What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-02-14 compared with 2021-11-15 · 129 added, 107 removed, 128 unchanged (65% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

following discussion of our financial condition and results of operations for the six months ended September 30, 2021 and 2020 should

be read in conjunction with our unaudited condensed consolidated financial statements and the notes to those statements that are included

elsewhere in this report.

Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties,

such as our plans, objectives, expectations and intentions.

Actual results and the timing of events could differ materially from those

anticipated in these forward-looking statements as a result of a number of factors, including those set forth under Item 1A.

appearing in our Annual Report on Form 10-K for the year ended March 31, 2021.

We use words such as “anticipate,” “estimate,”

“plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,”

“intend,” “may,” “will,” “should,” “could,” and similar expressions to identify

forward-looking statements.

following discussion of our financial condition and results of operations the three and nine months ended December 31, 2021 and 2020

should be read in conjunction with our unaudited condensed consolidated financial statements and the notes to those statements that are

included elsewhere in this report.

Our discussion includes forward-looking statements based upon current expectations that involve risks

and uncertainties, such as our plans, objectives, expectations and intentions.

Actual results and the timing of events could differ materially

from those anticipated in these forward-looking statements as a result of a number of factors, including those set forth under Item 1A.

Risk Factors appearing in our Annual Report on Form 10-K for the year ended March 31, 2021.

We use words such as “anticipate,”

“estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,”

“believe,” “intend,” “may,” “will,” “should,” “could,” and similar

expressions to identify forward-looking statements.

expressly indicated or the context requires otherwise, the terms “Elite”, the “Company”, “we”, “us”,

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Phendimetrazine

Tartrate 35mg tablets (“Phendimetrazine 35mg”)

HCl 15mg and 30mg capsules (“Phentermine 15mg” and “Phentermine 30mg”)

HCl 50mg tablets (“Naltrexone 50mg”)

Tartrate 35mg tablets

(“Phendimetrazine

HCl 15mg and 30mg capsules

(“Phentermine

15mg” and “Phentermine 30mg”)

HCl 50mg tablets

2.5mg and 5mg capsules (“Isradipine 2.5mg” and “Isradipine 5mg”)

36 unchanged sentences

estimates and such differences may be material.

were no significant changes during the three months ended September 30, 2021 to the items that we disclosed as our significant accounting

were no significant changes during the three months ended December 31, 2021 to the items that we disclosed as our significant accounting

policies and estimates described in “Note 1, Summary of Significant Accounting Policies” to the Company’s financial

4 unchanged sentences

necessarily indicative of future results.

months ended September 30, 2021 compared to September 30, 2020

months ended December 31, 2021 compared to December 31, 2020

Cost of revenue and Gross profit:

the Three Months Ended September 30,

Manufacturing

of manufacturing

profit - percentage

revenues for the three-month period ended September 30, 2021 increased by $1.2 million or 16%, to $8.6 million, as compared to $7.4 million,

for the corresponding period of the prior year, primarily due to strong sales of Amphetamine IR and ER tablets during the three

month period ended September 30, 2021 as compared to the comparable period of the prior fiscal year.

For the Three Months Ended December 31,

Manufacturing fees

Licensing fees

Total revenue

Cost of manufacturing

Gross profit - percentage

revenues for the three-month period ended December 31, 2021 increased by $3 million or 48%, to $9.0 million, as compared to $6.0 million,

for the corresponding period of the prior year, primarily due to strong sales of Amphetamine IR and ER tablets during the three-month

period ended December 31, 2021 as compared to the comparable period of the prior fiscal year.

Manufacturing

fees increased by $1.0 million, or 17%, primarily due to strong sales of Amphetamine IR and ER tablets during the three month

period ended September 30, 2021 as compared to the comparable period of the prior fiscal year.

fees increased by $2.8 million, or 58%, primarily due to strong sales of Amphetamine IR and ER tablets during the three-month period

ended December 31, 2021 as compared to the comparable period of the prior fiscal year.

fees increased by $0.1 million, or 9%.

This increase is primarily due to strong sales of Amphetamine IR and ER tablets during

the three months ended September 30, 2021 as compared to the comparable period of the prior fiscal year.

This increase is primarily due to strong sales of Amphetamine IR and ER tablets during the three

months ended December 31, 2021 as compared to the comparable period of the prior fiscal year.

of revenue consists of manufacturing and assembly costs.

