What changed in this filing

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Item 9A. Controls and Procedures

2022-06-29 compared with 2021-06-14 · 1508 added, 1740 removed, 528 unchanged (86% of the section changed)

CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and

term “disclosure controls and procedures,”

as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act, refers to controls

of Disclosure Controls and Procedures

term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act, refers to controls

and procedures that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits

under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and

Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required

to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s

management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding

5 unchanged sentences

Officer concluded that our disclosure controls and procedures were effective as of March 31, 2022 at the reasonable assurance level.

Management’s Report on Internal

Control Over Financial Reporting

Report on Internal Control Over Financial Reporting

control over financial reporting refers to the process designed by, or under the supervision of, our Chief Executive Officer and Chief

7 unchanged sentences

and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors;

provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s

assets that could have a material effect on the financial statements.

25 unchanged sentences

Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial

Management has used the framework set forth in the report entitled “Internal Control—Integrated Framework (2013)”

published by the Committee of Sponsoring Organizations of the Treadway Commission to evaluate the effectiveness of our internal control

2 unchanged sentences

as of March 31, 2022 at the reasonable assurance level.

Changes in internal control

over financial reporting

There were no changes in

our internal control over financial reporting identified in management’s evaluation pursuant to Rules 13a-15(d) or 15d-15(d) of

the Exchange Act during the fiscal quarter ended March 31, 2021 that materially affected, or are reasonably likely to materially affect,

our internal control over financial reporting.

in internal control over financial reporting

were no changes in our internal control over financial reporting identified in management’s evaluation pursuant to Rules 13a-15(d)

or 15d-15(d) of the Exchange Act during the fiscal quarter ended March 31, 2022 that materially affected, or are reasonably likely to

materially affect, our internal control over financial reporting.

OTHER INFORMATION

DIRECTORS, EXECUTIVE OFFICERS AND

CORPORATE GOVERNANCE

The following sets forth

biographical information about each of our directors and executive officers as of the date of this report:

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

following sets forth biographical information about each of our directors and executive officers as of the date of this report:

Director/Officer

President, Chief Executive Officer and Director

Barry Dash, Ph.

Jeffrey Whitnell

Chief Financial Officer, Secretary and Treasurer

Douglas Plassche

Executive Vice President of Operations

The principal occupations

and employment of each Director during the past five years is set forth below.

In each instance in which dates are not provided in connection

with a director’s business experience, such nominee has held the position indicated for at least the past five years.

Each director currently holds

office until the expiration of his Tier (each for three years) or until such director’s death, resignation, or removal.

to our recently amended and restated bylaws, our Board of Directors is now classified into three separate tiers of directors, with each

respective tier to serve a three-year term and until their successors are duly elected and qualified.

Nasrat Hakim has served

as a Director, President, and Chief Executive officer since August 2013.

He has been a member of the Audit Committee, member and chairman

of the nominating Committee and member of the Compensation Committee since September 2016.

Hakim has more than 30 years of pharmaceutical

and medical industry experience in Quality Assurance, Analytical Research and Development, Technical Services, and Regulatory Compliance.

He brings with him proven management experience, in-depth knowledge of manufacturing systems, development knowledge in immediate and

extended release formulations and extensive regulatory experience of GMP and FDA regulations.

From 2004 to 2013, Mr.

Hakim was employed

by Actavis, Watson and Alpharma in various senior management positions.

Chief Executive Officer and Director

Financial Officer, Secretary and Treasurer

Vice President of Operations

principal occupations and employment of each Director and executive officer during the past five years is set forth below.

each instance in which dates are not provided in connection with an individual’s business experience, such individual

has held the position indicated for at least the past five years.

to our recently amended and restated bylaws, our Board of Directors is now classified into three separate classes of directors.

Each director currently holds office until the expiration of the term of his class (each for three years) and until his successor

is duly elected and qualified, or until such director’s death, resignation, or removal.

Hakim has served as a Director, President, and Chief Executive officer since August 2013.

He has been a member of the Audit Committee,

member and chairman of the nominating Committee and member of the Compensation Committee since September 2016.

Hakim has more than

30 years of pharmaceutical and medical industry experience in Quality Assurance, Analytical Research and Development, Technical Services,

and Regulatory Compliance.

He brings with him proven management experience, in-depth knowledge of manufacturing systems, development

knowledge in immediate and extended release formulations and extensive regulatory experience of GMP and FDA regulations.

Hakim was employed by Actavis, Watson and Alpharma in various senior management positions.

Most recently, Mr.

Hakim served as International Vice President

of Quality Assurance at Actavis, overseeing 25 sites with more than 3,000 employees under his leadership.

Hakim also served as Corporate

Vice President of Technical Services, Quality and Regulatory Compliance for Actavis U.S., Global Vice President, Quality, and Regulatory

Compliance for Alpharma, as well as Executive Director of Quality Unit at TheraTech, overseeing manufacturing and research and development.

as International Vice President of Quality Assurance at Actavis, overseeing 25 sites with more than 3,000 employees under his leadership.

Hakim also served as Corporate Vice President of Technical Services, Quality and Regulatory Compliance for Actavis U.S., Global Vice

President, Quality, and Regulatory Compliance for Alpharma, as well as Executive Director of Quality Unit at TheraTech, overseeing manufacturing

and research and development.

Hakim founded Mikah Pharma, LLC, a virtual, fully functional pharmaceutical company.

Hakim holds a Bachelor in Chemistry/Bio-Chemistry

and Masters of Science in Chemistry from California State University at Sacramento, Sacramento, CA;

a Masters in Law with Graduate Certification

holds a Bachelor in Chemistry/Bio-Chemistry and Masters of Science in Chemistry from California State University at Sacramento, Sacramento,

a Masters in Law with Graduate Certification in U.S.

and International Taxation from St.

Thomas University, School of Law, Miami, FL.;

and a Graduate Certification in Regulatory

Affairs (RAC) from California State University at San Diego, San Diego, CA.

Hakim’s leadership experience (consisting of extensive

experience in senior management positions, responsible for 25 global manufacturing/regulatory sites with more than 3,000 employees under

his leadership), industry experience (comprising more than 30 years of pharmaceutical and medical industry experience served in various

quality assurance, analytical research and development/technical services and compliance positions) and academic experience (including

Bachelor degrees in Chemistry and Bio-Chemistry, Masters degrees in Chemistry and Law, with Graduate Certification in U.S.

and International

Taxation, and a Graduate Certification in Regulatory Affairs) led to the conclusion that he is qualified to serve as a director.

Barry Dash, Ph.D.

Barry Dash has

served as a Director since April 2005, member of the Audit Committee since April 2005, member of the Nominating Committee since April

2005 and member and Chairman of the Compensation Committee since June 2007.

Dash has been, since 1995, President and Managing Member

of Dash Associates, L.L.C., an independent consultant to the pharmaceutical and health industries.

From 1983 to 1996 he was employed

by Whitehall-Robins Healthcare, a division of American Home Products Corporation (now known as Wyeth), initially as Vice President of

Scientific Affairs, then as Senior Vice President of Scientific Affairs and then as Senior Vice President of Advanced Technologies, during

which time he personally supervised six separate departments:

Medical and Clinical Affairs, Regulatory Affairs, Technical Affairs, Research

and Development, Analytical R&D and Quality Management/Q.C.

Dash had been employed by the Whitehall Robins Healthcare from 1960

to 1976, during which time he served as Director of Product Development Research, Assistant Vice President of Product Development and

Vice President of Scientific Affairs.

Thomas University, School of Law, Miami,

and a Graduate Certification in Regulatory Affairs (RAC) from California State University at San Diego, San Diego, CA.

leadership experience (consisting of extensive experience in senior management positions, responsible for 25 global manufacturing/regulatory

sites with more than 3,000 employees under his leadership), industry experience (comprising more than 30 years of pharmaceutical and

medical industry experience served in various quality assurance, analytical research and development/technical services and compliance

positions) and academic experience (including Bachelor degrees in Chemistry and Bio-Chemistry, Masters degrees in Chemistry and Law,

with Graduate Certification in U.S.

and International Taxation, and a Graduate Certification in Regulatory Affairs) led to the conclusion

that he is qualified to serve as a director.

Barry Dash has served as a Director since April 2005, member of the Audit Committee since April 2005, member of the Nominating Committee

since April 2005 and member and Chairman of the Compensation Committee since June 2007.

Dash has been, since 1995, President and

Managing Member of Dash Associates, L.L.C., an independent consultant to the pharmaceutical and health industries.

From 1983 to 1996

he was employed by Whitehall-Robins Healthcare, a division of American Home Products Corporation (now known as Wyeth), initially as Vice

President of Scientific Affairs, then as Senior Vice President of Scientific Affairs and then as Senior Vice President of Advanced Technologies,

during which time he personally supervised six separate departments:

Medical and Clinical Affairs, Regulatory Affairs, Technical Affairs,

Research and Development, Analytical R&D and Quality Management/Q.C.

Dash had been employed by the Whitehall Robins Healthcare

from 1960 to 1976, during which time he served as Director of Product Development Research, Assistant Vice President of Product Development

and Vice President of Scientific Affairs.

Dash had been employed by J.B.

Williams Company (Nabisco Brands, Inc.) from 1978 to 1982.

1976 to 1978 he was Vice President and Director of Laboratories of the Consumer Products Division of American Can Company.

From 1976 to 1978 he was Vice President and Director of Laboratories of the Consumer Products Division of American Can Company.

holds a Ph.D.

from the University of Florida and M.S.

degrees from Columbia University where he was Assistant Professor at the College

of Pharmaceutical Sciences from 1956 to 1960.

He is a member of the American Pharmaceutical Association, the American Association for

the Advancement of Science and the Society of Cosmetic Chemist, American Association of Pharmaceutical Scientists, Drug Information Association,

American Foundation for Pharmaceutical Education, and Diplomate American Board of Forensic Examiners.

He is the author of scientific

publications and patents in the pharmaceutical field.

Dash’s extensive education in pharmaceutical sciences and his experience

in the development of scientific products, including his experience in regulatory affairs, led to the conclusion that he is qualified

to serve as a director.

Jeffrey Whitnell

Jeffrey Whitnell has

served as a Director since October 23, 2009, Chairman of the Audit Committee, member of the Compensation Committee since October 2009

and designated by the Board as an “

audit committee financial expert ”

as defined under applicable rules under the Exchange

degrees from Columbia University where he was Assistant Professor at the

College of Pharmaceutical Sciences from 1956 to 1960.

He is a member of the American Pharmaceutical Association, the American Association

for the Advancement of Science and the Society of Cosmetic Chemist, American Association of Pharmaceutical Scientists, Drug Information

Association, American Foundation for Pharmaceutical Education, and Diplomate American Board of Forensic Examiners.

He is the author of

scientific publications and patents in the pharmaceutical field.

Dash’s extensive education in pharmaceutical sciences and

his experience in the development of scientific products, including his experience in regulatory affairs, led to the conclusion that

he is qualified to serve as a director.

Whitnell has served as a Director since October 23, 2009, Chairman of the Audit Committee, member of the Compensation Committee since

October 2009 and designated by the Board as an “audit committee financial expert” as defined under applicable rules under

the Exchange Act.

Since April 2017, Mr.

Whitnell has provided financial advisory services, primarily to the healthcare industry, including LifeWatch

Services, where he served as the Vice President, Finance & Controller.

From June2010 to March 2015, Mr.

Whitnell was the Chief Financial

Officer for ReliefBand Medical Technologies, a medical device company.

From June 2009 to June 2010, Mr.

Whitnell provided financial advisory

services to various healthcare companies, including ReliefBand Medical Technologies.

From June 2004 to June 2009, Mr.

Whitnell was Chief

Financial Officer and Senior Vice President of Finance at Akorn, Inc.

From June 2002 to June 2004, Mr.

Whitnell was Vice President of

Finance and Treasurer for Ovation Pharmaceuticals.

Whitnell has provided financial advisory services, primarily to the healthcare industry, including

Southside Master, where he served as Chief Financial Officer from September 2018 to present.

Whitnell served as Vice President,

Finance and Controller for LifeWatch Services and other Private Equity-backed portfolio companies.

From June 2010 to March 2015,

Whitnell was the Chief Financial Officer for ReliefBand Medical Technologies, a medical device company.

From June 2009 to June 2010,

Whitnell provided financial advisory services to various healthcare companies, including ReliefBand Medical Technologies.

2004 to June 2009, Mr.

Whitnell was Chief Financial Officer and Senior Vice President of Finance at Akorn, Inc.

From June 2002 to June

Whitnell was Vice President of Finance and Treasurer for Ovation Pharmaceuticals.

From 1997 to 2001, Mr.

Whitnell was Vice President of Finance and Treasurer for MediChem

Whitnell was Vice

President of Finance and Treasurer for MediChem Research.

Prior to 1997, Mr.

Whitnell held various finance positions at Akzo Nobel and Motorola.

Whitnell began his career as an

auditor with Arthur Andersen & Co.

He is a certified public accountant and holds an M.B.A.

in Finance from the University of Chicago

Booth School of Business and a B.S.

Whitnell held various finance positions at Akzo Nobel and

Whitnell began his career as an auditor with Arthur Andersen & Co.

He is a certified public accountant and holds an

in Finance from the University of Chicago Booth School of Business and a B.S.

in Accounting from the University of Illinois.

Whitnell’s qualifications as an accounting

and audit expert provide specific experience to serve as a director for the Company.

Davis Caskey has served

as a Director since April 2016, and a member of the Audit Committee, the nominating Committee and the Compensation Committee since September

Whitnell’s qualifications as an accounting and audit expert led to the conclusion that he is qualified to serve as a director.

Caskey has served as a Director since April 2016, and a member of the Audit Committee, the nominating Committee and the Compensation

Committee since September 2016.

He brings more than 40 years of pharmaceutical industry experience to this position.

Caskey is currently President & CEO

of Caskey LLC, which he formed in 2013 to serve as an umbrella to manage his pharmaceutical consulting and other business interests.

Caskey is currently

President & CEO of Caskey LLC, which he formed in 2013 to serve as an umbrella to manage his pharmaceutical consulting and other

business interests.

From 1990 to 2013, Davis served as the operating officer of ECR Pharmaceuticals, of which he was a founding member.

HiTech Pharmacal

acquired the privately held ECR in 2009 and Mr.

HiTech Pharmacal acquired the privately held ECR in 2009 and Mr.

Caskey continued in his role until retiring in 2013.

Caskey was credited

with the establishment of the company’s sales and marketing structure, its product distribution format, and the development and management

of the firm’s internal organization.

His responsibilities included the oversight of drug development and regulatory filings, product

acquisitions, and acquisition of other companies.

A primary focus was to conceive and develop, with the assistance of key strategic partners,

unique dosage forms and extended release formulations of products which enhance patient compliance and safety.

was credited with the establishment of the company’s sales and marketing structure, its product distribution format, and the development

and management of the firm’s internal organization.

His responsibilities included the oversight of drug development and regulatory

filings, product acquisitions, and acquisition of other companies.

A primary focus was to conceive and develop, with the assistance of

key strategic partners, unique dosage forms and extended release formulations of products which enhance patient compliance and safety.

Prior to ECR, Mr.

was employed by A.H.

Caskey was employed by A.H.

Robins for 18 years in various field and home office management positions.

His experience brings critical insight

into the marketing and distribution of pharmaceutical products in a rapid and ever-changing competitive marketplace.

Caskey attended

the University of Texas (Austin) and Lamar University, and holds bachelor’s and master’s degrees.

Marc Bregman has served

as Chief Financial Officer, Secretary and Treasurer of the Company since May 17, 2021.

Prior to joining the Company, from February 2015

to May 2021, Mr.

Bregman served as Controller of Langan Engineering.

From 2013 to 2015, Mr.

Bregman served as financial controller at

Chemtrade Logistics.

From 2009 to 2013, Mr.

Bregman held corporate finance positions at Chemetall.

His experience

brings critical insight into the marketing and distribution of pharmaceutical products in a rapid and ever-changing competitive marketplace,

and this experience led to the conclusion that he is qualified to serve as a director.

Caskey attended the University of Texas

(Austin) and Lamar University, and holds bachelor’s and master’s degrees.

Chen has served as Chief Financial Officer, Secretary, and Treasurer of the Company since May 5, 2022.

Chen joins Elite with

broad experience in financial and operational leadership for life science companies, both private and public, ranging from preclinical

development to commercial operations.

Before joining Elite, Mr.

Chen served as Vice President for KBP Biosciences from December

2020 to February 2022.

From July 2019 to October 2020, Mr.

Chen was the Chief Financial Officer at Victory Commercial Management.

During 2019, Mr.

Chen served as Sr.

Director of Finance for WuXi Advanced Therapies.

From 2014 to 2019, Mr.

multiple corporate finance positions at National Starch and Chemical Company.

Bregman began his career as a certified public accountant

in the audit department of Ernst & Young, LLP.

Bregman is a Certified Public Accountant (“CPA”), and holds a Master

in Business degree from the New Jersey Institute of Technology, Newark, NJ and Bachelor of Science in Accounting from William Paterson

College, Wayne, NJ.

Bregman’s experience and expertise in the areas of finance, financial planning & analysis, Sarbanes

Oxley compliance, financial auditing and manufacturing accounting, provides the qualifications, attributes, and skills to serve as an

officer for the Company.

Douglas Plassche

Douglas Plassche has

served as Executive Vice President of Operations since August 2013.

Chen was the Sr.

of Finance at Taiho Oncology.

Chen held various other financial positions in the life sciences sector with increasing responsibilities.

Chen is a certified public accountant and began his career with Price Waterhouse and served as an Industrial Financial Analyst.

Chen brings with him extensive and diversified financial leadership background in the areas of financial reporting, including manufacturing,

financial and cost accounting, SEC, GAAP and IFRS, as well as financial planning and analysis, and this experience led to the conclusion

that he is qualified to serve as a director.

Chen has a Bachelor of Science in Business Administration, Accounting, and a Master

of Professional Accountancy degree from the University of Southern Mississippi.

He is a Certified Public Accountant (CPA).

Plassche has served as Executive Vice President of Operations since August 2013.

Prior to joining the Company, from 2009 to 2013, Mr.

Plassche served

as the Managing Director of the New Jersey Solid Oral Dose Operations of Actavis, overseeing 450 employees and the production of more

than 100 products.

Plassche served as the Managing Director of the New Jersey Solid Oral Dose Operations of Actavis, overseeing 450 employees and the production

of more than 100 products.

From 2007 to 2009, Mr.

Plassche was the Senior Director of Manufacturing for PAR Pharmaceuticals, overseeing 200 employees

and the production of more than 70 products.

From 1990 –

Plassche was employed by Schering-Plough, progressing steadily

through multiple disciplines, locations, and technical operations sectors with increasing levels of responsibility.

a bachelor’s degree in Economics from Rochester University.

There are no family relationships

between any of our directors and executive officers.

Committees of the Board

The Board of Directors has

an Audit Committee, a Compensation Committee, and a Nominating Committee.

Audit Committee

During Fiscal 2021, the members

of the Audit Committee were Jeffrey Whitnell (Chairman of the Audit Committee), Dr.

Barry Dash, Davis Caskey and Nasrat Hakim.

Whitnell, Dash, and Caskey to be independent and Mr.

Plassche was the Senior Director of Manufacturing for PAR Pharmaceuticals, overseeing

200 employees and the production of more than 70 products.

From 1990 – 2007, Mr.

Plassche was employed by Schering-Plough, progressing

steadily through multiple disciplines, locations, and technical operations sectors with increasing levels of responsibility.

has a bachelor’s degree in Economics from Rochester University.

are no family relationships between any of our directors and executive officers.

Board of Directors has an Audit Committee, a Compensation Committee, and a Nominating Committee.

the year ended March 31, 2022, the members of the Audit Committee were Jeffrey Whitnell (Chairman of the Audit Committee), Dr.

Dash, Davis Caskey and Nasrat Hakim.

The Board of Directors has determined that Messrs.

Whitnell, Dash, and Caskey to be independent

Whitnell to be qualified as an audit committee financial expert.

of Directors has determined that Messrs.

Whitnell, Dash and Caskey are independent directors as (i) defined in Rule 10A-3(b)(1)(ii) under

the Exchange Act and (ii) under Sections 803A(2) and 803B(2)(a) of the NYSE American LLC Company Guide (although our securities are not

listed on the NYSE American LLC or any other national exchange).

Nominating Committee

During Fiscal 2021, the members

of the Nominating Committee were Nasrat Hakim (Chairman of the Nominating Committee), Dr.

The Board of Directors has determined that Messrs.

Dash and Caskey are independent directors as (i) defined in Rule 10A-3(b)(1)(ii) under the Exchange Act and (ii) under Sections 803A(2)

and 803B(2)(a) of the NYSE American LLC Company Guide (although our securities are not listed on the NYSE American LLC or any other national

the year ended March 31, 2022, the members of the Nominating Committee were Nasrat Hakim (Chairman of the Nominating Committee), Dr.

Barry Dash, and Davis Caskey.

There were no

material changes to the procedures by which security holders may recommend nominees to our Board of Directors since the filing of our

last Annual Report on Form 10-K.

Compensation Committee

During Fiscal 2021, the members

of the Compensation Committee were Dr.

Barry Dash (Chairman of the Compensation Committee), Jeffrey Whitnell, Davis Caskey and Nasrat

Code of Conduct and Ethics

At the first meeting of the

Board of Directors following the annual meeting of stockholders held on June 22, 2004, and as further updated effective July 2009, the

Board of Directors adopted a Code of Business Conduct and Ethics that is applicable to the Company’s directors, officers, and employees.

A copy of the Code of Business Conduct and Ethics is available on our website at www.elitepharma.com, under Investor Relations.

Delinquent Section 16(a) Reports

Section 16(a) of the Exchange

Act requires our directors and executive officers and persons who beneficially own more than ten percent of our common stock to report

their ownership of, and transactions in, our stock in filings with the SEC.

Copies of these reports are also required to be supplied

VPG believes, based solely on a review of the copies of such reports received, that our directors and executive officers and

persons who beneficially own more than ten percent of our common stock complied with all applicable Section 16(a) reporting requirements

during the year ended March 31, 2021, except that Mr.

Plassche filed one late Form 4 reporting the award of salary shares.

ITEM 11 EXECUTIVE COMPENSATION

Role of the Compensation Committee

The Company formed the Compensation

Committee in June 2007.

Since the formation of the Compensation Committee all elements of the executives’

compensation are determined

by the Compensation Committee, which currently is comprised of three independent non-employee directors, and one director who is also

the Company’s Chief Scientific Officer.

However, the Compensation Committee’s decisions concerning the compensation of the

Company’s Chief Executive Officer are subject to ratification by the independent directors of the Board of Directors.

of the Compensation Committee are Dr.

Barry Dash (Chairman of the Compensation Committee), Jeffrey Whitnell, Davis Caskey and Nasrat Hakim.

There were no material changes to the procedures by which security holders may recommend nominees to our

Board of Directors since the filing of our last Annual Report on Form 10-K.

the year ended March 31, 2022, the members of the Compensation Committee were Dr.

Barry Dash (Chairman of the Compensation Committee),

Jeffrey Whitnell, Davis Caskey and Nasrat Hakim.

Section 16 Reports

16(a) of the Exchange Act requires the Company’s officers and directors, and persons who own more than ten percent of a registered

class of the Company’s stock, to file reports of ownership and changes in ownership with the SEC.

Officers, directors and greater

than ten percent stockholders are required by SEC regulation to furnish the Company with copies of all Section 16(a) reports they file.

solely on its review of copies of such reports and upon written representations from each of the Company’s officers and directors,

the Company believes that, for the year ended March 31, 2022, all Section 16(a) filing requirements applicable to the Company’s

officers, directors and greater than ten percent stockholders were complied with on a timely basis, except for one Form 4 filed on July

7, 2021 to report an award of options to Marc Bregman on May 17, 2021 that was late due to an administrative error.

of Conduct and Ethics

the first meeting of the Board of Directors following the annual meeting of stockholders held on June 22, 2004, and as further updated

effective July 2009, the Board of Directors adopted a Code of Business Conduct and Ethics that is applicable to the Company’s directors,

officers, and employees.

A copy of the Code of Business Conduct and Ethics is available on our website at www.elitepharma.com, under

Investor Relations.

EXECUTIVE COMPENSATION

of the Compensation Committee

Company formed the Compensation Committee in June 2007.

