What changed in this filing

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Item 9A. Controls and Procedures

2026-06-29 compared with 2025-06-30 · 687 added, 766 removed, 1382 unchanged (51% of the section changed)

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material weaknesses in the design and operation components of our internal controls within the COSO framework:

were unable to formalize and implement revised controls, policies and procedure documentation to evidence a system of internal controls,

including testing of such revised controls, that was consistent with available personnel and resources;

failed to maintain effective control activities over our control environment, risk assessment, information technology and monitoring

components and;

had insufficient segregation of duties, oversight of work performed and lack of compensating controls in our finance and accounting

functions due to limited personnel and resources.

were unable to formalize and implement revised controls, policies and procedure documentation

to evidence a system of internal controls, including testing of such revised controls, that

was consistent with available personnel and resources;

failed to maintain effective control activities over our control environment, risk assessment and response, information technology

and communication, objective setting, event identification, control activities and monitoring components and;

had insufficient segregation of duties, oversight of work performed and lack of compensating

controls in our finance and accounting functions due to limited personnel and resources.

Annual Report on Internal Control Over Financial Reporting

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efforts to address material weaknesses in internal controls over financial report ing

intend to revise the existing control environment documentation, designing and implementing controls, policies and procedure documentation

that is consistent with our current personnel, resources and capabilities, with significant focus on controls relating to financial oversight,

management, analysis and reporting of operations emanating from the Company’s manufacturing, marketing and distribution of its

Elite Label product line.

Please note that these material weaknesses cannot be considered remediated until the applicable

remedial controls operate for a sufficient period of time, allowing management, through testing, to reach a conclusion on such controls

design and operational effectiveness.

are in the process of revising and expanding control environment documentation and increasing personnel resources needed to support

the Company’s growth.

We have begun designing and implementing controls, policies and procedure documentation that are

consistent with current and planned personnel, resources and capabilities, with significant focus on controls relating to financial

oversight, management, analysis and reporting of operations emanating from the Company’s manufacturing, marketing and

distribution of its Elite Label product line as well as enhanced segregation of duties and testing of control procedures.

note that these material weaknesses cannot be considered remediated until the applicable remedial controls operate for a sufficient

period of time, allowing management, through testing, to reach a conclusion on such controls design and operational

effectiveness.

OTHER INFORMATION .

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Director/Officer

Chairman of the Board of Directors

of the Board of Directors

Commercial Officer

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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.

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 2015, Mr.

Whitnell has provided financial advisory services, primarily to the healthcare

He worked for Southside Master, a specialty pharmacy company from September 2018 to June 2022, where he served as Chief

Financial Officer.

From April 2015 to August 2018, Mr.

Whitnell provided financial advisory services to various Private Equity

portfolio companies, including Lifewatch Services (acquired by BioTelemetry), where he served as Vice President, Finance &

Whitnell was the Chief Financial Officer for ReliefBand Medical Technologies, a medical device company, from June 2010 to March 2015.

2009 to May 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., a specialty pharmaceuticals company.

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

for Southside Master, a specialty pharmacy company from September 2018 to June 2022, where he served as Chief Financial Officer.

April 2015 to August 2018, Mr.

Whitnell provided financial advisory services to various Private Equity portfolio companies, including

Lifewatch Services (acquired by BioTelemetry), where he served as Vice President, Finance & Controller.

Whitnell was the Chief

Financial Officer for ReliefBand Medical Technologies, a medical device company, from June 2010 to March 2015.

From July 2009 to May

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

June 2004 to June 2009, Mr.

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

From 2002 to 2004, Mr.

Whitnell was Vice President of Finance and Treasurer for Ovation Pharmaceuticals (acquired by

Whitnell was Vice President of Finance and Treasurer for Ovation Pharmaceuticals (acquired by Lundbeck).

From 1997 to 2001, Mr.

Whitnell was Vice President of Finance and Treasurer for MediChem Research (acquired by deCODE

Prior to 1997, Mr.

