Unassociated Document
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
13D/A
Under
the Securities Exchange Act of 1934
(Amendment
No. 1)*
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ELITE PHARMACEUTICALS, INC.
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(Name
of Issuer)
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Common Stock
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(Title
of Class of Securities)
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28659T200
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(CUSIP
Number)
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Ram
Potti
Epic
Pharma, LLC
227-15
North Conduit Avenue
Laurelton,
NY 11413
718-276-8600
copy
to:
Morris
Bienenfeld, Esq.
Wolff
& Samson PC
One
Boland Drive
West
Orange, NJ 07052
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973-325-1500
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(Name,
Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
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October 30, 2009
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(Date
of Event which Requires Filing of this Statement)
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If the
filing person has previously filed a statement on Schedule 13G to report the
acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the
following box. o
Note: Schedules filed in paper
format shall include a signed original and five copies of the schedule,
including all exhibits. See §240.13d-7 for other parties to whom copies are to
be sent.
* The
remainder of this cover page shall be filled out for a reporting person’s
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The
information required on the remainder of this cover page shall not be deemed to
be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934
(“Act”) or otherwise subject to the liabilities of that section of the Act but
shall be subject to all other provisions of the Act (however, see the
Notes).
SCHEDULE
13D
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(1)
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Names
of Reporting Persons
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I.R.S.
Identification Nos. of above persons (entities only)
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Epic
Investments, LLC (90-0486059)
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Check the Appropriate Box if
a Member of a Group (See Instructions)
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(A) x
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(B) o
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SEC
Use Only
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Source of Funds (See
Instructions)
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WC
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Check
if Disclosure of Legal Proceeding is Required Pursuant to Items 2(d) or
2(e)
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o
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Citizenship
or Place of Organization
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Delaware
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Sole
Voting Power
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0
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Number
of
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Shared
Voting Power
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Shares
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Beneficially
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120,000,000
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Owned
by
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Sole
Dispositive Power
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Each
Reporting
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Person
With
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0
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Shared
Dispositive Power
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120,000,000
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Aggregate
Amount Beneficially Owned by Each Reporting Person
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120,000,000
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Check
if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions)
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o
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Percent
of Class Represented by Amount in Row (11)
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60.39%
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Type of Reporting Person (See
Instructions)
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00
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SCHEDULE
13D
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(1)
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Names
of Reporting Persons
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I.R.S.
Identification Nos. of above persons (entities only)
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Epic
Pharma, LLC (32-0254130)
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Check the Appropriate Box if
a Member of a Group (See Instructions)
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(A) x
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(B) o
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SEC
Use Only
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Source of Funds (See
Instructions)
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WC
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Check
if Disclosure of Legal Proceeding is Required Pursuant to Items 2(d) or
2(e)
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o
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Citizenship
or Place of Organization
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Delaware
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Sole
Voting Power
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0
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Number
of
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Shared
Voting Power
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Shares
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Beneficially
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120,000,000
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Owned
by
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Sole
Dispositive Power
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Each
Reporting
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Person
With
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0
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Shared
Dispositive Power
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120,000,000
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Aggregate
Amount Beneficially Owned by Each Reporting Person
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120,000,000
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Check
if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions)
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o
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Percent
of Class Represented by Amount in Row (11)
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60.39%
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Type of Reporting Person (See
Instructions)
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00
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SCHEDULE
13D
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(1)
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Names
of Reporting Persons
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I.R.S.
Identification Nos. of above persons (entities only)
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Ashok G.
Nigalaye
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Check the Appropriate Box if
a Member of a Group (See Instructions)
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(A) x
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(B) o
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SEC
Use Only
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Source of Funds (See
Instructions)
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WC
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Check
if Disclosure of Legal Proceeding is Required Pursuant to Items 2(d) or
2(e)
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o
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Citizenship
or Place of Organization
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United
States
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Sole
Voting Power
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0
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Number
of
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Shared
Voting Power
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Shares
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Beneficially
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120,000,000
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Owned
by
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Sole
Dispositive Power
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Each
Reporting
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Person
With
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0
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Shared
Dispositive Power
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120,000,000
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Aggregate
Amount Beneficially Owned by Each Reporting Person
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120,000,000
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Check
if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions)
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o
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Percent
of Class Represented by Amount in Row (11)
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60.39%
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Type of Reporting Person (See
Instructions)
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IN
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SCHEDULE
13D
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(1)
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Names
of Reporting Persons
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I.R.S.
Identification Nos. of above persons (entities only)
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Check the Appropriate Box if
a Member of a Group (See Instructions)
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(A) x
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(B) o
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SEC
Use Only
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Source of Funds (See
Instructions)
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WC
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Check
if Disclosure of Legal Proceeding is Required Pursuant to Items 2(d) or
2(e)
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o
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Citizenship
or Place of Organization
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United
States
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Sole
Voting Power
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0
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Number
of
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Shared
Voting Power
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Shares
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Beneficially
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120,000,000
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Owned
by
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Sole
Dispositive Power
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Each
Reporting
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Person
With
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0
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Shared
Dispositive Power
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120,000,000
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Aggregate
Amount Beneficially Owned by Each Reporting Person
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120,000,000
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Check
if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions)
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o
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Percent
of Class Represented by Amount in Row (11)
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60.39%
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Type of Reporting Person (See
Instructions)
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IN
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SCHEDULE
13D
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(1)
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Names
of Reporting Persons
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I.R.S.
Identification Nos. of above persons (entities only)
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Ram
Potti
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Check the Appropriate Box if
a Member of a Group (See Instructions)
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(A) x
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(B) o
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SEC
Use Only
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Source of Funds (See
Instructions)
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WC
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Check
if Disclosure of Legal Proceeding is Required Pursuant to Items 2(d) or
2(e)
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o
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Citizenship
or Place of Organization
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United
States
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Sole
Voting Power
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0
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Number
of
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Shared
Voting Power
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Shares
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|
Beneficially
|
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120,000,000
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Owned
by
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Sole
Dispositive Power
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Each
Reporting
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Person
With
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0
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Shared
Dispositive Power
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120,000,000
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Aggregate
Amount Beneficially Owned by Each Reporting Person
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120,000,000
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Check
if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions)
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|
o
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Percent
of Class Represented by Amount in Row (11)
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60.39%
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Type of Reporting Person (See
Instructions)
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IN
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This
Amendment No. 1 to Schedule 13D (the “Amendment”) is being filed on
behalf of the Reporting Persons (as defined and identified below) to amend the
original Schedule 13D filed by the Reporting Persons with the United States
Securities and Exchange Commission on June 12, 2009 (the “Original Schedule 13D” and
the Original Schedule 13D as so amended, the “Schedule 13D”) to report the
purchase by the Purchaser (as defined and identified below) of an
additional 1,000 shares of Elite Pharmaceuticals, Inc. (“Elite”) Series E Convertible
Preferred Stock and warrants to purchase up to an additional 40,000,000 shares
of Elite Common Stock as described below.
Item 1. Security
and Issuer
The title of the class of equity
securities to which this statement on Schedule 13D relates is the Common Stock,
par value US $0.001 per share (the “Common Stock”) of Elite
Pharmaceuticals, Inc. (“Elite” or the “Issuer”), with its principal
executive offices located at 165 Ludlow Avenue, Northvale, New
Jersey 07647.