Since the formation of the Compensation Committee all elements of the executives’

compensation are determined by the Compensation Committee, which currently is comprised of three independent non-employee directors,

and one director who is also the Company’s Chief Executive Officer.

However, the Compensation Committee’s decisions

concerning the compensation of the Company’s Chief Executive Officer are subject to ratification by the independent directors of

the Board of Directors.

The members of the Compensation Committee are Dr.

Barry Dash (Chairman of the Compensation Committee), Jeffrey

Whitnell, Davis Caskey and Nasrat Hakim.

The Committee operates pursuant to a charter.

Under the Compensation Committee charter, the Compensation Committee has authority to retain

compensation consultants, outside counsel, and other advisors that the committee deems appropriate, in its sole discretion, to assist

it in discharging its duties, and to approve the terms of retention and fees to be paid to such consultants.

During the fiscal year ended

March 31, 2021, the Compensation Committee did not engage any advisors.

Named Executive Officers

The named executive officers

for the fiscal year ended March 31, 2021 were:

Nasrat Hakim, Chief Executive Officer, and President for the full year;

Ward, Chief Financial Officer, Secretary, and Treasurer for

the full year;

Douglas Plassche, Executive Vice President for the full year.

These individuals are referred

to collectively as the “

Named Executive Officers ”.

Our executive compensation program

Our approach to executive

compensation, one of the most important and complex aspects of corporate governance, is influenced by our belief in rewarding people for

consistently strong execution and performance.

We believe that the ability to attract and retain qualified executive officers and other

key employees is essential to our long-term success.

Our plan to obtain and retain highly skilled employees is to provide significant

incentive compensation opportunities and market competitive salaries.

We strive to link individual employee objectives with overall company

strategies and results, and to reward executive officers and significant employees for their individual contributions to those strategies

Furthermore, we believe that equity ownership serves to align the interests of our executives with those of our stockholders.

Under the Compensation Committee charter, the

Compensation Committee has authority to retain compensation consultants, outside counsel, and other advisors that the committee deems

appropriate, in its sole discretion, to assist it in discharging its duties, and to approve the terms of retention and fees to be paid

to such consultants.

During the fiscal year ended March 31, 2022, the Compensation Committee did not engage any advisors.

Executive Officers

named executive officers for the fiscal year ended March 31, 2022 were:

Hakim, Chief Executive Officer, and President for the full year;

Bregman, Chief Financial Officer, Secretary, and Treasurer from May 17, 2021 through April 29, 2022;

Plassche, Executive Vice President for the full year.

individuals are referred to collectively as the “Named Executive Officers”.

executive compensation program

approach to executive compensation, one of the most important and complex aspects of corporate governance, is influenced by our belief

in rewarding people for consistently strong execution and performance.

We believe that the ability to attract and retain qualified executive

officers and other key employees is essential to our long-term success.

Our plan to obtain and retain highly skilled employees is to

provide significant incentive compensation opportunities and market competitive salaries.

We strive to link individual employee objectives

with overall company strategies and results, and to reward executive officers and significant employees for their individual contributions

to those strategies and results.

Furthermore, we believe that equity ownership serves to align the interests of our executives with those

of our stockholders.

As such, equity is a key component of our compensation program.

The primary elements of our

executive compensation program are base salary, incentive cash and stock bonus opportunities and equity incentives typically in the form

of stock option grants or stock awards.

Although we provide other types of compensation, these three elements are the principal means

by which we provide the Named Executive Officers with compensation opportunities.

Elements of our executive compensation program

We pay a base salary to certain

of the Named Executive Officers, with such payments being made in either cash, Common Stock or a combination of cash and Common Stock.

In general, base salaries for the Named Executive Officers are determined by evaluating the responsibilities of the executive’s

position, the executive’s experience, and the competitive marketplace.

Base salary adjustments are considered and take into account

changes in the executive’s responsibilities, the executive’s performance, and changes in the competitive marketplace.

believe that the base salaries of the Named Executive Officers are appropriate within the context of the compensation elements provided

to the executives and because they are at a level which remains competitive in the marketplace.

In the section below entitled

Agreements with Named Executive Officers ”, we describe the breakdown between compensation paid in cash and in equity

for each Named Executive Officer during the fiscal year ended March 31, 2021.

Named Executive Officers may

earn discretionary bonuses, which are awarded by the Compensation Committee in its discretion after the end of a fiscal year based on

its assessment of factors including Company and individual performance.

Pursuant to his employment agreement, Mr.

Hakim was eligible to

earn a discretionary bonus for the fiscal year ended March 31, 2021 up to 100% of his base salary ($500,000 for fiscal 2021), which he

earned in full.

In addition, as described in the section below entitled “Agreements with Named Executive Officers,”

was guaranteed a $75,000 annual bonus for the fiscal year ended March 31, 2021.

Ward was awarded a $25,000 discretionary bonus for

his service during fiscal 2021.

As noted above, certain components of our Named Executive

Officers’

fiscal year 2021 base salary and bonuses were payable in shares of Common Stock.

In addition, Messrs.

Plassche are each entitled to an annual grant of restricted shares of Common Stock, as described in the section entitled

Agreements with Named Executive Officers ”

During the fiscal year ended 2021, this amount was $25,000

worth of fully vested restricted shares for Mr.

Ward and $30,000 worth of fully vested restricted shares for Mr.

From time to time, we also

grant stock options to our Named Executive Officers which generally vest over time, obtainment of a corporate goal or a combination of

We did not grant any stock options to our named executive officers in fiscal year 2021.

Retirement Benefits

We maintain a tax-qualified

retirement plan under Section 401(k) of the Code.

The plan allows employees to defer compensation on a pre-tax basis subject to certain

primary elements of our executive compensation program are base salary, incentive cash and stock bonus opportunities and equity incentives

typically in the form of stock option grants or stock awards.

Although we provide other types of compensation, these three elements are

the principal means by which we provide the Named Executive Officers with compensation opportunities.

of our executive compensation program

pay a base salary to certain of the Named Executive Officers, with such payments being made in either cash, Common Stock or a combination

of cash and Common Stock.

In general, base salaries for the Named Executive Officers are determined by evaluating the responsibilities

of the executive’s position, the executive’s experience, and the competitive marketplace.

Base salary adjustments are considered

and take into account changes in the executive’s responsibilities, the executive’s performance, and changes in the competitive

We believe that the base salaries of the Named Executive Officers are appropriate within the context of the compensation

elements provided to the executives and because they are at a level which remains competitive in the marketplace.

the section below entitled “ Agreements with Named Executive Officers ”, we describe the breakdown between compensation

paid in cash and in equity for each Named Executive Officer during the fiscal year ended March 31, 2022.

Executive Officers may earn discretionary bonuses, which are awarded by the Compensation Committee in its discretion after the end of

a fiscal year based on its assessment of factors including Company and individual performance.

Pursuant to his employment agreement,

Hakim was eligible to earn an annual bonus for the fiscal year ended March 31, 2022 up to 100% of his base salary ($500,000

for fiscal 2022), which he earned in full.

In addition, as described in the section below entitled “ Agreements with Named Executive

Officers ,” Mr.

Plassche was entitled to earn an annual bonus for the fiscal year ended March 31, 2022 up to 30% of his base

salary $78,493 for fiscal 2022.

Plassche was awarded an $83,600 bonus for the fiscal year ended March 31, 2022.

was entitled to earn an annual bonus for the fiscal year ended March 31, 2022 up to 20% of his base salary $37,400 for fiscal

2022, which he earned in full.

noted above, certain components of our Named Executive Officers’ fiscal year 2022 base salary and bonuses were payable in shares

of Common Stock.

In addition, Mr.

Plassche is entitled to an annual grant of shares of Common Stock, as described in the section entitled

“ Agreements with Named Executive Officers ” below.

During the fiscal year ended March 31, 2022, this amount was

$18,750 worth of fully vested shares for Mr.

Plassche, which he elected to take as a cash bonus payment.

Plassche’s annual

grant of shares of Common Stock in lieu of salary was terminated on December 31, 2021.

time to time, we also grant stock options to our Named Executive Officers which generally vest over time, obtainment of a corporate goal

or a combination of the two.

Bregman was granted stock options to purchase 300,000 shares of Common Stock with the strike price

being closing price of the Company’s stock as traded on the OTC Bulletin Board (symbol ELTP) on the first day of employment.

options were to vest over a three-year period commencing one year from the date of issuance.

Bregman resigned prior to any of the

options vesting.

We did not grant any other stock options to our named executive officers during the fiscal year ended March

maintain a tax-qualified retirement plan under Section 401(k) of the Code.

The plan allows employees to defer compensation on a pre-tax

basis subject to certain limits;

however, Elite does not provide a matching contribution to its participants.

Hakim receives a monthly

car allowance of up to $1,500 pursuant to the terms of his employment agreement.

Plassche receives a monthly car allowance of up to

Hakim receives a monthly car allowance of up to $1,500 pursuant to the terms of his employment agreement.

Plassche receives a monthly

car allowance of up to $500.

Hakim is also entitled to a monthly housing allowance up to $5,000.

These perquisites represent a small fraction of the total

compensation of each such Named Executive Officer.

The value of the perquisites we provide are taxable to the Named Executive Officers

and the incremental cost to us of providing these perquisites is reflected in the Summary Compensation Table.

The Board of Directors believes

that the perquisites provided are reasonable and appropriate.

The Company generally covers life insurance premiums for its employee population,

including its Named Executive Officers.

For more information on perquisites provided to the Named Executive Officers, please see the “

Other Compensation ”

column of the Summary Compensation Table.

Agreements with Named Executive Officers

Pursuant to his August 2013

employment agreement, as amended on January 12, 2016 (the “

Hakim Employment Agreement ”), Mr.

Hakim receives an annual

salary of $500,000 per year.

The Salary is paid in shares of the Company’s Common Stock pursuant to the Company’s current

procedures for paying Company executives in Stock.

He also is entitled to an annual performance bonus equal to up to 100% of his annual

salary, payable in shares of Common Stock as well.

The value of the perquisites we

provide are taxable to the Named Executive Officers and the incremental cost to us of providing these perquisites are reflected

in the Summary Compensation Table.

The Board of Directors believes that the perquisites provided are reasonable and appropriate.

Company generally covers life insurance premiums for its employee population, including its Named Executive Officers.

For more information

on perquisites provided to the Named Executive Officers, please see the “ All Other Compensation ” column of the Summary

Compensation Table.

with Named Executive Officers

to his August 2013 employment agreement, as amended on January 12, 2016 (the “Hakim Employment Agreement”), Mr.

Hakim receives

an annual salary of $500,000 per year.

The Salary is paid in shares of the Company’s Common Stock pursuant to the Company’s

current procedures for paying Company executives in Stock.

He also is entitled to an annual bonus equal to up to 100% of his annual salary,

payable in accordance with the Company’s payroll practices.

The Board may also award discretionary bonuses in its sole discretion.

entitled to employee benefits (e.g., health, vacation, employee benefit plans and programs) consistent with other Company employees of

his seniority and a car allowance of up to $1,500 per month.

The Hakim Employment Agreement contains restrictive covenants including a

confidentiality provision and a one year post-termination non-solicit provision.

Hakim’s employment

is terminable by the Company for cause (as defined below).

The Hakim Employment Agreement also may be terminated by the Company upon at

least 30 days written notice due to disability (as defined below) or without cause.

Hakim can terminate the Hakim Employment Agreement

by resigning, provided he gives notice at least 60 days prior to the effective resignation date.

Hakim is terminated

for cause or he resigns, he only is entitled to accrued and unpaid annual salary, accrued vacation time and any reasonable and necessary

business expenses, all through the date of termination and payable in stock (“Basic Termination Benefits”).

terminated because of disability or death, in addition to Basic Termination Benefits, he is entitled to a pro rata annual bonus through

the date of termination (payable in Stock), payable in a lump sum.

Hakim is entitled to employee benefits (e.g., health, vacation, employee benefit plans and programs) consistent with other Company

employees of his seniority and a car allowance of up to $1,500 per month.

The Hakim Employment Agreement contains confidentiality,

non-competition and other standard restrictive covenants.

Hakim’s employment is terminable by the Company for cause (as defined in the Hakim Employment Agreement).

The Hakim Employment

Agreement also may be terminated by the Company upon at least 30 days written notice due to disability (as defined in the Hakim Employment

Agreement) or without cause.

Hakim can terminate the Hakim Employment Agreement by resigning, provided he gives notice at least 60

days prior to the effective resignation date.

Hakim is terminated for cause or he resigns, he only is entitled to accrued and unpaid annual salary, accrued vacation time and any

reasonable and necessary business expenses, all through the date of termination and payable in stock (“Basic Termination Benefits”).

Hakim is terminated because of disability or death, in addition to Basic Termination Benefits, he is entitled to a pro rata annual

bonus through the date of termination (payable in Stock), payable in a lump sum.

In addition, in the event of the termination of Mr.

Hakim’s employment

due to his disability, he will be entitled to a lump sum payment within 60 days of the termination date equal to one year of his base

salary (payable in Stock), subject to his execution of a release.

Hakim’s employment due to his disability, he will be entitled to a lump sum payment within 60 days of the termination date equal

to one year of his base salary (payable in Stock), subject to his execution of a release.

If the Company terminates Mr.

Hakim without cause, in addition to Basic

Termination Benefits, Mr.

Hakim is entitled to his pro rata annual bonus through the date of termination and an amount equal to two years’

annual salary (all payable in Stock in a lump sum within 60 days of the termination date), and 12 months of continued health insurance

continuation under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), at active employee rates,

subject to his execution of a release and his continued compliance with applicable restrictive covenants.

Upon a termination of employment

in connection with a Change of Control (as defined below), in addition to Basic Termination Benefits, Mr.

Hakim is entitled to a pro rata

annual bonus and payment in an amount equal to two year’s base annual salary in effect upon the Date of Termination, less applicable

deductions, and withholdings, payable in Stock in a lump sum within 60 days, and two years of health care continuation benefits.

all outstanding unvested equity held by Mr.

Hakim without

cause, in addition to Basic Termination Benefits, Mr.

Hakim is entitled to his pro rata annual bonus through the date of termination

and an amount equal to two years’ annual salary (all payable in Stock in a lump sum within 60 days of the termination date), and

12 months of continued health insurance continuation under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”),

at active employee rates, subject to his execution of a release and his continued compliance with applicable restrictive covenants.

a termination of employment in connection with a Change of Control (as defined below), in addition to Basic Termination Benefits, Mr.

Hakim is entitled to a pro rata annual bonus and payment in an amount equal to two year’s base annual salary in effect upon the

Date of Termination, less applicable deductions, and withholdings, payable in Stock in a lump sum within 60 days, and two years of health

care continuation benefits.

In addition, all outstanding unvested equity held by Mr.

Hakim will then vest.

Under the Hakim Employment

“Cause”

Hakim’s failure or refusal to perform the services required under the agreement, (2) the material breach by Mr.

any of the terms of the agreement, or (3) Mr.

Hakim’s conviction of a crime that results in imprisonment or involves embezzlement,

the Hakim Employment Agreement:

means (1) Mr.

Hakim’s failure or refusal to perform the services required under the agreement, (2) the material breach by Mr.

of any of the terms of the agreement, or (3) Mr.

Hakim’s conviction of a crime that results in imprisonment or involves embezzlement,

dishonest or activities injurious to the Company or its reputation.

“Change of Control”

means generally (1) an acquisition or merger resulting in the holders of the Company’s voting stock immediately prior to the transaction

holding less than fifty (50%) percent of the combined voting power after the transaction;

(2) the sale of all or substantially all of

the assets or capital stock of the Company;

or (3) the securities of the Company representing greater than fifty (50%) percent of the

combined voting power of the Company’s then outstanding voting securities are acquired in a single transaction or series of related

transactions.

“Disability”

Hakim is prevented by illness, accident or other disability (mental or physical) from performing the essential functions of his

position for one or more periods cumulatively totaling 3 months during any consecutive 12 month period.

On November 12, 2009, the

Company entered into an employment agreement with Mr.

Ward (the “

Ward Employment Agreement ”) which superseded

his prior agreement with the Company.

Pursuant to the terms of the Ward Employment Agreement, Mr.

Ward continues as an at-will employee

of the Company as its Chief Financial Officer.

Under the Ward Employment Agreement, Mr.

Ward was entitled to an initial base salary of

$125,000 in accordance with the Company’s payroll practices and an additional $25,000 per annum paid by the issuance of restricted

shares of Common Stock.

of Control” means generally (1) an acquisition or merger resulting in the holders of the Company’s voting stock immediately

prior to the transaction holding less than fifty (50%) percent of the combined voting power after the transaction;

(2) the sale of all

or substantially all of the assets or capital stock of the Company;

or (3) the securities of the Company representing greater than fifty

(50%) percent of the combined voting power of the Company’s then outstanding voting securities are acquired in a single transaction

or series of related transactions.

means that Mr.

Hakim is prevented by illness, accident or other disability (mental or physical) from performing the essential functions

of his position for one or more periods cumulatively totaling 3 months during any consecutive 12 month period.

April 26, 2021, the Company entered into an employment agreement with Mr.

Marc Bregman (the “Bregman Employment Agreement”).

Pursuant to the terms of the Bregman Employment Agreement, Mr.

Bregman served as an at-will employee of the Company as its Chief Financial

Bregman received a base salary of $187,000, payable in accordance with the Company’s payroll practices.

also eligible for an annual bonus, equal to up to 20% of his base salary.

Bregman was granted

stock options to purchase 300,000 shares of Common Stock.

The options were to vest over a three-year period, commencing one year from

the date of issuance.

Bregman was entitled generally to the same employee benefits offered to other employees of the Company, subject to applicable

eligibility requirements.

Bregman subsequently resigned as CFO of the Company, effective April 29, 2022.

July 20, 2013, the Company entered into an employment agreement with Mr.

Douglas Plassche (the “Plassche Employment Agreement”).

Pursuant to the Plassche Employment Agreement, Mr.

Plassche serves as an at-will employee, in the position of Vice President of Operations,

commencing on August 12, 2013.

The Plassche Employment Agreement includes an initial base salary of $205,000 being paid in accordance

with the Company’s payroll practices and an additional $25,000 being paid by the issuance of shares of Common Stock.

The Common Stock component of Mr.

Ward’s compensation is to be computed on a quarterly basis, with the number

of shares issued equal to the quotient of the quarterly amount due of $6,250 divided by the average daily closing price of the Company’s

Common Stock for the quarter just ended.

On April 1, 2020, Mr.

compensation was adjusted to include a total compensation of $200,529, consisting of $170,529 being paid in cash in accordance with the

Company’s payroll practices and $30,000 being paid by the issuance of restricted shares of Common Stock.

On March 1, 2021, Mr.

compensation was adjusted to include a total compensation of $208,543, consisting of $178,543 being paid in accordance with the Company’s

payroll practices and $30,000 being paid by the issuance of restricted shares of Common Stock.

Ward subsequently

resigned as CFO of the Company, effective May 14, 2021.

Douglas Plassche

On July 20, 2013, the Company

entered into an employment agreement with Mr.

Douglas Plassche (the “

Plassche Employment Agreeme nt”).

Pursuant to the

Plassche Employment Agreement, Mr.

Plassche serves as an at-will employee, in the position of Vice President of Operations, commencing

on August 12, 2013.

The Plassche Employment Agreement includes an initial base salary of $205,000 being paid in accordance with the Company’s

payroll practices and an additional $25,000 being paid by the issuance of restricted shares of Common Stock.

The Common Stock component

Plassche’s compensation is to be computed on an annual basis, with the number of shares issued being equal to the quotient

of the annual amount due, divided by the average daily closing price of the Company’s Common Stock for the calendar year just ended.

Plassche is also eligible

for an annual bonus in cash and/or equity-based awards for up to an equivalent of 30% of base salary, with such annual bonus being granted

based upon the achievement of agreed milestones and at the discretion of the Company and its Chief Executive Officer.

In addition, pursuant

to the Plassche Employment Agreement, he was initially granted options to purchase 3,000,000 shares of Common Stock, at a price of $ 0.07

per share, (the closing price of the Common Stock on the date of the Plassche Employment Agreement).

The options were issued pursuant

to the 2004 Employee Stock Option Plan and vested over a period of three years with the vesting period commencing one year from the date

Plassche’s employment

is terminable by either party.

Plassche’s compensation is to be computed on an annual basis, with the number of shares issued

being equal to the quotient of the annual amount due, divided by the average daily closing price of the Company’s Common Stock

for the calendar year just ended.

Plassche is also eligible for an annual bonus in cash and/or equity-based awards for up to an equivalent of 30% of base salary, with

such annual bonus being awarded based upon the achievement of agreed milestones and at the discretion of the Company and its

Chief Executive Officer.

In addition, pursuant to the Plassche Employment Agreement, Mr.

Plassche was initially granted

options to purchase 3,000,000 shares of Common Stock, at a price of $ 0.07 per share, (the closing price of the Common Stock on the

date of the Plassche Employment Agreement).

The options were issued pursuant to the 2004 Employee Stock Option Plan and vested over

a period of three years with the vesting period commencing one year from the date of issuance.

entitled to a monthly automobile allowance of $500.

Plassche’s employment is terminable by either party.

If the Company terminates Mr.

Plassche without cause, Mr.

Plassche is entitled to an amount equal to six

months of base annual salary in effect upon the date of termination.

Throughout his tenure, Mr.

Plassche’s compensation was increased from time to time by the Board.

On June 21, 2019, Mr.

entered into a retention agreement with the Company (the “Plassche Retention Agreement”), as an in incentive for his continued

employment and cooperating during a transitional period for the Company.

Plassche is entitled

to an amount equal to six months of base annual salary in effect upon the date of termination.

his tenure, Mr.

Plassche’s compensation was increased from time to time by the Board.

April 1, 2020, Mr.

Plassche’s compensation was adjusted to include a total base compensation of $272,530, consisting of $247,530

being paid in cash in accordance with the Company’s payroll practices and $25,000 being paid by the issuance of shares of Common Stock in lieu of cash.

Plassche is party to two retention agreements with the Company.

On June 21, 2019, he entered into an agreement as an incentive for his

continued employment and cooperation during a transitional period for the Company, which provided a retention bonus of $253,552, subject

to his continued employment through June 30, 2021.

This amount was earned during fiscal 2022 and is reflected in the Summary Compensation

February 18, 2022, Mr.

Plassche entered into a subsequent retention agreement with the Company (the “Plassche Retention

Agreement”), also as an incentive for his continued employment and cooperation during a transitional period for the Company.

Pursuant to the Plassche Retention Agreement, Mr.

entitled to a lump sum retention payment of $253,552 as of June 30, 2021, provided Mr.

Plassche remains continuously employed by the Company

through such date.

In addition, Mr.

Plassche was paid a one-time $30,000 relocation payment during fiscal year 2020.

Under the Plassche

Retention Agreement, the Company also guaranteed Mr.

Plassche a salary of $253,552 and an annual bonus of $75,000 during the two year

period following the agreement date.

On April 1, 2020, Mr.

Plassche’s

compensation was adjusted to include a total base compensation package of $272,530, consisting of $247,530 being paid in accordance with

the Company’s payroll practices and $25,000 being paid by the issuance of restricted shares of Common Stock.

On March 1, 2021, Mr.

Plassche’s

compensation was adjusted to include a total base compensation package of $278,606, consisting of $253,606 being paid in accordance with

the Company’s payroll practices and $25,000 being paid by the issuance of restricted shares of Common Stock.

Potential Payments Upon Termination or Change

Hakim and Plassche

are entitled to certain benefits upon a termination event (and in the case of Mr.

Hakim, in connection with a change of control), as described

in the section entitled “

Agreements with Named Executive Officers ”

We do not presently provide the Named Executive

Officers with any plan or arrangement, other than those that may be contained in the employment contracts disclosed above, in connection

with any termination, including, without limitation, through retirement, resignation, severance, or constructive termination (including

a change in responsibilities) of such Named Executive Officer’s employment with the Company.

As part of the Company’s

efforts to ensure the retention and continuity of key employees, officers, and directors in the event of a change of control of the ownership

of the Company, unless otherwise stated in applicable employment contracts, key executives would receive an amount not to exceed twelve

months of such executive’s salary, and certain Directors and managers would receive an amount equal to six months of such Director’s

or manager’s fees or salaries, as applicable.

In addition, any outstanding and unvested options would immediately vest, in the event

of a change of control.

