What changed in this filing

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Item 1. Financial Statements

2023-02-14 compared with 2022-11-14 · 170 added, 156 removed, 794 unchanged (29% of the section changed)

FINANCIAL STATEMENTS

September 30, 2022

December 31, 2022

March 31, 2022

33 unchanged sentences

50 shares authorized;

0 issued and outstanding as of September 30, 2022 and March 31, 2022

0 issued and outstanding as of December 31, 2022 and March 31, 2022

Common stock;

1 unchanged sentence

1,445,000,000 shares authorized;

1,014,015,081 shares issued as of September 30, 2022 and March 31, 2022;

1,013,915,081 shares outstanding as of September 30, 2022 and March 31, 2022.

1,014,015,081 and 1,011,381,988 shares issued as of December 31, 2022 and March 31, 2022, respectively;

1,013,915,081 and 1,011,281,988 shares outstanding as of December 31, 2022 and March 31, 2022, respectively

Additional paid-in capital

Treasury stock;

100,000 shares as of September 30, 2022 and March 31, 2022;

100,000 shares as of December 31, 2022 and March 31, 2022;

Accumulated deficit

6 unchanged sentences

AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS

For the Three Months Ended

September 30,

For the Six Months Ended

September 30,

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

For the Three Months Ended December 31,

For the Nine Months Ended December 31,

Manufacturing fees

12 unchanged sentences

Interest expense and amortization of debt issuance costs

Gain on sale of ANDA

Interest income

Other (expense) income, net

Income from operations before income taxes

Other income, net

Income before income taxes

Income tax expense

13 unchanged sentences

1,010,416,823

accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

The accompanying notes are an integral part

of these unaudited condensed consolidated financial statements.

PHARMACEUTICALS, INC.

AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

Series J Preferred Stock

Additional Paid-In

Treasury Stock

6 unchanged sentences

Non-cash compensation through the issuance of employee stock options

Shares issued in payment of salaries

Balance at June 30, 2022

11 unchanged sentences

$ ( 138,238,722 )

Non-cash compensation through the issuance of employee stock options

Balance at December 31, 2022

1,014,015,081

$ 164,735,980

$ ( 306,841 )

$ ( 135,268,644 )

accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

ELITE PHARMACEUTICALS, INC.

AND SUBSIDIARY

CONDENSED CONSOLIDATED

STATEMENTS OF SHAREHOLDERS’ EQUITY

Series J Preferred Stock

Additional Paid-In

Treasury Stock

Total Shareholders’

Shareholders’

Balance as of March 31, 2021

16 unchanged sentences

$ ( 144,771,894 )

The accompanying notes are an integral part

of these unaudited condensed consolidated financial statements.

Non-cash compensation through the issuance of employee stock options

Balance at December 31, 2021

1,011,381,988

$ 164,573,491

$ ( 306,841 )

$ ( 142,488,481 )

accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

PHARMACEUTICALS, INC.

AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Six Months Ended September 30,

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Nine Months Ended

CASH FLOWS FROM OPERATING ACTIVITIES:

32 unchanged sentences

Cash paid for interest

Cash paid for income taxes

Financing of equipment purchases and insurance renewal

1 unchanged sentence

Supplemental non-cash amounts of lease liabilities arising from obtaining right of use assets

The accompanying notes are an integral part

of these unaudited condensed consolidated financial statements.

accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

PHARMACEUTICALS, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

20 unchanged sentences

which are, in the opinion of management, necessary for a fair presentation of such statements.

The results of operations for the six

months ended September 30, 2022 are not necessarily indicative of the results that may be expected for the entire year.

The results of operations for the nine

months ended December 31, 2022 are not necessarily indicative of the results that may be expected for the entire year.

Accounting Standards Board (“FASB”) Accounting Standards Codification 280 (“ASC 280”), Segment Reporting ,

25 unchanged sentences

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

ASC 606, Revenue from Contacts with Customers (“ASC 606”), the Company recognizes revenue when the customer obtains

56 unchanged sentences

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

management judgment is required to determine the level of effort required under an arrangement and the period over which the Company

10 unchanged sentences

None of the Company’s contracts contained a significant financing

component as of September 30, 2022.

component as of December 31, 2022.

accordance with ASC 606-10-55-65, royalties are recognized when the subsequent sale of the customer’s products occurs.