Our costs of revenue increased by $1.0 million or 27%, to $4.8 million

as compared to $3.8 million for the corresponding period in the prior fiscal year.

This increase was due to higher revenues during

the three months ended September 30, 2021, as compared to the comparable period of the prior fiscal year.

gross profit margin was 44% during the three months ended September 30, 2021 as compared to 49% during the comparable period of the prior

the Three Months Ended September 30,

and development

and administrative

and amortization

Our costs of revenue increased by $2.3 million or 88%, to $4.9 million as compared

to $2.6 million for the corresponding period in the prior fiscal year.

This increase was due to higher revenues during the three months

ended December 31, 2021, as compared to the comparable period of the prior fiscal year.

gross profit margin was 45% during the three months ended December 31, 2021 as compared to 56% during the comparable period of the prior

For the Three Months Ended December 31,

Operating expenses:

Research and development

General and administrative

Non-cash compensation

Depreciation and amortization

Total operating expenses

expenses consist of research and development costs, general and administrative, non-cash compensation and depreciation and amortization

Operating expenses for the three months ended September 30, 2021 increased by $0.1 million, or 3%, to $2.3 million

as compared to $2.3 million for the corresponding period in the prior fiscal year.

and development costs for the three months ended September 30, 2021 were $1.1 million, which was virtually unchanged from $1.1

million of such costs for the comparable period of the prior year.

and administrative expenses for the three months ended September 30, 2021 were $0.9 million, which was virtually unchanged from $0.8

Operating expenses for the three months ended December 31, 2021 decreased by $0.2 million, or 9%, to $2.2 million as compared

to $2.4 million for the corresponding period in the prior fiscal year.

and development costs for the three months ended December 31, 2021 were $0.9 million, a decrease of $0.3 million, or 23%, from $1.2 million

of such costs for the comparable period of the prior year.

and administrative expenses for the three months ended December 31, 2021 were $0.9 million, an increase of $0.1 million or 13% from $0.8

million of such costs for the comparable period of the prior year.

compensation expense for the three months ended September 30, 2021 and 2020 was less than $0.1 million.

and amortization expenses for the three months ended September 30, 2021 were $0.3 million, which remained consistent from $0.3 million

compensation expense for the three months ended December 31, 2021 and 2020 was less than $0.1 million.

and amortization expenses for the three months ended December 31, 2021 were $0.3 million, which remained consistent from $0.3 million

of such costs for the comparable period of the prior fiscal year.

a result of the foregoing, our income from operations for the three months ended September 30, 2021 was $1.4 million, compared to income

a result of the foregoing, our income from operations for the three months ended December 31, 2021 was $1.8 million, compared to income

from operations of $1.0 million for the comparable period of the prior fiscal year.

the Three Months Ended September 30,

in fair value of derivative instruments

expense and amortization of debt issuance costs

on sale of fixed assets

income, net for the three months ended September 30, 2021 was $0.4 million, a decrease of $0.8 million from the other income, net of

For the Three Months Ended December 31,

Other income, net:

Change in fair value of derivative instruments

Interest expense and amortization of debt issuance costs

Gain on sale of fixed assets

Interest income

Other income, net

income, net for the three months ended December 31, 2021 was $0.5 million, a decrease of $0.6 million from the other income, net of $1.0

million for the comparable period of the prior fiscal year.

The decrease in other income was due to income relating to changes in

the fair value of our outstanding derivative warrants during the three months ended September 30, 2021.

Please note that the change in

the fair value of derivative instruments is determined in large part by the change in the closing price of the Company’s Common

Stock as of the end of the period, as compared to the closing price at the beginning of the period, with a strong inverse relationship

between the fair value of our derivatives instruments and decreases in the closing price of the Company’s Common Stock.

see Note 11 to the Unaudited Condensed Consolidated Financial Statements above.

a result of the foregoing, our net income before the net benefit from sale of net operating loss credits for the three months ended September

The decrease in other income was due to income relating to changes in the

fair value of our outstanding derivative warrants during the three months ended December 31, 2021.

Please note that the change in the

fair value of derivative instruments is determined in large part by the change in the closing price of the Company’s Common Stock

as of the end of the period, as compared to the closing price at the beginning of the period, with a strong inverse relationship between

the fair value of our derivatives instruments and decreases in the closing price of the Company’s Common Stock.