Hedging Policy

We do not permit the Named

Executive Officers to “hedge”

ownership by engaging in short sales or trading in any options contracts involving securities.

Summary Compensation Table

Plassche is entitled to a $150,000 retention payment on each of October 31,

2022 and June 30, 2023, subject in each case to his continued employment through such date.

March 1, 2022, Mr.

Plassche’s compensation was adjusted to include a total base compensation package of $300,000 payable in accordance

with the Company’s payroll practices.

Payments Upon Termination or Change of Control

Hakim and Plassche are entitled to certain benefits upon a termination event (and in the case of Mr.

Hakim, in connection with a change

of control), as described in the section entitled “Agreements with Named Executive Officers” above.

We do not presently provide

the Named Executive Officers with any plan or arrangement, other than those that may be contained in the employment contracts disclosed

above, in connection with any termination, including, without limitation, through retirement, resignation, severance, or constructive

termination (including a change in responsibilities) of such Named Executive Officer’s employment with the Company.

part of the Company’s efforts to ensure the retention and continuity of key employees, officers, and directors in the event of

a change of control of the ownership of the Company, unless otherwise stated in applicable employment contracts, key executives would

receive an amount not to exceed twelve months of such executive’s salary, and certain Directors and managers would receive an amount

equal to six months of such Director’s or manager’s fees or salaries, as applicable.

In addition, any outstanding and unvested

options would immediately vest, in the event of a change of control.

do not permit the Named Executive Officers to “hedge” ownership by engaging in short sales or trading in any options contracts

involving securities.

Compensation Table

Name and Principal Position

Option Awards

All Other Compensation ($)

Nasrat Hakim, President, Chief Executive Officer and Chairman of the Board of Directors

Ward, Chief Financial Officer

Marc Bregman, Chief Financial Officer

Douglas Plassche, Executive Vice President

(1) Represents

salary earned by Mr.

1 unchanged sentence

of Common Stock in lieu of cash.

No shares of Common Stock have been issued

No shares of Common Stock have been issued to Mr.

Hakim in payment of salaries due for Fiscal 2022.

A total of 11,570,858 shares of Common Stock are due and owing to Mr.

in payment of salaries earned during Fiscal 2021.

A total of 6,305,856 shares of Common Stock are due and owing to Mr.

Hakim in payment

of salaries earned during Fiscal 2020.

In aggregate, a total of $2,125,000 is accrued, due and owing to Mr.

Hakim for salaries earned

during Fiscal 2021, Fiscal 2020, and the thirty-six months ended March 31, 2019, but not paid.

This amount is to be paid via the

issuance of 24,342,733 shares of Common Stock, with the date of such issuance of shares of Common Stock being undetermined.

The bonus earned by Mr.

Hakim in payment of salaries earned during Fiscal 2022.

total of 7,388,707 shares of Common Stock are due and owing to Mr.

Hakim in payment of salaries earned during Fiscal 2021.

aggregate, a total of $2,625,000 is accrued, due and owing to Mr.

Hakim for salaries earned during Fiscal 2022, Fiscal 2021, and the

forty-eight months ended March 31, 2020, but not paid.

This amount is to be paid via the issuance of 35,913,602 shares of Common

Stock, with the date of such issuance of shares of Common Stock being undetermined.

bonus earned by Mr.

Hakim for fiscal 2022.

Bonuses earned by Mr.

Hakim during Fiscal

2021 were paid in accordance with the Company’s payroll practices during Fiscal 2021.

Hakim was also paid $437,500 during Fiscal 2021 for bonuses earned

and accrued during the twelve months ended March 31, 2018, and not paid previously.

Hakim during Fiscal 2022 were paid in accordance with the

Company’s payroll practices during Fiscal 2022.

Hakim was also paid $187,500 during Fiscal 2022 for bonuses earned and

accrued during the twelve months ended March 31, 2019, and not paid previously.

Hakim was also paid $375,000 during Fiscal 2022

for bonuses earned and accrued during the twelve months ended March 31, 2020, and not previously paid.

Hakim accordingly was paid

a total of $1,250,000 during Fiscal 2021, with such amount representing bonuses earned during Fiscal 2021 and the twenty-four month period

ending March 31, 2019, and not previously paid.

Hakim accordingly was

paid a total of $1,062,000 during Fiscal 2022, with such amount representing bonuses earned during Fiscal 2022 and the twenty-four

month period ending March 31, 2020, and not previously paid.

A total of $500,000 of bonus earned by Mr.

Hakim during Fiscal 2020 was paid in accordance with the Company’s payroll practices.

A total of $375,000 of bonus earned by

Hakim during Fiscal 2020 was accrued and is owing to Mr.

As of March 31, 2021, Mr.

Hakim is owed $562,500 in bonuses earned

during the twenty-four-month period ending March 31, 2020.

Pursuant to the Hakim Employment Agreement, these bonuses are to be paid in

accordance with the Company’s payroll practices.

Hakim during Fiscal 2021 was

paid in accordance with the Company’s payroll practices.

Hakim was also paid a total of $750,000 of bonuses earned and

accrued during the twenty-four month period ending March 31, 2019 and not previously paid.

Represents $18,000 amounts paid for auto allowance and $60,000 for housing allowances.

Represents salaries earned by Mr.

Ward pursuant to the Ward Employment Agreement.

Fiscal 2021 salaries consist of $171,197 being

paid in accordance with the Company’s payroll practices and $30,000 being accrued, due, owing and to be paid via the issuance of

443,355 shares of Common Stock.

In aggregate, salaries totaling $97,500 are accrued,

due and owing to Mr.

Ward for salaries earned and not paid during Fiscal 2021, Fiscal 2020 and the twenty-four month period ended March

31, 2019, with such accrued amount being paid via the issuance of 1,218,536 shares of Common Stock during May 2021.

Represents the bonus earned by Mr.

Ward for fiscal 2021.

Represents salaries earned by Mr.

Bregman pursuant to the Bregman Employment Agreement.

Represents bonus earned by Mr.

Bregman during fiscal 2022.

salaries earned by Mr.

Plassche pursuant to the Plassche Employment Agreement.

Fiscal 2021 salaries consist of $242,536 being

paid in accordance with the Company’s payroll practices and $25,000 being accrued, due, owing and to be paid via the issuance of

369,462 shares of Common Stock.

In aggregate, salaries totaling $25,000 are accrued,

due and owing to Mr.

Plassche for salaries earned and not paid during Fiscal 2021, with such accrued amount to be paid via the issuance

of 369,462 shares of Common Stock, with the date of such issuance of shares of Common Stock being undetermined.

Represents the bonus earned by Mr.

Fiscal 2022 salaries consist of $261,644 being paid

in accordance with the Company’s payroll practices.

Represents the bonus of $83,600 earned by Mr.

Plassche for fiscal 2022 pursuant to the Plassche Employment Agreement, $18,750

of salaries earned during Fiscal 2022 which Mr.

Plassche has elected to receive in cash instead of the issuance of common stock, and

$291,552 as retention bonus under the June 2019 retention agreement.

Represents amounts paid for auto allowances.

Outstanding Equity Awards at March 31, 2021

Option Awards

Equity Awards at March 31, 2022

Unexercisable

4 unchanged sentences

Douglas Plassche

Director Compensation

The following table sets forth

information concerning director compensation for the year ended March 31, 2021:

following table sets forth information concerning director compensation for the year ended March 31, 2022:

Jeffrey Whitnell

Please refer to the section below titled “

Fee Compensation ”

for details on the Company’s director fee compensation policy.

refer to the section below titled “Director Fee Compensation” for details on the Company’s director fee compensation

No directors held unexercised or unvested stock awards as of March 31, 2022.

Amounts represent Director fees earned during the

fiscal year ended March 31, 2021 which are to be paid in cash.

These fees were accrued and unpaid as of March 31, 2021, with a payment

date being undetermined.

In aggregate, Directors fees totaling $30,000 ($10,000 for each of the Company’s three non-employee

Directors) is accrued, due and owing for Director fees earned during Fiscal 2021.

This amount is to be paid in cash, with the date

of such payment being undetermined.

Director equity compensation for the fiscal year ended March 31, 2021 consists of an entitlement to 295,570 shares of Common Stock for each of Dr.

represent Director fees earned during the fiscal year ended March 31, 2022 which are to be paid in cash.

These fees were accrued

and unpaid as of March 31, 2022, with a payment date being undetermined.

In aggregate, Directors fees totaling $30,000 ($10,000 for

each of the Company’s three non-employee Directors) is accrued, due and owing for Director fees earned during Fiscal 2022.

equity compensation for the fiscal year ended March 31, 2022 consists of an entitlement to 295,570 shares of Common Stock for each

Whitnell and Mr.

Caskey each receiving 295,570 shares of Common Stock.

Payment of this amount due via share issuance will be made at an as yet undetermined date.

Director Fee Compensation

The Company’s policy

regarding director fees is as follows:

(i) Directors who are employees or consultants of the Company (and/or any of its subsidiaries)

receive no additional remuneration for serving as directors or members of committees of the Board;

(ii) all Directors are entitled to

reimbursement for out-of-pocket expenses incurred by them in connection with their attendance at the Board or committee meetings;

Directors who are not employees or consultants of the Company (and/or any of its subsidiaries) receive a $30,000 annual retainer fee,

with $20,000 of this amount being paid via the issuance of restricted Common Stock, and the remaining $10,000 being paid in cash;

Directors and the Chairman do not receive any additional compensation for attendance at or chairing of any meetings.

Director Equity Compensation

As described above, members

of the Board of Directors and the Chairman are paid a portion of their annual retainer fees via the issuance of restricted shares of Common

Stock of the Company.

The number of shares to be issued to each Director and the Chairman is equal to the quotient of the quarterly amount

due to each Director and the Chairman, respectively, divided by the average daily closing price of the Company’s stock for the quarter

Members of the Board of Directors

during the fiscal year ended March 31, 2021 did not receive any options or equity compensation for serving as directors other than shares

of Common Stock earned in lieu of cash in relation to Director fees due.

The Company’s Articles

of Incorporation provide for the indemnification of each of the Company’s directors to the fullest extent permitted under Nevada

General Corporation Law.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL

OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table sets forth

certain information, as of June 7, 2021 (except as otherwise indicated), regarding beneficial ownership of our Common Stock by (i) each

person who is known by us to own beneficially more than 5% of each such class, (ii) each of our directors, (iii) each of our executive

officers and (iv) all our directors and executive officers as a group.

As of June 7, 2021, we had 1,009,176,752 shares of Common Stock

outstanding (exclusive of 0.1 million treasury shares).

On any matter presented to the holders of our Common Stock for their action or

consideration at any meeting of our Shareholders, each share of Common Stock entitles the holder to one vote.

As used in the table below

and elsewhere in this report, the term beneficial ownership with respect to a security consists of sole or shared voting power, including

the power to vote or direct the vote, and/or sole or shared investment power, including the power to dispose or direct the disposition,

with respect to the security through any contract, arrangement, understanding, relationship, or otherwise, including a right to acquire

such power(s) during the 60 days immediately following June 7, 2021.

Except as otherwise indicated, the Shareholders listed in the table

have sole voting and investment powers with respect to the shares indicated.

Name and Address of Beneficial

Owner of Common Stock

Fee Compensation

Company’s policy regarding director fees is as follows:

(i) Directors who are employees or consultants of the Company (and/or any

of its subsidiaries) receive no additional remuneration for serving as directors or members of committees of the Board;

(ii) all Directors

are entitled to reimbursement for out-of-pocket expenses incurred by them in connection with their attendance at the Board or committee

(iii) Directors who are not employees or consultants of the Company (and/or any of its subsidiaries) receive a $30,000 annual

retainer fee, with $20,000 of this amount being paid via the issuance of Common Stock, and the remaining $10,000 being paid in

(iv) Directors do not receive any additional compensation for attendance at or chairing of any meetings.

Equity Compensation

described above, members of the Board of Directors are paid a portion of their annual retainer fees via the issuance

of shares of Common Stock of the Company.

The number of shares to be issued to each Director is equal to

the quotient of the quarterly amount due to each Director, divided by the average daily closing price

of the Company’s stock for the quarter just ended.

of the Board of Directors during the fiscal year ended March 31, 2022 did not receive any additional equity compensation for serving

as directors.

Company’s Articles of Incorporation provide for the indemnification of each of the Company’s directors to the fullest extent

permitted under Nevada General Corporation Law.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

following table sets forth certain information, as of June 23, 2022 (except as otherwise indicated), regarding beneficial ownership

of our Common Stock by (i) each person who is known by us to own beneficially more than 5% of each such class, (ii) each of our directors,

(iii) each of our executive officers and (iv) all our directors and executive officers as a group.

As of June 23, 2022, we had

1,011,281,988 shares of Common Stock outstanding (exclusive of 0.1 million treasury shares).

On any matter presented to the holders of our

Common Stock for their action or consideration at any meeting of our Shareholders, each share of Common Stock entitles the holder to

used in the table below and elsewhere in this report, the term beneficial ownership with respect to a security consists of sole or shared

voting power, including the power to vote or direct the vote, and/or sole or shared investment power, including the power to dispose

or direct the disposition, with respect to the security through any contract, arrangement, understanding, relationship, or otherwise,

including a right to acquire such power(s) during the 60 days immediately following June 23, 2022.

Except as otherwise indicated,

the Shareholders listed in the table have sole voting and investment powers with respect to the shares indicated.

Name and Address of Beneficial Owner of Common Stock

Percent (%) of

Voting Securities

Nasrat Hakim, President, Chief Executive Officer

and Chairman of the Board of Directors*

Nasrat Hakim, President, Chief Executive Officer and Chairman of the Board of Directors*

284,737,145 (1)

5 unchanged sentences

1,537,779 (4)

Ward, Former Chief Financial Officer

5,185,023 (5)

Douglas Plassche, Executive Vice President *

3 unchanged sentences

address is c/o Elite Pharmaceuticals Inc., 165 Ludlow Avenue, Northvale, NJ 07647.

Includes 169,814,882 shares of Common Stock held and 24,342,744 shares

of Common Stock due and owing to Mr.

Hakim as of March 31, 2021 (the latest practicable date) for compensation earned pursuant to Mr.

Hakim’s employment agreement with the Company and 79,008,661 shares of Common Stock issuable upon cash exercise of the Series J

Warrants with an exercise price of $0.1521 per share.

Includes 1,932,792 shares of Common Stock held and

295,570 shares of Common Stock due and owing to Dr.

Dash as of March 31, 2021 (the latest practicable date) for Directors fees accrued

as of such date.

Includes 1,884,257 shares of Common Stock held and

295,570 shares of Common Stock due and owing to Mr.

Whitnell as of March 31, 2021 (the latest practicable date) for Directors fees

accrued as of such date.

Includes 746,673 shares of Common Stock held and 295,570

shares of Common Stock due and owing to Mr.

Caskey as of March 31, 2021 (the latest practicable date) Date for Directors fees accrued

as of such date.

Ward resigned on May 14, 2021.

is c/o Enveric Biosciences Inc., 4851 Tamiami Trail N, Naples FL 34103.

Includes 3,771,919 shares of Common Stock

held and 1,263,104 shares of Common Stock due and owing to Mr.

Ward as of May 14, 2021.

for salaries earned pursuant to Mr.

employment agreement with the Company, with such shares being issued to Mr.

Ward during May 2021, and vested options to purchase

150,000 shares of Common Stock.

Includes 1,133,932 shares of Common Stock held 369,462

shares of Common Stock due and owing to Mr.

Plassche as of March 31, 2021 (the latest practicable date) for salaries earned pursuant

Plassche’s employment agreement with the Company, and shares of Common Stock issuable upon cash exercise of vested options

to purchase 3,000,000 shares of Common Stock.

Relates only to current directors and officers.

175,512,536 shares of Common Stock held, 25,598,916 shares of Common Stock due and owing as of March 31, 2021 (the latest practicable

date) for director’s fees and salaries accrued as of such date, 3,000,000 shares of Common Stock issuable upon cash exercise

of vested options and 79,008,661 shares of Common Stock issuable upon cash exercise of warrants at an exercise price of $0.1521 per

share of Common Stock.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR

Certain Related Person Transactions

In May 2020, SunGen, under

an asset purchase agreement, assigned its rights and obligations under the SunGen Agreement for Amphetamine IR and Amphetamine ER to

Mikah Pharmaceuticals.

The ANDAs for Amphetamine IR and Amphetamine ER are now registered under Elite’s name.

Mikah will now be

Elite’s partner with respect to Amphetamine IR and ER and will assume all the rights and obligations for these products from SunGen.

Mikah Pharmaceuticals was founded in 2009 by Nasrat Hakim.

Director Independence

All related person transactions

are reviewed and, as appropriate, may be approved or ratified by the Board of Directors.

If a Director is involved in the transaction,

he or she may not participate in any review, approval, or ratification of such transaction.

Related person transactions are approved

by the Board of Directors only if, based on all of the facts and circumstances, they are in, or not inconsistent with, our best interests

and the best interests of our stockholders, as the Board of Directors determines in good faith.

The Board of Directors takes into account,

among other factors it deems appropriate, whether the transaction is on terms generally available to an unaffiliated third-party under

the same or similar circumstances and the extent of the related person’s interest in the transaction.

The Board of Directors may

also impose such conditions as it deems necessary and appropriate on us or the related person in connection with the transaction.

In the case of a transaction

presented to the Board of Directors for ratification, the Board of Directors may ratify the transaction or determine whether rescission

of the transaction is appropriate.

169,814,882 shares of Common Stock held and 35,913,602 shares of Common Stock due and owing to Mr.

Hakim as of March 31, 2022 (the

latest practicable date) for compensation earned pursuant to Mr.

Hakim’s employment agreement with the Company and 79,008,661

shares of Common Stock issuable upon cash exercise of the Series J Warrants with an exercise price of $0.1521 per share.

2,228,182 shares of Common Stock held and 495,536 shares of Common Stock due and owing to Dr.

Dash as of March 31, 2022 (the latest

practicable date) for Directors fees accrued as of such date.

2,179,827 shares of Common Stock held and 495,536 shares of Common Stock due and owing to Mr.

Whitnell as of March 31, 2022 (the

latest practicable date) for Directors fees accrued as of such date.

1,042,243 shares of Common Stock held and 495,536 shares of Common Stock due and owing to Mr.

Caskey as of March 31, 2022 (the latest

practicable date) Date for Directors fees accrued as of such date.

1,133,932 shares of Common Stock held 357,552 shares of Common Stock due and owing to Mr.

Plassche as of March 31, 2022 (the latest

practicable date) for salaries earned pursuant to Mr.

Plassche’s employment agreement with the Company, and shares of Common

Stock issuable upon cash exercise of vested options to purchase 3,000,000 shares of Common Stock.

only to current directors and officers.

Includes 176,399,066 shares of Common Stock held, 37,757,762 shares of Common Stock

due and owing as of March 31, 2022 (the latest practicable date) for director’s fees and salaries accrued as of such date,

3,000,000 shares of Common Stock issuable upon cash exercise of vested options and 79,008,661 shares of Common Stock issuable upon

cash exercise of warrants at an exercise price of $0.1521 per share of Common Stock.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Related Person Transactions

May 2020, Praxgen , under an asset purchase agreement, assigned its rights and obligations

under the Praxgen Agreement for Amphetamine IR and Amphetamine ER to Mikah.

for Amphetamine IR and Amphetamine ER are now registered under Elite’s name.

Mikah is now Elite’s partner with respect

to Amphetamine IR and ER and Mikah will assume all the rights and obligations for these products from Praxgen .

Mikah was founded in 2009 by Nasrat Hakim.

related person transactions are reviewed and, as appropriate, may be approved or ratified by the Board of Directors.

If a Director is

involved in the transaction, he or she may not participate in any review, approval, or ratification of such transaction.

Related person

transactions are approved by the Board of Directors only if, based on all of the facts and circumstances, they are in, or not inconsistent

with, our best interests and the best interests of our stockholders, as the Board of Directors determines in good faith.

Directors takes into account, among other factors it deems appropriate, whether the transaction is on terms generally available to an

unaffiliated third-party under the same or similar circumstances and the extent of the related person’s interest in the transaction.

The Board of Directors may also impose such conditions as it deems necessary and appropriate on us or the related person in connection

with the transaction.

the case of a transaction presented to the Board of Directors for ratification, the Board of Directors may ratify the transaction or

determine whether rescission of the transaction is appropriate.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

The Company’s independent

registered public accounting firm for the fiscal year ending March 31, 2022 is Buchbinder Tunick & Company LLP (“

Buchbinder ”).

The following table presents

fees, including reimbursements for expenses, for professional audit services rendered by Buchbinder, for the audits of our financial

statements and interim reviews of our quarterly financial statements.

Audit-Related Fees

Represents fees for professional

services provided for the audit of our annual financial statements, services that are performed to comply with generally accepted auditing

standards, and review of our financial statements included in our quarterly reports and services in connection with statutory and regulatory

Company’s independent registered public accounting firm for the fiscal year ending March 31, 2023 is Buchbinder Tunick & Company

LLP (“ Buchbinder ”).

following table presents fees, including reimbursements for expenses, for professional audit services rendered by Buchbinder, for the

audits of our financial statements and interim reviews of our quarterly financial statements.

Audit-Related Fees

Represents the fees for assurance

and related services that were reasonably related to the performance of the audit or review of our financial statements.

Represents preparation of

Federal, State and Local income tax returns.

The Audit Committee has determined

that Buchbinder’s rendering of these audit-related services was compatible with maintaining auditor’s independence.

of Directors considered Buchbinder to be well qualified to serve as our independent public accountants.

The Committee also pre-approved

the charges for services performed in Fiscal 2021.

Pre-Approval Procedures

The Audit Committee pre-approves

all audit and tax services and the terms thereof (which may include providing comfort letters in connection with securities underwriting)

and non-audit services (other than non-audit services prohibited under Section 10A(g) of the Exchange Act or the applicable rules of

the SEC or the Public Company Accounting Oversight Board) to be provided to us by the independent auditor;

provided, however, the pre-approval

requirement is waived with respect to the provisions of non-audit services for us if the “de minimus”

provisions of Section

10A (i)(1)(B) of the Exchange Act are satisfied.

This authority to pre-approve non-audit services may be delegated to one or more members

of the Audit Committee, who shall present all decisions to pre-approve an activity to the full Audit Committee at its first meeting following

such decision.

fees for professional services provided for the audit of our annual financial statements, services that are performed to comply with

generally accepted auditing standards, and review of our financial statements included in our quarterly reports and services in connection

with statutory and regulatory filings.

Audit-Related

the fees for assurance and related services that were reasonably related to the performance of the audit or review of our financial statements.

preparation of Federal, State and Local income tax returns.

Audit Committee has determined that Buchbinder’s rendering of these audit-related services was compatible with maintaining auditor’s

independence.

The Board of Directors considered Buchbinder to be well qualified to serve as our independent public accountants.

The Committee

also pre-approved the charges for services performed in Fiscal 2022.

Audit Committee pre-approves all audit related and tax services and the terms thereof (which may include providing comfort letters in

connection with securities underwriting) and non-audit services (other than non-audit services prohibited under Section 10A(g) of the

Exchange Act or the applicable rules of the SEC or the Public Company Accounting Oversight Board) to be provided to us by the independent

provided, however, the pre-approval requirement is waived with respect to the provisions of non-audit services for us if the

“de minimus” provisions of Section 10A (i)(1)(B) of the Exchange Act are satisfied.

This authority to pre-approve non-audit

services may be delegated to one or more members of the Audit Committee, who shall present all decisions to pre-approve an activity to

the full Audit Committee at its first meeting following such decision.

EXHIBITS, FINANCIAL STATEMENTS AND SCHEDULES

The following are filed as part of this Annual Report on

The financial statements and schedules required to be filed by Item

8 of this Annual Report on Form 10-K and listed in the Index to Consolidated Financial Statements.

The Exhibits required by Item 601 of Regulation S-K and listed below

in the “

Index to Exhibits required by Item 601 of Regulation S- K.”

The Exhibits are filed with or incorporated by reference

in this Annual Report on Form 10-K

Index to Exhibits required by Item 601 of Regulation S-K.

following are filed as part of this Annual Report on Form 10-K

financial statements and schedules required to be filed by Item 8 of this Annual Report on Form 10-K and listed in the Index to Consolidated

Financial Statements.

