Item 5. Other Information
ITEM
5. OTHER INFORMATION
On
April 2, 2022, the Company and Elite Labs entered into a Loan and Security Agreement (the “EWB Loan Agreement”) with East West
Bank (“EWB”). Pursuant to the EWB Loan Agreement, the Company and Elite Labs received one term loan for a principal amount
of $12,000,000 (the “EWB Term Loan”) and a revolving line of credit up to $2,000,000 (the “EWB Revolver,” together
with the “EWB Term Loan,” the EWB Loans” ), each of which shall be used for working capital. The EWB Term Loan bears
interest at a rate of 6.48% (1.73% plus the prime rate (“Prime”)) and is repayable over five years, maturing on May 1, 2027.
The EWB Revolver bears interest at a rate of (5.65% (0.87% plus Prime)) and matures on May 1, 2027. The total transaction costs associated
with the EWB Loans incurred as of June 30, 2022, were $40,120, which are being amortized on a monthly basis over five years, beginning
in April 2022. The EWB Loans are secured by a security interest in the personal property of the Company and Elite Labs. The EWB Loan
Agreement contains customary representations, warranties and covenants. These covenants include, but are not limited to, maintaining
maximum leverage ratios of 3.50 to 1.00, minimum liquidity of $5,000,000, minimum cash of $1,000,000, a fixed charge coverage ratio of
1.25 to 1.00 and restrictions on mergers or sales of assets and debt borrowings. As of June 30, 2022, the Company is in compliance
with each financial covenant and the Company has not used any of the Revolving line of credit The foregoing description of the EWB Loan
Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions of the EWB Loan Agreement, a copy
of which is attached hereto as Exhibit 10.3 and is incorporated by reference herein.
On
April 8, 2022, the Company entered into an Agreement for Sale and Purchase of Real Estate, by and between Clyde Wesp and Margaret Wesp
as Trustees of the Wesp Family Joint Living Trust UTD November 19, 2015 and the Company, to purchase the building located at 135-137
Ludlow Avenue in Northvale, New Jersey for a purchase price of $5,100,000.00 (the “Real Estate Agreement”). The Company had
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 purchase was contingent upon the Company’s ability to obtain a sufficient
commercial mortgage loan, and the purchase closed on July 1, 2022.
On
July 1, 2022, the EWB provided a mortgage loan in the amount of $2.55 million for the purchase of the above property. The mortgage
loan matures in 10 years and bears interest at a rate of 4.75% fixed for 5 years then adjustable at WSJP plus 0.5% with floor rate
of 4.5%.
The foregoing description of
the Real Estate Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions of the Real Estate
Agreement, a copy of which is attached hereto as Exhibit 10.2 and is incorporated by reference herein.
7
ITEM
6. EXHIBITS
Exhibit
No.
Description
10.1
Employment Agreement, dated May 5, 2022, between Elite Pharmaceuticals, Inc. and Robert Chen, incorporated by reference to Exhibit 10.1 to Form 8-K filed with the Securities and Exchange Commission on May 11, 2022.
10.2
Agreement for Sale and Purchase of Real Estate, dated April 8, 2022, by and between Clyde Wesp and Margaret Wesp as trustees of the Wesp Family Joint Living Trust UTD November 19, 2015 and the Company.*
10.3
Loan and Security Agreement, dated April 1, 2022, by and among East West Bank, Elite Pharmaceuticals, Inc. and Elite Laboratories, Inc.
31.1
Certification
of Chief Executive Officer pursuant to Exchange Act Rule 13a-14(a) and Rule 15d-14(a)*
31.2
Certification
of Chief Financial Officer pursuant to Exchange Act Rule 13a-14(a) and Rule 15d-14(a)*
32.1
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*
32.2
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*
101.INS
Inline
XBRL Instance Document
101.SCH
Inline
XBRL Taxonomy Schema Document
101.CAL
Inline
XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF
Inline
XBRL Taxonomy Extension Definition Linkbase Document
101.LAB
Inline
XBRL Taxonomy Extension Label Linkbase Document
101.PRE
Inline
XBRL Taxonomy Extension Presentation Linkbase Document
104
Cover
Page Interactive Data File (embedded within the Inline XBRL document)
*
Filed
herewith.
**
Furnished
herewith.
8
SIGNATURES
Pursuant
to the requirements 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.
August
15, 2022
By:
/s/
Nasrat Hakim
Nasrat
Hakim
Chief
Executive Officer, President and
Chairman
of the Board of Directors
(Principal
Executive Officer)
August
15, 2022
By:
/s/
Robert Chen
Robert
Chen
Chief
Financial Officer
(Principal Accounting and Financial Officer)
9
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.