Item
2. Identity and
Background
(a) This
statement is being filed jointly by Epic Pharma, LLC, a Delaware limited
liability company (“Epic”), Epic Investments,
LLC, (the “Purchaser”),
Ashok G. Nigalaye, an individual (“Nigalaye”), Jeenarine Narine,
an individual (“Narine”) and Ram Potti, an
individual (“Potti”)
(each of Epic, the Purchaser, Nigalaye, Narine and Potti, a “Reporting Person” and
collectively, the “Reporting
Persons”). Potti, Nigalaye and Narine are executive officers
and equity owners of Epic and the Purchaser. Epic is an equity owner
of the Purchaser. Epic, Potti, Nigalaye and Narine share voting,
investment and dispositive power over, and are indirect beneficial owners of,
all securities owned by the Purchaser reported herein. The interests
of each of Epic, Nigalaye, Narine and Potti in the securities of the Issuer
owned by the Purchaser and described herein are each limited, and each of Epic,
Nigalaye, Narine and Potti disclaim beneficial ownership of such securities
except, to the extent of their respective pecuniary interests in the
Purchaser.
(b) The
addresses of the principal business and principal offices of each Reporting
Person is c/o Epic Pharma, LLC, 227-15 North Conduit Avenue, Laurelton, New
York 11413.
(c) The
principal business of Epic and the Purchaser is research, development,
manufacturing sales and marketing of pharmaceuticals. Nigalaye’s
principal occupation and employment is Chief Executive Officer of Epic, and each
of Narine’s and Potti’s principal occupation and employment is Vice President of
Epic. The business, principal occupation and/or employment, as
applicable, of each Reporting Person is primarily conducted at 227-15 North
Conduit Avenue, Laurelton, New York 11413. In addition to
his duties as Chief Executive Officer of Epic, Nigalaye was appointed as the
Chief Scientific Officer of the Issuer (Elite) on September 15,
2009.
(d) During
the last five years, none of the Reporting Persons has been, and none of their
executive officers, directors, managers or controlling persons has been,
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors).
(e) During
the last five years, none of the Reporting Persons was, and none of their
executive officers, directors, managers or controlling persons was, a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction
and as a result of such proceeding was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding any violation
with respect to such laws.
(f) Nigalaye,
Narine and Potti are each citizens of the United States.
Item
3. Source and Amount
of Funds or Other Consideration
The Purchaser used internal cash of
$2,000,000 in the aggregate exclusive of costs, to purchase the securities of
the Issuer reported herein.
Item
4. Purpose of
Transaction
The purpose or purposes of the
acquisition of securities of the Issuer by the Reporting Persons is to commence
and continue a strategic alliance relationship between Epic and the Issuer
(Elite), as more fully described below, and which may, upon the issuance of
additional securities of the Issuer to the Purchaser subject to certain
conditions precedent as more fully described below, ultimately result in the
control of the Issuer by the Reporting Persons. The Reporting Persons
intend to review their holdings of the securities of the Issuer on a continuing
basis and in that connection expect to consider various factors including,
without limitation, the current and anticipated future trading price levels of
the Issuer’s Common Stock, the financial condition, results of operations and
prospects of the Issuer, tax considerations, conditions in the pharmaceutical
industry and securities markets, general economic and industry conditions, other
investment and business opportunities available to the Reporting Persons, and
other factors that the Reporting Persons may deem relevant, and will in the
future take such actions with respect to investment in the Issuer as they deem
appropriate. Such actions that the Reporting Persons may take include, without
limitation, one or more of the following actions, although, except as
contemplated by the Alliance Agreement (as defined below) or otherwise incident
thereto, the Reporting Persons have no current specific plans or proposals to
take any of such actions: (a) the acquisition by any person of additional
securities of the Issuer, or the disposition of securities of the Issuer; (b) an
extraordinary corporate transaction, such as a merger, reorganization or
liquidation, involving the Issuer or any of its subsidiaries; (c) a sale or
transfer of a material amount of assets of the Issuer or any of its
subsidiaries; (d) any change in the present board of directors or management of
the Issuer, including any plans or proposals to change the number or term of
directors or to fill any existing vacancies on the board; (e) any material
change in the present capitalization or dividend policy of the Issuer; (f) any
other material change in the Issuer’s business or corporate structure; (g)
changes in the Issuer’s charter, bylaws or instruments corresponding thereto or
other actions which may impede the acquisition of control of the Issuer by any
person; (h) causing a class of securities of the Issuer to be delisted from a
national securities exchange or to cease to be authorized to be quoted in an
inter-dealer quotation system of a registered national securities association;
(i) a class of equity securities of the Issuer becoming eligible for termination
of registration pursuant to Section 12(g)(4) of the Securities Exchange Act of
1933 as amended (the “Act”); or (j) any action
similar to any of those enumerated above.
Entry
Into Strategic Alliance Agreement
On March 18, 2009, Elite
Pharmaceuticals, Inc., a Delaware corporation (the “Issuer”), entered into a
Strategic Alliance Agreement (the “Initial Alliance Agreement”)
with Epic Pharma, LLC, a Delaware limited liability company (“Epic”), and Epic Investments,
LLC, a Delaware limited liability company and a subsidiary of Epic (the “Purchaser”), as amended by an
Amendment, dated as of April 30, 2009, by and among Epic, the Purchaser and the
Issuer (the “First
Amendment”), a Second Amendment, dated as of June 1, 2009, by and among
Epic, the Purchaser, the Issuer, Ashok G. Nigalaye (“Nigalaye”) and Jeenarine
Narine (“Narine”) and a
Third Amendment, dated as of August 18, 2009, by and between Epic, the Purchaser
and the Issuer (the “Third
Amendment”) (the Initial Alliance Agreement, as amended by the First
Amendment, the Second Amendment and the Third Amendment, is hereinafter referred
to as the “Alliance
Agreement”). Pursuant to the Alliance Agreement, the Issuer
has commenced a strategic relationship with Epic, a pharmaceutical company that
operates a business synergistic to that of the Issuer in the research and
development, manufacturing, sales and marketing of oral immediate and controlled
release drug products. Under the Alliance Agreement (i) Epic
will pursue the development of at least eight additional generic drug products
at the Issuer’s facility with the intent of filing abbreviated new drug
applications for obtaining United States Food and Drug Administration (“FDA”) approval of such
generic drugs, (ii) the Issuer will be entitled to 15% of the profits generated
from the sales of such additional generic drug products upon approved by the
FDA, and (iii) Epic and the Issuer will share with each other certain resources,
technology and know-how in the development of drug products. In
order to provide the Issuer with the additional capital necessary for the
product development and synergies presented by the strategic relationship with
Epic, the Purchaser will invest in the Issuer through the purchase of up to an
aggregate of $3.75 million of newly issued shares of the Issuer’s Series E
Convertible Preferred Stock, par value US$0.01 per share (the “Series E Preferred Stock”),
at a price of US$1,000 per share, each share convertible, at US$0.05 per share
(the “Conversion
Price”), into 20,000 shares of its Common Stock, par value US$0.001 per
share (the “Common
Stock”), subject to certain adjustments, together with certain warrants
to purchase Common Stock as more fully described herein. A copy of
(i) the Initial Alliance Agreement was previously filed by the Issuer with the
United States Securities and Exchange Commission (the “SEC”) as Exhibit 10.1 to the
Issuer’s Current Report on Form 8-K dated and filed with the SEC on March 23,
2009, (ii) the First Amendment was previously filed by the Issuer with the SEC
as Exhibit 10.1 to the Issuer’s Current Report on Form 8-K dated and filed with
the SEC on May 6, 2009, (iii) the Second Amendment was previously filed by the
Issuer with the SEC as Exhibit 10.1 to the Issuer’s Current Report on Form 10-K
dated and filed with the SEC on June 5, 2009, and (iv) the Third Amendment was
previously filed by the Issuer with the SEC as Exhibit 10.3 to the Issuer’s
Quarterly Report on Form 10-Q dated and filed with the SEC on August 19,
2009. The copies of the Initial Alliance Agreement, First Amendment,
Second Amendment and Third Amendment so previously filed by the Issuer with the
SEC are incorporated by reference as Exhibits 10.1.1, 10.1.2, 10.1.3 and 10.1.4,
respectively, to this Schedule 13D and this summary of the terms of the Alliance
Agreement, and any reference herein to the Alliance Agreement, is qualified in
it entirety by reference to such Exhibit.