Exhibits required by Item 601 of Regulation S-K and listed below in the “Index to Exhibits required by Item 601 of Regulation S-K.”

Exhibits are filed with or incorporated by reference in this Annual Report on Form 10-K

to Exhibits required by Item 601 of Regulation S-K.

of Incorporation of Elite-Nevada, incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the SEC on

5 unchanged sentences

1) to the Registration Statement on Form 8-A filed with the SEC on November 15, 2013.

of Designations of the Series I Convertible Preferred Stock as filed with the Secretary of State of the State of Nevada on February

6, 2014, incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K, dated February 6, 2014 and filed with the SEC

on February 7, 2014.

Certificate of Designations of the Series I Convertible Preferred Stock as filed with the Secretary of State of the State of Nevada on February 6, 2014, incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K, dated February 6, 2014 and filed with the SEC on February 7, 2014.

of Designations of the Series J Convertible Preferred Stock as filed with the Secretary of State of the State of Nevada on May 3,

15 unchanged sentences

Report on Form 8-K, dated April 28, 2017, and filed with the SEC on April 28, 2017.

of Common Stock, incorporated by reference to Exhibit 4.6 to the Report 10-K filed in June 2020.

of Common Stock, incorporated by reference to Exhibit 4.6 to the Annual Report on Form 10-K, filed with the SEC on June 29, 2020

Pharmaceuticals, Inc.

2014 Equity Incentive Plan, incorporated by reference to Appendix B to the Company’s Definitive Proxy

Statement for its Annual Meeting of Shareholders, filed with the SEC on April 3, 2014.

1 unchanged sentence

of Confidentiality Agreement (employee), incorporated by reference to Exhibit 10.8 to the Form SB-2.

Agreement, dated as of August 15, 2005, between New Jersey Economic Development Authority (“NJEDA”) and the Company,

incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, dated August 31, 2005 and filed with the SEC on September

1 unchanged sentence

10.2 to the Current Report on Form 8-K, dated August 31, 2005 and filed with the SEC on September 6, 2005.

B Note in the aggregate principal amount of $495,000.00 payable to the order of the NJEDA, incorporated by reference to Exhibit 10.3

to the Current Report on Form 8-K, dated August 31, 2005 and filed with the SEC on September 6, 2005.

from the Company to the NJEDA, incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K, dated August 31, 2005

and filed with the SEC on September 6, 2005.

between NJEDA and the Bank of New York as Trustee, dated as of August 15, 2005, incorporated by reference to Exhibit 10.5 to the

Current Report on Form 8-K, dated August 31, 2005 and filed with the SEC on September 6, 2005.

Agreement, dated as of November 13, 2009, by and between the Company and Carter J.

Ward, incorporated by reference to Exhibit 10.2

to the Quarterly Report on Form 10-Q, for the period ending September 30, 2009 and filed with the SEC on November 16, 2009.+

Agreement, dated as of September 10, 2010, by and among Precision Dose Inc.

and the Company, incorporated by reference to Exhibit

10.8 to the Quarterly Report on Form 10-Q, for the period ended September 30, 2010 and filed with the SEC on November 15, 2010 (Confidential

Treatment granted with respect to portions of the Agreement).

Manufacturing

and Supply Agreement, dated as of September 10, 2010, by and among Precision Dose Inc.

and the Company, incorporated by reference

to Exhibit 10.9 to the Quarterly Report on Form 10-Q, for the period ended September 30, 2010 and filed with the SEC on November

15, 2010 (Confidential Treatment granted with respect to portions of the Agreement).

1, 2013 Employment Agreement with Nasrat Hakim, incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K, dated

August 1, 2013 and filed with the SEC on August 5, 2013.+

1, 2013 Mikah LLC Asset Purchase Agreement, incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K/A, dated

August 1, 2013 and filed with the SEC on August 30, 2018.

(Confidential Treatment granted with respect to portions of the Agreement).

1, 2013 Secured Convertible Note from the Company to Mikah Pharma LLC., incorporated by reference to Exhibit 10.2 to the Current

Report on Form 8-K, dated August 1, 2013 and filed with the SEC on August 5, 2013.

1, 2013 Security Agreement from the Company to Mikah Pharma LLC., incorporated by reference to Exhibit 10.3 to the Current Report

on Form 8-K, dated August 1, 2013 and filed with the SEC on August 5, 2013.

August 1, 2013 Security Agreement from the Company to Mikah Pharma LLC, incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K, dated August 1, 2013 and filed with the SEC on August 5, 2013.

15, 2013 Hakim Credit Line Agreement, incorporated by reference to Exhibit 10.16 to the Quarterly Report on Form 10-Q for the period

16 unchanged sentences

31, 2014 and filed with the SEC on February 17, 2015.

June 4, 2015 License Agreement with Epic Pharma LLC, incorporated by reference to Exhibit 10.85 to Amendment No.

1 to the Annual Report on Form 10-K for the fiscal year ended March 31, 2015 and filed with the SEC on June 15, 2015.

(Confidential Treatment granted with respect to portions of the Agreement).

1 to Hakim Employment Agreement, incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC

5 unchanged sentences

Treatment granted with respect to portions of the Agreement).

Purchase Agreement between the Company and Lincoln Park Capital LLC dated July 8, 2020, incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, dated July 9, 2020 and filed with the SEC on July 9, 2020.

Rights Agreement between the Company and Lincoln Park Capital LLC dated July 8, 2020, incorporated by reference to Exhibit 10.2 to

the Current Report on Form 8-K, dated July 9, 2020 and filed with the SEC on July 9, 2020.

Agreement between the Company and Lincoln Park Capital LLC dated May 1, 2017, incorporated by reference to Exhibit 10.1 to the Current

Report on Form 8-K, dated May 2, 2017 and filed with the SEC on May 2, 2017.

Rights Agreement between the Company and Lincoln Park Capital LLC dated May 1, 2017, incorporated by reference to Exhibit 10.2 to

the Current Report on Form 8-K, dated May 2, 2017 and filed with the SEC on May 2, 2017.

28, 2017 Exchange Agreement between the Company and Nasrat Hakim, incorporated by reference to Exhibit 10.1 to the Current Report

on Form 8-K, dated April 28, 2017 and filed with the SEC on April 28.

2017 Trimipramine Acquisition Agreement from Mikah Pharma, incorporated by reference to Exhibit 10.50 to the Annual Report on Form

4 unchanged sentences

10-K, for the period ended March 31, 2017 and filed with the SEC on June 14, 2017.

2017 Assignment of Supply and Distribution Agreement between Dr.

Reddy’s Laboratories and Mikah Pharma, incorporated by reference

to Exhibit 10.53 to the Annual Report on Form 10-K, for the period ended March 31, 2017 and filed with the SEC on June 14, 2017.

May 2017 Assignment of Supply and Distribution Agreement between Dr.

Reddy’s Laboratories and Mikah Pharma, incorporated by reference to Exhibit 10.53 to the Annual Report on Form 10-K, for the period ended March 31, 2017 and filed with the SEC on June 14, 2017.

2017 Assignment of Manufacturing and Supply Agreement between Epic and Mikah Pharma, incorporated by reference to Exhibit 10.54 to

the Annual Report on Form 10-K, for the period ended March 31, 2017 and filed with the SEC on June 14, 2017.

and Distribution Agreement between Dr.

Reddy’s Laboratories and Mikah Pharma, incorporated by reference to Exhibit 10.55 to

the Annual Report on Form 10-K, for the period ended March 31, 2017 and filed with the SEC on June 14, 2017.

(Confidential Treatment

granted with respect to portions of the Agreement).

Supply and Distribution Agreement between Dr.

Reddy’s Laboratories and Mikah Pharma, incorporated by reference to Exhibit 10.55 to the Annual Report on Form 10-K, for the period ended March 31, 2017 and filed with the SEC on June 14, 2017.

(Confidential Treatment granted with respect to portions of the Agreement).

Manufacturing

15 unchanged sentences

(Confidential Treatment granted with respect to portions of the Agreement).

Supply And Distribution Agreement effective March 6, 2019 by and between Elite Pharmaceuticals, Inc., and Elite Laboratories, Inc.

and Lannett Company, Inc., USA, incorporated by reference to Exhibit 10.45 to the Quarterly Report on Form 10-Q, for the period ended

December 31, 2019 and filed with the SEC on February 10, 2020.

(Portions of this Agreement have been redacted in compliance with

Regulation S-K Item 601(b)(10)).

Supply and Distribution Agreement effective April 9, 2019 by and between Elite Pharmaceuticals, Inc., and Elite Laboratories, Inc.

and Lannett Company, Inc., USA, incorporated by reference to Exhibit 10.49 to the Annual Report on Form 10-K for the period ended

March 31, 2019 and filed with the SEC on June 21, 2019 (portions of this Agreement have been redacted in compliance with Regulation

S-K Item 601(b)(10)).

Supply and Distribution Agreement effective March 6, 2019 by and between Elite Pharmaceuticals, Inc., and Elite Laboratories, Inc.

and Lannett Company, Inc., USA, incorporated by reference to Exhibit 10.50 to the Annual Report on Form 10-K for the period ended

March 31, 2019 and filed with the SEC on June 21, 2019 (portions of this Agreement have been redacted in compliance with Regulation

S-K Item 601(b)(10)).

Agreement effective December 3, 2018 by and between Mikah Pharma LLC and Elite Laboratories, Inc., incorporated by reference to Exhibit

10.51 to the Annual Report on Form 10-K for the period ended March 31, 2019 and filed with the SEC on June 21, 2019 (portions of

this Agreement have been redacted in compliance with Regulation S-K Item 601(b)(10)).

Purchase Agreement dated November 13, 2019 by and between the Company and Nostrum Laboratories Inc.

, incorporated by reference to

Exhibit 10.49 to the Quarterly Report on Form 10-Q, for the period ended December 31, 2019 and filed with the SEC on February 10,

2, 2020 Amendment to the Glenmark Pharmaceuticals Inc.

USA License, Supply and Distribution Agreement, incorporated by reference

to Exhibit 10.50 to the Quarterly Report on Form 10-Q, for the period ended December 31, 2019 and filed with the SEC on February

22, 2018 License, Manufacturing and Supply Agreement with Glenmark Pharmaceuticals Inc.

USA, incorporated by reference to Exhibit

10.60 to the Annual Report on Form 10-K for the fiscal year ended March 31, 2018 and filed with the SEC on June 14, 2018.

(Confidential

treatment granted with respect to portions of the Agreement).

August 1, 2018 Amendment to the Glenmark Pharmaceuticals Inc.

USA License, Supply and Distribution Agreement, incorporated by reference to Exhibit 10.44 to the Quarterly Report on Form 10-Q, for the period ended December 31, 2019 and filed with the SEC on February 10, 2020.

(Portions of this Agreement have been redacted in compliance with Regulation S-K Item 601(b)(10)).of this Agreement have been redacted in compliance with Regulation S-K Item 601(b)(10)).

License, Supply And Distribution Agreement effective March 6, 2019 by and between Elite Pharmaceuticals, Inc., and Elite Laboratories, Inc.

and Lannett Company, Inc., USA, incorporated by reference to Exhibit 10.45 to the Quarterly Report on Form 10-Q, for the period ended December 31, 2019 and filed with the SEC on February 10, 2020.

(Portions of this Agreement have been redacted in compliance with Regulation S-K Item 601(b)(10)).

Purchase Agreement executed January 16, 2020 by and between the Company and Nostrum Laboratories Inc., incorporated by reference

to Exhibit 10.49 to the Quarterly Report on Form 10-Q, for the period ended December 31, 2019 and filed with the SEC on February

Employment Agreement with Douglas Plassche *+

June 21, 2019 Retention Agreement with Douglas Plassche.* +

License, Supply and Distribution Agreement effective April 9, 2019 by and between Elite Pharmaceuticals, Inc., and Elite Laboratories, Inc.

and Lannett Company, Inc., USA, incorporated by reference to Exhibit 10.49 to the Annual Report on Form 10-K for the period ended March 31, 2019 and filed with the SEC on June 21, 2019 (portions of this Agreement have been redacted in compliance with Regulation S-K Item 601(b)(10)).

License, Supply and Distribution Agreement effective March 6, 2019 by and between Elite Pharmaceuticals, Inc., and Elite Laboratories, Inc.

and Lannett Company, Inc., USA, incorporated by reference to Exhibit 10.50 to the Annual Report on Form 10-K for the period ended March 31, 2019 and filed with the SEC on June 21, 2019 (portions of this Agreement have been redacted in compliance with Regulation S-K Item 601(b)(10)).

Development Agreement effective December 3, 2018 by and between Mikah Pharma LLC and Elite Laboratories, Inc., incorporated by reference to Exhibit 10.51 to the Annual Report on Form 10-K for the period ended March 31, 2019 and filed with the SEC on June 21, 2019 (portions of this Agreement have been redacted in compliance with Regulation S-K Item 601(b)(10)).

Asset Purchase Agreement dated November 13, 2019 by and between the Company and Nostrum Laboratories Inc.

, incorporated by reference to Exhibit 10.49 to the Quarterly Report on Form 10-Q, for the period ended December 31, 2019 and filed with the SEC on February 10, 2020.

January 2, 2020 Amendment to the Glenmark Pharmaceuticals Inc.

USA License, Supply and Distribution Agreement, incorporated by reference to Exhibit 10.50 to the Quarterly Report on Form 10-Q, for the period ended December 31, 2019 and filed with the SEC on February 10, 2020.

(Portions of this Agreement have been redacted in compliance with Regulation S-K Item 601(b)(10)).

Asset Purchase Agreement executed January 16, 2020 by and between the Company and Nostrum Laboratories Inc., incorporated by reference to Exhibit 10.49 to the Quarterly Report on Form 10-Q, for the period ended December 31, 2019 and filed with the SEC on February 10, 2020.

Employment Agreement with Douglas Plassche, incorporated by reference to Exhibit 10.52 to the Annual Report on Form 10-K, filed with the SEC on June 14, 2021.

July 29, 2019 Amendment To The License, Supply And Distribution Agreement Between Elite Pharmaceuticals, Inc./Elite Laboratories, Inc.

And Lannett Company, Inc.

(Portions of this Agreement have been redacted in compliance with Regulation S-K Item 601(b)(10)).*

(Portions of this Agreement have been redacted in compliance with Regulation S-K Item 601(b)(10)), incorporated by reference to Exhibit 10.54 to the Annual Report on Form 10-K, filed with the SEC on June 14, 2021.

Master Development and License Agreement for Products Between Elite Pharmaceuticals, Inc.

and Mikah Pharma LLC, effective as of June 10, 2021.(Portions of this Agreement have been redacted in compliance with Regulation S-K Item 601(b)(10), incorporated by reference to the 10-Q for the period ended June 30, 2021 and filed with the SEC on August 16, 2021.

License, Supply, and Distribution Agreement by and between Elite Pharmaceuticals, Inc.

and Lannett Company, Inc, dated October 18, 2021.*

License, Supply, and Distribution Agreement by and between Elite Pharmaceuticals, Inc.

and Lannett Company, Inc, dated October 18, 2021.*

License and Distribution Agreement by and between Elite Pharmaceuticals, Inc.

and Dexcel Ltd.

(Or Akiva, Israel), dated December 6, 2021.*

February 18, 2022 Retention Agreement with Douglas Plassche.*

License, Supply, and Distribution

Agreement by and between Elite Pharmaceuticals and Lannett, Inc., dated July 20, 2021*

of the Company, incorporated by reference to Exhibit 21 to the Annual Report on Form 10-K, for the period ended March 31, 2019 and

1 unchanged sentence

Consent of Buchbinder Tunick & Company LLP, Independent Registered Public Accounting Firm*

Certification of Chief Executive Officer pursuant to Exchange Act Rule 13a-14(a) and Rule 15d-14(a)*

Certification of Chief Financial Officer pursuant to Exchange Act Rule 13a-14(a) and Rule 15d-14(a)*

Certification of Chief Executive Officer pursuant to 18 U.S.C.

Certification

of Chief Executive Officer pursuant to Exchange Act Rule 13a-14(a) and Rule 15d-14(a)*

Certification

of Chief Financial Officer pursuant to Exchange Act Rule 13a-14(a) and Rule 15d-14(a)*

Certification

of Chief Executive Officer pursuant to 18 U.S.C.

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*

Certification of Chief Financial Officer pursuant to 18 U.S.C.

Certification

of Chief Financial Officer pursuant to 18 U.S.C.

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*

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XBRL Taxonomy Extension Presentation Linkbase Document

Cover Page Interactive Data File

Indicates management contract or compensatory plan or arrangement.

Cover Page Interactive Data File (embedded within the

Inline XBRL document)

FORM 10-K SUMMARY

Pursuant to the requirements of Section 13 or

15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned,

thereunto duly authorized.

ELITE PHARMACEUTICALS, INC.

/s/ Nasrat Hakim

Chief Executive Officer

June 14, 2021

/s/ Marc Bregman

Chief Financial Officer

June 14, 2021

Pursuant to the requirements of the Securities

Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the

dates indicated.

Chief Executive Officer,

President and Chairman of the

Board of Directors (Principal Executive Officer)

Chief Financial Officer, Treasurer, Secretary (Principal

to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed

on its behalf by the undersigned, thereunto duly authorized.

PHARMACEUTICALS, INC.

Executive Officer

June 29, 2022

Financial Officer and Principal Accounting Officer)

Financial Officer

June 29, 2022

to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant

and in the capacities and on the dates indicated.

Executive Officer, President and Chairman of the Board of Directors (Principal Executive Officer)

Financial Officer, Secretary, and Treasurer

Jeffrey Whitnell

June 14, 2021

ELITE PHARMACEUTICALS, INC.

PHARMACEUTICALS, INC.

AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED MARCH 31, 2021 AND 2020

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING

FINANCIAL STATEMENTS

THE YEARS ENDED MARCH 31, 2022 AND 2021

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (Buchbinder Tunick & Company # 6189 )

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED STATEMENTS OF OPERATIONS

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

CONSOLIDATED STATEMENTS OF CASH FLOWS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING

REPORT OF INDEPENDENT

REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and

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Opinion on the Financial Statements

We have audited the accompanying

consolidated balance sheets of Elite Pharmaceuticals, Inc.

and Subsidiary (the Company) as of March 31, 2021 and 2020, and the related

consolidated statements of operations, stockholders’

equity, and cash flows for each of the years in the two-year period ended March

We have audited the accompanying consolidated balance

sheets of Elite Pharmaceuticals, Inc.

and Subsidiary (the “Company”) as of March 31, 2022 and 2021, and the related consolidated

statements of operations, stockholders’ equity, and cash flows for each of the years in the two year period ended March 31, 2022,

and the related notes (collectively referred to as the “consolidated financial statements”).

4 unchanged sentences

Basis for Opinion

These consolidated financial statements

are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated

financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board

(United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities

laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance

with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether

the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were

we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits, we are required to obtain an

understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the

Company’s internal control over financial reporting.

These consolidated financial statements are the responsibility

of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements

based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB)

and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable

rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards

of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements

are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform,

an audit of its internal control over financial reporting.

As part of our audits, we are required to obtain an understanding of internal

control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal

control over financial reporting.

Accordingly, we express no such opinion.

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Critical Audit Matter

The critical audit matter communicated

below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated

to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved

our especially challenging, subjective, or complex judgments.

The communication of the critical audit matter does not alter in any way

our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing

separate opinions on the critical audit matter or on the accounts or disclosures to which they relate.

Indefinite-Lived Intangible Assets Impairment

Assessments of ANDAs and Patents —

Refer to Notes 1, 4 and 15 to the financial statements

The critical audit matter communicated below is a

matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit

committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially

challenging, subjective, or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on

the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions

on the critical audit matter or on the accounts or disclosures to which they relate.

Intangible Assets — Refer to Notes 1 and 4 to

the consolidated financial statements

Critical Audit Matter Description

As of March 31,

2021, the Company has capitalized costs of $6,168,351 for ANDAs and $465,684 for patents.

The Company evaluates its intangible assets

for impairment annually during the fourth quarter in accordance with ASC Topic 350, Intangibles Goodwill and Other, and between annual

evaluations if events occur or circumstances change that would more likely than not reduce the fair value of the assets carrying amount.

Management evaluates qualitative

factors to determine whether it is more likely than not that the fair value of the intangible assets is less than its carrying amount.

The qualitative factors management considers include, but are not limited to, the current project status, expected future cash flows,

decline in the Company’s stock price, legal and regulatory factors and industry and market considerations.

We identified the impairment evaluation

of the intangibles as a critical audit matter because of the significant judgements made by management to estimate the fair value of the

intangible assets.

Our audit procedures related to impairment

of indefinite lived intangible assets included review of management’s analysis and testing the significant assumptions used by management.

As described in Note 1 and 4 to

the consolidated financial statements, the Company has capitalized costs of $6,168,351 for ANDAs and $465,684 for patents.

evaluates its intangible assets for impairment annually during the fourth quarter in accordance with ASC Topic 350, Intangibles, Goodwill

and Other, and whenever events or circumstances change that indicate impairment may have occurred.

Management performs a qualitative assessment of each

intangible assets prior to performing a quantitative impairment test.

Qualitative factors management considers include, the current project

status, cost factors of raw material and labor, current cash flows, legal and regulatory factors and industry and market considerations.

If the qualitative assessment indicates the fair value is more likely than not less than the carrying value a quantitative test is performed.

The management performed a quantitative test on certain intangible assets using a discounted cash flow methodology and market approach.

The methods used to estimate the fair value of intangible assets involve significant assumptions.

The significant assumptions applied

by management in estimating the fair value of intangible assets included income projections and discount rates.

Due to the significant

estimates and assumptions management is required to make, we identified the fair value of intangible assets as a critical audit matter.

Performing audit procedures to evaluate the reasonableness of these estimates and assumptions required a high degree of auditor judgment

and an increased extent of effort.

How We Addressed the Matter in Our Audit

The primary procedures we performed to address this

critical audit matter included:

We obtained an understanding and evaluated

the design and implementation of controls over the intangible valuation process.

This included management’s review over the assessment

of the methodology, significant inputs and assumptions included in the fair value estimate, as well as management’s review around

the completeness, accuracy and reasonableness of the data used in this estimate.

Our audit procedures assessed whether the

valuation methodology used was appropriate and tested the mathematical accuracy of the valuation model.

We evaluated whether the assumptions used

were reasonable by considering the past performance, and discount rates, and whether such assumptions were consistent with evidence obtained

in other areas of the audit.

/s/ Buchbinder Tunick & Company LLP

Buchbinder Tunick & Company LLP

We have served as the Company’s auditor since 2010.

Little Falls, New Jersey 07424

June 29, 2022

ELITE PHARMACEUTICALS, INC.

ELITE PHARMACEUTICALS,

AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

March 31, 2022

March 31, 2021

Current assets:

Accounts receivable, net of allowance for doubtful accounts

of $-0-, respectively

Prepaid expenses and other current

Accounts receivable, net of allowance for doubtful accounts of $- 0 -, respectively

Prepaid expenses and other current assets

Total current assets

Property and equipment, net of accumulated

depreciation of $12,153,626 and $10,957,334, respectively

Intangible assets, net of accumulated

amortization of $-0-, respectively

Property and equipment, net of accumulated depreciation of

and $ 12,153,626 ,

Intangible assets

Operating lease - right-of-use asset

Deferred income tax asset

Other assets:

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Total other assets

LIABILITIES AND SHAREHOLDERS’

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities:

5 unchanged sentences

Lease obligation - operating lease, current portion

Senior secured promissory note -

related party, current portion

Total current liabilities

1 unchanged sentence

Deferred revenue, net of current portion

Bonds payable, net of current portion and bond issuance

Bonds payable, net of current portion and bond issuance costs

Loans payable, net of current portion

4 unchanged sentences

Total liabilities

The accompanying notes are an integral part

of these audited consolidated financial statements.

ELITE PHARMACEUTICALS, INC.

accompanying notes are an integral part of these consolidated financial statements.