11 unchanged sentences

OF DISAGGREGATION OF REVENUE

For the Three Months Ended September 30,

For the Six Months Ended September 30,

For the Three Months Ended December 31,

For the Nine Months Ended December 31,

Licensing fees

4 unchanged sentences

Total revenue

PHARMACEUTICALS, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.

4 unchanged sentences

financial institutions and, to date has not experienced losses on any of its balances.

of September 30, 2022, and March 31, 2022, the Company had $ 405,164 and $ 405,039 , of restricted cash, respectively, related to debt service

PHARMACEUTICALS, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

of December 31, 2022, and March 31, 2022, the Company had $ 405,164 and $ 405,039 , of restricted cash, respectively, related to debt service

reserve in regard to the New Jersey Economic Development Authority (“NJEDA”) bonds (see Note 6).

28 unchanged sentences

and slower growth rates.

of September 30, 2022, the Company did not identify any indicators of impairment.

of December 31, 2022, the Company did not identify any indicators of impairment.

also see Note 4 for further details on intangible assets.

PHARMACEUTICALS, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

and Development

9 unchanged sentences

of complex judgments about future events and can rely heavily on estimates and assumptions.

PHARMACEUTICALS, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

taxes are accounted for under the asset and liability method.

12 unchanged sentences

tax jurisdiction until the applicable statutes of limitation expire.

As of September 30, 2022, a summary of the tax years that remain

As of December 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.

The Company did not record unrecognized tax positions for the six months ended September 30, 2022.

PHARMACEUTICALS, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

United States – Federal, 2016 and forward.

The Company did not record

unrecognized tax positions for the nine months ended December 31, 2022.

and Preferred Shares

16 unchanged sentences

Company’s Common Stock.

the nine months ended December 31, 2022, the Company entered into an agreement with Pyros Pharmaceuticals, Inc.

pursuant to which the Company sold to Pyros its rights in and to the Company’s approved abbreviated new drug applications (ANDAs)

for its generic Sabril drug.

The Company sold its rights to Pyros for $ 1,000,000 , which was recorded as gain on sale of ANDA during the

nine months ended December 31, 2022.

There is no further action required by the Company regarding the rights which would affect future

conjunction with the sale of its Product to Pyros, the Company executed a Manufacturing and Supply agreement (the “Pyros Agreement”)

Under the terms of the Pyros Agreement, the Company will receive an agreed-upon price per drug for the manufacturing and

packaging of Sabril over a term of three years.

Revenue per the Pyros Agreement will be recognized as control of the manufactured and

supplied drugs is transferred to Pyros (at the time of delivery).

Per Share Attributable to Common Shareholders ’

8 unchanged sentences

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONDENSED 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 Three Months Ended September 30,

For the Six Months Ended September 30,

For the Three Months Ended December 31,

For the Nine Months Ended December 31,

Net income - basic

38 unchanged sentences

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

on a Recurring Basis

2 unchanged sentences

OF LIABILITIES MEASURED AT FAIR VALUE ON A RECURRING BASIS

Amount at Fair

Fair Value Measurement Using

Amount at Fair Value

Balance as of March 31, 2022

Change in fair value of derivative instruments

Balance as of September 30, 2022

Balance as of December 31, 2022

Note 11 for specific inputs used in determining fair value.

24 unchanged sentences

consisted of the following:

September 30, 2022

December 31, 2022

March 31, 2022

5 unchanged sentences

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

PROPERTY AND EQUIPMENT, NET

1 unchanged sentence

OF PROPERTY AND EQUIPMENT

September 30, 2022

December 31, 2022

March 31, 2022

8 unchanged sentences

Property and equipment, net

expense was $ 316,007 and $ 295,491 for the three months ended September 30, 2022 and 2021, respectively.

and $ 608,755 and $ 604,648 for

the six months ended September 30, 2022 and 2021, respectively.

expense was $ 314,610 and $ 293,014 for the three months ended December 31, 2022 and 2021, respectively, and $ 923,365 and $ 897,662 for

the nine months ended December 31, 2022 and 2021, respectively.