Please see Note

11 to the Unaudited Condensed Consolidated Financial Statements above.

a result of the foregoing, our net income before the net benefit from sale of net operating loss credits for the three months ended December

31, 2021 was $2.3 million, compared to net income of $2.0 million for the comparable period of the prior fiscal year.

months ended September 30, 2021 compared to September 30, 2020 2021

months ended December 31, 2021 compared to December 31, 2020

Cost of revenue and Gross profit:

the Six Months Ended September 30,

Manufacturing

of manufacturing

profit - percentage

revenues for the six-month period ended September 30, 2021 increased by $0.7 million or 5%, to $15.6 million, as compared to $14.9 million,

for the corresponding period of the prior year, primarily due strong sales of Amphetamine IR and ER tablets during the six month

period ended September 30, 2021 as compared to the comparable period of the prior fiscal year.

For the Nine Months Ended December 31,

Manufacturing fees

Licensing fees

Total revenue

Cost of manufacturing

Gross profit - percentage

revenues for the nine-month period ended December 31, 2021 increased by $3.6 million or 17%, to $24.6 million, as compared to $21.0 million,

for the corresponding period of the prior year, primarily due strong sales of Amphetamine IR and ER tablets during the nine-month period

ended December 31, 2021 as compared to the comparable period of the prior fiscal year.

Manufacturing

fees for the six month period ended September 30, 2021 were $13.0 million, which was virtually unchanged from $12.8 million of such fees

for the comparable period of the prior year.

fees for the nine-month period ended December 31, 2021 were $20.6 million, an increase of $2.9 million, or 17%, from $17.7 million primarily

due to strong sales of Amphetamine IR and ER tablets during the nine months ended December 31, 2021 as compared to the comparable period

of the prior year.

fees increased by $0.6 million, or 19%.

This increase is primarily due to strong sales of Amphetamine IR and ER tablets during

the six months ended September 30, 2021 as compared to the comparable period of the prior fiscal year.

This increase is primarily due to strong sales of Amphetamine IR and ER tablets during the nine

months ended December 31, 2021 as compared to the comparable period of the prior fiscal year.

of revenue consists of manufacturing and assembly costs.

Our costs of revenue for the six month period ended September 30, 2021 were

$8.3 million which was virtually unchanged from $8.3 million of such fees for the comparable period of the prior year.

gross profit margin was 47% during the six months ended September 30, 2021 as compared to 44% during the comparable period of the prior

the Six Months Ended September 30,

and development

and administrative

and amortization

Our costs of revenue for the nine-month period ended December 31, 2021 were

$13.2 million, an increase of $2.2 million, or 20%, from $11.0 million of such fees for the comparable period of the prior year.

gross profit margin was 46% during the nine months ended December 31, 2021 as compared to 48% during the comparable period of the prior

For the Nine Months Ended December 31,

Operating expenses:

Research and development

General and administrative

Non-cash compensation

Depreciation and amortization

Total operating expenses

expenses consist of research and development costs, general and administrative, non-cash compensation and depreciation and amortization

Operating expenses for the six months ended September 30, 2021 increased by $0.5 million, or 12%, to $5.0 million as compared

Operating expenses for the nine months ended December 31, 2021 increased by $0.3 million, or 5%, to $7.1 million as compared

to $6.8 million for the corresponding period in the prior fiscal year.

and development costs for the six months ended September 30, 2021 were $2.4 million, an increase of $0.3 million, or 13%, from approximately

and development costs for the nine months ended December 31, 2021 were $3.3 million, which was virtually unchanged from approximately

$3.3 million of such costs for the comparable period of the prior year.

The increase was due to higher product development activities

during the six month period ended September 30, 2021 as compared to the comparable period of the prior fiscal year.

and administrative expenses for the six months ended September 30, 2021 were $2.0 million, an increase of $0.3 million, or 20% from $1.7

and administrative expenses for the nine months ended December 31, 2021 were $2.9 million, an increase of $0.4 million, or 18% from $2.5

million of such costs for the comparable period of the prior year due to increased costs and headcounts relating to regulatory compliance

and laboratory activities.

compensation expense for the six months ended September 30, 2021 and 2020 was less than $0.1 million.

and amortization expenses for the six months ended September 30, 2021 were $0.6 million, which was virtually unchanged from $0.7 million

compensation expense for the nine months ended December 31, 2021 and 2020 was less than $0.1 million.

and amortization expenses for the nine months ended December 31, 2021 were $0.9 million, which was virtually unchanged from $1.0 million

in such costs for the comparable period of the prior fiscal year.