ELITE PHARMACEUTICALS,

AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

Shareholders’

Series J convertible preferred stock;

value of $0.01;

50 shares authorized;

0 issued and outstanding as of March 31, 2021 and 24.0344 issued and outstanding as of March

March 31, 2022

March 31, 2021

Shareholders’ equity:

Common stock;

1 unchanged sentence

1,445,000,000 shares authorized;

1,009,276,752

1,011,381,988 shares issued and 1,011,281,988 shares outstanding as of March 31, 2022;

840,504,367 shares issued and 840,404,367 shares outstanding

as of March 31, 2020

1,009,276,752 shares issued and 1,009,176,752 shares outstanding as of March 31, 2021

Additional paid-in capital

4 unchanged sentences

( 148,957,989 )

Total shareholders’

Total liabilities

and shareholders’

The accompanying notes are an integral part

of these audited consolidated financial statements.

ELITE PHARMACEUTICALS, INC.

Total shareholders’ equity

Total liabilities and shareholders’ equity

accompanying notes are an integral part of these consolidated financial statements.

PHARMACEUTICALS, INC.

AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS

For the Years Ended

STATEMENTS OF OPERATIONS

For the Years Ended March 31,

Manufacturing fees

8 unchanged sentences

Total operating expenses

Income (loss) from operations

Other income (expense):

Income from operations

Other income, net:

Change in fair value of derivative instruments

1 unchanged sentence

Gain on sale of fixed assets

Gain on transfer/discontinuance of intangible assets

Interest income

1 unchanged sentence

Other income, net

Income (loss) from operations before income taxes

Income tax benefit (expense)

Net income (loss) attributable to common shareholders

$ (2,240,351 )

Basic net income (loss) per share attributable to common shareholders

Diluted net income (loss) per share attributable to common shareholders

Income from operations before income taxes

Income tax benefit

Net benefit for sale of state net operating losses and credits

Net income attributable to common shareholders

Basic net income per share attributable to common shareholders

Diluted net income per share attributable to common shareholders

Basic weighted average Common Stock outstanding

1,010,607,713

Diluted weighted average Common Stock outstanding

The accompanying notes are an integral part

of these audited consolidated financial statements.

ELITE PHARMACEUTICALS, INC.

1,010,607,713

accompanying notes are an integral part of these consolidated financial statements.

PHARMACEUTICALS, INC.

AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’

STATEMENTS OF SHAREHOLDERS’ EQUITY

Preferred Stock

Treasury Stock

Shareholders’

Total Shareholders’

Balance as of March 31, 2020

2 unchanged sentences

$ ( 154,046,410 )

Common Stock sold pursuant to the Lincoln Park purchase

Common Stock issued as additional commitment shares pursuant

to the LPC purchase agreement

Costs associated with raising capital

Non-cash compensation through the issuance of employee

stock options

Reclassification of mezzanine equity

to permanent equity

Balance at March 31, 2020

$ 150,264,605

$ (154,046,410 )

Conversion of Preferred Stock to Common Stock

( 13,903,960 )

Initial commitment shares issued pursuant to the 2020

Initial commitment shares issued pursuant to the 2020 Lincoln Park purchase

Common Stock sold pursuant to the 2020 Lincoln Park purchase agreement

Common Stock issued as additional commitment shares pursuant to the 2020

Lincoln Park purchase agreement

Common Stock sold pursuant to the Lincoln Park purchase

Common Stock issued as additional commitment shares pursuant

to the LPC purchase agreement

Costs associated with raising capital

Non-cash compensation through the issuance of employee

stock options

Non-cash compensation through the issuance of employee stock options

Shares issued in payment of Director fees

Shares issued in payment of salaries

Shares issued in payment of consulting

Shares issued in payment of consulting expenses

Balance as of March 31, 2021

1,009,276,752

$ 164,407,480

$ ( 306,841 )

$ ( 148,957,989 )

Beginning balance

1,009,276,752

$ 164,407,480

$ ( 306,841 )

$ ( 148,957,989 )

Non-cash compensation through the issuance of employee stock options

Shares issued in payment of salaries

Balance at March 31, 2022

2 unchanged sentences

$ ( 306,841 )

The accompanying notes are an integral part

of these audited consolidated financial statements.

ELITE PHARMACEUTICALS, INC.

$ ( 140,059,744 )

Ending balance

1,011,381,988

$ 164,577,227

$ ( 306,841 )

$ ( 140,059,744 )

accompanying notes are an integral part of these consolidated financial statements.

ELITE PHARMACEUTICALS,

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Years Ended March 31,

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income (loss)

$ (2,240,351 )

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

Amortization of operating leases - right-of-use assets

Gain on the disposal of property and equipment

Gain on sale of fixed assets

Change in fair value of derivative financial instruments - warrants

( 1,425,409 )

( 1,237,132 )

PPP loan forgiveness

( 1,013,480 )

Deferred income tax asset

( 2,171,821 )

Non-cash compensation accrued

Non-cash compensation from issuances of options

Non-cash compensation through the issuance of employee stock options

Non-cash rent expense and lease accretion

1 unchanged sentence

Accounts receivable

( 1,728,268 )

Prepaid expenses and other current assets

Accounts payable, accrued expenses and other current liabilities

( 1,768,862 )

Deferred revenue and customer deposits

Lease obligations - operating leases

Net cash provided by (used in) operating activities

Net cash provided by operating activities

CASH FLOWS FROM INVESTING ACTIVITIES:

3 unchanged sentences

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from the issuance of Common Stock

Proceeds from PPP loan

Proceeds from the issuance of Common Stock

Payment of related party note payable

( 1,200,000 )

Payment of bond principal

Other loan payments

Net cash (used in) provided by financing activities

Net cash used in financing activities

Net change in cash and restricted cash

Cash and restricted cash, beginning of year

Cash and restricted cash, end of year

Cash and restricted cash, beginning of period

Cash and restricted cash, end of period

Supplemental disclosure of cash and non-cash transactions:

2 unchanged sentences

Stock issued in payment of Directors fees, salaries and consulting expenses

Supplemental non-cash amounts of lease liabilities arising from obtaining right of use assets

Commitment shares issued to Lincoln Park Capital

Conversion of preferred stock to Common Stock

Supplemental non-cash amounts of lease liabilities arising from obtaining right of use assets

Reconciliation of cash and restricted cash

Restricted cash - debt service for NJEDA bonds

Total cash and restricted cash shown in statement of cash flows

accompanying notes are an integral part of these consolidated financial statements.

ELITE PHARMACEUTICALS, INC.

2 unchanged sentences

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Elite Pharmaceuticals, Inc.

(the “Company”

or “Elite”) was incorporated on October 1, 1997 under the laws of the State of Delaware, and its

wholly-owned subsidiary Elite Laboratories, Inc.

(“Elite Labs”) was incorporated on August 23, 1990 under the laws of the

State of Delaware.

On January 5, 2012, Elite Pharmaceuticals was reincorporated under the laws of the State of Nevada.

Elite Labs engages

primarily in researching, developing, licensing and manufacture of generic, oral dose pharmaceuticals.

The Company is equipped to manufacture

controlled-release products on a contract basis for third parties and itself, if and when the products are approved.

These products include

drugs that cover therapeutic areas for allergy, bariatric, attention deficit and infection.

Research and development activities are performed

with an objective of developing products that will secure marketing approvals from the United States Food and Drug Administration (“FDA”),

and thereafter, commercially exploiting such products.

Principles of Consolidation

The accompanying audited

consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States

(“GAAP”).

The audited consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary,

Elite Laboratories, Inc.

Pharmaceuticals, Inc.

(the “Company” or “Elite”) was incorporated on October 1, 1997 under the laws of the State

of Delaware, and its wholly-owned subsidiary Elite Laboratories, Inc.

(“Elite Labs”) was incorporated on August 23, 1990

under the laws of the State of Delaware.

On January 5, 2012, Elite Pharmaceuticals was reincorporated under the laws of the State of

Elite Labs engages primarily in researching, developing, licensing and manufacture of generic, oral dose pharmaceuticals.

Company is equipped to manufacture controlled-release products on a contract basis for third parties and itself, if and when the products

are approved.

These products include drugs that cover therapeutic areas for allergy, bariatric, attention deficit and infection.

and development activities are performed with an objective of developing products that will secure marketing approvals from the United

States Food and Drug Administration (“FDA”), and thereafter, commercially exploiting such products.

of Consolidation

accompanying audited consolidated financial statements have been prepared in accordance with generally accepted accounting principles

in the United States (“GAAP”).

The audited consolidated financial statements include the accounts of the Company and its

wholly-owned subsidiary, Elite Labs.

All significant intercompany accounts and transactions have been eliminated in consolidation.

The audited consolidated

financial statements reflect all adjustments, consisting of normal recurring items, which are, in the opinion of management, necessary

for a fair presentation of such statements.

Segment Information

Financial Accounting Standards

Board (“FASB”) Accounting Standards Codification 280 (“ASC 280”), Segment Reporting , establishes standards

for reporting information about operating segments.

Operating segments are defined as components of an enterprise about which separate

financial information is available that is evaluated regularly by the chief operating decision maker, or decision-making group, in deciding

how to allocate resources and in assessing performance.

The Company’s chief

operating decision maker is the Chief Executive Officer, who reviews the financial performance and the results of operations of the segments

prepared in accordance with GAAP when making decisions about allocating resources and assessing performance of the Company.

The Company has determined

that its reportable segments are products whose marketing approvals were secured via an Abbreviated New Drug Applications (“ANDA”)

and products whose marketing approvals were secured via a New Drug Application (“NDA”).

ANDA products are referred to as

generic pharmaceuticals and NDA products are referred to as branded pharmaceuticals.

There are currently no intersegment

Asset information by operating segment is not presented below since the chief operating decision maker does not review this

information by segment.

The reporting segments follow the same accounting policies used in the preparation of the Company’s audited

consolidated financial statements.

Accounting Standards Board (“FASB”) Accounting Standards Codification 280 (“ASC 280”), Segment Reporting ,

establishes standards for reporting information about operating segments.

Operating segments are defined as components of an enterprise

about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision-making

group, in deciding how to allocate resources and in assessing performance.

Company’s chief operating decision maker is the Chief Executive Officer, who reviews the financial performance and the results

of operations of the segments prepared in accordance with GAAP when making decisions about allocating resources and assessing performance

of the Company.

Company has determined that its reportable segments are products whose marketing approvals were secured via an Abbreviated New Drug Applications

(“ANDA”) and products whose marketing approvals were secured via a New Drug Application (“NDA”).

ANDA products

are referred to as generic pharmaceuticals and NDA products are referred to as branded pharmaceuticals.

are currently no intersegment revenues.

Asset information by operating segment is not presented below since the chief operating decision

maker does not review this information by segment.

The reporting segments follow the same accounting policies used in the preparation

of the Company’s audited consolidated financial statements.

Please see Note 15 for further details.

Revenue Recognition

The Company generates revenue

primarily from manufacturing and licensing fees.

Manufacturing fees include the development of pain management products, manufacturing

of a line of generic pharmaceutical products with approved ANDA, through the manufacture of formulations and the development of new products.

Licensing fees include the commercialization of products either by license and the collection of royalties, or the expansion of licensing

agreements with other pharmaceutical companies, including co-development projects, joint ventures and other collaborations.

Under ASC 606, Revenue

from Contacts with Customers (“ASC 606”), the Company recognizes revenue when the customer obtains control of promised

goods or services, in an amount that reflects the consideration which is expected to be received in exchange for those goods or services.

The Company recognizes revenues following the five-step model prescribed under ASC 606:

(i) identify contract(s) with a customer;

identify the performance obligation(s) in the contract;

(iii) determine the transaction price;

(iv) allocate the transaction price to

the performance obligation(s) in the contract;

and (v) recognize revenues when (or as) the Company satisfies a performance obligation.

The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled

to in exchange for the goods or services it transfers to the customer.

At contract inception, once the contract is determined to be within

the scope of ASC 606, the Company assesses the goods or services promised within each contract and determines those that are performance

obligations and assesses whether each promised good or service is distinct.

The Company then recognizes as revenue the amount of the

transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied.

value add, and other taxes collected on behalf of third parties are excluded from revenue.

Company generates revenue primarily from manufacturing and licensing fees.

Manufacturing fees include the development of pain management

products, manufacturing of a line of generic pharmaceutical products with approved ANDA, through the manufacture of formulations and

the development of new products.

Licensing fees include the commercialization of products either by license and the collection of royalties,

or the expansion of licensing agreements with other pharmaceutical companies, including co-development projects, joint ventures and other

collaborations.

ELITE PHARMACEUTICALS, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Nature of goods and services

The following is a description

of the Company’s goods and services from which the Company generates revenue, as well as the nature, timing of satisfaction of

performance obligations, and significant payment terms for each, as applicable:

a) Manufacturing Fees

The Company is equipped to

manufacture controlled-release products on a contract basis for third parties, if, and when, the products are approved.

These products

include products using controlled-release drug technology.

The Company also develops and markets (either on its own or by license to

other companies) generic and proprietary controlled-release pharmaceutical products.

The Company recognizes revenue

when the customer obtains control of the Company’s product based on the contractual shipping terms of the contract.

is primarily responsible for fulfilling the promise to provide the product, is responsible to ensure that the product is produced in

accordance with the related supply agreement and bears risk of loss while the inventory is in-transit to the commercial partner.

is measured as the amount of consideration the Company expects to receive in exchange for transferring products to a customer.

b) License Fees

The Company enters into licensing

and development agreements, which may include multiple revenue generating activities, including milestones payments, licensing fees,

product sales and services.

The Company analyzes each element of its licensing and development agreements in accordance with ASC 606

to determine appropriate revenue recognition.

The terms of the license agreement may include payment to the Company of licensing fees,

non-refundable upfront license fees, milestone payments if specified objectives are achieved, and/or royalties on product sales.

If the contract contains

a single performance obligation, the entire transaction price is allocated to the single performance obligation.

Contracts that contain

multiple performance obligations require an allocation of the transaction price based on the estimated relative standalone selling prices

of the promised products or services underlying each performance obligation.

The Company determines standalone selling prices based on

the price at which the performance obligation is sold separately.

If the standalone selling price is not observable through past transactions,

the Company estimates the standalone selling price taking into account available information such as market conditions and internally

approved pricing guidelines related to the performance obligations.

The Company recognizes revenue

from non-refundable upfront payments at a point in time, typically upon fulfilling the delivery of the associated intellectual property

to the customer.

For those milestone payments which are contingent on the occurrence of particular future events (for example, payments

due upon a product receiving FDA approval), the Company determined that these need to be considered for inclusion in the calculation

of total consideration from the contract as a component of variable consideration using the most-likely amount method.

As such, the Company

assesses each milestone to determine the probability and substance behind achieving each milestone.

Given the inherent uncertainty of

the occurrence of future events, the Company will recognize revenue from the milestone when there is not a high probability of a reversal

of revenue, which typically occurs near or upon achievement of the event.

Significant management judgment

is required to determine the level of effort required under an arrangement and the period over which the Company expects to complete

its performance obligations under the arrangement.

If the Company cannot reasonably estimate when its performance obligations either

are completed or become inconsequential, then revenue recognition is deferred until the Company can reasonably make such estimates.

is then recognized over the remaining estimated period of performance using the cumulative catch-up method.

When determining the transaction

price of a contract, an adjustment is made if payment from a customer occurs either significantly before or significantly after performance,

resulting in a significant financing component.

Applying the practical expedient in ASC 606-10-32-18, the Company does not assess whether

a significant financing component exists if the period between when the Company performs its obligations under the contract and when

the customer pays is one year or less.

None of the Company’s contracts contained a significant financing component as of March 31,

ASC 606, Revenue from Contacts with Customers (“ASC 606”), the Company recognizes revenue when the customer obtains

control of promised goods or services, in an amount that reflects the consideration which is expected to be received in exchange for

those goods or services.

The Company recognizes revenues following the five-step model prescribed under ASC 606:

(i) identify contract(s)

with a customer;

(ii) identify the performance obligation(s) in the contract;

(iii) determine the transaction price;

(iv) allocate the

transaction price to the performance obligation(s) in the contract;

and (v) recognize revenues when (or as) the Company satisfies a performance

The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration

it is entitled to in exchange for the goods or services it transfers to the customer.

At contract inception, once the contract is determined

to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determines those that

are performance obligations and assesses whether each promised good or service is distinct.

The Company then recognizes as revenue the

amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is

Sales, value add, and other taxes collected on behalf of third parties are excluded from revenue.

of goods and services

following is a description of the Company’s goods and services from which the Company generates revenue, as well as the nature,

timing of satisfaction of performance obligations, and significant payment terms for each, as applicable:

Manufacturing Fees

Company is equipped to manufacture controlled-release products on a contract basis for third parties, if, and when, the products are

These products include products using controlled-release drug technology.

The Company also develops and markets (either on

its own or by license to other companies) generic and proprietary controlled-release pharmaceutical products.

Company recognizes revenue when the customer obtains control of the Company’s product based on the contractual shipping terms of

the contract.

The Company is primarily responsible for fulfilling the promise to provide the product, is responsible to ensure that the

product is produced in accordance with the related supply agreement and bears risk of loss while the inventory is in-transit to the commercial

Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products to a

Company enters into licensing and development agreements, which may include multiple revenue generating activities, including milestones

payments, licensing fees, product sales and services.

The Company analyzes each element of its licensing and development agreements in

accordance with ASC 606 to determine appropriate revenue recognition.

The terms of the license agreement may include payment to the Company

of licensing fees, non-refundable upfront license fees, milestone payments if specified objectives are achieved, and/or royalties on

product sales.

the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation.

Contracts that contain multiple performance obligations require an allocation of the transaction price based on the estimated relative

standalone selling prices of the promised products or services underlying each performance obligation.

The Company determines standalone

selling prices based on the price at which the performance obligation is sold separately.

If the standalone selling price is not observable

through past transactions, the Company estimates the standalone selling price taking into account available information such as market

conditions and internally approved pricing guidelines related to the performance obligations.

Company recognizes revenue from non-refundable upfront payments at a point in time, typically upon fulfilling the delivery of the associated

intellectual property to the customer.

For those milestone payments which are contingent on the occurrence of particular future events

(for example, payments due upon a product receiving FDA approval), the Company determined that these need to be considered for inclusion

in the calculation of total consideration from the contract as a component of variable consideration using the most-likely amount method.

As such, the Company assesses each milestone to determine the probability and substance behind achieving each milestone.

Given the inherent

uncertainty of the occurrence of future events, the Company will recognize revenue from the milestone when there is not a high probability

of a reversal of revenue, which typically occurs near or upon achievement of the event.

ELITE PHARMACEUTICALS, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In accordance with ASC 606-10-55-65,

royalties are recognized when the subsequent sale of the customer’s products occurs.

The Company entered into

a sales and distribution licensing agreement with Epic Pharma LLC, (“Epic”) dated June 4, 2015 (the “2015 Epic License

Agreement”), which has been determined to satisfy the criteria for consideration as a collaborative agreement, and is accounted

for accordingly.

management judgment is required to determine the level of effort required under an arrangement and the period over which the Company

expects to complete its performance obligations under the arrangement.

If the Company cannot reasonably estimate when its performance

obligations either are completed or become inconsequential, then revenue recognition is deferred until the Company can reasonably make

such estimates.

Revenue is then recognized over the remaining estimated period of performance using the cumulative catch-up method.

determining the transaction price of a contract, an adjustment is made if payment from a customer occurs either significantly before

or significantly after performance, resulting in a significant financing component.

Applying the practical expedient in ASC 606-10-32-18,

the Company does not assess whether a significant financing component exists if the period between when the Company performs its obligations

under the contract and when the customer pays is one year or less.

None of the Company’s contracts contained a significant financing

component as of March 31, 2022.

accordance with ASC 606-10-55-65, royalties are recognized when the subsequent sale of the customer’s products occurs.

Company entered into a sales and distribution licensing agreement with Epic Pharma LLC, (“Epic”) dated June 4, 2015 (the

“2015 Epic License Agreement”), which has been determined to satisfy the criteria for consideration as a collaborative agreement,

and is accounted for accordingly.

The 2015 Epic License Agreement expired on June 4, 2020 without renewal.

The Company entered into

a Master Development and License Agreement with SunGen Pharma LLC dated August 24, 2016 (the “SunGen Agreement”), which has

been determined to satisfy the criteria for consideration as a collaborative agreement, and is accounted for accordingly.

2020, Elite and SunGen mutually agreed to discontinue any further joint product development activities.

Disaggregation of revenue

In the following table, revenue

is disaggregated by type of revenue generated by the Company.

The table also includes a reconciliation of the disaggregated revenue with

the reportable segments:

Company entered into a Master Development and License Agreement with Praxgen, formerly known

as SunGen Pharma LLC dated August 24, 2016 (the “SunGen Agreement”), which has been determined to satisfy the

criteria for consideration as a collaborative agreement, and is accounted for accordingly.

On April 3, 2020, Elite and Praxgen

mutually agreed to discontinue any further joint product development activities.

Disaggregation

the following table, revenue is disaggregated by type of revenue generated by the Company.

The table also includes a reconciliation of

the disaggregated revenue with the reportable segments:

OF DISAGGREGATION OF REVENUE

For the Years Ended March 31,

Manufacturing fees

Licensing fees

4 unchanged sentences

Total revenue

The Company considers all

highly liquid investments with an original maturity of three months or less to be cash equivalents.

Cash and cash equivalents consist

of cash on deposit with banks and money market instruments.

The Company places its cash and cash equivalents with high-quality, U.S.

information on reportable segments and reconciliation of operating income by segment to income (loss) from operations before income taxes

are disclosed within Note 15.

Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.

Cash and cash

equivalents consist of cash on deposit with banks and money market instruments.

The Company places its cash and cash equivalents with

high-quality, U.S.

financial institutions and, to date has not experienced losses on any of its balances.

Restricted Cash

As of March 31, 2021

and March 31, 2020, the Company had restricted cash of $405,013 and $404,802, respectively, related to debt service reserve in regard

to the New Jersey Economic Development Authority (“NJEDA”) bonds (see Note 5).

Accounts Receivable

Accounts receivable are comprised

of balances due from customers, net of estimated allowances for uncollectible accounts.

In determining collectability, historical trends

are evaluated, and specific customer issues are reviewed on a periodic basis to arrive at appropriate allowances.

Inventory is recorded at

the lower of cost or market on specific identification by lot number basis.

ELITE PHARMACEUTICALS, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Long-Lived Assets

The Company periodically

evaluates the fair value of long-lived assets, which include property and equipment and intangibles, whenever events or changes in circumstances

indicate that its carrying amounts may not be recoverable.

Property and equipment are

stated at cost.

Depreciation is provided on the straight-line method based on the estimated useful lives of the respective assets which

range from three to forty years.

of March 31, 2022, and March 31, 2021, the Company had $ 405,039 and $ 405,013 , of restricted cash, respectively, related to debt service

reserve in regard to the New Jersey Economic Development Authority (“NJEDA”) bonds (see Note 5).

receivable are comprised of balances due from customers, net of estimated allowances for uncollectible accounts.

In determining collectability,

historical trends are evaluated, and specific customer issues are reviewed on a periodic basis to arrive at appropriate allowances.

is recorded at the lower of cost or market on specific identification by lot number basis.

Company periodically evaluates the fair value of long-lived assets, which include property and equipment and intangibles, whenever events

or changes in circumstances indicate that its carrying amounts may not be recoverable.

and equipment are stated at cost.

Depreciation is provided on the straight-line method based on the estimated useful lives of the respective

assets which range from three to forty years .

Major repairs or improvements are capitalized.

Minor replacements and maintenance and repairs which

do not improve or extend asset lives are expensed currently.

Upon retirement or other

disposition of assets, the cost and related accumulated depreciation are removed from the accounts and the resulting gain or loss, if

any, is recognized in income.

Intangible Assets

The Company capitalizes certain

costs to acquire intangible assets;

if such assets are determined to have a finite useful life they are amortized on a straight-line

basis over the estimated useful life.

Costs to acquire indefinite lived intangible assets, such as costs related to ANDAs are capitalized

The Company tests its intangible

assets for impairment at least annually (as of March 31st) and whenever events or circumstances change that indicate impairment may have

A significant amount of judgment is involved in determining if an indicator of impairment has occurred.

Such indicators may

include, among others and without limitation:

a significant decline in the Company’s expected future cash flows;

a sustained, significant

decline in the Company’s stock price and market capitalization;

a significant adverse change in legal factors or in the business

climate of the Company’s segments;

Minor replacements and maintenance and repairs

which do not improve or extend asset lives are expensed currently.

retirement or other disposition of assets, the cost and related accumulated depreciation are removed from the accounts and the resulting

gain or loss, if any, is recognized in income.