Whitnell was Vice President of Finance and Treasurer for MediChem Research (acquired by deCODE genetics).

Whitnell held various finance positions with Akzo Nobel and Motorola.

Whitnell began his career as

an auditor with Arthur Andersen & Co.

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.

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 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.

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.

From 1990 to 2013, Davis served as the operating officer of ECR

Pharmaceuticals (“ECR”), of which he was a founding member.

HiTech Pharmacal acquired the privately held ECR in 2009 and

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 (“ECR”), of which he

was a founding member.

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

Caskey continued in his role until retiring in

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.

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.

Prior to ECR, Mr.

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

Robins for 18 years in various field and home office management

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

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From April 2008 to February 2020, Mr.

employed by Sandoz and served in positions of increasing responsibilities beginning with Country Head & Managing Director of Bulgaria

from 2008 to 2011.

was employed by Sandoz and served in positions of increasing responsibilities beginning with Country Head & Managing Director of

Bulgaria from 2008 to 2011.

From 2011 to 2013, Mr.

Kirkov served as Sandoz’s Business Unit Head, Branded Prescription Generics in Russia,

and most recently, from January 2013 to February 2020, served as Sandoz’s Executive Director, Commercial Operations.

brings with him a broad range of experience in the areas of business development, operationalization of commercial strategy, and implementation

of retail and wholesale channel sales operations, having overseen sales portfolios consisting of 400+ product families, and 1,500+ SKUs

covering both generic and branded products.

Kirkov has a Bachelor of Science in Mechanical Engineering/Engineering Management from the

University of Ottawa, two Masters of Science degrees in Naval Architecture and Ocean Systems Management, respectively, from the Massachusetts

Institute of Technology, a Master of Science in Applied Positive Psychology and Coaching from the University of East London, and an MBA

from the University of Durham.

Kirkov served as Sandoz’s Business Unit Head, Branded Prescription Generics

in Russia, and most recently, from January 2013 to February 2020, served as Sandoz’s Executive Director, Commercial Operations.

Kirkov brings with him a broad range of experience in the areas of business development, operationalization of commercial strategy,

and implementation of retail and wholesale channel sales operations, having overseen sales portfolios consisting of 400+ product families,

and 1,500+ SKUs covering both generic and branded products.

Kirkov has a Bachelor of Science in Mechanical Engineering/Engineering Management from the University of Ottawa, two Masters of Science

degrees in Naval Architecture and Ocean Systems Management, respectively, from the Massachusetts Institute of Technology, a Master of

Science in Applied Positive Psychology and Coaching from the University of East London, and an MBA from the University of Durham.

Plassche has served as the Company’s 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.

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.

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.

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.

was employed by Schering-Plough, progressing steadily through multiple disciplines, locations, and technical operations sectors with

increasing levels of responsibility.

Plassche was employed by Schering-Plough,

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

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

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In between Mr.

Ward’s roles with the Company, he served as Chief Financial Officer of Mirror Biologics, a privately held biotech organization

from September 2022 to July 2023 and as CFO of Enveric Biosciences, a NASDAQ listed biotech company, from May 2021 to September 2022.

Prior to initially joining the Company, from July 2005 to April 2009, Mr.

Ward filled multiple finance and supply chain leadership roles

with the Actavis Group and its U.S.

roles with the Company, he served as Chief Financial Officer of Mirror Biologics, a privately held biotech organization from September

2022 to July 2023 and as CFO of Enveric Biosciences, a NASDAQ listed biotech company, from May 2021 to September 2022.

Prior to initially

joining the Company, from July 2005 to April 2009, Mr.

Ward filled multiple finance and supply chain leadership roles with the Actavis

Group and its U.S.

subsidiary, Amide Pharmaceuticals.

From September 2004 to June 2005, Mr.

Ward was a consultant, mainly

engaged in improving internal controls and supporting Sarbanes Oxley compliance of Centennial Communications, Inc, a NASDAQ listed wireless

communications provider.