The
Issuer, Epic and the Purchaser conducted an initial closing (the “Initial Closing”) on June 3,
2009 (the date of such Initial Closing, the “Initial Closing Date”), at
which 1,000 shares of Series E Preferred Stock (convertible into an aggregate of
20,000,000 shares of Common Stock) and an initial warrant to purchase up to
40,000,000 shares of Common Stock were issued by the Issuer to the Purchaser as
previously reported and as more fully described below.
The
Issuer, Epic and the Purchaser conducted a second closing (the “Second Closing”) on October
30, 2009 (the date of such Second Closing, the “Second Closing Date”), at
which an additional 1,000 shares of Series E Preferred Stock (convertible into
an aggregate of 20,000,000 shares of Common Stock) and a second warrant to
purchase up to 40,000,000 shares of Common Stock were issued by the Issuer to
the Purchaser as more fully described below.
Use
of Facility and Joint Development of Drug Products
Under the
Alliance Agreement, Epic has the right to use and occupy a portion of the
Issuer’s facility located at 165 Ludlow Avenue, Northvale, New Jersey (the
“Facility”), for the
purpose of developing new generic drug products, all at Epic’s sole cost and
expense (other than Facility related expenses), for a period of at least three
years (the “Initial
Term”), unless sooner terminated or extended pursuant to the Alliance
Agreement or by mutual agreement of the Issuer and Epic (the Initial Term, as
shortened or extended, the “Term”). In
addition to the use of the Facility, Epic will use the Issuer’s machinery,
equipment, systems, instruments and tools residing at the Facility (collectively
the “Personal
Property”) in connection with its joint drug development project at the
Facility. Epic will have the right, exercisable in its sole
discretion, to extend the Initial Term for two periods of one year each by
giving written notice to the Issuer of such extension within ninety days of the
end of the Initial Term or any extension thereof. Any such extension
will be on the same terms and conditions contained in the Alliance
Agreement. The Issuer will be responsible for (and Epic will have no
responsibility for) any maintenance, services, repairs and replacements in, to
or of the Facility and the Personal Property, at the Issuer’s sole cost and
expense, unless any such maintenance, service, repair or replacement is required
as a result of the negligence or misconduct of Epic’s employees or
representatives, in which case Epic will be responsible for the costs and
expenses associated therewith.
During the Term, Epic will use and
occupy the Facility and the Personal Property for the purpose of developing (i)
at least four control release products (the “Identified CR Products”) and
(ii) at least four immediate release products (the “Identified IR Products”), the
identity of each will be subject to agreement between Epic and the
Issuer. If, during the Term, Epic determines, in its reasonable
business judgment, that the further or continuing development of any Identified
CR Product and/or Identified IR Product is no longer commercially feasible, Epic
may, upon written notice to the Issuer, eliminate from development under the
Alliance Agreement such Identified CR Product and/or Identified IR Product, and
replace such eliminated product with another control release or immediate
release product, as applicable.
Epic will also use a portion of the
Facility and use the Personal Property for the purpose of developing (x)
additional control release products of Epic (the “Additional CR Products”),
subject to the mutual agreement of Epic and the Issuer, and/or (y) additional
immediate release products of Epic (the “Additional IR Products”),
subject to the mutual agreement of the Issuer and Epic (each Identified CR
Product, Identified IR Product, Additional CR Product and Additional IR Product,
individually, a “Product,” and collectively,
the “Products”). Under
the Alliance Agreement, Epic may not eliminate an Identified CR Product or an
Identified IR Product unless it replaces such Product with an Additional CR
product or Additional IR Product, as the case may be. Subject to the mutual
agreement of the parties as to additional consideration and other terms, Epic
may use and occupy the Facility for the development of other products of Epic
(in addition to the Products).
As additional consideration for Epic’s
use and occupancy of the Facility and its use of the Personal Property during
the Term and the issuance and delivery by the Issuer to the Purchaser of the
Milestone Shares (as defined below) and Milestone Warrants (as defined below),
for the period beginning on the First Commercial Sale (as defined in the
Alliance Agreement) of each Product and continuing for a period of ten years
thereafter (measured independently for each Product), Epic will pay the Issuer a
cash fee (the “Product
Fee”) equal to fifteen percent of the Profit (as defined in the Alliance
Agreement), if any, on each of the Products.
With respect to each Identified CR
Product and Additional CR Product developed by Epic at the Facility: (i) the
Issuer will issue and deliver to Epic a seven year warrant to purchase up to
10,000,000 shares of Common Stock, at an exercise price of US$0.0625, following
the receipt by the Issuer from Epic of each written notice of Epic’s receipt of
an acknowledgement from the FDA that the FDA has accepted for filing an ANDA (as
defined below) for such Identified CR Products and/or Additional CR Products, up
to a maximum of four such warrants for the right to purchase up to an aggregate
of 40,000,000 shares of Common Stock (such warrants, the “CR Related Warrants”), and
(ii) the Issuer will issue and deliver to Epic 7,000,000 shares of Common Stock
following the receipt by the Issuer from Epic of each written notice of Epic’s
receipt from the FDA of approval for such Identified CR Products and/or
Additional CR Products, up to a maximum of an aggregate of 28,000,000 shares of
Common Stock (such shares, the “CR Related
Shares”).
With respect to each Identified IR
Product and Additional IR Product developed by Epic at the Facility, (i) the
Issuer will issue and deliver to the Purchaser a seven year warrant to purchase
up to 4,000,000 shares of Common Stock, at an exercise price of US$0.0625,
following the receipt by the Issuer from Epic of each written notice of Epic’s
receipt of an acknowledgement from the FDA that the FDA has accepted for filing
an ANDA for such Identified IR Products and/or Additional IR Products, up to a
maximum of four such warrants for the right to purchase up to an aggregate of
16,000,000 shares of Common Stock (such warrants, together with the CR Related
Warrants, the “Milestone
Warrants”), and (ii) the Issuer will issue and deliver to Epic 3,000,000
shares of Common Stock following the receipt by the Issuer from Epic of each
written notice of Epic’s receipt from the FDA of approval for such Identified IR
Products and/or Additional IR Products, up to a maximum of an aggregate of
12,000,000 shares of Common Stock (such shares, together with the CR Related
Shares, the “Milestone
Shares”). The Milestone Warrants may only be exercised by
payment of the applicable cash exercise price. The Issuer will have
no obligation to register with the SEC or any state securities commission the
resale of the Milestone Shares, Milestone Warrants or the shares of Common Stock
issuable upon exercise of the Milestone Warrants.
Subject to the mutual agreement of Epic
and the Issuer with respect to the selection of Additional CR Products and/or
Additional IR Products pursuant to the Alliance Agreement, Epic will have the
sole right to make all decisions regarding all aspects of the Products,
including, but not be limited to, (i) research and development, formulation,
studies and validation of each Product, (ii) identifying, evaluating and
obtaining ingredients for each Product, (iii) preparing and filing an
abbreviated new drug application (an “ANDA”) for each Product with
the FDA and addressing and handling all regulatory inquiries, audits and
investigations pertaining to the ANDA, and (iv) the manufacture, marketing,
supply and commercialization of each Product. In addition, Epic will
be the sole and exclusive owner of all right, title and interest in and to each
of the Products.
