite Pharmaceuticals, Inc. (the “Registrant”) on Form 10-Q for the quarter ended September 30, 2013 filed with the Securities and Exchange Commission (the “Report”), I, Carter J Ward, Chief Financial Officer and Treasurer of the Registrant, certify, pursuant to 18 U.S. C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and

(2) Information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

Date:	November 14, 2013	/s/ Carter J. Ward
		Carter J. Ward
		Chief Financial Officer of
		Elite Pharmaceuticals, Inc.
		(Principal Accounting and Financial Officer)

This certification has been furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.