Ward was a consultant, mainly engaged in

improving internal controls and supporting Sarbanes Oxley compliance of Centennial Communications, Inc, a NASDAQ listed wireless communications

Ward began his career as a certified public accountant in the audit department of KPMG.

in Accounting from Long Island University from where he graduated summa cum laude.

Ward holds a B.S.

in Accounting

from Long Island University from where he graduated summa cum laude.

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

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Davis Caskey and Mr.

Nasrat Hakim.

The Board of Directors has determined that Messrs.

1 unchanged sentence

Dash are independent and Mr.

qualified as an audit committee financial expert.

Whitnell is qualified

as an audit committee financial expert.

The Board of Directors has determined that Messrs.

Whitnell, Caskey and Dr.

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).

Dash 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).

members of the Nominating Committee are Mr.

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Barry Dash, and Mr.

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.

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.

members of the Compensation Committee are Dr.

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Company has adopted insider trading policies and procedures governing the purchase, sale and/or other dispositions of its securities

by directors, officers and employees of the Company, that are reasonably designed to promote compliance with insider trading

laws, rules and regulations and any listing standards applicable to the Company.

Such policies are described in our Code of Business Conduct and Ethics filed as Exhibit 14.1 to this Annual Report

on Form 10-K.

by directors, officers and employees of the Company, that are reasonably designed to promote compliance with insider trading laws, rules

and regulations and any listing standards applicable to the Company.

Such policies are described in our Code of Business Conduct and

Ethics filed as Exhibit 14.1 to this Annual Report on Form 10-K.

EXECUTIVE COMPENSATION

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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 and equity awards are subject

to ratification by the full Board of Directors.

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 and equity awards are subject to ratification by the full Board of Directors.

The members of the Compensation Committee are Dr.

Barry Dash (Chairman of the

Compensation Committee), and Messrs, Jeffrey Whitnell, Davis Caskey and Nasrat Hakim.

The Compensation 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, 2025,

the Compensation Committee did not engage any advisors.

Barry Dash (Chairman of the Compensation Committee), and Messrs Jeffrey Whitnell,

Davis Caskey and Nasrat Hakim.

The Compensation 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, 2026, the Compensation Committee did not engage any advisors.

Executive Officers

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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.

typically in the form of stock option grants.

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

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paid in cash and in equity for each Named Executive Officer during the fiscal year ended March 31, 2026.

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.

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.

For the fiscal year ended March 31, 2026,

31, 2025, Mr.

Plassche received a discretionary cash bonus of $178,482 and Mr.

received a discretionary cash bonus of $137,500.

Ward received a discretionary cash bonus of $141,625.

was awarded a discretionary cash bonus of $5,000,000 that was accrued and owing as of March 31, 2026 and paid subsequent to March 31,

In the section below titled “Agreements with Named Executive Officers,” we describe Mr.

Ward’s guaranteed annual bonus.

addition to cash compensation, our Named Executive Officers from time to time are granted stock options.

All options granted include

vesting periods consisting of one-third of total options granted vesting on each of the first, second and third anniversaries of the

grant date, with current employment being a requisite for all vesting.

Options granted expire the earlier of ten years from the

grant date or 90 days subsequent to the employee’s last date of employment.

There were no stock options issued to our Named

Executive Officers during the fiscal year ended March 31, 2025.

All Options granted

typically include vesting periods consisting of one-third of total options granted vesting on each of the first, second and third

anniversaries of the grant date, with current employment being a requisite for all vesting.

Options granted expire the earlier of

ten years from the grant date or 90 days subsequent to the employee’s last date of employment.

There were no stock options

granted to our Named Executive Officers during the fiscal year ended March 31, 2026.

we do not have a formal policy regarding the timing of awards of stock options, stock appreciation rights (“SARs”) and/or

6 unchanged sentences

basis subject to certain limits.

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

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 $500.

Plassche receives a

monthly car allowance of up to $500.

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

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.