Pursuant to the Alliance Agreement,
each of the Issuer and Epic use of the other party’s confidential and
proprietary information will be restricted by customary confidentiality
provisions. The Issuer, and Epic and the Purchaser (severally, and not jointly),
also agreed in the Alliance Agreement to indemnify and hold each other harmless
from certain losses under the Alliance Agreement.
Under certain circumstances Epic will
be entitled to terminate the Term early in the event that the Facility is
totally damaged or destroyed such that the Facility is rendered wholly
untenantable. In addition, subject to certain exceptions, either the
Issuer or Epic may terminate the Term at any time if the other party is in
breach of any material obligations under Article V of the Alliance Agreement and
has not cured such breach within sixty days after receipt of written notice
requesting cure of such breach.
In addition to the development of the
Products at the Facility and the sharing of the profits resulting from the sale
of such Products after FDA approval, Epic will assist the Issuer in the
continued development of the Issuer’s current drug products, as well as share
with the Issuer Epic’s resources, technology and know-how in the development of
drug products.
Infusion
of Additional Capital Necessary for Product Development
In order
to provide the Issuer with the additional capital necessary for the product
development and synergies presented by the strategic relationship with Epic, the
Purchaser paid to the Issuer the sum of US $1,000,000 in exchange for 1,000
shares of Series E Preferred Stock, which such shares of Series E Preferred
Stock are convertible, at the Conversion Price, subject to adjustment, into an
aggregate of 20,000,000 shares of Common Stock, and a warrant dated June 3, 2009
(the “Initial Warrant”)
to purchase up to 40,000,000 shares of Common Stock. The Initial Warrant will be
exercisable until the date that is the seventh anniversary of the Initial
Closing Date i.e., until June 3, 2016, and will have a per share exercise price
equal to US$0.0625, subject to adjustments for certain events, including, but
not limited to, dividends, stock splits, combinations and the like. The per
share exercise price of the Initial Warrant will also be subject to adjustment
for the sale of Common Stock or securities convertible into Common Stock at a
price less than the then applicable per share exercise price of the Initial
Warrant, for which the Purchaser’s consent was not required under the Alliance
Agreement (as described in further detail below). A copy of the
Initial Warrant was previously filed by the Issuer with the SEC
as Exhibit 4.2 to the Issuer’s Current Report on Form 8-K dated and filed on
June 5, 2009. The copy of the Initial Warrant so previously filed by
the Issuer with the SEC is incorporated by reference as Exhibit 4.1 to this
Schedule 13D and this summary of the terms of the Initial Warrant, and any
reference herein to the Initial Warrant, is qualified in its entirety by
reference to such Exhibit.
On
October 23, 2009, a Special Meeting of Stockholders (as defined in the Alliance
Agreement) was held at which the Shareholder Approval (as defined in the
Alliance Agreement) was obtained, and thereafter on October 30, 2009 the Issuer
and the Purchaser conducted a second closing (the “Second Closing” and the date
of such Second Closing, the “Second Closing Date”). At the
Second Closing, the Purchaser paid to the Issuer a sum of US $1,000,000 in
exchange for an additional 1,000 shares of Series E Preferred Stock, which
shares of Series E Preferred Stock are convertible, at the Conversion Price,
subject to adjustment, into 20,000,000 shares of Common Stock, and a warrant
(the “Second Warrant”)
to purchase an additional 40,000,000 shares of Common Stock. The Second Warrant
will be exercisable until the date that is the seventh anniversary of the Second
Closing Date, i.e., until October 30, 2016, and will have a per share exercise
price equal to US $0.0625, subject to adjustments for certain events, including,
but not limited to, dividends, stock splits, combinations and the like. The per
share exercise price of the Second Warrant will also be subject to adjustment
for the sale of Common Stock or securities convertible into Common Stock at a
price less than the then applicable per share exercise price of the Second
Warrant, for which the Purchaser’s consent was not required under the Alliance
Agreement. A copy of the Second Warrant is filed as Exhibit 4.3 to
this Schedule 13D and this summary of the terms of the Second Warrant, and any
reference herein to the Second Warrant, is qualified in its entirety by
reference to such Exhibit.
On the
first trading day following the first anniversary of the Initial Closing Date
(June 4, 2010), the Issuer and the Purchaser will conduct a third closing (the
“Third Closing” and the
date of such Third Closing, the “Third Closing Date”),
provided that all conditions precedent to such Third Closing contained in the
Alliance Agreement have been satisfied or waived by the appropriate party on or
before such Third Closing Date. The Third Closing must occur within
thirty days from the first anniversary of the Initial Closing Date (June 3,
2010). At the Third Closing, the Purchaser will pay to the Issuer a
sum of US$1,000,000 in exchange for an additional 1,000 shares of Series E
Preferred Stock, which such shares of Series E Preferred Stock will be
convertible, at the Conversion Price, subject to adjustment, into 20,000,000
shares of Common Stock, and a warrant (the “Third Warrant” and
collectively with the Initial Warrant and the Second Warrant, the “Warrants”) to purchase an
additional 40,000,000 shares of Common Stock. The Third Warrant will be
exercisable until the date that is the seventh anniversary of the Third Closing
Date and will have a per share exercise price equal to US$0.0625, subject to
adjustments for certain events, including, but not limited to, dividends, stock
splits, combinations and the like. The per share exercise price of the Third
Warrant will also be subject to adjustment for the sale of Common Stock or
securities convertible into Common Stock at a price less than the then
applicable per share exercise price of the Third Warrant, for which the
Purchaser’s consent was not required under the Alliance Agreement.
In
addition, the Alliance Agreement provides that within ten business days
following the last day of each calendar quarter, beginning with the first
calendar quarter following the Initial Closing Date and continuing for each of
the eleven calendar quarters thereafter, the Purchaser will pay to the Issuer a
sum of US$62,500, for an aggregate purchase price over such period of
US$750,000, in exchange for an additional 62.5 shares of Series E Preferred
Stock per quarter and 750 shares of Series E Preferred Stock, in the aggregate,
over such period, which such shares will be convertible into 1,250,000 shares of
Common Stock per quarter and 15,000,000 shares of Common Stock, in the
aggregate, over such period, subject to adjustment. The first such
quarterly purchase has not yet been consummated.
If the Issuer determines, in its
reasonable judgment, that additional funding is required for the development of
its pharmaceutical products, then, either (i) the Issuer will issue, and the
Purchaser will purchase, such additional number of shares of Series E Preferred
Stock or Common Stock from the Issuer, upon such terms and conditions as may be
agreed upon by the Issuer and Epic at the time of such determination; or (ii) on
or after September 15, 2011, Epic will provide a loan to the Issuer, in an
aggregate principal amount not to exceed US $1,000,000, which such loan will (A)
have an interest rate equal to the then prime interest rate as published in the
Wall Street Journal on the date of such loan, (B) mature on the 2nd
anniversary of date of such loan, and (C) be on such other terms and conditions
which are customary and reasonable to loans of a similar nature and which are
mutually agreed upon between Epic and the Issuer.