Company capitalizes certain costs to acquire intangible assets;

if such assets are determined to have a finite useful life they are amortized

on a straight-line basis over the estimated useful life.

Costs to acquire indefinite lived intangible assets, such as costs related to

ANDAs are capitalized accordingly.

Company tests its intangible assets for impairment at least annually (as of March 31st) and whenever events or circumstances change that

indicate impairment may have occurred.

A significant amount of judgment is involved in determining if an indicator of impairment has

Such indicators may include, among others and without limitation:

a significant decline in the Company’s expected future

a sustained, significant decline in the Company’s stock price and market capitalization;

a significant adverse change

in legal factors or in the business climate of the Company’s segments;

unanticipated competition;

and slower growth rates.

As of March 31, 2021,

the Company did not identify any indicators of impairment.

Please also see Note 4 for

further details on intangible assets.

Research and Development

Research and development

expenditures are charged to expense as incurred.

of March 31, 2022, the Company did not identify any indicators of impairment.

also see Note 4 for further details on intangible assets.

and Development

and development expenditures are charged to expense as incurred.

ELITE PHARMACEUTICALS, INC.

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Contingencies

Occasionally, the Company may be involved in claims and legal proceedings

arising from the ordinary course of its business.

The Company records a provision for a liability when it believes that it is both probable

that a liability has been incurred, and the amount can be reasonably estimated.

If these estimates and assumptions change or prove to

be incorrect, it could have a material impact on the Company’s consolidated financial statements.

Contingencies are inherently unpredictable,

and the assessments of the value can involve a series of complex judgments about future events and can rely heavily on estimates and assumptions.

Income taxes are accounted

for under the asset and liability method.

Deferred tax assets and liabilities are recognized for the estimated future tax consequences

attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective

Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences

are expected to be recovered or settled.

Where applicable, the Company records a valuation allowance to reduce any deferred tax assets

that it determines will not be realizable in the future.

The Company recognizes the

benefit of an uncertain tax position that it has taken or expects to take on income tax returns it files if such tax position is more

likely than not to be sustained on examination by the taxing authorities, based on the technical merits of the position.

These tax benefits

are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution.

The Company operates in multiple

tax jurisdictions within the United States of America.

The Company remains subject to examination in all tax jurisdiction until the applicable

statutes of limitation expire.

As of March 31, 2021, a summary of the tax years that remain subject to examination in our major

tax jurisdictions are:

United States –

Federal, 2016 and forward, and State, 2012 and forward.

The Company did not record unrecognized

tax positions for the years ended March 31, 2021 and 2020.

Occasionally,

the Company may be involved in claims and legal proceedings arising from the ordinary course of its business.

The Company records a provision

for a liability when it believes that it is both probable that a liability has been incurred, and the amount can be reasonably estimated.

If these estimates and assumptions change or prove to be incorrect, it could have a material impact on the Company’s condensed

consolidated financial statements.

Contingencies are inherently unpredictable, and the assessments of the value can involve a series

of complex judgments about future events and can rely heavily on estimates and assumptions.

taxes are accounted for under the asset and liability method.

Deferred tax assets and liabilities are recognized for the estimated future

tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and

their respective tax bases.

Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which

those temporary differences are expected to be recovered or settled.

Where applicable, the Company records a valuation allowance to reduce

any deferred tax assets that it determines will not be realizable in the future.

Company recognizes the benefit of an uncertain tax position that it has taken or expects to take on income tax returns it files if such

tax position is more likely than not to be sustained on examination by the taxing authorities, based on the technical merits of the position.

These tax benefits are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution .

Company operates in multiple tax jurisdictions within the United States of America.

The Company remains subject to examination in all

tax jurisdiction until the applicable statutes of limitation expire.

As of March 31, 2022, a summary of the tax years that remain subject

to examination in our major tax jurisdictions are:

United States – Federal, 2016 and forward, and State, 2013 and forward.

Company did not record unrecognized tax positions for the years ended March 31, 2022 and 2021.

ELITE PHARMACEUTICALS, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Warrants and Preferred Shares

The accounting treatment

of warrants and preferred share series issued is determined pursuant to the guidance provided by ASC 470, Debt , ASC 480, Distinguishing

Liabilities from Equity , and ASC 815, Derivatives and Hedging , as applicable.

Each feature of a freestanding financial instrument

including, without limitation, any rights relating to subsequent dilutive issuances, dividend issuances, equity sales, rights offerings,

forced conversions, optional redemptions, automatic monthly conversions, dividends and exercise is assessed with determinations made

regarding the proper classification in the Company’s financial statements.

Stock-Based Compensation

The Company accounts for

stock-based compensation in accordance with ASC 718, Compensation-Stock Compensation .

Under the fair value recognition provisions,

stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as an expense on a

straight-line basis over the requisite service period, based on the terms of the awards.

The cost of the stock-based payments to nonemployees

that are fully vested and non-forfeitable as at the grant date is measured and recognized at that date, unless there is a contractual

term for services in which case such compensation would be amortized over the contractual term.

In accordance with the Company’s

Director compensation policy and certain employment contracts, director’s fees and a portion of employee’s salaries are to

be paid via the issuance of shares of the Company’s Common Stock (“Common Stock”), in lieu of cash, with the valuation

of such shares being calculated on a quarterly basis and equal to the simple average closing price of the Company’s Common Stock

for each trading day of the quarter just ended.

Earnings (Loss) Per Share Attributable

to Common Shareholders’

The Company follows ASC 260,

Earnings Per Share , which requires presentation of basic and diluted earnings (loss) per share (“EPS”) on the face

of the income statement for all entities with complex capital structures and requires a reconciliation of the numerator and denominator

of the basic EPS computation to the numerator and denominator of the diluted EPS computation.

In the accompanying financial statements,

basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of Common Stock outstanding

and Preferred Shares

accounting treatment of warrants and preferred share series issued is determined pursuant to the guidance provided by ASC 470, Debt ,

ASC 480, Distinguishing Liabilities from Equity , and ASC 815, Derivatives and Hedging , as applicable.

Each feature of a

freestanding financial instrument including, without limitation, any rights relating to subsequent dilutive issuances, dividend issuances,

equity sales, rights offerings, forced conversions, optional redemptions, automatic monthly conversions, dividends and exercise is assessed

with determinations made regarding the proper classification in the Company’s financial statements.

Company accounts for stock-based compensation in accordance with ASC 718, Compensation-Stock Compensation .

Under the fair value

recognition provisions, stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized

as an expense on a straight-line basis over the requisite service period, based on the terms of the awards.

The cost of the stock-based

payments to nonemployees that are fully vested and non-forfeitable as at the grant date is measured and recognized at that date, unless

there is a contractual term for services in which case such compensation would be amortized over the contractual term.

accordance with the Company’s Director compensation policy and certain employment contracts, director’s fees and a portion

of employee’s salaries are to be paid via the issuance of shares of the Company’s Common Stock (“Common Stock”),

in lieu of cash, with the valuation of such share being calculated on a quarterly basis and equal to the average closing price of the

Company’s Common Stock.

Per Share Attributable to Common Shareholders’

Company follows ASC 260, Earnings Per Share, which requires presentation of basic and diluted earnings per share (“EPS”)

on the face of the income statement for all entities with complex capital structures and requires a reconciliation of the numerator and

denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation.

In the accompanying financial

statements, basic earnings per share is computed by dividing net income by the weighted average number of shares of Common Stock outstanding

during the period.

The computation of diluted net income (loss) per share does not include the conversion of securities that would have

an antidilutive effect.

The following is the computation

of earnings (loss) per share applicable to common shareholders for the periods indicated:

The computation of diluted net income per share does not include the conversion of securities that would have an antidilutive

ELITE PHARMACEUTICALS, INC.

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

following is the computation of earnings per share applicable to common shareholders for the periods indicated:

OF EARNINGS (LOSS) PER SHARE APPLICABLE TO COMMON SHAREHOLDERS

For the Years Ended March 31,

Net income (loss) - basic

$ (2,240,351 )

Net income - basic

Effect of dilutive instrument on net income

Net income (loss) - diluted

( 1,425,409 )

( 1,237,132 )

Net income - diluted

Weighted average shares of Common Stock outstanding - basic

1,010,607,713

Dilutive effect of stock options and convertible securities

Weighted average shares of Common Stock outstanding - diluted

Net income (loss) per share

1,010,607,713

Net income per share

Value of Financial Instruments

820, Fair Value Measurements and Disclosures (“ASC 820”) provides a framework for measuring fair value in accordance

with generally accepted accounting principles.

820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction

between market participants at the measurement date.

ASC 820 establishes a fair value hierarchy that distinguishes between (1) market

participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s

own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable

fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for

identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3).

The three levels of the fair value

hierarchy under ASC 820 are described as follows:

1 – Unadjusted quoted prices in active markets for identical assets or liabilities that are accessible at the measurement date.

2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly

or indirectly.

Level 2 inputs include quoted prices for similar assets or liabilities in active markets;

quoted prices for identical

or similar assets or liabilities in markets that are not active;

inputs other than quoted prices that are observable for the asset

or liability;

and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

3 – Inputs that are unobservable for the asset or liability.

ELITE PHARMACEUTICALS, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Fair Value of Financial Instruments

ASC 820, Fair Value Measurements

and Disclosures (“ASC 820”) provides a framework for measuring fair value in accordance with generally accepted accounting

ASC 820 defines fair value

as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants

at the measurement date.

ASC 820 establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed

based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant

assumptions developed based on the best information available in the circumstances (unobservable inputs).

The fair value hierarchy

consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or

liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3).

The three levels of the fair value hierarchy under ASC

820 are described as follows:

Level 1 –

quoted prices in active markets for identical assets or liabilities that are accessible at the measurement date.

Level 2 –

other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

2 inputs include quoted prices for similar assets or liabilities in active markets;

quoted prices for identical or similar assets

or liabilities in markets that are not active;

inputs other than quoted prices that are observable for the asset or liability;

inputs that are derived principally from or corroborated by observable market data by correlation or other means.

Level 3 –

that are unobservable for the asset or liability.

Measured on a Recurring

The following table presents

information about our liabilities measured at fair value on a recurring basis, aggregated by the level in the fair value hierarchy within

which those measurements fell:

Value Measurement Using

on a Recurring Basis

following table presents information about our liabilities measured at fair value on a recurring basis, aggregated by the level in the

fair value hierarchy within which those measurements fell:

OF LIABILITIES MEASURED AT FAIR VALUE ON A RECURRING BASIS

Fair Value Measurement Using

March 31, 2022

Derivative financial instruments

Derivative financial instruments - warrants

March 31, 2021

Derivative financial instruments - warrants

See Note 11, for specific

inputs used in determining fair value.

The carrying amounts of the

Company’s financial assets and liabilities, such as cash, accounts receivable, prepaid expenses and other current assets, accounts

payable and accrued expenses, approximate their fair values because of the short maturity of these instruments.

Based upon current borrowing

rates with similar maturities the carrying value of long-term debt approximates fair value.

Non-Financial Assets that

are Measured at Fair Value on a Non-Recurring Basis

Non-financial assets such

as intangible assets, and property and equipment are measured at fair value only when an impairment loss is recognized.

The Company did

not record an impairment charge related to these assets in the periods presented.

ELITE PHARMACEUTICALS, INC.

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Treasury Stock

The Company records treasury

stock at the cost to acquire it and includes treasury stock as a component of shareholders’

Recently Adopted Accounting Standards

August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (ASC 820):

Disclosure Framework-Changes to the Disclosure Requirements

for Fair Value Measurement .

ASU 2018-13 removes certain disclosures, modifies certain disclosures and adds additional disclosures.

The ASU is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2019.

adoption is permitted.

The Company adopted the guidance as of April 1, 2020.

The Company is not materially impacted by the implementation

of this pronouncement.

In November 2018, the FASB

issued ASU 2018-18, Collaborative Arrangements (Topic 808) , Clarifying the Interaction between Topic 808 and Topic 606.

clarifies when transactions between collaborative participants are in the scope of ASC 606.

The ASU also provides some guidance on presentation

of transactions not in the scope of ASC 606.

ASU 2018-18 is effective for fiscal years, and interim periods within those years, beginning

after December 15, 2019.

Early adoption is permitted for fiscal years, and interim periods within those years.

The Company adopted the

guidance as of April 1, 2020.

The Company is not materially impacted by the implementation of this pronouncement.

In March 2020, the FASB issued

ASU 2020-03, Codification Improvements to Financial Instruments .

The ASU clarifies disclosure guidance for fair value options,

adds clarifications to the subsequent measurement of fair value, clarifies disclosure for depository and lending institutions, clarifies

the line-of-credit or revolving-debt arrangements guidance, and the interaction of Financial Instruments - Credit Losses (Topic 326) with

Leases (Topic 842) and Transfers and Servicing-Sales of Financial Assets (Subtopic 860-20).

In accordance with ASU 2020-03, the Company

adopted the guidance as of April 1, 2020.

The Company is not materially impacted by the implementation of this pronouncement.

Recently Issued Accounting Pronouncements

In June 2016, the FASB issued

ASU 2016-13, Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments.

This update requires

immediate recognition of management’s estimates of current expected credit losses (“CECL”).

Under the prior model,

losses were recognized only as they were incurred.

The new model is applicable to all financial instruments that are not accounted for

at fair value through net income.

The standard is effective for fiscal years beginning after December 15, 2022 for public entities qualifying

as smaller reporting companies.

Note 11 for specific inputs used in determining fair value.

carrying amounts of the Company’s financial assets and liabilities, such as cash, accounts receivable, prepaid expenses and other

current assets, accounts payable and accrued expenses, approximate their fair values because of the short maturity of these instruments.

Based upon current borrowing rates with similar maturities the carrying value of long-term debt approximates fair value.

Non-Financial

Assets that are Measured at Fair Value on a Non-Recurring Basis

Non-financial

assets such as intangible assets, and property and equipment are measured at fair value only when an impairment loss is recognized.

Company did not record an impairment charge related to these assets in the periods presented.

Company records treasury stock at the cost to acquire it and includes treasury stock as a component of shareholders’ equity.

Issued Accounting Pronouncements

June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses on Financial

Instruments .

This update requires immediate recognition of management’s estimates of current expected credit losses (“CECL”).

Under the prior model, losses were recognized only as they were incurred.

The new model is applicable to all financial instruments that

are not accounted for at fair value through net income.

The standard is effective for fiscal years beginning after December 15, 2022

for public entities qualifying as smaller reporting companies.

Early adoption is permitted.

The Company is currently assessing the impact of this update on the consolidated

financial statements and does not expect a material impact on the consolidated financial statements.

Management has evaluated

other recently issued accounting pronouncements and does not believe that any of these pronouncements will have a significant impact

on our consolidated financial statements and related disclosures.

Inventory consisted of the

The Company is currently assessing the impact

of this update on the consolidated financial statements and does not expect a material impact on the consolidated financial statements.

has evaluated other recently issued accounting pronouncements and does not believe that any of these pronouncements will have a significant

impact on our consolidated financial statements and related disclosures.

consisted of the following:

March 31, 2022

March 31, 2021

Finished goods

5 unchanged sentences

PROPERTY AND EQUIPMENT, NET

Property and equipment consisted

of the following:

and equipment consisted of the following:

OF PROPERTY AND EQUIPMENT

March 31, 2022

March 31, 2021

Land, building and improvements

Laboratory, manufacturing, warehouse and transportation

Laboratory, manufacturing, warehouse and transportation equipment

Office equipment and software

1 unchanged sentence

Accumulated depreciation

Depreciation expense was

$1,299,668 and $1,305,616 for the years ended March 31, 2021 and 2020, respectively.

( 13,348,565 )

( 12,153,626 )

expense was $ 1,194,939 and $ 1,299,668 for the years ended March 31, 2022 and 2021, respectively.

INTANGIBLE ASSETS

The following table summarizes

the Company’s intangible assets:

following table summarizes the Company’s intangible assets:

SCHEDULE OF INTANGIBLE ASSETS

March 31, 2022

Estimated Useful Life

Gross Carrying Amount

Accumulated Amortization

Net Book Value

Patent application costs

ANDA acquisition costs

March 31, 2021

Estimated Useful Life

Gross Carrying Amount

Accumulated Amortization

Net Book Value

Patent application costs *

ANDA acquisition costs

Patent application costs

were incurred in relation to the Company’s abuse deterrent opioid technology.

Amortization of the patent costs will begin upon

the issuance of marketing authorization by the FDA.

Amortization will then be calculated on a straight-line basis through the expiry

of the related patent(s).

application costs were incurred in relation to the Company’s abuse deterrent opioid technology.

Amortization of the patent

costs will begin upon the issuance of marketing authorization by the FDA.

Amortization will then be calculated on a straight-line

basis through the expiry of the related patent(s).

August 2005, the Company refinanced a bond issue occurring in 1999 through the issuance of Series A and B Notes tax-exempt bonds (the

“NJEDA Bonds” and/or “Bonds”).

During July 2014, the Company retired all outstanding Series B Notes, at par,

along with all accrued interest due and owed.

relation to the Series A Notes, the Company is required to maintain a debt service reserve.

The debt service reserve is classified as

restricted cash on the accompanying audited consolidated balance sheets.

The NJEDA Bonds require the Company to make an annual principal

payment on September 1st based on the amount specified in the loan documents and semi-annual interest payments on March 1st and September

1st, equal to interest due on the outstanding principal.

The annual interest rate on the Series A Note is 6.5 % .

The NJEDA Bonds are collateralized

by a first lien on the Company’s facility and equipment acquired with the proceeds of the original and refinanced bonds.

ELITE PHARMACEUTICALS, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

During August 2005, the Company

refinanced a bond issue occurring in 1999 through the issuance of Series A and B Notes tax-exempt bonds (the “NJEDA Bonds”

and/or “Bonds”).

During July 2014, the Company retired all outstanding Series B Notes, at par, along with all accrued interest

due and owed.

In relation to the Series

A Notes, the Company is required to maintain a debt service reserve.

The debt service reserve is classified as restricted cash on the

accompanying consolidated balance sheets.

The NJEDA Bonds require the Company to make an annual principal payment on September 1st based

on the amount specified in the loan documents and semi-annual interest payments on March 1st and September 1st, equal to interest due

on the outstanding principal.

The annual interest rate on the Series A Note is 6.5%.

The NJEDA Bonds are collateralized by a first lien

on the Company’s facility and equipment acquired with the proceeds of the original and refinanced bonds.

The following tables summarize

the Company’s bonds payable liability:

following tables summarize the Company’s bonds payable liability:

OF BONDS PAYABLE LIABILITY

March 31, 2022

March 31, 2021

Gross bonds payable

NJEDA Bonds -

Series A Notes

Current portion of

bonds payable (prior to deduction of bond offering costs)

Long-term portion of bonds

payable (prior to deduction of bond offering costs)

NJEDA Bonds - Series A Notes

Current portion of bonds payable (prior to deduction

of bond offering costs)

Long-term portion of bonds payable (prior to deduction of

bond offering costs)

Bond offering costs

Accumulated amortization

Bond offering costs, net

Current portion of bonds payable - net of bond offering

Current portions of bonds

Bonds offering costs

to be amortized in the next 12 months

Current portion of bonds

payable, net of bond offering costs

Long term portion of bonds payable - net of bond

offering costs

Long term portion of bonds

Bond offering costs

to be amortized subsequent to the next 12 months

Long term portion of bonds

payable, net of bond offering costs

Amortization expense was

$14,179 and $14,174 for the year ended March 31, 2021 and 2020, respectively.

As of March 31, 2021 and 2020, interest payable was $7,963

and $8,531, respectively.

Maturities of bonds for the next five years are

Current portion of bonds payable - net of bond offering costs

Current portions of bonds payable

Bonds offering costs to be amortized in the next 12 months

Current portion of bonds payable, net of bond offering costs

Long term portion of bonds payable - net of bond offering costs

Long term portion of bonds payable

Bond offering costs to be amortized subsequent to the

next 12 months

Long term portion of bonds payable, net of bond offering

expense was $ 14,180 and $ 14,179 for the years ended March 31, 2022 and 2021, respectively.

As of March 31, 2022 and March 31, 2021, interest

payable was $ 7,367 and $ 7,963 , respectively.

of bonds for the next five years are as follows:

SCHEDULE OF MATURITIES OF BONDS FOR THE NEXT FIVE YEARS

Years ending March 31,

ELITE PHARMACEUTICALS, INC.

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

LOANS PAYABLE

Loans payable consisted of

the following:

Equipment and insurance financing

loans payable, between 3.5% and 12.73% interest and maturing between January 2021 and October 2026

payable consisted of the following:

SCHEDULE OF LOANS PAYABLE

March 31, 2022

March 31, 2021

Equipment and insurance financing loans payable, between 3.30 % and 12.02 % interest and maturing between October 2022 and October 2025

Current portion of loans payable

Long-term portion of loans payable

The interest expense associated

with the loans payable was $77,218 and $79,870 for the years ended March 31, 2021 and 2020, respectively.

Loan principal payments for

the next five years are as follows:

ELITE PHARMACEUTICALS, INC.

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

interest expense associated with the loans payable was $ 62,845 and $ 77,218 for the years ended March 31, 2022 and 2021, respectively.

principal payments for the next five years are as follows:

SCHEDULE OF LOAN PRINCIPAL PAYMENTS

Years ending March 31,

2020 Paycheck Protection

Program Term Note

In April 2020, the Company

entered into a Paycheck Protection Program Term Note (the “PPP Note”) with TD Bank, NA in the amount of $1,013,480.

Note was issued to the Company pursuant to the Coronavirus, Aid, Relief, and Economic Security Act’s (the “CARES Act”)

116-136) Paycheck Protection Program (the “Program”).

Under the Program, all or a portion of the PPP Note may be forgiven

in accordance with the Program requirements.

On January 12, 2021, the

Company received notification that the United States Small Business Administration (“SBA”), had approved, in full, the Company’s

application for forgiveness of amounts received pursuant to the CARES Act and the Program.

RELATED PARTY SECURED PROMISSORY NOTE

WITH MIKAH PHARMA, LLC

For consideration of the

assets acquired on May 15, 2017, the Company issued a Secured Promissory Note (the “Mikah Note”) to Mikah Pharma, LLC (“Mikah”)

for the principal sum of $1,200,000.

Mikah was founded in 2009 by Nasrat Hakim (“Hakim”), a related party and, the Company’s

President, Chief Executive Officer and Chairman of the Board.

The Mikah Note matured on December 31, 2020 and was retired at par in March

Paycheck Protection Program Term Note

April 2020, the Company entered into a Paycheck Protection Program Term Note (the “PPP Note”) with TD Bank, NA in the amount

of $ 1,013,480 .

The PPP Note was issued to the Company pursuant to the Coronavirus, Aid, Relief, and Economic Security Act’s (the

“CARES Act”) (P.L.

116-136) Paycheck Protection Program (the “Program”).

Under the Program, all or a portion

of the PPP Note may be forgiven in accordance with the Program requirements.

January 12, 2021, the Company received notification that the United States Small Business Administration (“SBA”), had approved,

in full, the Company’s application for forgiveness of amounts received pursuant to the CARES Act and the Program.

RELATED PARTY SECURED PROMISSORY NOTE WITH MIKAH PHARMA, LLC

consideration of the assets acquired on May 15, 2017, the Company issued a Secured Promissory Note (the “Mikah Note”) to

Mikah Pharma, LLC (“Mikah”) for the principal sum of $ 1,200,000 .

Mikah was founded in 2009 by Nasrat Hakim (“Hakim”),

a related party and, the Company’s President, Chief Executive Officer and Chairman of the Board.

The Mikah Note matured on December

31, 2020 and was retired at par in March 2021.

The principal amount of $ 1,200,000 was repaid by the Company at maturity.

Interest expense associated with the Note was $90,000 and $120,000

for the years ended March 31, 2021 and 2020, respectively.

A total of $435,000 in accrued interest expense, representing interest expense

accrued during the life of the Mikah Note was due and owing as of the maturity date of the Note.

Of the $435,000 accrued interest due

at maturity, $238,451 of accrued interest was satisfied by offset against amounts due from Mikah pursuant to the development agreement

between the Company and Mikah, dated December 3, 2018 (see Note 16).

The balance of $196,549 of accrued interest expense owing in relation

to the Mikah Note is recorded as a non-interest bearing, general liability of the Company.

expense associated with the Note was $ 90,000 for the year ended March 31, 2021.