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.

The value of the

perquisites we provide are taxable to the Named Executive Officers and the aggregate incremental cost to us for providing these

perquisites are 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 “ All Other

Compensation ” column of the Summary Compensation Table.

with Named Executive Officers

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

seniority, a car allowance of $1,500 and housing allowance of $5,000 per month, respectively.

The Hakim Employment Agreement

contains confidentiality, non-competition and other standard restrictive covenants.

seniority, a car allowance of $1,500 per month and housing allowance of $5,000 per month, respectively.

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.

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.

The Hakim Employment Agreement shall also automatically terminate upon Mr.

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

effective resignation date.

Hakim’s death.

can terminate the Hakim Employment Agreement by resigning, provided he gives notice at least 60 days prior to the effective resignation

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

reimbursement of any reasonable and necessary business expenses, all through the date of termination (“Basic Termination

Hakim is terminated because of disability or death, in addition to Basic Termination Benefits, he is

entitled to a pro rata discretionary bonus, if any, as awarded by the Board in its sole discretion, from the beginning of the

calendar year of termination through the date of termination, payable in a lump sum.

In addition, in the event of the termination of

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, subject to his execution of a release.

reimbursement of any reasonable and necessary business expenses, all through the date of termination, payable in stock (“Basic

Termination Benefits”).

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, 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 discretionary bonus, if any, as awarded by the Board

in its sole discretion, from the beginning of the calendar year of termination through the date of termination and an amount equal

to two years’ annual base salary, all payable in a lump sum within 60 days of the termination date, and 12 months of partial

health benefits continuation under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), at

active employee rates, subject to his election of COBRA coverage, execution of a release and 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,

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

effect upon the date of termination, less applicable deductions, and withholdings, in a lump sum within 60 days, and two years of

health care continuation benefits.

Hakim without cause, in addition to Basic Termination Benefits, Mr.

Hakim is entitled to

an amount equal to two years’ annual base salary, payable in stock as a lump sum within 60 days of the termination date, and

12 months of partial health benefits continuation under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended

(“COBRA”) equal to amounts the Company paid immediately prior to his separation of employment, subject to his timely

election of COBRA coverage, execution of a release and 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 discretionary bonus and payment in an amount equal to two year’s annual base salary in effect upon

the date of termination, less applicable deductions, and withholdings, in a lump sum within 60 days, and two years of health care continuation

In addition, all outstanding unvested equity held by Mr.

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

Douglas Plassche (the “Plassche Employment Agreement”).

Douglas Plassche (as modified by the retention agreement

dated February 18, 2022, 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 annual stock award in an amount equal to $25,000.

The stock award component of Mr.

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, 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 expired, unexercised, ten years from the date of issuance in July of 2023.

Plassche serves as an at-will employee, in the position of Vice President of Operations, commencing on August 12, 2013.

his tenure, Mr.

Plassche’s compensation has been increased from time to time by the Board and the annual stock award has been

On March 1, 2026, Mr.

Plassche’s compensation was adjusted to include an annual salary of $374,812, payable in

accordance with the Company’s payroll practices.

In addition, Mr.

Plassche is entitled to a monthly automobile allowance of

$500 and an annual bonus based upon the achievement of agreed milestones and at the discretion of the Company and its Chief

Executive Officer.

Plassche Employment Agreement also provides for the granting of 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 expired, unexercised, ten years from the date of issuance, in accordance with the terms and

conditions of the option agreement.

Plassche’s employment is terminable by either party.

2 unchanged sentences

Plassche is entitled

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

his tenure, Mr.

Plassche’s compensation has been increased from time to time by the Board and the annual stock award has been removed.

March 1, 2025, Mr.

Plassche’s compensation was adjusted to include an annual salary of $356,964 payable in accordance with the

Company’s payroll practices.

February 18, 2022, Mr.

Plassche entered into a second retention agreement with the Company (the “2022 Plassche Retention Agreement”),

as an incentive for his continued employment and cooperation during a transitional period for the Company.