Terms
of Series E Preferred Stock
Concurrent with the Initial Closing on
the Initial Closing Date, pursuant to the authority of its Board of Directors,
the Issuer filed with the Secretary of State of the State of Delaware the
Certificate of Designation of Preferences, Rights and Limitations of Series E
Convertible Preferred Stock (the “Series E
Certificate”). A copy of the Series E Certificate was
previously filed by the Issuer with the SEC as Exhibit 3.1 to the Issuer’s
Current Report on Form 8-K dated and filed on June 5, 2009. The copy
of the Series E Certificate so previously filed by the Issuer with the SEC is
incorporated by reference as Exhibit 3.1 to this Schedule 13D and this summary
of the terms of the Series E Preferred Stock, and any reference herein to the
Series E Preferred Stock, is qualified in its entirety by reference to such
Exhibit. Pursuant to the Series E Certificate, each share of Series E
Preferred Stock will have a stated value equal to US$1,000 (the “Stated Value”). In
addition, so long as any Series E Preferred Stock remain outstanding, the Issuer
will not declare, pay or set aside any dividends on shares of any other class or
series of capital stock of the Issuer (other than dividends payable under the
current terms of its Outstanding Preferred Stock) unless the Purchaser first
receives, or simultaneously receives, a dividend on each outstanding share of
Series E Preferred Stock in an amount equal to the dividend the Purchaser would
have been entitled to receive upon conversion, in full, on one share of Series E
Preferred Stock immediately prior to the record date for determination of
holders entitled to receive such dividend.
In addition to the restrictions on
Issuer Actions (as defined below), the Series E Certificate provides that on any
matter presented to the stockholders of the Issuer for their action or
consideration at any meeting of stockholders of the Issuer (or by written
consent of stockholders in lieu of meeting), the Purchaser will be entitled to
cast the number of votes equal to the number of shares of Common Stock into
which the shares of Series E Preferred Stock held by the Purchaser are
convertible as of the record date for determining the stockholders entitled to
vote on such matter. Except as provided by law or by the other provisions of the
Series E Certificate, the Purchaser will vote together with the holders of
Common Stock, as a single class.
Upon any liquidation, dissolution or
winding-up of the Issuer, whether voluntary or involuntary (a “Liquidation”), the Purchaser
will be entitled to receive out of the assets, whether capital or surplus, of
the Issuer an amount equal to the Stated Value for each share of Series E
Preferred Stock held by the Purchaser before any distribution or payment will be
made to the holders of Common Stock, the Series B 8% Convertible Preferred
Stock, par value US$0.01 per share (the “Series B Preferred Stock”),
the Series C 8% Convertible Preferred Stock, par value US$0.01 per share (the
“Series C Preferred
Stock”), and all other Common Stock Equivalents, other than (i) the
Series D 8% Convertible Preferred Stock, par value US$0.01 per share (the “Series D Preferred Stock,”
and collectively with the Series B Preferred Stock and Series C Preferred Stock,
the “Outstanding Preferred
Stock”) and (ii) any securities which are explicitly senior or pari passu to the Series E
Preferred Stock in dividend rights or liquidation preference (such securities,
“Junior
Securities”). Upon a Liquidation, the Series E Preferred Stock
will rank (a) pari
passu with the Series D Preferred Stock and (b) senior to any Junior
Securities, including, without limitation, the Series B Preferred Stock and the
Series C Preferred Stock. If the assets of the Issuer will be insufficient to
pay in full such amounts, then the entire assets to be distributed to the
Purchaser and the holders of all outstanding shares of Series D Preferred Stock
will be ratably distributed among the Purchaser and such holders of Series D
Preferred Stock in accordance with the respective amounts that would be payable
on the shares of Series E Preferred Stock owned by the Purchaser and such shares
of Series D Preferred Stock if all amounts payable thereon were paid in
full.
Each
share of Series E Preferred Stock is initially convertible at the Conversion
Price into 20,000 shares of Common Stock. The Conversion Price is
subject to adjustment for certain events, including, without limitation,
dividends, stock splits, combinations and the like. The Conversion price is also
subject to adjustment for (a) the sale of Common Stock or securities convertible
into or exercisable for Common Stock at a price less than the then applicable
Conversion Price, for which the Purchaser’s consent was not required under the
Series E Certificate, (b) the issuance of Common Stock in lieu of cash in
satisfaction of the Issuer’s dividend obligations on shares of outstanding
shares of Series B Preferred Stock, Series C Preferred Stock and/or Series D
Preferred Stock, and (c) the issuance of Common Stock as a result of any holder
of Series D Preferred Stock exercising its right to require the Issuer to redeem
all of such holder’s shares of Series D Preferred Stock pursuant to the terms
thereof. The effect of the adjustments described under clauses
(b) and (c) above are to cause the Series E Preferred Stock to remain
convertible into an equivalent percentage of the Common Stock of the Issuer as
it was immediately prior to the issuance described in such clauses.
At any
time following the date upon which there are no Outstanding Preferred Stock
outstanding, the Issuer may automatically convert all of the then outstanding
shares of Series E Preferred Stock into Common Stock at the then effective
Conversion Price (such automatic conversion, the “Forced Conversion”), if,
after giving effect to the Forced Conversion, the shares of Common Stock issued
to the Purchaser upon such Forced Conversion plus the number of shares of
Common Stock owned by the Purchaser immediately prior to such Forced Conversion
will equal a number of shares of Common Stock that is greater than fifty percent
(50%) of the then outstanding Common Stock.
Pursuant
to the Series E Certificate, other than with respect to transfers to Affiliates
of the Purchaser, the Purchaser will not be entitled to transfer its shares of
Series E Preferred Stock without the prior written consent of the Issuer;
provided, however, the Purchaser will not be prohibited or otherwise restricted,
following the Lock-Up Period (as defined below), from transferring the
Conversion Shares issued to it following a conversion of its shares of Series E
Preferred Stock in accordance with the terms of the Series E
Certificate.
Board
of Directors Composition and Voting Rights
As of the Initial Closing Date and at
all times thereafter, except as otherwise set forth herein, the Issuer and its
Board of Directors will take any and all action necessary so that (i) the size
of the Board of Directors will be set and remain at seven directors, (ii) three
individuals designated by Epic (the “Purchaser Directors”) will be
appointed to the Board of Directors and (iii) the Purchaser Directors will be
nominated at each annual or special meeting of stockholders at which an election
of directors is held or pursuant to any written consent of the stockholders;
provided, however, that if at any time following the Lock-Up Period the
Purchaser owns less than (A) a number of shares of Series E Preferred Stock
equal to ninety percent of the aggregate number of shares of Series E Preferred
Stock purchased by the Purchaser at all of the then applicable Closings or (B)
following the conversion by the Purchaser of the Series E Preferred Stock, a
number of shares of Common Stock equal to ninety percent of the number of shares
of Common Stock so converted (the “Minimum Share Requirement”),
neither the Issuer nor its Board of Directors will be obligated to nominate
Purchaser Directors or take any other action with respect to those actions
described in (i), (ii) and/or (iii) above. No Purchaser Director may
be removed from office for cause unless such removal is directed or approved by
(x) a majority of the independent members of the Board of Directors and (y) all
of the non-affected Purchaser Director(s). Any vacancies created by
the resignation, removal or death of a Purchaser Director will be filled by the
appointment of an additional Purchaser Director. Any Purchaser
Director may be removed from office upon the request of the
Purchaser. At such time as the Purchaser owns more than 50% of the
issued and outstanding Common Stock or other voting securities of the Issuer,
the number of Purchaser Directors the Purchaser will be entitled to designate
under the Alliance Agreement will be equal to a majority of the Board of
Directors. As of the Initial Closing Date, Nigalaye, Narine and Potti
were appointed as the initial Purchaser Directors and were subsequently duly
elected as directors by the Issuer’s stockholders at a special meeting of the
Issuer’s stockholders held on October 23, 2009.