A total of $ 435,000 in accrued interest expense, representing

interest expense accrued during the life of the Mikah Note, was due and owing as of the maturity date of the Mikah Note.

Of the $ 435,000

accrued interest due at maturity, $ 435,000 of accrued interest was satisfied by offset against amounts due from Mikah pursuant to the

development agreement between the Company and Mikah, dated December 3, 2018 (see Note 16).

ELITE PHARMACEUTICALS, INC.

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DEFERRED REVENUE

Deferred revenues in the

aggregate amount of $58,891 as of March 31, 2021, were comprised of a current component of $13,333 and a long-term component of

revenues in the aggregate amount of $ 45,559 as of March 31, 2022, were comprised of a current component of $ 13,333 and a long-term component

of $ 32,226 .

Deferred revenues in the aggregate amount of $ 58,891 as of March 31, 2021, were comprised of a current component of $ 13,333

1 unchanged sentence

These line items represent the unamortized amounts of a $ 200,000 advance payment received for a

TAGI Pharma (“TAGI”) licensing agreement with a fifteen-year term beginning in September 2010 and ending in August 2025 and

the $5,000,000 advance payment Epic Collaborative Agreement with a five-year term beginning in June 2015 and ending in May 2020.

advance payments were recorded as deferred revenue when received and are earned, on a straight-line basis over the life of the licenses.

The current component is equal to the amount of revenue to be earned during the 12-month period immediately subsequent to the balance

sheet date and the long-term component is equal to the amount of revenue to be earned thereafter.

TAGI Pharma (“TAGI”) licensing agreement with a fifteen-year term beginning in September 2010 and ending in August 2025 .

These advance payments were recorded as deferred revenue when received and are earned, on a straight-line basis over the life of the

The current component is equal to the amount of revenue to be earned during the 12-month period immediately subsequent to the

balance sheet date and the long-term component is equal to the amount of revenue to be earned thereafter.

COMMITMENTS AND CONTINGENCIES

Occasionally, the Company may be involved in claims and legal proceedings

arising from the ordinary course of its business.

The Company records a provision for a liability when it believes that is both probable

that a liability has been incurred, and the amount can be reasonably estimated.

If these estimates and assumptions change or prove to

be incorrect, it could have a material impact on the Company’s consolidated financial statements.

Contingencies are inherently unpredictable,

and the assessments of the value can involve a series of complex judgments about future events and can rely heavily on estimates and assumptions.

Operating Leases

The Company entered into

an operating lease for a portion of a one-story warehouse, located at 135 Ludlow Avenue, Northvale, New Jersey (the “135 Ludlow

lease”).

Occasionally,

the Company may be involved in claims and legal proceedings arising from the ordinary course of its business.

The Company records a provision

for a liability when it believes that it is both probable that a liability has been incurred, and the amount can be reasonably estimated.

If these estimates and assumptions change or prove to be incorrect, it could have a material impact on the Company’s condensed

consolidated financial statements.

Contingencies are inherently unpredictable, and the assessments of the value can involve a series

of complex judgments about future events and can rely heavily on estimates and assumptions.

Leases – 135 Ludlow Ave.

Company entered into an operating lease for a portion of a one-story warehouse, located at 135 Ludlow Avenue, Northvale, New Jersey (the

“135 Ludlow Ave.

The 135 Ludlow Ave.

lease is for approximately 15,000 square feet of floor space and began on July

July 2014, the Company modified the 135 Ludlow Ave.

lease in which the Company was permitted to occupy the entire 35,000 square feet

of floor space in the building (“135 Ludlow Ave.

Modified Lease”).

The 135 Ludlow Ave.

Lease includes an initial term, which expired on December 31, 2016 with two tenant renewal options of five years each, at the sole discretion

of the Company.

On June 22, 2016, the Company exercised the first of these renewal options, with such option including a term that begins

on January 1, 2017 and expires on December 31, 2021.

The 135 Ludlow Ave.

lease property required significant leasehold improvements and qualifications, as a prerequisite, for its intended future use.

Manufacturing,

packaging, warehousing and regulatory activities are currently conducted at this location.

Additional renovations and construction to

further expand the Company’s manufacturing resources are in progress.

The Company plans to exercise

the second option pursuant to the 135 Ludlow Ave.

Modified Lease in June 2021.

This option includes a term that begins on January 1, 2022

and expires on December 31, 2026.

Minimum lease payments required during the five year term of this option total $1,212,480.

In October 2020, the Company

entered into an operating lease for office space in Pompano Beach, Florida (the “Pompano Office Lease”).

The Pompano Office

Lease is for approximately 1,275 square feet of office space, with Elite taking occupancy on November 1, 2020.

The Pompano Office includes

a 3 month abatement from November 2020 through February 2021 and has a term of three years, ending on October 31, 2023.

The Company assesses whether

an arrangement is a lease or contains a lease at inception.

For arrangements considered leases or that contain a lease that is accounted

for separately, the Company determines the classification and initial measurement of the right-of-use asset and lease liability at the

lease commencement date, which is the date that the underlying asset becomes available for use.

The Company has elected to account for

non-lease components associated with its leases and lease components as a single lease component.

The Company recognizes a

right-of-use asset, which represents the Company’s right to use the underlying asset for the lease term, and a lease liability,

which represents the present value of the Company’s obligation to make payments arising over the lease term.

The present value

of the lease payments is calculated using either the implicit interest rate in the lease or an incremental borrowing rate.

During July 2014, the Company modified the 135 Ludlow Ave.

lease in which the Company was permitted to occupy the entire 35,000

square feet of floor space in the building (“135 Ludlow Ave.

modified lease”).

135 Ludlow Ave.

modified lease includes an initial term, which expired on December 31, 2016 with two tenant renewal options of five years

each, at the sole discretion of the Company.

On June 22, 2016, the Company exercised the first of these renewal options, with such option

including a term that begins on January 1, 2017 and expires on December 31, 2021.

On June 30, 2021, the Company exercised the second

of the renewal options, with such option including a term that begins on January 1, 2022 and expires on December 31, 2026 .

135 Ludlow Ave.

modified lease property required significant leasehold improvements and qualifications, as a prerequisite, for its intended

Manufacturing, packaging, warehousing and regulatory activities are currently conducted at this location.

Additional renovations

and construction to further expand the Company’s manufacturing resources are in progress.

October 2020, the Company entered into an operating lease for office space in Pompano Beach, Florida (the “Pompano Office Lease”).

The Pompano Office Lease is for approximately 1,275 square feet of office space, with Elite taking occupancy on November 1, 2020.

Pompano Office includes a 3 month abatement from November 2020 through February 2021 and has a term of three years, ending on October

Company assesses whether an arrangement is a lease or contains a lease at inception.

For arrangements considered leases or that contain

a lease that is accounted for separately, the Company determines the classification and initial measurement of the right-of-use asset

and lease liability at the lease commencement date, which is the date that the underlying asset becomes available for use.

has elected to account for non-lease components associated with its leases and lease components as a single lease component.

Company recognizes a right-of-use asset, which represents the Company’s right to use the underlying asset for the lease term, and

a lease liability, which represents the present value of the Company’s obligation to make payments arising over the lease term.

The present value of the lease payments is calculated using either the implicit interest rate in the lease or an incremental borrowing

ELITE PHARMACEUTICALS, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Lease assets and liabilities are classified as follows on the consolidated

balance sheet:

assets and liabilities are classified as follows on the condensed consolidated balance sheet:

SCHEDULE OF LEASE ASSETS AND LIABILITIES

Classification

of March 31, 2021

Operating lease –

As of March 31, 2022

Operating lease – right-of-use asset

Total leased assets

Lease obligation –

operating lease

obligation –

operating lease, net of current portion

Lease obligation – operating lease

Lease obligation – operating lease, net of current portion

Total lease liabilities

Rent expense is recorded on the straight-line basis.

Rent expense under

the 135 Ludlow Ave.

Modified lease for the years ended March 31, 2021 and 2020, is $219,638 and $220,650, respectively.

Rent expense under

the Pompano Office Lease for the years ended March 31, 2021 and 2020, is $9,544 and $0, respectively.

Rent expense is recorded in general

and administrative expense in the audited consolidated statements of operations.

The table below show the

future minimum rental payments, exclusive of taxes, insurance and other costs, in aggregate, under the 135 Ludlow Ave.

modified lease

and the Pompano Office Lease:

Subsequent to March 31, 2026

Total future minimum lease

expense is recorded on the straight-line basis.

Rent expense under the 135 Ludlow Ave.

modified lease for the years ended March 31, 2022

and 2021 was $ 229,563 and $ 219,636 , respectively.

Rent expense under the Pompano Office Lease for the year ended March 31, 2022 was $ 23,430 .

There was no rent expense under the Pompano Office lease for the year ended March 31, 2021 as there was a rent abatement period from

November 2020 through February 2021.

Rent expense is recorded in general and administrative expense in the audited consolidated statements

of operations.

table below shows the future minimum rental payments, exclusive of taxes, insurance and other costs, under the 135 Ludlow Ave.

lease and the Pompano Office Lease:

OF FUTURE MINIMUM RENTAL PAYMENTS

Years ending March 31,

Total future minimum lease payments

Present value of lease payments

The weighted-average remaining

lease term and the weighted-average discount rate of our lease was as follows:

weighted-average remaining lease term and the weighted-average discount rate of our lease was as follows:

SCHEDULE OF WEIGHTED-AVERAGE

REMAINING LEASE TERM AND THE WEIGHTED-AVERAGE DISCOUNT RATE

Lease Term and Discount Rate

4 unchanged sentences

Operating leases

The Company has an obligation

for the restoration of its leased facility and the removal or dismantlement of certain property and equipment as a result of its business

operation in accordance with ASC 410, Asset Retirement and Environmental Obligations –

Asset Retirement Obligations .

Company records the fair value of the asset retirement obligation in the period in which it is incurred.

The Company increases, annually,

the liability related to this obligation.

The liability is accreted to its present value each period and the capitalized cost is depreciated

over the useful life of the related asset.

Upon settlement of the liability, the Company records either a gain or loss.

As of March 31,

2021, and March 31, 2020, the Company had a liability of $37,628 and $35,442, respectively, recorded as a component of other long-term

Company has an obligation for the restoration of its leased facility and the removal or dismantlement of certain property and equipment

as a result of its business operation in accordance with ASC 410, Asset Retirement and Environmental Obligations – Asset Retirement

Obligations .

The Company records the fair value of the asset retirement obligation in the period in which it is incurred.

increases, annually, the liability related to this obligation.

The liability is accreted to its present value each period and the capitalized

cost is depreciated over the useful life of the related asset.

Upon settlement of the liability, the Company records either a gain or

As of March 31, 2022, and March 31, 2021, the Company had a liability of $ 38,780 and $ 37,628 , respectively, recorded as a component

of other long-term liabilities.

ELITE PHARMACEUTICALS, INC.

2 unchanged sentences

PREFERRED STOCK

Series J convertible preferred stock

On April 28, 2017, the Company

created the Series J Convertible Preferred Stock (“Series J Preferred”) in conjunction with the Certificate of Designations

(“Series J COD”).

A total of 50 shares of Series J Preferred were authorized, zero shares are outstanding, with a stated

value of $1,000,000 per share and a par value of $0.01 as of March 31, 2021.

On April 27, 2017, a total of 24.0344 shares of Series J Preferred

were issued pursuant to an exchange agreement (the “Exchange Agreement”) with Nasrat Hakim (“Mr.

Hakim”), a related

party and the Company’s President, Chief Executive Officer and Chairman of the Board of Directors.

The Exchange Agreement provided

for Hakim to exchange 158,017,321 shares of Common Stock for 24.0344 shares of Series J Preferred and warrants to purchase 79,008,661

shares of Common Stock at $0.1521 per share.

The aggregate stated value of the Series J Preferred issued was equal to the aggregate value

of the shares of Common Stock exchanged, with such value of each share of Common Stock exchanged being equal to the closing price of the

Common Stock on April 27, 2017.

In connection with the Exchange Agreement, the Company also issued warrants to purchase 79,008,661 shares

of Common Stock at $0.1521 per share, and such warrants are classified as liabilities on the accompanying consolidated balance sheet as

of March 31, 2021 (See Note 11).

An amendment to the Company’s

Articles of Incorporation to increase the number of shares of Common Stock the Company is authorized to issue from 995,000,000 shares

to 1,445,000,000 shares was approved at the Company’s Annual Meeting of Shareholders held on December 4, 2019.

Prior to the approval

of the increase in the number of authorized shares, there were insufficient authorized shares if the Series J Preferred Stock were converted.

J convertible preferred stock

April 28, 2017, the Company created the Series J Convertible Preferred Stock (“Series J Preferred”) in conjunction with the

Certificate of Designations (“Series J COD”).

A total of 50 shares of Series J Preferred were authorized, zero shares are

issued and outstanding, with a stated value of $ 1,000,000 per share and a par value of $ 0.01 as of March 31, 2022.

April 27, 2017, a total of 24.0344 shares of Series J Preferred were issued pursuant to an exchange agreement (the “Exchange Agreement”)

with Hakim, a related party and the Company’s President, Chief Executive Officer and Chairman of the Board of Directors.

Agreement provided for Hakim to exchange 158,017,321 shares of Common Stock for 24.0344 shares of Series J Preferred and warrants to

purchase 79,008,661 shares of Common Stock at $ 0.1521 per share.

The aggregate stated value of the Series J Preferred issued was equal

to the aggregate value of the shares of Common Stock exchanged, with such value of each share of Common Stock exchanged being equal to

the closing price of the Common Stock on April 27, 2017.

In connection with the Exchange Agreement, the Company also issued warrants

to purchase 79,008,661 shares of Common Stock at $ 0.1521 per share, and such warrants are classified as liabilities on the accompanying

audited consolidated balance sheet as of March 31, 2022 (See Note 11).

amendment to the Company’s Articles of Incorporation to increase the number of shares of Common Stock the Company is authorized

to issue from 995,000,000 shares to 1,445,000,000 shares was approved at the Company’s Annual Meeting of Shareholders held on December

Prior to the approval of the increase in the number of authorized shares, there were insufficient authorized shares if the Series

J Preferred Stock were converted.

As a result, the shares were classified in mezzanine equity.

After the approval of the increase in the number of authorized shares, there

are now sufficient authorized shares in the event of a full conversion of Series J Preferred Stock.

With the approval of the increase

in the number of authorized shares, there is no longer the presumption that a cash settlement will be required.

Therefore, the Series

J Preferred was reclassified from mezzanine equity to permanent equity at its carrying amount of $13,903,960 on the consolidated balance

sheet as of March 31, 2020.

On June 23, 2020, the Company

held a Special Meeting of Shareholders, with such including a proposal for shareholders to again vote on the above referenced amendment

to the Company’s Articles of Incorporation.

After the approval of the increase in

the number of authorized shares, there are now sufficient authorized shares in the event of a full conversion of Series J Preferred Stock.

With the approval of the increase in the number of authorized shares, there is no longer the presumption that a cash settlement will

Therefore, the Series J Preferred was reclassified from mezzanine equity to permanent equity at its carrying amount of $ 13,903,960

on the consolidated balance sheets as of March 31, 2022 and 2021.

June 23, 2020, the Company held a Special Meeting of Shareholders, with such including a proposal for shareholders to again vote on the

above referenced amendment to the Company’s Articles of Incorporation.

This proposal was also passed by shareholder vote.

On August 24, 2020, Hakim

converted the 24.0344 shares of Series J Preferred into 158,017,321 shares of Common Stock at a conversion price of $0.1521 per share.

August 24, 2020, Hakim converted the 24.0344 shares of Series J Preferred into 158,017,321 shares of Common Stock at a conversion price

of $ 0.1521 per share.

ELITE PHARMACEUTICALS, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DERIVATIVE FINANCIAL INSTRUMENTS

The Company evaluates and

accounts for its freestanding instruments in accordance with ASC 815, Accounting for Derivative Instruments and Hedging Activities .

The Company issued warrants,

with a term of ten years, to affiliates in connection with an exchange agreement dated April 28, 2017, as further described in this note

A summary of warrant activity

is as follows:

Average Exercise Price

DERIVATIVE FINANCIAL INSTRUMENTS – WARRANTS

Company evaluates and accounts for its freestanding instruments in accordance with ASC 815, Accounting for Derivative Instruments

and Hedging Activities .

Company issued warrants, with a term of ten years, to affiliates in connection with an exchange agreement dated April 28, 2017, as further

described in this note below.

summary of warrant activity is as follows:

SCHEDULE OF WARRANT ACTIVITY

March 31, 2022

March 31, 2021

Warrant Shares

Weighted Average Exercise Price

Warrant Shares

Weighted Average Exercise Price

Balance at beginning of period

granted pursuant to the issuance of Series J convertible preferred shares

Warrants granted pursuant to the issuance of Series J convertible preferred shares

Warrants exercised, forfeited and/or expired, net

Balance at end of period

On April 28, 2017, the Company entered into an Exchange Agreement with

Hakim, the Chairman of the Board, President, and Chief Executive Officer of the Company, pursuant to which the Company issued to Hakim

24.0344 shares of its Series J Preferred and warrants to purchase an aggregate of 79,008,661 shares of its Common Stock (the “Series

J Warrants”

and, along with the Series J Preferred issued to Mr.

Hakim, the “Securities”) in exchange for 158,017,321

shares of Common Stock owned by Mr.

The fair value of the Series J Warrants was determined to be $6,474,674 upon issuance at April

The Series J Warrants are

exercisable for a period of 10 years from the date of issuance, commencing April 28, 2020.

The initial exercise price is $0.1521 per

share and the Series J Warrants can be exercised for cash or on a cashless basis.

The exercise price is subject to adjustment for any

issuances or deemed issuances of Common Stock or Common Stock equivalents, other than shares issued pursuant to the 2020LPC Purchase

Agreement (as defined below), at an effective price below the then exercise price.

Such exercise price adjustment feature prohibits the

Company from being able to conclude the warrants are indexed to its own stock and thus such warrants are classified as liabilities and

measured initially and subsequently at fair value.

The Series J Warrants also provide for other standard adjustments upon the happening

of certain customary events.

April 28, 2017, the Company entered into an Exchange Agreement with Hakim, the Chairman of the Board, President, and Chief Executive

Officer of the Company, pursuant to which the Company issued to Hakim 24.0344 shares of its Series J Preferred and warrants to purchase

an aggregate of 79,008,661 shares of its Common Stock (the “Series J Warrants” and, along with the Series J Preferred issued

to Hakim, the “Securities”) in exchange for 158,017,321 shares of Common Stock owned by Hakim.

The fair value of the Series

J Warrants was calculated using a Black-Scholes model.

The following assumptions were used in the Black-Scholes model to calculate the

fair value of the Series J Warrants:

Fair value of the Company’s Common

J Warrants was determined to be $ 6,474,674 upon issuance at April 28, 2017.

Series J Warrants are exercisable for a period of 10 years from the date of issuance, commencing April 28, 2020.

The initial exercise

price is $ 0.1521 per share and the Series J Warrants can be exercised for cash or on a cashless basis.

The exercise 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

exercise price.

Such exercise price adjustment feature prohibits the Company from being able to conclude the warrants are indexed to

its own stock and thus such warrants are classified as liabilities and measured initially and subsequently at fair value.

J Warrants also provide for other standard adjustments upon the happening of certain customary events.

fair value of the Series J Warrants was calculated using a Black-Scholes model instead of a Monte Carlo Simulation because the probability

with the shareholder approval provisions was no longer a factor.

The following assumptions were used in the Black-Scholes model to calculate

the fair value of the Series J Warrants:

OF FAIR VALUE OF WARRANTS ISSUED

March 31, 2022

March 31, 2021

Fair value of the Company’s Common Stock

Initial exercise price

4 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The changes in warrants (Level

3 financial instruments) measured at fair value on a recurring basis for the years ended March 31, 2021 were as follows:

changes in warrants (Level 3 financial instruments) measured at fair value on a recurring basis for the year ended March 31, 2022 were

SCHEDULE OF CHANGES IN WARRANTS MEASURED AT FAIR VALUE ON A RECURRING BASIS

Balance at March 31, 2020

Change in fair value of derivative financial instruments

Change in fair value of derivative financial instruments - warrants

( 1,237,132 )

Balance at March 31, 2021

Change in fair value of derivative financial instruments

Change in fair value of derivative financial instruments - warrants

( 1,425,409 )

Balance at March 31, 2022

SHAREHOLDERS’

Lincoln Park Capital –

Purchase Agreement

On May 1, 2017, the Company

entered into a purchase agreement (the “2017 LPC Purchase Agreement”), together with a registration rights agreement (the

“2017 LPC Registration Rights Agreement”), with Lincoln Park.

Under the terms and subject to the conditions of the 2017 LPC Purchase

Agreement, the Company had the right to sell to and Lincoln Park was obligated to purchase up to $40 million in shares of Common Stock,

subject to certain limitations, from time to time, over the 36-month period that commenced on June 5, 2017.

The 2017 LPC Purchase Agreement

expired on July 1, 2020.

During the year ended March

31, 2021, there were no shares sold to Lincoln Park pursuant to the 2017 LPC Purchase Agreement.

In addition, there were no shares issued

to Lincoln Park as additional commitment shares, pursuant to the 2017 LPC Purchase Agreement.

During the year ended March 31, 2020, a

total of 15,358,627 shares were sold to Lincoln Park pursuant to the 2017 LPC Purchase Agreement for net proceeds totaling $15,359.

addition, 199,181 shares were issued to Lincoln Park as additional commitment shares, pursuant to the 2017 LPC Purchase Agreement.

Lincoln Park Capital Transaction - July

8, 2020 Purchase Agreement

On July 8, 2020, Elite Pharmaceuticals,

Inc., a Nevada corporation (the “Company”), entered into a purchase agreement (the “Purchase Agreement”), and

a registration rights agreement (the “Registration Rights Agreement”), with Lincoln Park Capital Fund, LLC (“Lincoln

Park”), pursuant to which Lincoln Park has committed to purchase up to $25.0 million of the Company’s common stock, $0.001

par value per share (the “Common Stock”), from time to time over the term of the Purchase Agreement, at the Company’s

During the year ended March

31, 2021 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

The Company sold 640,543 shares of its Common Stock pursuant to the 2020 LPC Purchase Agreement during the year ended March 31,

2021 for net proceeds totaling $42,223.

In addition, 10,094 shares were issued to Lincoln Park as additional commitment shares, pursuant

to the 2020 LPC Agreement.

SHAREHOLDERS’ EQUITY

Park Capital Transaction - July 8, 2020 Purchase Agreement

July 8, 2020, the Company entered into a purchase agreement (the “2020 LPC Purchase Agreement”), and a registration rights

agreement (the “2020 LPC Registration Rights Agreement”), with Lincoln Park Capital Fund, LLC (“Lincoln Park”),

pursuant to which Lincoln Park has committed to purchase up to $ 25.0 million of the Company’s Common Stock, $ 0.001 par value per

share, from time to time over the term of the 2020 LPC 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 year ended March 31, 2022.

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

the year ended March 31, 2021 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 year ended March 31, 2021 for net proceeds totaling $ 42,223 .

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

commitment shares, pursuant to the 2020 LPC Agreement.

ELITE PHARMACEUTICALS, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Summary of Common Stock Activity

During the years ended March

31, 2021 and 2020, the Company issued 168,772,385 and 15,557,808 shares of Common Stock, respectively, with such issuances of Common

Stock being summarized as follows:

Stock issued as of March 31, 2021 and 2020, respectively

stock converted from Preferred Stock

Stock sold pursuant to the Lincoln Park Capital Purchase Agreements, with net proceeds of such shares totaling $42,223 and $1,437,978

for the years ended March 31, 2021 and 2020, respectively.

Stock issued as initial and additional commitment shares pursuant to the Lincoln Park Capital Purchase Agreements

Stock issued in payment of Directors fees, salaries and consulting fees

Stock issued during the fiscal year

Stock issued as of March 31, 2021 and 2020, respectively

of Common Stock Activity

the years ended March 31, 2022 and 2021, the Company issued 2,105,236 and 168,772,385 shares of Common Stock, respectively, with such

issuances of Common Stock being summarized as follows:

SCHEDULE OF COMMON STOCK ACTIVITY

Common Stock issued as of March 31, 2021 and 2020, respectively

1,009,276,752

Common stock converted from Preferred Stock

Common Stock sold pursuant to the Lincoln Park Capital Purchase Agreements, with net proceeds of such shares totaling $ - and $ 42,223 for the years ended March 31, 2022 and 2021, respectively.