Pursuant to the 2022 Plassche

Retention Agreement, Mr.

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.

The retention payments have been made to Mr.

Plassche in accordance with

2022 Plassche Retention Agreement.

to an amount equal to six months of his then current base annual salary.

September 5, 2023, the Company entered into an employment agreement with Mr.

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Ward’s employment is terminated by the Company without cause, then the Company must pay Mr.

in addition to any then-accrued and unpaid obligations owed to him, severance payments equal to two months of his then-current base salary

for each year of service, up to a maximum of 12 months, and 12 months of continued health insurance continuation under COBRA, at active

employee rates, in each case, subject to his execution of a release and his compliance with applicable restrictive covenants.

Ward, in addition to any then-accrued and unpaid obligations owed to him, severance payments equal to two months of his then-current

base salary for each year of service, up to a maximum of 12 months, and 12 months of continued health insurance continuation under

COBRA equal to amounts the Company paid immediately prior to his separation of employment, at active employee rates, in each case, subject to his execution of a release and his compliance with applicable restrictive

Ward Employment Agreement also contains covenants restricting Mr.

3 unchanged sentences

from disclosing confidential information regarding the Company at any time.

his tenure, Mr.

Ward’s compensation has been increased from time to time by the Board.

On March 1, 2026, Mr.

Ward’s compensation

was adjusted to include an annual salary of $297,413, payable in accordance with the Company’s payroll practices.

Payments Upon Termination or Change of Control

7 unchanged sentences

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 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.

a change of control 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 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.

Compensation Table

Name and Principal Position

Option Awards

All Other Compensation

Nasrat Hakim,

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

Douglas Plassche,

Executive Vice President

Chief Financial Officer 6

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

Douglas Plassche, Executive Vice President

Carter Ward, Chief Financial Officer

salary earned by Mr.

2 unchanged sentences

annual auto and housing allowances of $18,000 and $60,000, respectively.

discretionary cash bonus awarded to Mr.

Hakim by the Board for fiscal year 2026.

salary earned by Mr.

Plassche pursuant to the Plassche Employment Agreement and paid in accordance with the Company’s payroll

discretionary cash bonuses earned pursuant to the Plassche Employment Agreement and retention bonuses earned pursuant to the 2022

Plassche Retention Agreement and paid in accordance with the Company’s payroll practices.

annual auto allowances.

Ward has served as the Company’s Chief Financial Officer since September 5, 2023.

discretionary cash bonus earned pursuant to the Plassche Employment Agreement and paid in accordance with the Company’s payroll

annual auto allowance.

salary earned by Mr.

Ward pursuant to the Ward Employment Agreement and paid in accordance with the Company’s payroll practices.

discretionary cash bonuses earned pursuant to the Ward Employment Agreement and paid in accordance with the Company’s payroll

options to purchase 3,000,000 shares of Common Stock at a price of $0.0898 per share with the grant date fair value of such option

awards being determined using the Black Scholes option-pricing model with assumptions of such valuation being detailed in Note 12 of the financial statements of this Annual Report on

Represents cash bonuses earned pursuant to the Ward Employment Agreement and paid in accordance with the Company’s payroll

Equity Awards as of March 31, 2026

Option Awards

Unexercisable

Douglas Plassche

vest in equal annual increments of 2,500,000 shares on January 3, 2024, January 3, 2025 and January 3, 2026.

vest in equal annual increments of 1,000,000 shares on September 5, 2024, September 5, 2025 and September 5, 2026

The remaining portion of this option grant is scheduled to

vest on September 5, 2026, subject to Mr.

Ward’s continued employment through the vest date.

Fee Compensation

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represent Director fees earned during the fiscal year ended March 31, 2026 payable in cash.