Under the Alliance Agreement and the
Series E Certificate, the Issuer has agreed that, between the date of the
Alliance Agreement and the date which is the earlier of (x) the date the
Purchaser Directors constitute a majority of the Board of Directors and (y)
ninety days following the fifth anniversary of the Initial Closing Date, except
as Epic will otherwise agree in writing, the Issuer will conduct its operations
only in the ordinary and usual course of business consistent with past practice.
Specifically, the Issuer will not, directly or indirectly, do, or agree to do,
any of the following (such actions, the “Issuer Actions”) without the
prior written consent of Epic:
(i) amend or
otherwise change the Issuer’s certificate of incorporation or bylaws so as to
adversely affect the Purchaser or Epic in a material manner;
(ii) (A) other
than in connection with an Exempt Issuance (as defined in the Alliance Agreement
and the Series E Certificate), issue or otherwise sell any shares of Common
Stock or Common Stock Equivalents (as defined in the Alliance Agreement), or (B)
following the Lock-Up Period, so long as the Purchaser owns at least the Minimum
Share Requirement, sell or otherwise dispose of any material property or assets
of the Issuer, except pursuant to existing contracts or commitments or the sale
or purchase of goods in the ordinary course of business consistent with past
practice, or enter into any commitment or transaction outside the ordinary
course of business consistent with past practice. Notwithstanding the foregoing,
both Epic and the Issuer have agreed in the Alliance Agreement that (x) the
Issuer will continue to seek a strategic partner(s) for the Issuer’s lead pain
products (ELI-154 and ELI-216) and (y) Epic will reasonably consider all
candidates for such strategic partner(s) identified by the Issuer;
(iii) declare,
set aside, make or pay any dividend or other distribution (whether payable in
cash, stock, property or a combination thereof) with respect to any of its
capital stock, other than dividends payable on shares of Outstanding Preferred
Stock in accordance with the terms thereof as in effect on the date
hereof;
(iv) other
than in connection with a reverse stock split, reclassify, combine, split,
subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any
of its capital stock, Common Stock, Common Stock Equivalents, the Outstanding
Preferred Stock (or any securities of the Issuer or its subsidiaries which would
entitle the holder thereof to acquire at any time Outstanding Preferred Stock),
Series E Preferred Stock, or any other equity security or capital stock of the
Issuer;
(v) (A)
acquire any interest in any person or any division thereof or any assets, other
than acquisitions of inventory or other assets in the ordinary course of
business consistent with past practice; or (B) other than Permitted Indebtedness
(as defined in the Alliance Agreement), for a period of three years from the
Initial Closing Date, incur any indebtedness for borrowed money or issue any
debt securities or assume, guarantee or endorse, or otherwise as an
accommodation become responsible for, the obligations of any person, except for
indebtedness for borrowed money incurred by the Issuer in the ordinary course of
business consistent with past practice pursuant to the terms of a current
contract to which the Issuer is currently a party and listed in the Alliance
Agreement as a “Company Material Contract”;
(vi) except as
may be required by contractual commitments or corporate policies with respect to
employee severance or termination pay in existence on the date of the Alliance
Agreement, (A) increase the compensation or benefits payable or to become
payable to its directors, officers or employees, except for customary increases
to compensation or benefits of Issuer employees (other than officers and
directors) of not more than five percent in the aggregate per annum made by the
Issuer consistent with past practice and approved by a majority of the
independent members of the Board of Directors; or (B) grant any rights to
severance or termination pay to, or enter into any employment or severance
agreement with, any director, officer or other employee of the Issuer, or
establish, adopt, enter into or amend any collective bargaining, bonus, profit
sharing, thrift, compensation, stock option, restricted stock, pension,
retirement, deferred compensation, employment, termination, severance or other
plan, agreement, trust, fund, policy or arrangement for the benefit of any
director, officer or employee, except to the extent required by applicable law
and except for such employment, severance or termination agreements with Issuer
employees (other than officers and directors) that are entered into on an arm’s
length basis and approved by a majority of the independent members of the Board
of Directors;
(vii) (A) pay,
discharge or satisfy any material claims, liabilities or obligations (absolute,
accrued, contingent or otherwise), except in the ordinary course of business
consistent with past practice and in accordance with their terms; (B) accelerate
or delay collection of any material notes or accounts receivable in advance of
or beyond their regular due dates or the dates when the same would have been
collected in the ordinary course of business consistent with past practice, or
(C) delay or accelerate payment of any material account payable in advance of
its due date or the date such liability would have been paid in the ordinary
course of business consistent with past practice;
(viii) make any
material change in accounting policies or procedures, other than in the ordinary
course of business consistent with past practice or except as required by United
States generally accepted accounting principles or by a governmental
entity;
(ix) following
the Lock-Up Period, so long as the Purchaser owns at least the Minimum Share
Requirement, waive, release, assign, settle or compromise any material claims,
or any material litigation or arbitration;
(x) following
the Lock-Up Period, so long as the Purchaser owns at least the Minimum Share
Requirement, make any material tax election, settle or compromise any material
liability for taxes owed by the Issuer, or materially amend any of its tax
returns;
(xi) following
the Lock-Up Period, so long as the Purchaser owns at least the Minimum Share
Requirement, be a party to any Change of Control Transaction (as defined in the
Alliance Agreement) or otherwise enter into any sale, transfer, assignment,
lease, license, mortgage, pledge, exchange or other disposition of all or
substantially all of the assets or property (real or personal, tangible or
intangible) of the Issuer or any merger, consolidation or reorganization of the
Issuer with another entity;
(xii) following
the Lock-Up Period, so long as the Purchaser owns at least the Minimum Share
Requirement, take any action or step in connection with the voluntary
liquidation and dissolution of the Issuer or the filing of a voluntary petition
or other institution of proceedings to have the Issuer adjudicated as bankrupt
or the consenting to the institution of such proceedings against the Issuer;
or
(xiii) authorize
or enter into any agreement or otherwise make any commitment to do any of the
foregoing.
Notwithstanding
the foregoing, if at any time after the Purchaser has acquired 25% or more of
the shares of the capital stock of the Issuer, on an as-converted basis,
pursuant to the terms of Alliance Agreement or the Warrants, the Purchaser’s
ownership percentage of the shares of capital stock of the Issuer, on an
as-converted basis, falls below 20% of the shares of the capital stock of the
Issuer, on an as-converted basis, as a result of transfers made by the
Purchaser, then the prior written consent of the Purchaser will not be required
prior to the consummation of any of the foregoing Issuer Actions.
Pursuant to the Alliance Agreement, subject to the satisfaction of certain
conditions precedent contained therein, the Purchaser will not, without the
prior written consent of the Issuer, transfer any Common Stock acquired by
it upon conversion of the
Series E Preferred Stock or otherwise acquired or purchased under the
Alliance Agreement or the
other transaction documents for a period commencing on the Initial
Closing Date and ending on the later of (a) the date immediately following the
first anniversary of the
Initial Closing Date (i.e.,
June 4, 2010) and (b) the
Third Closing Date (such period, the “Lock-Up
Period”).
Certain
Conditions to each Closing
Under the
Alliance Agreement, the Issuer had agreed (x) to hold a meeting of its
stockholders by July 31, 2009 to approve an amendment to the Issuer’s
certificate of incorporation to (i) increase the number of authorized shares of
Common Stock from 210,000,000 to 360,000,000 shares and the decrease of the par
value of its Common Stock from $0.01 to $0.001 and (y) to file such amendment to
its certificate of incorporation with the Secretary of State of the State of
Delaware. The filing of such amendment was a condition
precedent to the Second Closing. Such stockholders meeting was held
on October 23, 2009, at which such amendment to the certificate of incorporation
was approved. Such amendment was filed with the Secretary of State of
the State of Delaware on October 26, 2009 and the Second Closing was held on
October 30, 2009.
