Elite Pharmaceuticals Inc (ELTP)

[Hike]

Midsummer sued for breach of contract. They felt they were entitled to compensation for being diluted as a result of the Strategic alliance Agreement with Epic.

They wanted $7,455,363.00 and 1,000,000 common shares and a declaration that all future conversions of their Series D Preferred Stock, is at a conversion price of $0.05, attorneys' fees, interest and costs.

They must have thought their preferred shares were worth quite a lot to expect such compensation for their dilution.

The parties negotiated and settled.

Midsummer got the conversion price changed as they wanted but to .07, not to .05 from .20. But they also had the planned dividend increase from 8 to 15% eliminated. Also Elite was now able to pay the dividend in more preferred stock as opposed to only in common stock or cash.

Then Elite negotiated an automatic conversion of the preferred to common over a gradual period of time so as to in effect get Midsummer out of their hair without tanking the stock with a single huge sell off.

Epic also had their conversion priced reduced and Epic was expressly excluded from a “Change of Control Transaction” due to the acquisition in excess of 40% of the Company’s voting securities. In other words Epic was blocked from taking over control of Elite.

Elite agreed to increase the authorized shares to 760,000,000.

If it were true that "Baiscally Midsummer went from owning "8,661,136" to owning "0" as they unchackled themselves from owning shares in this debt ridden death spiral. " then why did Midsummer sue to RECEIVE 1,000,000 shares of common stock?

Thoughts all?