Replies to post #318315 on Elite Pharmaceuticals Inc (ELTP)

[rrr2003]

The conversion of Series J shares to common stock is locked in at .1521 cents a share. Now if you are talking about stock dividends which are tied to the J's or the sale or grant of shares below the conversion price (shares not be part of the core number of J's) then yes there could be a deviation from the stated .1521 conversion price.

And your reference to the possible conversion of J's at .07 cents to result in 343,348,571 shares won't happen because, as I previously stated, the J's are locked in. Any related transactions to the issued core number of 24.0344 series J could involve a deviation of the conversion price such as (from the 10K - page 79):

"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. The Conversion price also is adjustable upon the happening of certain customary events such as stock dividends and splits, pro rata distributions and fundamental transactions."

https://s3.amazonaws.com/sec.irpass.cc/2258/0001213900-19-011224.pdf

Summary: There is no ratchets associated with the core Series J shares.

[no2koolaid]

The quotes from the 10k are spot on. However, the application and math is missapplied. Let me help by stating what is obvious...THERE IS NO RATCHET!

OKAY? NOW LET'S FILL IN THE BLANKS WITH THE CORRECT ANSWERS RELATED TO THE SERIES J...

While the math is correct, the assumptions are not. Here is the math proferred...

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

And, the problem is that is not accurate because there is no such conversion down. That would be tantamount to adjusting the price on stock options. Such efforts are frowned upon by the feds.

Here is the reality...

To begin with, Since preferred shares benefit from being paid off in the event of a BK and common shares are not, it should give comfort to investors that Nasrat wants to convert. Further, since preferred shares are locked in at a specific price, they do not gain from the rise in the share price until such time as they are converted. If, however, the shares remain below the strike price, there is a corresponding loss that allows for no adjustment. That means Nasrat's Series J shares are currently worth only about half the price.

To sum it up...1) There is no adjusting the preferred price p/s down, 2) Nasrat only benefits on conversion with a price increase and (this is the kicker)...3) Since preferred shares get paid on BK and common do not, wanting his shares converted only confirms the belief that Nasrat knows better than anyone that the future of Elite is bright. And, that light will begin to shine with the Q1 2020 results.

As for funding the future, Elite will seek the increase in authorized shares because that enables them to avoid debt and self-fund...until CFP.