Pursuant to the terms of the Alliance
Agreement, on or before the Initial Closing Date, the Issuer effected a
delisting of the Common Stock from NYSE Alternext US LLC (the “Exchange”) and has caused or
will cause the Common Stock to be quoted on the OTC Bulletin Board.
Item
5. Interest in
Securities of the Issuer
(a) and
(b) The
calculation of the percentages in this Statement are based on a total of
198,720,026 outstanding shares of the Issuer’s Common Stock as of October 30,
2009 consisting of (i) 78,720,026 total issued and outstanding shares of Common
Stock as disclosed by the Issuer to the Reporting Persons, plus (ii) 40,000,000
total shares of Common Stock into which the 2,000 shares of Series E Preferred
Stock held by the Reporting Persons are convertible, plus (iii) 80,000,000 total
shares of Common Stock into which the Initial Warrant and the Second Warrant
held by the Reporting Persons are exercisable).
With respect to the amount of Common
Stock beneficially owned by each Reporting Person, the nature of such beneficial
ownership and the related percentages of the class of Common Stock, the
information contained in each of the cover pages, and in Items 1 through 14
thereon, is incorporated by reference herein.
The aggregate number and percentage of
the class of securities identified pursuant to Item 1 of this Schedule 13D that
are beneficially owned by the Reporting Persons listed in Item 2 of this
Schedule 13D, or that the Reporting Persons listed in Item 2 may be deemed to
beneficially own pursuant to Rule 13d-3 of the Act, are as follows:
The
Purchaser (Epic Investments, LLC) has (i) beneficial ownership of 2,000 shares of the Issuer’s
Series E Preferred Stock, convertible at any time, at the option of the
shareholder, and in certain circumstances at the option of the Issuer, into an
aggregate of up to 40,000,000 shares of the Issuer’s Common Stock, (ii)
beneficial ownership of the Initial Warrant exercisable at any time, at the
option of the warrant holder, to purchase up to an aggregate of 40,000,000
shares of the Issuer’s Common Stock, and (iii) beneficial ownership of the
Second Warrant exercisable at at any time, at the option of the warrant holder,
to purchase up to an aggregate of 40,000,000 shares of the Issuer’s Common
Stock, representing an aggregate of approximately 60.39% of the
outstanding shares of Common Stock of the Issuer as of October 30, 2009 on an
as-converted basis.(1)
Epic
Pharma, LLC (Epic) has (i) beneficial ownership of 2,000 shares of the Issuer’s
Series E Preferred Stock, convertible at any time, at the option of the
shareholder, and in certain circumstances at the option of the Issuer, into an
aggregate of up to 40,000,000 shares of the Issuer’s Common Stock, (ii)
beneficial ownership of the Initial Warrant exercisable at any time, at the
option of the warrant holder, to purchase up to an aggregate of 40,000,000
shares of the Issuer’s Common Stock, and (iii) beneficial ownership of the
Second Warrant exercisable at any time, at the option of the warrant holder, to
purchase up to an aggregate of 40,000,000 shares of the Issuer’s Common
Stock, representing an aggregate of approximately 60.39% of the
outstanding shares of Common Stock of the Issuer as of October 30, 2009 on an
as-converted basis.
(1)
Ashok G.
Nigalaye has (i) beneficial ownership of 2,000 shares of the Issuer’s Series E
Preferred Stock, convertible at any time, at the option of the shareholder, and
in certain circumstances at the option of the Issuer, into an aggregate of up to
40,000,000 shares of the Issuer’s Common Stock, (ii) beneficial ownership of the
Initial Warrant exercisable at any time, at the option of the warrant holder, to
purchase up to an aggregate of 40,000,000 shares of the Issuer’s Common Stock,
and (iii) beneficial ownership of the Second Warrant exercisable at any time, at
the option of the warrant holder, to purchase up to an aggregate of 40,000,000
shares of the Issuer’s Common Stock, representing an aggregate of approximately
60.39% of the outstanding shares of Common Stock of the Issuer as of October 30,
2009 on an as-converted basis.
(1)
Jeenarine
Narine has (i) beneficial ownership of 2,000 shares of the Issuer’s Series E
Preferred Stock, convertible at any time, at the option of the shareholder, and
in certain circumstances at the option of the Issuer, into an aggregate of up to
40,000,000 shares of the Issuer’s Common Stock, (ii) beneficial ownership of the
Initial Warrant exercisable at any time, at the option of the warrant holder, to
purchase up to an aggregate of 40,000,000 shares of the Issuer’s Common Stock,
and (iii) beneficial ownership of the Second Warrant exercisable at any time, at
the option of the warrant holder, to purchase up to an aggregate of 40,000,000
shares of the Issuer’s Common Stock, representing an aggregate of approximately
60.39% of the outstanding shares of Common Stock of the Issuer as of October 30,
2009 on an as-converted basis.
(1)
Ram Potti
has (i) beneficial ownership of 2,000 shares of the Issuer’s Series E Preferred
Stock, convertible at any time, at the option of the shareholder, and in certain
circumstances at the option of the Issuer, into an aggregate of up to 40,000,000
shares of the Issuer’s Common Stock, (ii) beneficial ownership of the
Initial Warrant exercisable at any time, at the option of the warrant holder, to
purchase up to an aggregate of 40,000,000 shares of the Issuer’s Common Stock,
and (iii) beneficial ownership of the Second Warrant exercisable at any time, at
the option of the warrant holder, to purchase up to an aggregate of 40,000,000
shares of the Issuer’s Common Stock representing an aggregate of approximately
60.39% of the outstanding shares of Common Stock of the Issuer as of October 30,
2009 on an as-converted basis.
(1)
Each of the Reporting Persons, other
than the Purchaser, expressly disclaims beneficial ownership of the shares of
capital stock and warrants of the Issuer owned by all other Reporting
Persons.
Footnotes to Item
5
(1) All
such shares and warrants are directly held and directly beneficially owned by
the Purchaser. Epic, as an equity owner of the Purchaser, and
Messers. Nigalaye, Narine and Potti, as equity owners, executive officers and/or
managing members of the Purchaser, may be deemed to share voting and investment
power with respect to such shares. With respect to Epic and Messers.
Nigalaye, Narine and Potti, this Statement relates only to their indirect
beneficial ownership of such shares and warrants.
(c) No
transactions in the Common Stock were effected during the past sixty days or
since the most recent filing of Schedule 13D (§240.13d-191), whichever is less,
by the Reporting Persons except as set forth in the response to Item 4 hereof,
which is incorporated herein by reference.
(d) The
Purchaser may distribute shares and/or warrants to purchase shares of the
Issuer’s capital stock held by it (including any shares of the Issuer’s Common
Stock) to its members including Epic, Nigalaye, Narine and
Potti. Epic may further distribute shares and/or warrants to purchase
shares of the Issuer’s capital stock (including any shares of the Issuer’s
Common Stock) held by Epic (whether received by Epic as a distribution from the
Purchaser or otherwise) to Epic’s members, including Nigalaye, Narine and
Potti. In addition, Epic has pledged all of its assets, including its
membership interest in the Purchaser, to its lender as security for certain
indebtedness of Epic. Except as set forth above and in the response
to Item 4 hereof, which is incorporated herein by reference, no other person is
known to have the right to receive or the power to direct the receipt of
dividends from, or the proceeds from the sale of, the Common Stock or Series E
Preferred Stock held by the Reporting Persons.