Company’s Articles of Incorporation, as amended, 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

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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*

300,581,058 (1)

Barry Dash, Director*

3,235,555 (2)

Jeffrey Whitnell, Director*

3,187,020 (3)

Davis Caskey, Director*

2,049,436 (4)

Douglas Plassche, Executive Vice President *

6,000,000 (5)

Carter Ward, Chief Financial Officer

6,990,445 (6)

All Directors and Officers as a group

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

322,043,514 (7)

The address is c/o Elite

Pharmaceuticals Inc., 165 Ludlow Avenue, Northvale, NJ 07647.

219,349,250 shares of Common Stock held by Mr.

Hakim and 2,223,147 shares of Common Stock held by Mr.

Hakim’s spouse 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.

Hakim and 2,223,147 shares of Common Stock

Hakim’s spouse 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.

3,235,555 shares of Common Stock held by Dr.

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2,049,436 shares of Common Stock held by Mr.

shares of Common Stock issuable upon cash exercise of vested options to purchase 5,000,000 shares of Common Stock and excludes 2,500,000

shares issuable upon exercise of options not vested or not exercisable within the next 60 days.

6,000,000 shares of Common Stock held by Mr.

Ward and shares of Common Stock issuable upon cash exercise of vested options to purchase

1,000,000 shares of Common Stock and excludes 2,000,000 shares issuable upon exercise of options not vested or not exercisable within

the next 60 days.

4,990,445 shares of Common Stock held by Mr.

Ward and shares of Common Stock issuable upon

cash exercise of vested options to purchase 2,000,000 shares of Common Stock and excludes

1,000,000 shares issuable upon exercise of options not vested or not exercisable within the

next 60 days.

only to current directors and officers.

Includes 235,034,853 shares of Common Stock held, 6,000,000 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, and excludes 4,500,000 shares issuable upon exercise of options not vested or not exercisable

within the next 60 days.

Includes 241,034,853 shares of Common Stock held,

2,000,000 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, and excludes 1,000,000 shares issuable upon exercise of options

not vested or not exercisable within the next 60 days.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

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now Elite’s partner with respect to Amphetamine IR and ER and has assumed all the rights and obligations for these products from

Mikah was founded in 2009 by Nasrat Hakim, the Company’s President, Chief Executive Officer and Chairman of the Board of Directors.

Mikah was founded in 2009 by Nasrat Hakim, the Company’s President, Chief Executive Officer and Chairman of the Board

of Directors.

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

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PRINCIPAL ACCOUNTANT FEES AND SERVICES

Company’s independent registered public accounting firm for the fiscal years ending March 31, 2025 and March 31, 2024 is Forvis

Mazars LLP (“ Forvis Mazars ”).

following table presents fees, including reimbursements for expenses, for professional audit services rendered by Forvis Mazars (or its

predecessor), for the fiscal years ended March 31, 2025 and March 31, 2024 for the audits of our financial statements and interim reviews

of our quarterly financial statements.

Audit Fees - Mazars USA LLP

Company’s independent registered public accounting firm for the fiscal years ending March 31, 2026 and 2025 is Forvis Mazars LLP

(“ Forvis Mazars ”).

following table presents fees, including reimbursements for expenses, for professional audit services rendered by Forvis Mazars, for the fiscal years ended March 31, 2026 and 2025 for the audits of our financial statements and interim reviews of our

quarterly financial statements.

Audit Fees - Forvis Mazars, LLP

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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.

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

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EXHIBITS, FINANCIAL STATEMENTS AND SCHEDULES

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

The following are filed as

part of this Annual Report on Form 10-K

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.

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

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

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

The 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.

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incorporated by reference to Exhibit 10.59 to the Annual Report on Form 10-K, filed with the SEC on July 1, 2024

Amendment to Hakim Employment Agreement, dated September 13, 2023.

Amendment to Hakim Employment Agreement, dated September 13, 2023 incorporated by reference to Exhibit 10.24 to the Annual Report of Form 10-K, filed with the SEC on June 30, 2025.

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

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Code of Business Conduct and Ethics of Elite Pharmaceuticals, Inc.