INTANGIBLE ASSETS

following table summarizes the Company’s intangible assets:

OF INTANGIBLE ASSETS

September 30, 2022

SCHEDULE OF INTANGIBLE ASSETS

December 31, 2022

Patent application costs

11 unchanged sentences

ACCRUED EXPENSES

of September 30, 2022 and March 31, 2022, the Company’s accrued expenses consisted of the following:

of December 31, 2022 and March 31, 2022, the Company’s accrued expenses consisted of the following:

OF ACCRUED EXPENSES

September 30, 2022

December 31, 2022

March 31, 2022

17 unchanged sentences

OF BONDS PAYABLE LIABILITY

September 30, 2022

December 31, 2022

March 31, 2022

14 unchanged sentences

Long term portion of bonds payable, net of bond offering costs

expense was $ 3,539 and $ 3,545 for the three months ended September 30, 2022 and 2021, $ 7,085 and $ 7,090 for the six months ended September

30, 2022 and 2021, respectively.

As of September 30, 2022 and March 31, 2022, interest payable was $ 6,744 and $ 7,367 , respectively.

expense was $ 3,544 and $ 3,545 for the three months ended December 31, 2022 and 2021, and $ 10,629 and $ 10,635 for the nine months ended

December 31, 2022 and 2021, respectively.

As of December 31, 2022 and March 31, 2022, interest payable was $ 6,744 and $ 7,367 , respectively.

PHARMACEUTICALS, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

of bonds for the next five years are as follows:

11 unchanged sentences

The total transaction costs

associated with the EWB Loans incurred as of September 30, 2022, were $ 40,120 , which are being amortized on a monthly basis over five

associated with the EWB Loans incurred as of December 31, 2022, were $ 40,120 , which are being amortized on a monthly basis over five

years, beginning in April 2022.

4 unchanged sentences

ratio of 1.25 to 1.00 and restrictions on mergers or sales of assets and debt borrowings.

As of September 30, 2022, the Company is in

As of December 31, 2022, the Company is in

compliance with each financial covenant and the Company has not used any of the Revolving line of credit.

4 unchanged sentences

The total transaction costs

associated with the EWB Mortgage Loan incurred as of September 30, 2022, were $ 34,952 , which are being amortized on a monthly basis over

associated with the EWB Mortgage Loan incurred as of December 31, 2022, were $ 34,952 , which are being amortized on a monthly basis over

ten years, beginning in July 2022.

3 unchanged sentences

of 1.50 to 1.00.

As of September 30, 2022, the Company was in compliance with each financial covenant .

As of December 31, 2022, the Company was in compliance with each financial covenant.

payable consisted of the following:

OF LOANS PAYABLE

September 30, 2022

December 31, 2022

March 31, 2022

Equipment and insurance financing and mortgage loans payable, between 3.30 % and 12.02 % interest and maturing between October 2022 and June 2032

Equipment and insurance financing and mortgage loans payable, between 4.75 % and 12.02 % interest and maturing between March 2023 and June 2032

Current portion of loans payable

Long-term portion of loans payable

interest expense associated with the loans payable was $ 83,686 and $ 17,001 for the three months ended September 30, 2022 and 2021, respectively,

and $ 261,265 and $ 35,598 for the six months ended September 30, 2022 and 2021, respectively.

interest expense associated with the loans payable was $ 317,844 and $ 14,692 for the three months ended December 31, 2022 and 2021, respectively,

and $ 579,109 and $ 50,290 for the nine months ended December 31, 2022 and 2021, respectively.

PHARMACEUTICALS, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

principal payments for the next five years are as follows:

1 unchanged sentence

Years ending March 31,

2023 (excluding the six months ended September 30, 2022)

2023 (excluding the nine months ended December 31, 2022)

2028 and thereafter

1 unchanged sentence

DEFERRED REVENUE

revenues in the aggregate amount of $ 38,889 as of September 30, 2022, were comprised of a current component of $ 13,333 and a long-term

revenues in the aggregate amount of $ 35,556 as of December 31, 2022, were comprised of a current component of $ 13,333 and a long-term

component of $ 22,223 .