(e) Not
applicable.
Item
6. Contracts,
Arrangements, Understandings or Relationships with Respect to Securities of the
Issuer
Except as set forth in the response to
Item 4 hereof, which is incorporated herein by reference, there are no
contracts, arrangements, understandings or relationships (legal or otherwise)
among the persons named in Item 2 and between such persons and any person with
respect to any securities of the issuer, including but not limited to transfer
or voting of any of the securities, finder’s fees, joint ventures, loan or
option arrangements, puts or calls, guarantees of profits, division of profits
or loss, or the giving or withholding of proxies.
Item
7. Material to Be
Filed as Exhibits
The following documents are filed as
exhibits:
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Exhibit
A
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Joint
filing Agreement (filed herewith)
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Exhibit
3.1
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Certificate
of Designation of Preferences, Rights and Limitations of the Series E
Convertible Preferred Stock as filed with the Secretary of State of the
State of Delaware on June 3, 2009 (incorporated by reference from Exhibit
3.1 to Elite Pharmaceuticals, Inc. Current Report on Form 8-K dated and
filed with SEC on June 5, 2009).
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Exhibit
4.2
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Warrant
to Purchase Common Stock, dated June 3, 2009 (incorporated by reference
from Exhibit 4.2 to Elite Pharmaceuticals, Inc. Current Report on Form 8-K
dated and filed with SEC on June 5,
2009).
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Exhibit
4.3
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Warrant
to Purchase Common Stock, dated October 30, 2009 (filed
herewith)
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Exhibit
10.1.1
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Strategic
Alliance Agreement, dated as of March 18, 2009, by and among Elite
Pharmaceuticals, Inc., Epic Pharma, LLC and Epic Investment, LLC
(incorporated by reference from Exhibit 10.1 to Elite Pharmaceuticals,
Inc. Current Report on Form 8-K dated and filed with SEC on March 23,
2009).
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Exhibit
10.1.2.
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Amendment,
dated as of April 30, 2009, by and between Elite Pharmaceuticals, Inc., on
the one hand, and Epic Pharma, LLC and Epic Investments, LLC, on the other
hand, relating to the Strategic Alliance Agreement, dated as of March 18,
2009 (incorporated by reference from Exhibit 10.1 to Elite
Pharmaceuticals, Inc. Current Report on Form 8-K dated and filed with SEC
on May 6, 2009).
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Exhibit
10.1.3
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Second
Amendment, dated as of June 1, 2009, by and between Elite Pharmaceuticals,
Inc., on the one hand, and Epic Pharma, LLC, Epic Investments, LLC, Ashok
G. Nigalaye and Jeenarine Narine, on the other hand, relating to the
Strategic Alliance Agreement, dated as of March 18, 2009 (incorporated by
reference from Exhibit 10.1 to Elite Pharmaceuticals, Inc. Current Report
on Form 8-K dated and filed with SEC on June 5,
2009).
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Exhibit
10.1.4
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Third
Amendment, dated as of August 18, 2009, by and between Elite
Pharmaceuticals, Inc., on the one hand, and Epic Pharma, LLC and Epic
Investments, LLC, on the other hand, relating to the Strategic Alliance
Agreement, dated as of March 18, 2009 (incorporated by reference from
Exhibit 10.3 to Elite Pharmaceuticals, Inc. Quarterly Report on Form 10-Q
dated and filed with SEC on August 19,
2009).
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Signature
After
reasonable inquiry and to the best of my knowledge and belief, I certify that
the information set forth in this statement is true, complete and
correct.
November
5, 2009
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/s/ Ashok
G. Nigalaye |
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ASKOK G.
NIGALAYE |
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/s/ Jeenarine
Narine |
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JEENARINE
NARINE |
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/s/ Ram
Potti |
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RAM
POTTI |
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EPIC
PHARMA, LLC
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By:
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/s/
Ram Potti |
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Name: Ram
Potti |
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Title: Vice
President |
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EPIC INVESTMENTS,
LLC |
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By:
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/s/
Ram Potti |
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Name: Ram
Potti |
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Title: Vice
President |
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EXHIBIT
INDEX
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Exhibit
A
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Joint
filing Agreement (filed herewith)
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Exhibit
3.1
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Certificate
of Designation of Preferences, Rights and Limitations of the Series E
Convertible Preferred Stock as filed with the Secretary of State of the
State of Delaware on June 3, 2009 (incorporated by reference from Exhibit
3.1 to Elite Pharmaceuticals, Inc. Current Report on Form 8-K dated and
filed with SEC on June 5, 2009).
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Exhibit
4.2
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Warrant
to Purchase Common Stock, dated June 3, 2009 (incorporated by reference
from Exhibit 4.2 to Elite Pharmaceuticals, Inc. Current Report on Form 8-K
dated and filed with SEC on June 5,
2009).
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Exhibit
4.3
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Warrant
to Purchase Common Stock dated October 30, 2009 (filed
herewith)
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Exhibit
10.1.1
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Strategic
Alliance Agreement, dated as of March 18, 2009, by and among Elite
Pharmaceuticals, Inc., Epic Pharma, LLC and Epic Investment, LLC
(incorporated by reference from Exhibit 10.1 to Elite Pharmaceuticals,
Inc. Current Report on Form 8-K dated and filed with SEC on March 23,
2009).
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Exhibit
10.1.2.
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Amendment,
dated as of April 30, 2009, by and between Elite Pharmaceuticals, Inc., on
the one hand, and Epic Pharma, LLC and Epic Investments, LLC, on the other
hand, relating to the Strategic Alliance Agreement, dated as of March 18,
2009 (incorporated by reference from Exhibit 10.1 to Elite
Pharmaceuticals, Inc. Current Report on Form 8-K dated and filed with SEC
on May 6, 2009).
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Exhibit
10.1.3
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Second
Amendment, dated as of June 1, 2009, by and between Elite Pharmaceuticals,
Inc., on the one hand, and Epic Pharma, LLC, Epic Investments, LLC, Ashok
G. Nigalaye and Jeenarine Narine, on the other hand, relating to the
Strategic Alliance Agreement, dated as of March 18, 2009 (incorporated by
reference from Exhibit 10.1 to Elite Pharmaceuticals, Inc. Current Report
on Form 8-K dated and filed with SEC on June 5,
2009).
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Exhibit
10.1.4
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Third
Amendment, dated as of August 18, 2009, by and between Elite
Pharmaceuticals, Inc., on the one hand, and Epic Pharma, LLC and Epic
Investments, LLC, on the other hand, relating to the Strategic Alliance
Agreement, dated as of March 18, 2009 (incorporated by reference from
Exhibit 10.3 to Elite Pharmaceuticals, Inc. Quarterly Report on Form 10-Q
dated and filed with SEC on August 19,
2009).
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Exhibit
A
AGREEMENT
We, the undersigned, hereby express our
agreement that the attached Amendment No. 1 to Schedule 13D, dated November 5,
2009, relating to common stock of Elite Pharmaceuticals, Inc., is filed on
behalf of us.
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/s/ Ashok
G. Nigalaye |
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ASKOK G.
NIGALAYE |
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/s/ Jeenarine
Narine |
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JEENARINE
NARINE |
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/s/ Ram
Potti |
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RAM
POTTI |
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EPIC
PHARMA, LLC
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By:
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/s/
Ram Potti |
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Name: Ram
Potti |
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Title: Vice
President |
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EPIC INVESTMENTS,
LLC |
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By:
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/s/
Ram Potti |
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Name: Ram
Potti |
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Title: Vice
President |
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