a result of the foregoing, our income from operations for the six months ended September 30, 2021 was $2.4 million, compared to income

a result of the foregoing, our income from operations for the nine months ended December 31, 2021 was $4.2 million, compared to income

from operations of $3.2 million for the comparable period of the prior fiscal year.

the Six Months Ended September 30,

in fair value of derivative instruments

expense and amortization of debt issuance costs

on sale of fixed assets

income, net for the six months ended September 30, 2021 was $0.9 million, an increase of $0.5 million from the other income, net of $0.4

For the Nine Months Ended December 31,

Other income, net:

Change in fair value of derivative instruments

Interest expense and amortization of debt issuance costs

Gain on sale of fixed assets

Interest income

Other income, net

income, net for the nine months ended December 31, 2021 was $1.4 million, a decrease of $0.1 million from the other income, net of $1.5

million for the comparable period of the prior fiscal year.

The increase in other income was due to income relating to changes in the

fair value of our outstanding derivative warrants during the six month period ended September 30, 2021.

The decrease in other income was due to income relating to changes in the

fair value of our outstanding derivative warrants during the nine-month period ended December 31, 2021.

Please note that the change in

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see Note 11 to the Unaudited Condensed Consolidated Financial Statements above.

a result of the foregoing, our net income before the net benefit from sale of net operating loss credits for the six months ended September

a result of the foregoing, our net income before the net benefit from sale of net operating loss credits for the nine months ended December

31, 2021 was $5.6 million, compared to net income $4.6 million for the comparable period of the prior fiscal year.

and Capital Resources

December 31, 2021

March 31, 2021

Current assets

Current liabilities

Working capital

working capital (total current assets less total current liabilities) increased by $5.2 million from $6.4 million as of March 31, 2021

to $9.6 million as of September 30, 2021, with such increase being primarily related to the net income of $4.2 million and a net positive

cash flow of $1.3 million achieved during the six months ended September 30, 2021.

to $11.6 million as of December 31, 2021, with such increase being primarily related to the net income of $6.5 million and a net positive

cash flow of $4.1 million achieved during the nine months ended December 31, 2021.

of Cash Flows:

the Six Months Ended September 30,

cash provided by operating activities

cash used in investing activities

cash (used in) provided by financing activities

cash provided by operating activities for the six months ended September 30, 2021 was $1.9 million, which included net income

of $4.2 million and increases in non-cash expenses totaling $0.1 million, offset by net increases in assets and decreases in liabilities

totaling $2.4 million.

cash used in investing activities for the six months ended September 30, 2021 was comprised of purchases of property and equipment of

For the Nine Months Ended December 31,

Net cash provided by operating activities

Net cash used in investing activities

Net cash (used in) provided by financing activities

cash provided by operating activities for the nine months ended December 31, 2021 was $4.9 million, which included net income of $6.5

million and increases in non-cash expenses totaling $0.2 million, offset by net increases in assets and decreases in liabilities totaling

$(1.8) million.

cash used in financing activities was $0.4 million for the six months ended September 30, 2021 which consisted of loan

cash used in investing activities for the nine months ended December 31, 2021 was comprised of purchases of property and equipment of

$0.2 million.

cash used in financing activities was $0.6 million for the nine months ended December 31, 2021 which consisted of loan and bond payments.

Park Capital – July 8, 2020 Purchase Agreement

3 unchanged sentences

Purchase Agreement, at the Company’s direction.

Company did not issue any shares of its Common Stock pursuant to the 2020 LPC Purchase Agreement during the six months ended September

Company did not issue any shares of its Common Stock pursuant to the 2020 LPC Purchase Agreement during the nine months ended December

In addition, there were no shares issued to Lincoln Park as additional commitment shares, pursuant to the 2020 LPC Agreement.

the six months ended September 30, 2020 the Company issued an aggregate of 5,975,857 shares of Common Stock in the amount of $469,105

the nine months ended December 31, 2020 the Company issued an aggregate of 5,975,857 shares of Common Stock in the amount of $469,105

to Lincoln Park as initial commitment shares.

The Company sold 640,543 shares of its Common Stock pursuant to the 2020 LPC Purchase Agreement

during the six months ended September 30, 2020 for net proceeds totaling $42,223.

during the nine months ended December 31, 2020 for net proceeds totaling $42,223.

In addition, 10,094 shares were issued to Lincoln Park

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis