Elite Pharmaceuticals Inc (ELTP)

[namtae]

Here you go

This right out of the recent 10K filing. As it clearly demonstrates, the sale or grant of common shares below the Series J conversion price triggers an adjustment down of the Series J preferred conversion price. This is classic RATCHET.

For example, should the conversion price be adjusted down from .1521 to .07, then the series J would convert into 343,348,571 shares. Heres the math:

24,034,400 (stated value) / .07 (conversion price) = 343,348,571 shares

From the 10K:

Subject to certain exceptions, the Conversion Price is subject to adjustment for any issuances or deemed issuances of common stock or common stock equivalents at an effective price below the then Conversion Price.

Based on the current conversion price, the Series J Preferred is convertible into 158,017,321 shares of Common Stock. The conversion price is subject to the following adjustments: (i) stock dividends and splits, (ii) sale or grant of shares below the conversion price, (iii) pro rata distributions; or (iv) fundamental changes (merger, consolidation, or sale of all or substantially all assets).