10 unchanged sentences

lease”) which began in 2010.

On June 30, 2021, the Company exercised a renewal option, with such option

including a term that begins on January 1, 2022 and expires on December 31, 2026.

On June 30, 2021, the Company exercised a renewal option, with such option including

a term that begins on January 1, 2022 and expires on December 31, 2026.

The Ludlow Ave.

lease was terminated on July 1,

2022, when the Company purchased the underlying property.

lease was terminated on July 1, 2022, when the

Company purchased the underlying property.

October 2020, the Company entered into an operating lease for office space in Pompano Beach, Florida (the “Pompano Office Lease”).

1 unchanged sentence

Pompano Office has a term of three years, ending on October 31, 2023.

April 8, 2022, the Company entered into an Agreement for Sale and Purchase of Real Estate to purchase the building located at 135-137

Ludlow Avenue in Northvale, NJ.

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 closing of the Agreement

for Sale and Purchase of Real Estate occurred on July 1, 2022 (refer to Note 7).

Company assesses whether an arrangement is a lease or contains a lease at inception.

8 unchanged sentences

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

expense is recorded on the straight-line basis.

Rent expense under the leases for the three months ended September 30, 2022 and 2021

was $ 6,330 and $ 62,877 , respectively, and $ 70,908 and $ 125,754 for the six months ended September 30, 2022 and 2021, respectively.

expense is recorded in general and administrative expense in the unaudited condensed consolidated statements of operations.

Rent expense under the leases for the three months ended December 31, 2022 and 2021 was

$ 6,330 and $ 63,249 , respectively, and $ 77,238 and $ 189,003 for the nine months ended December 31, 2022 and 2021, respectively.

is recorded in general and administrative expense in the unaudited condensed consolidated statements of operations.

table below shows the future minimum rental payments, exclusive of taxes, insurance and other costs, under the Ludlow Ave.

lease and the Pompano Office Lease:

modified lease

and the Pompano Office Lease:

OF FUTURE MINIMUM RENTAL PAYMENTS

Years ending March 31,

2023 (excluding the six months ended September 30, 2022)

2023 (excluding the nine months ended December 31, 2022)

Total future minimum lease payments

8 unchanged sentences

Upon settlement of the liability, the Company records either a gain or

As of September 30, 2022, and March 31, 2022, the Company had a liability of $ 0 and $ 38,780 , respectively, recorded as other long-term

As of December 31, 2022, and March 31, 2022, the Company had a liability of $ 0 and $ 38,780 , respectively, recorded as other long-term

DERIVATIVE FINANCIAL INSTRUMENTS – WARRANTS

3 unchanged sentences

described in this note below.

The warrant share balance is 79,008,661 as of September 30, 2022, and March 31, 2022 with a weighted average

exercise price of $ 0.1521 as of September 30, 2022, and March 31, 2022.

The warrant share balance is 79,008,661 as of December 31, 2022, and March 31, 2022 with a weighted average

exercise price of $ 0.1521 as of December 31, 2022, and March 31, 2022.

April 28, 2017, the Company entered into an Exchange Agreement with Nasrat Hakim (“Hakim”), the Chairman of the Board, President,

19 unchanged sentences

OF FAIR VALUE OF WARRANTS ISSUED

September 30, 2022

December 31, 2022

March 31, 2022

3 unchanged sentences

Risk free rate

changes in warrants (Level 3 financial instruments) measured at fair value on a recurring basis for the six months ended September 30,

changes in warrants (Level 3 financial instruments) measured at fair value on a recurring basis for the nine months ended December 31,

2022 were as follows:

2 unchanged sentences

Change in fair value of derivative financial instruments - warrants

Balance at September 30, 2022

Balance at December 31, 2022

SHAREHOLDERS’ EQUITY

4 unchanged sentences

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 six months ended September

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

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

of September 30, 2022, the Company has issued an aggregate of 5,975,857 shares of Common Stock for net proceeds of $ 469,105 to Lincoln

of December 31, 2022, the Company has issued an aggregate of 5,975,857 shares of Common Stock for net proceeds of $ 469,105 to Lincoln

Park as initial commitment shares.

