From Dianne:
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Obviously from the previous press releases one could assume that there should be news coming down the pipe.
I am afraid that when the news does start flowing it will seem like “feast or famine”.
There is a lot going on – just don’t know the timing of things – nor can the company control the timing.
The good news about the methadone products is the fact that it was developed in house so there is not a change in the manufacturing which requires a lot of work and then approval by the FDA. However, since the time that the manufacturing agreement was signed, Elite then had to apply and receive approval to obtain the active ingredients to make the methadone as these are controlled substances.
The manufacturing of pharmaceutical products is very different from the manufacturing of widgets. There is a lot of red tape with outside agencies that are involved which is why it is very difficult to predict the timing of different events.
There is a lot of work going on behind the scenes which will result in news flow.
Have you received your proxy card?
I strongly encourage you to take the time to vote. It is imperative that we obtain a quorum Proposal 3. The hurdle for this proposal is even higher than normal as the item is considered "non-routine" which does not receive the benefit of discretionary or proportionate votes. Voter returns for companies with a large retail base is historically low, which makes it even more important for you to vote your shares.
The move to NV is critical to the company at this point and time. Elite is doing everything in its power to conserve cash in order to create shareholder value. Being a corporation registered in Delaware requires the company pay exorbitant fees to the State of Delaware. Therefore, the most important issue for the company at the moment is to get the votes in to allow the company to incorporate in Nevada. The purpose of this proposal is simply a cost savings. There has been a recent trend for smaller companies, like Elite, to incorporate in Nevada because of the lower costs. The franchise tax in Delaware last year was approximately $70,000 and we are expecting this to increase to $180,000 for 2011. In comparison, Nevada’s franchise tax would be approximately $475. We do not expect for Elite to operate any differently in Nevada, but clearly there is a substantial cost savings for Elite from this move.
Elite cannot afford to pay to pay this amount of tax to the state of Delaware. We need to keep this money in-house so it can be used to create shareholder value.
Please be sure to vote your proxy - even if it is only for proposal 3.
If you know anyone else who owns ELTP, please encourage them to vote their proxy as well.
If you have any questions, please let me know.
Best regards,
Dianne.
Dianne Will
Investor Relations for Elite Pharmaceuticals
phone: (518) 398-6222
dianne@elitepharma.com
