Elite Pharmaceuticals Inc (ELTP)

[WeeZuhl]

Why convert the Preferred?

If this is true then my assessment was wrong about Nasrat converting to common in order to use the remainder of the Lincoln Park funds.

Does anybody actually have a good educated reason as to why he converted to common shares?

Lots of people are saying it's just because he hit his 3 year mark and it's a non-issue and nothing more.

What would be the purpose of converting to common shares at his 3 year mark?

LPC holds no more than a few million shares, but it is possible that some other benevolent player is approaching 15% ownership, with Nasrat's blessing and assistance-- or a hostile actor is approaching 15%, and Nasrat does not want to trigger the SHA yet, for some ? reason.

The Preferred shares have full voting rights; are covered under Shareholder Rights Agreement; have no expiration; and there was no waiting period. There is no obvious reason to convert, other than whatever plan Nasrat is executing.

As others have noted, with this conversion, we are running tight up against total authorized shares (have to leave enough of a cushion for Treppel to convert his Preferred, too). Plus, LPC II is about to expire, with ~$15 million still available to tap.

One possible scenario would be for Nasrat to sell Mikah to Elite (again). The original note was for $10 million for 13 ANDA's, which was converted to 143,000,000 shares (.07/share) and then 100 Preferred. Mikah also held ELTP shares from previous ANDA purchases (naltrexone, hydromorphone) and has received ELTP shares from Epic. So with the conversion, Mikah has over 160,000,000 shares of ELTP in all. Nasrat could agree to accept .10/share and take an interest-bearing note for $16+ million dollars (or whatever #'s he likes). Elite takes those shares and, with plently left over, taps out LPC for the remaining ~$16 million cash.

Nasrat will have turned his ~$3 million worth of ANDA's into ~$16 million bearing X% interest. The company then has enough cash for another ADF to be developed, and there has been zero additional dilution.

Just sayin'. One possible scenario.