Replies to post #433966 on Elite Pharmaceuticals Inc (ELTP)

[WeeZuhl]

why did Nasrat help in purchasing 1/2 of adderall when we had Lincoln Park revolving credit line of 40 mil. Why did we get the credit line if we never used it

There was never any revolving line of credit with Lincoln Park Capital (LPC). There was a series of three stock purchase agreements. LPC received a few million free shares as "placement," then when Hakim wanted cash he would have to notify LPC in advance and then sell shares at a discount. LPC would immediately sell those shares on the open market, causing both dilution and constant downward pressure on share price. Each agreement had a successively lower "floor price," below which there could be no share transfers. Usually the ELTP market share price fairly quickly equilibrated at the floor price and then fell below it, so the LPC dilution machine would be shut down sooner than anticipated. Also, at one point there were not enough shares to enter the next LPC agreement, and that is what necessitated the preferred share switcharoo that netted Hakim nearly 80 million warrants. It seems not many companies who make these dilution deals with LPC have had good success in the end, hopefully ELTP will be their shining star.

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