PHARMACEUTICALS, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

STOCK-BASED COMPENSATION

5 unchanged sentences

the valuation of such shares being calculated on quarterly basis and equal to the average closing price of the Company’s Common

of September 30, 2022, the Company accrued director’s fees totaling $ 45,000 , which will be paid via cash payments totaling $ 15,000

of December 31, 2022, the Company accrued director’s fees totaling $ 67,500 , which will be paid via cash payments totaling $ 22,500

and the issuance of 1,193,253 shares of Common Stock.

The Company anticipates that these shares of Common Stock will be issued prior to

the end of the current fiscal year.

The Company anticipates that these shares of Common Stock will be issued prior

to the end of the current fiscal year.

Employee/Consultant Compensation

3 unchanged sentences

and equal to the average closing price of the Company’s Common Stock.

the six months ended September 30, 2022, the Company accrued salaries totaling $ 250,000 owed to the Company’s President and Chief

Executive Officer and certain other employees which will be paid via the issuance of 6,109,277 shares of Common Stock.

of September 30, 2022, the Company owed its President and Chief Executive Officer and certain other employees’ salaries totaling

the nine months ended December 31, 2022, the Company accrued salaries totaling $ 375,000 owed to the Company’s President and Chief

Executive Officer which will be paid via the issuance of 10,000,176 shares of Common Stock.

of December 31, 2022, the Company owed its President and Chief Executive Officer and certain other employees’ salaries totaling

$ 4,000,000 which will be paid via the issuance of 60,190,955 shares of Common Stock.

9 unchanged sentences

A summary of the activity of Company’s 2014 Stock Option Plan

for the six months ended September 30, 2022 is as follows:

for the nine months ended December 31, 2022 is as follows:

OF STOCK OPTION PLAN

Exercise Price

Weighted Average

Remaining Contractual

Shares Underlying Options

Weighted Average Exercise Price

Weighted Average Remaining

Contractual Term (in years)

Aggregate Intrinsic

Outstanding at March 31, 2022

Outstanding at September 30, 2022

Exercisable at September 30, 2022

Outstanding at December 31, 2022

Exercisable at December 31, 2022

granted during the nine months ended December 31, 2022 were valued using the Black Scholes model with the following assumptions:

OF OPTIONS GRANTED

December 31, 2022

Exercise Price

Dividend Yield

Expected Volatility

Risk Free Rate

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 September 30, 2022 and March 31, 2022 of $ 0.10 and $ 0.10 , respectively.

of September 30, 2022, there was $ 38,357 in unrecognized stock based compensation expense that will be recognized over 2.5 years.

and the quoted price of the Company’s Common Stock as of December 31, 2022 and March 31, 2022 of $ 0.03 and $ 0.03 , respectively.

of December 31, 2022, there was $ 95,888 in unrecognized stock based compensation expense that will be recognized over 2.3 years.

CONCENTRATIONS AND CREDIT RISK

customers accounted for approximately 96 %

of the Company’s revenues for the six months ended September 30, 2022.

These two customers accounted for approximately 85 % and 11 % of revenues each, respectively.

customers accounted for approximately 95 % of the Company’s revenues for the six months ended September 30, 2021.

of the Company’s revenues for the nine months ended December 31, 2022.

These two customers accounted for approximately 85 %

of revenues each, respectively.

The same two customers accounted for 85 % and 12 % of revenues each, respectively, for the three months ended December

customers accounted for approximately 96 % of the Company’s revenues for the nine months ended December 31, 2021.

These two customers

1 unchanged sentence

The same two customers accounted for 84 % and 9 % of revenues each,

respectively, for the three months ended September 30, 2021.

customers accounted for approximately 97 % of the Company’s accounts receivable as of September 30, 2022.

These two customers accounted

for approximately 79 % and 18 % of accounts receivable each, respectively.

customers accounted for approximately 91 % the Company’s accounts receivable as of March 31, 2022.