Common Stock issued as initial and additional commitment shares pursuant to the Lincoln Park Capital Purchase Agreements

Common Stock issued in payment of Directors fees, salaries and consulting fees

Common Stock issued during the fiscal year

Common Stock issued as of March 31, 2022 and 2021, respectively

1,011,381,988

1,009,276,752

STOCK-BASED COMPENSATION

Part of the compensation

paid by the Company to its Directors and employees consists of the issuance of Common Stock or via the granting of options to purchase

Common Stock.

Stock-based Director Compensation

The Company’s Director

compensation policy, instituted in October 2009 and further revised in January 2016, includes provisions that a portion of director’s

fees are to be paid via the issuance of shares of the Company’s Common Stock, in lieu of cash, with the valuation of such shares

being calculated on quarterly basis and equal to the average closing price of the Company’s Common Stock.

During the year ended March

31, 2021, the Company issued 1,550,343 shares of Common Stock to its Directors in payment of director’s fees totaling an aggregate of

$135,000 and with such aggregate director’s fees being earned and accrued over the twenty-seven month period beginning on January 1,

2018 and ending on March 31, 2020.

In addition, the Company made cash payments totaling an aggregate of $67,500 in payment of director’s

fees earned over the same twenty-seven month period.

During the year ended March 31, 2021, the Company

accrued director’s fees totaling $60,000, which will be paid via cash payments totaling $30,000 and the issuance of 886,710 shares

of Common Stock.

As of March 31, 2021,

the Company owed its Directors a total of $30,000 in cash payments and 886,710 shares of Common Stock in payment of director fees totaling

$60,000 due and owing.

The Company anticipates that these shares of Common Stock will be issued prior to the end of the subsequent fiscal

Stock-based Employee/Consultant Compensation

Employment contracts with

the Company’s President and Chief Executive Officer, Chief Financial Officer and certain other employees and engagement contracts

with certain consultants include provisions for a portion of each employee’s salaries or consultant’s fees to be paid via

the issuance of shares of the Company’s Common Stock, in lieu of cash, with the valuation of such shares being calculated on a

quarterly basis and equal to the average closing price of the Company’s Common Stock.

During the year ended March

31, 2021, the Company issued 646,336 shares of Common Stock in payment of salaries totaling $56,250 pursuant to the employment contract

of the Company’s Executive Vice President of Operations and with such salaries being earned and accrued over the thirty-month period

beginning on January 1, 2018 and ending on June 30, 2020.

of the compensation paid by the Company to its Directors and employees consists of the issuance of Common Stock or via the granting of

options to purchase Common Stock.

Director Compensation

Company’s Director compensation policy, instituted in October 2009 and further revised in January 2016, includes provisions that

a portion of director’s fees are to be paid via the issuance of shares of the Company’s Common Stock, in lieu of cash, with

the valuation of such shares being calculated on quarterly basis and equal to the average closing price of the Company’s Common

the year ended March 31, 2022, the Company accrued director’s fees totaling $ 90,000 , which will be paid via cash payments totaling

$ 30,000 and the issuance of 1,378,608 shares of Common Stock.

of March 31, 2022, the Company owed its Directors a total of $ 30,000 in cash payments and 1,378,608 shares of Common Stock in payment

of director fees totaling $ 90,000 due and owing.

The Company anticipates that these shares of Common Stock will be issued prior to the

end of the current fiscal year.

Employee/Consultant Compensation

contracts with the Company’s President and Chief Executive Officer and certain other employees and engagement contracts with certain

consultants include provisions for a portion of each employee’s salaries or consultant’s fees to be paid via the issuance

of shares of the Company’s Common Stock, in lieu of cash, with the valuation of such shares being calculated on a quarterly basis

and equal to the average closing price of the Company’s Common Stock.

the year ended March 31, 2022, the Company issued 1,218,526 shares of Common Stock in payment of salaries totaling $ 97,500 pursuant to

the employment contract of the Company’s former Chief Financial Officer, with such salaries being earned and accrued over the forty

one month period beginning on October 1, 2018 and ending on March 31, 2021.

ELITE PHARMACEUTICALS, INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

During the year ended March

31, 2021, the Company accrued salaries totaling $748,750 owed to the Company’s President and Chief Executive Officer, Chief Financial

Officer and certain other employees which will be paid via the issuance of 11,250,185 shares of Common Stock.

As of March 31, 2021,

the Company owed its President and Chief Executive Officer, Chief Financial Officer and certain other employees’

salaries totaling

the year ended March 31, 2022, the Company accrued salaries totaling $ 84,000 owed

to a certain other employees which will be paid via the issuance of 14,105,665 shares

of Common Stock.

of March 31, 2022, the Company owed its President and Chief Executive Officer and certain other employees’ salaries totaling $ 3,625,000

which will be paid via the issuance of 50,190,779 shares of Common Stock.

During the year ended March

31, 2021, the Company issued 1,931,891 shares of Common Stock in payment of consulting fees totaling $161,033, pursuant to engagement

contracts with a certain consultant, and with such consulting expenses being earned and accrued over the twenty seven month period beginning

on January 1, 2018 and ending March 31, 2020.

Under its 2014 Stock Option

Plan and prior options plans, the Company may grant stock options to officers, selected employees, as well as members of the Board of

Directors and advisory board members.

All options have generally been granted at a price equal to or greater than the fair market value

of the Company’s Common Stock at the date of the grant.

Generally, options are granted with a vesting period of up to three years

and expire ten years from the date of grant.

A summary of the activity of Company’s 2014 Stock Option Plan for the years ended March

31, 2021and 2020 is as follows:

its 2014 Stock Option Plan and prior options plans, the Company may grant stock options to officers, selected employees, as well as members

of the Board of Directors and advisory board members.

All options have generally been granted at a price equal to or greater than the

fair market value of the Company’s Common Stock at the date of the grant.

Generally, options are granted with a vesting period

of up to three years and expire ten years from the date of grant.

A summary of the activity of Company’s 2014 Stock Option Plan

for the years ended March 31, 2022 and 2021 is as follows:

SCHEDULE OF STOCK OPTION PLAN

Exercise Price

Weighted Average

Remaining Contractual Term (in years)

Aggregate Intrinsic

Outstanding at March 31, 2020

4 unchanged sentences

Exercisable at March 31, 2022

The aggregate intrinsic value

for outstanding options is calculated as the difference between the exercise price of the underlying awards and the quoted price of the

Company’s Common Stock as of March 31, 2021 and March 31, 2020 of $0.06 and $0.07, respectively.

aggregate intrinsic value for outstanding options is calculated as the difference between the exercise price of the underlying awards

and the quoted price of the Company’s Common Stock as of March 31, 2022 and March 31, 2021 of $ 0.10 and $ 0.06 , respectively.

of March 31, 2022, there was $ 25,328 in unrecognized stock-based compensation expense that will be recognized over a 3 year period.

CONCENTRATIONS AND CREDIT RISK

Two customers accounted for

approximately 92% of the Company’s revenues for the year ended March 31, 2021.

These two customers accounted for approximately

77% and 15% of revenues each, respectively.

Three customers accounted

for approximately 92% of the Company’s revenues for the year ended March 31, 2020.

These three customers accounted for approximately

55%, 24%, and 13% of revenues each, respectively.

Accounts Receivable

Three customers accounted

for approximately 99% of the Company’s accounts receivable as of March 31, 2021.

These three customers accounted for approximately

73%, 15% and 11% of accounts receivable each, respectively.

Four customers accounted

for substantially all the Company’s accounts receivable as of March 31, 2020.

These four customers accounted for approximately

73%, 13%, 8%, and 5% of accounts receivable each, respectively.

customers accounted for approximately 95 % of the Company’s revenues for the year ended March 31, 2022.

These two customers accounted

for approximately 84 % and 11 % of revenues each, respectively.

customers accounted for approximately 92 % of the Company’s revenues for the year ended March 31, 2021.

These two customers accounted

for approximately 77 % and 15 % of revenues each, respectively.

customers accounted for approximately 91 % of the Company’s accounts receivable as of March 31, 2022.

These two customers accounted

for approximately 78 % and 13 % of accounts receivable each, respectively.

customers accounted for substantially all the Company’s accounts receivable as of March 31, 2021.

These three customers accounted

for approximately 73 %, 15 % and 10 % of accounts receivable each, respectively.

ELITE PHARMACEUTICALS, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Four suppliers accounted

for approximately 78% of the Company’s purchases of raw materials for the year ended March 31, 2021.

These four suppliers accounted

for approximately 54%, 13%, 6% and 5% of purchases each, respectively.

Three suppliers accounted

for more than 71% of the Company’s purchases of raw materials for the year ended March 31, 2020.

These three suppliers accounted

for approximately 41%, 23%, and 7% of purchases each, respectively.

suppliers accounted for approximately 69 % of the Company’s purchases of raw materials for the year ended March 31, 2022.

four suppliers accounted for approximately 51 %, 7 %, 6 % and 5 % of purchases each, respectively.

suppliers accounted for more than 78 % of the Company’s purchases of raw materials for the year ended March 31, 2021.

suppliers accounted for approximately 54 %, 13 %, 6 %, and 5 % of purchases each, respectively.

SEGMENT RESULTS

FASB ASC 280-10-50 requires

use of the “management approach”

model for segment reporting.

The management approach is based on the way a company’s

management organized segments within the company for making operating decisions and assessing performance.

Reportable segments are based

on products and services, geography, legal structure, management structure, or any other manner in which management disaggregates a company.

The Company has determined

that its reportable segments are ANDAs for generic products and NDAs for branded products.

The Company identified its reporting segments

based on the marketing authorization relating to each and the financial information used by its chief operating decision maker to make

decisions regarding the allocation of resources to and the financial performance of the reporting segments.

Asset information by operating

segment is not presented below since the chief operating decision maker does not review this information by segment.

The reporting segments

follow the same accounting policies used in the preparation of the Company’s consolidated financial statements.

Disaggregated revenue

by reportable segments is disclosed in Note 1.

The following represents

selected information for the Company’s reportable segments:

ASC 280-10-50 requires use of the “management approach” model for segment reporting.

The management approach is based on

the way a company’s management organized segments within the company for making operating decisions and assessing performance.

Reportable segments are based on products and services, geography, legal structure, management structure, or any other manner in which

management disaggregates a company.

Company has determined that its reportable segments are ANDAs for generic products and NDAs for branded products.

The Company identified

its reporting segments based on the marketing authorization relating to each and the financial information used by its chief operating

decision maker to make decisions regarding the allocation of resources to and the financial performance of the reporting segments.

information by operating segment is not presented below since the chief operating decision maker does not review this information by

The reporting segments follow the same accounting policies used in the preparation of the Company’s audited consolidated

financial statements.

following represents selected information for the Company’s reportable segments:

SCHEDULE OF SELECTED INFORMATION FOR REPORTABLE SEGMENTS

For the Years Ended March 31,

Operating Income by Segment

The table below reconciles

the Company’s operating income by segment to income (loss) from operations before provision for income taxes as reported in the

Company’s consolidated statements of operations.

Operating Income by Segment

table below reconciles the Company’s operating income by segment to income from operations before provision for income taxes as

reported in the Company’s audited consolidated statement of operations:

SCHEDULE OF OPERATING LOSS BY SEGMENT TO (LOSS) INCOME FROM OPERATIONS

For the Years Ended March 31,

1 unchanged sentence

Corporate unallocated costs

( 3,696,881 )

( 2,252,983 )

Interest income

1 unchanged sentence

Depreciation and amortization expense

( 1,194,939 )

( 1,313,847 )

Significant non-cash items

1 unchanged sentence

Change in fair value of derivative instruments

Income (loss) from operations before income taxes

$ (2,238,351 )

RELATED PARTY AGREEMENTS WITH MIKAH PHARMA, LLC

On December 3, 2018, the

Company executed a development agreement with Mikah pursuant to which Mikah and the Company will collaborate to develop and commercialize

generic products including formulation development, analytical method development, bioequivalence studies and manufacture of development

batches of generic products.

As of the date of this report, the Company has incurred costs which are $238,451 in excess of advanced payments

received to date from Mikah.

This balance due from Mikah was offset, in full, against accrued interest due and owing to Mikah pursuant

to the Mikah Note (see Note 7).

Income from operations before income taxes

ELITE PHARMACEUTICALS, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In May 2020, SunGen Pharma LLC (“SunGen”), under an asset

purchase agreement, assigned its rights and obligations under the SunGen Agreement for Amphetamine IR and Amphetamine ER to Mikah Pharmaceuticals.

The ANDAs for Amphetamine IR and Amphetamine ER are now registered under Elite’s name.

Mikah will now be Elite’s partner with

respect to Amphetamine IR and ER and will assume all the rights and obligations for these products from SunGen.

RELATED PARTY AGREEMENTS WITH MIKAH PHARMA, LLC

December 3, 2018, the Company executed a development agreement with Mikah, pursuant to which Mikah and the Company will collaborate to

develop and commercialize generic products including formulation development, analytical method development, bioequivalence studies and

manufacture of development batches of generic products.

As of March 31, 2021, the Company has incurred costs which are $ 238,451 in excess

of advanced payments received to date from Mikah.

This balance due from Mikah was offset, in full, against accrued interest due and owing

to Mikah pursuant to the Mikah Note (see Note 7).

May 2020, Praxgen , pursuant to an asset purchase agreement, assigned its rights and

obligations under the Praxgen Agreement for Amphetamine IR and Amphetamine ER to

Mikah Pharmaceuticals.

was founded in 2009 by Nasrat Hakim.

The components of the income

taxes benefit (expense) are as follows:

Ended March 31,

The ANDAs for Amphetamine IR and Amphetamine ER are now registered under Elite’s name.

Mikah will now be

Elite’s partner with respect to Amphetamine IR and ER and will assume all the rights and obligations for these products from Praxgen .

Mikah Pharmaceuticals was founded in 2009 by Nasrat Hakim, a related party and the Company’s President, Chief Executive Officer

and Chairman of the Board.

June 2021, the Company entered into a development and license agreement with Mikah Pharma LLC, pursuant to which Mikah Pharma LLC will

engage in the research, development, sales and licensing of generic pharmaceutical products.

In addition, Mikah Pharma LLC will collaborate

to develop and commercialize generic products including formulation development, analytical method development, manufacturing, sales

and marketing of generic products.

Initially two generic products were identified for the parties to develop.

components of the income taxes benefit (expense) are as follows:

OF COMPONENTS OF CREDIT FOR INCOME TAXES

Year Ended March 31,

Income tax benefit

Benefit from sale of state net operating loss credits

Net benefit from sale of state net operating loss credits

The major components of deferred

tax assets and liabilities as of March 31, 2021 and 2020 are as follows (amounts in thousands of dollars):

major components of deferred tax assets and liabilities as of March 31, 2022 and 2021 are as follows (amounts in thousands of dollars):

SCHEDULE OF COMPONENTS OF DEFERRED TAX ASSETS AND LIABILITIES

Year Ended March 31,

1 unchanged sentence

Valuation allowance

Deferred tax assets and

Net operating loss carry forward

Valuation Allowance

At March 31, 2021 and

2020 a 100% valuation allowance is provided, as it is uncertain if the deferred tax assets will provide any future benefits because of

the uncertainty about the Company’s ability to generate the future taxable income necessary to use the net operating loss carry

Absent the above mentioned allowance, at March 31, 2021, the Company’s federal and state income taxes due were $0.4 million

and $0.2 million, respectively.

Absent the above mentioned allowance, at March 31, 2020, the Company’s federal and state income

taxes due were $0.2 million and $0.1 million, respectively.

The company believes that

temporary timing differences between accrual and payment of income taxes are not material to the financial position of the Company.

As of March 31, 2021,

Elite has a federal net operating loss carry forward of $99.5 million, which do not expire and net operating loss carry forward in state

tax jurisdictions of $9.3 million some of which will began to expire in 2021.

Deferred tax assets and

ELITE PHARMACEUTICALS, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Sale of New Jersey Net Operating Loss

In April 2020, Elite Laboratories

Inc., a wholly owned subsidiary of Elite Pharmaceuticals Inc., received final approval from the New Jersey Economic Development Authority

for the sale of net tax benefits of $607,635 relating to New Jersey net operating losses and net tax benefits of $338,772, relating to

R&D tax credits.

The Company sold the net tax benefits approved for sale for total proceeds of $946,407.

March 31, 2022 and 2021 a 100 %

valuation allowance is provided, as it is uncertain if the deferred tax assets will provide any future benefits because of the uncertainty

about the Company’s ability to generate the future taxable income necessary to use the net operating loss carry forwards.

company believes that temporary timing differences between accrual and payment of income taxes are not material to the financial position

of the Company.

of March 31, 2022, Elite has a federal net operating loss carry forward of $ 100.8

million, which do not expire and net operating

loss carry forward in state tax jurisdictions of $ 8.4

million some of which will begin to expire

During 2022, the Company was able

to release a portion of its valuation allowance as it determined future profits will offset a portion of its valuation allowance.

2022, the Company recorded a tax benefit of $ 2.2

million as a result of this change in

Absent the above mentioned allowance, at March 31, 2022, the Company’s federal and state income taxes due were $ 0.0

million and $ 0.4

million, respectively.

of New Jersey Net Operating Loss

April 2020, Elite Labs received final approval from the New Jersey Economic Development Authority for the sale of net tax benefits of

$ 607,635 relating to New Jersey net operating losses and net tax benefits of $ 338,772 , relating to R&D tax credits.

The Company sold

the net tax benefits approved for sale for total proceeds of $ 946,407 during the year ended March 31, 2021.

of New Jersey Net Operating Loss and Research and Development Tax Credit

April 2021, Elite Labs received final approval from the New Jersey Economic Development Authority for the sale of net tax benefits of

$ 796,860 relating to New Jersey net operating losses and net tax benefits of $ 58,490 , relating to research and development tax credits.

The Company sold the net tax benefits approved for sale at a transfer price equal to ninety three and one half cents for every benefit

dollar and incurred transaction fees of $ 12,861 , resulting in net proceeds to the Company of $ 857,379 , during the year ended March 31,

COVID-19 UPDATE

In December 2019, the Novel

Corona Virus, COVID-19 was reported to have emerged in Wuhan, China.

In March 2020, the World Health Organization (“WHO”)

declared the COVID-19 outbreak a global pandemic.

Governments at the national, state and local level in the United States, and globally,

have implemented aggressive actions to reduce the spread of the virus, with such actions including, without limitation, lockdown and

shelter in place orders, limitations on non-essential gatherings of people, suspension of all non-essential travel, and ordering certain

businesses and governmental agencies to cease non-essential operations at physical locations.

Under current and applicable laws and regulations,

the Company’s business is deemed essential and it has continued to operate in all aspects of its pharmaceutical manufacturing,

distribution, product development, regulatory compliance and other activities.

The Company’s management has developed and implemented

a range of measures to address the risks, uncertainties, and operational challenges associated with operating in a COVID-19 environment.

The Company is closely monitoring the rapidly evolving and changing situation and are implementing plans intended to limit the impact

of COVID-19 on our business so that the Company can continue to manufacture those medicines used by end user patients.

Actions the Company

has taken to date are, without limitation, further described below.

The Company has taken and

will continue to take, proactive measures to provide for the well-being of its workforce while continuing to safely produce pharmaceutical

The Company has implemented alternative working practices, which include, without limitation, modified schedules, shift rotation

and work at home abilities for appropriate employees to best ensure adequate social distancing.

In addition, the Company increased its

already thorough cleaning protocols throughout its facilities and has prohibited visits from non-essential visitors.

Certain of these

measures have resulted in increased costs.

Manufacturing and Supply Chain

During the year ended March

31, 2021, the Company has not experienced material, detrimental issues related to COVID-19 in its manufacturing, supply chain, quality

assurance and regulatory compliance activities, and has been able to operate without interruption.

The Company has taken, and plans to

continue to take, commercially practical measures to keep its facilities open.

The Company’s supply chains remain intact and operational,

and the Company is in regular communications with its suppliers and third-party partners.

A prolonging of the current situation relating

to COVID-19 may result in an increased risk of interruption in the Company supply chain in the future, with no assurances given as the

materiality of such future interruption on the Company’s business, financial condition, results of operations and cash flows.

December 2019, the Novel Corona Virus, COVID-19 was reported to have emerged in Wuhan, China.

In March 2020, the World Health Organization

(“WHO”) declared the COVID-19 outbreak a global pandemic.

Governments at the national, state and local level in the United

States, and globally, have implemented aggressive actions to reduce the spread of the virus, with such actions including, without limitation,

lockdown and shelter in place orders, limitations on non-essential gatherings of people, suspension of all non-essential travel, and

ordering certain businesses and governmental agencies to cease non-essential operations at physical locations.

Under current and applicable

laws and regulations, the Company’s business is deemed essential and it has continued to operate in all aspects of its pharmaceutical

manufacturing, distribution, product development, regulatory compliance and other activities.

The Company’s management has developed

and implemented a range of measures to address the risks, uncertainties, and operational challenges associated with operating in a COVID-19

The Company is closely monitoring the rapidly evolving and changing situation and are implementing plans intended to limit

the impact of COVID-19 on our business so that the Company can continue to manufacture those medicines used by end user patients.

the Company has taken to date are, without limitation, further described below.

Company has taken and will continue to take, proactive measures to provide for the well-being of its workforce while continuing to safely

produce pharmaceutical products.

The Company has implemented alternative working practices, which include, without limitation, modified

schedules, shift rotation and work at home abilities for appropriate employees to best ensure adequate social distancing.

the Company increased its already thorough cleaning protocols throughout its facilities and has prohibited visits from non-essential

Certain of these measures have resulted in increased costs.

Manufacturing

and Supply Chain

the year ended March 31, 2022, and as of the date of this Annual Report on Form 10-K, the Company has not experienced material, detrimental

issues related to COVID-19 in its manufacturing, supply chain, quality assurance and regulatory compliance activities, and has been able

to operate without interruption.

The Company has taken, and plans to continue to take, commercially practical measures to keep its facilities

The Company’s supply chains remain intact and operational, and the Company is in regular communications with its suppliers

and third-party partners.

A prolonging of the current situation relating to COVID-19 may result in an increased risk of interruption

in the Company supply chain in the future, with no assurances given as the materiality of such future interruption on the Company’s

business, financial condition, results of operations and cash flows.

SUBSEQUENT EVENTS

Sale of New Jersey Net Operating Loss and

Research and Development Tax Credit

In April 2021, Elite Laboratories

Inc., a wholly owned subsidiary of Elite Pharmaceuticals Inc.

received final approval from the New Jersey Economic Development Authority

for the sale of net tax benefits of $798,889 relating to New Jersey net operating losses and net tax benefits of $58,490, relating to

research and development tax credits.

The Company sold the net tax benefits approved for sale at a transfer price equal to ninety three

and one half cents for every benefit dollar and incurred transaction fees of $12,861, resulting in net proceeds to the Company of $788,789.

April 2, 2022, the Company entered into a loan and security agreement with East West Bank, pursuant to which the Company was granted

by the Bank a term loan of $ 12,000,000 for

a duration of five

years and an asset-based Revolving Line of

Credit up to $ 2,000,000 .

The Company has received the proceeds of $ 11,959,880 out

of the term loan net of applicable professional changes, and it will be used for general working capital purpose.

In return for the term loan, the Company is required to meet certain financial terms and

On April 8, 2022, the Company

entered into an Asset Purchase Agreement to purchase the building located at 135-137 Ludlow Avenue in Northvale NJ and is currently in

The Company has leased the entire 35,000 square feet of floor space since 2014.

This property is occupied by the Company’s

Quality Assurance department, commercial manufacturing, packaging, and warehouse.

The closing date is expected to take place in July

On June 27, 2022, the Company

received notification from the US Food and Drug Administration (FDA) for the approval of the Company’s Abbreviated New Drug Application

(ANDA) for a generic version of Sabril® (Vigabatrin USP) 500 mg powder for solution packet.

Company, Inc.

has an exclusive license to market and distribute the product in the U.S.

and territories.

Elite will exclusively manufacture

and package the product for sale for an agreed-upon transfer price.

The companies will share in product net profits.

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-K

Item 9A. Controls and Procedures