These two customers accounted

for approximately 78 % and 13 % of accounts receivable each, respectively.

supplier accounted for approximately 62 % of the Company’s purchases of raw materials for the six months ended September 30, 2022.

supplier accounted for approximately 61 % of the Company’s purchases of raw materials for the six months ended September 30, 2021.

respectively, for the three months ended December 31, 2021.

customer accounted for approximately 89 % of the Company’s accounts receivable as of December 31, 2022.

PHARMACEUTICALS, INC.

1 unchanged sentence

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

customers accounted for approximately 91 % the Company’s accounts receivable as of March 31, 2022.

These two customers accounted

for approximately 78 % and 13 % of accounts receivable each, respectively.

supplier accounted for approximately 62 % of the Company’s purchases of raw materials for the nine months ended December 31, 2022.

supplier accounted for approximately 55 % of the Company’s purchases of raw materials for the nine months ended December 31, 2021.

SEGMENT RESULTS

13 unchanged sentences

OF SELECTED INFORMATION FOR REPORTABLE SEGMENTS

For the Three Months Ended September 30,

For the Six Months Ended September 30,

For the Three Months Ended December 31,

For the Nine Months Ended

Operating Income by Segment

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 unaudited condensed consolidated statements of operations.

table below reconciles the Company’s operating income by segment to income before income taxes as reported in the Company’s

unaudited condensed consolidated statements of operations.

OF OPERATING LOSS BY SEGMENT TO (LOSS) INCOME FROM OPERATIONS

For the Three Months Ended September 30,

For the Six Months Ended September 30,

For the Three Months Ended December 31,

For the Nine Months Ended December 31,

Operating income by segment

7 unchanged sentences

Change in fair value of derivative instruments

Income from operations before income taxes

Income before income taxes

PHARMACEUTICALS, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

RELATED PARTY AGREEMENTS WITH MIKAH PHARMA, LLC

8 unchanged sentences

against accrued interest due and owing to Mikah pursuant to the Secured Promissory Note, dated May 15, 2017, issued by the Company to

PHARMACEUTICALS, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

May 2020, SunGen Pharma LLC (“SunGen”), pursuant to an asset purchase agreement, assigned its rights and obligations under

12 unchanged sentences

Initially two generic products were identified for the parties to develop.

Company’s effective tax rate was 11.5 % and income tax expense for the six months ended September 30, 2022 was $ 11,587 .

Company’s effective tax rate was 11.5 % and income tax expense for the nine months ended December 31, 2022 was $ 50,837 .

The Company’s

effective tax rate was 10.75 % and income tax expense was $ 4,000 for the six months ended September 30, 2021.

effective tax rate was 10.75 % and income tax expense was $ 4,000 for the nine months ended December 31, 2021.

The Company has evaluated its

19 unchanged sentences

the Company has taken to date are, without limitation, further described below.

PHARMACEUTICALS, INC.

AND SUBSIDIARY

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Company has taken and will continue to take, proactive measures to provide for the well-being of its workforce while continuing to safely

6 unchanged sentences

and Supply Chain

the six months ended September 30, 2022, and as of the date of this Quarterly Report on Form 10-Q, the Company has not experienced material,

the nine months ended December 31, 2022, and as of the date of this Quarterly Report on Form 10-Q, the Company has not experienced material,

detrimental issues related to COVID-19 in its manufacturing, supply chain, quality assurance and regulatory compliance activities, and

8 unchanged sentences

SUBSEQUENT EVENTS

November 2, 2022, in a press release, the Company reported positive results from pivotal fed and fasted bioequivalence studies for an

undisclosed extended-release generic drug product in a class of medications called dopamine agonists.

The results indicate that the generic

product is bioequivalent to the branded product.

studies were single-dose crossover comparative bioavailability studies in healthy male and female volunteers in both the fed and fasting

The results indicate that the generic product is bioequivalent to the branded

The Company is compiling the data for this product to file an Abbreviated New

Drug Application with the US Food and Drug Administration.

November 10, 2022, in an 8-K, the Company reported the termination of the License, Supply, and Distribution Agreement with Lannett Company,

Inc for Vigabatrin, 500 mg.

effective as of November 9, 2022.

marketing rights will return at that time to Elite.

through filing]

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

What changed 10-Q

Item 1. Financial Statements