Buchbinder Letter Dated July 17, 2023, incorporated by reference to Exhibit 16 to the Current Report on Form 8-K filed with the SEC on July 17, 2023.

Subsidiaries 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 filed with the SEC on June 21, 2019.

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Taxonomy Extension Presentation Linkbase Document

Cover Page Interactive Data File (embedded within the Inline XBRL document).

Filed herewith.

Furnished herewith.

FORM 10-K SUMMARY

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Financial Officer

Accounting and Financial Officer)

Accounting Officer and Principal Financial Officer)

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

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Financial Officer

Accounting and Financial Officer)

Accounting Officer and Principal Financial Officer)

Jeffrey Whitnell

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of Independent Registered Public Accounting Firm

the Board of Directors and

of Elite Pharmaceuticals, Inc.

the Shareholders, Board of Directors, and Audit Committee

Pharmaceuticals, Inc.

on the Consolidated Financial Statements

have audited the accompanying consolidated balance sheets

of Elite Pharmaceuticals, Inc.

(the “Company”) as of March 31, 2025 and 2024, the related consolidated statements of income,

stockholders’ equity, and cash flows for each of the years in the two-year period ended March 31, 2025, and the related notes (collectively

referred to as the “financial statements”).

In our opinion, the consolidated financial statements referred to above present

fairly, in all material respects, the financial position of the Company as of March 31, 2025 and 2024, and the results of its operations

and its cash flows for each of the years in the two-year period ended March 31, 2025, in conformity with accounting principles generally

accepted in the United States of America.

have audited the accompanying consolidated balance sheets of Elite Pharmaceuticals, Inc.

(the “Company”) as of March 31,

2026 and 2025, the related consolidated statements of operations, shareholders’ equity, and cash flows for each of the

years in the two-year period ended March 31, 2026, and the related notes (collectively referred to as the “financial

statements”).

In our opinion, the financial statements referred to above present fairly, in all material

respects, the financial position of the Company as of March 31, 2026 and 2025, and the results of its operations and its cash flows

for each of the years in the two-year period ended March 31, 2026, in conformity with accounting principles generally accepted in

the United States of America.

financial statements are the responsibility of the Company’s management.

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We believe that our audits

provide a reasonable basis for our opinion.

Audit Matters

critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated

provides a reasonable basis for our opinion.

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) relate to accounts or disclosures that are material to the financial

(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 critical audit matters

The communication of a 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

matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

described in Note 1 to the financial statements, the Company recognizes revenue from the sale of generic pharmaceutical products under

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The Company provides for chargebacks to wholesalers for sales to various end-customers, including hospitals, group purchasing organizations,

and pharmacies.

The Company’s estimate for chargebacks is developed based on management’s assumptions regarding anticipated

product returns, other rebates, and historical information.

institutions, and pharmacies.

The Company’s estimate for chargebacks is developed based on management’s assumptions regarding

anticipated product returns, other rebates, and historical information.

identified the chargeback reserve as a critical audit matter due to the subjectivity involved in management’s assumptions used

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primary procedures we performed to address this critical audit matter included:

● Obtaining an understanding of management’s process for developing the chargeback reserve, including

an understanding of management’s process for developing the chargeback reserve, including

the methods and assumptions used;

● Testing the completeness and accuracy of the underlying data used in the estimate, including historical

the completeness and accuracy of the underlying data used in the estimate, including historical

chargeback activity and customer arrangements;

● Developing an independent expectation of the chargeback reserve using relevant historical chargeback data

to assess the reasonableness of management’s estimate

● Assessed the relevance and reliability of the data from external sources utilized in determination of the independent expectation

of the chargeback reserve.

an independent expectation of the chargeback reserve using relevant historical chargeback

data to assess the reasonableness of management’s estimate;

the relevance and reliability of the data from external sources utilized in determination

of the independent expectation of the chargeback reserve.

Forvis Mazars, LLP

have served as the Company’s auditor since 2024.

June 30, 2025

PHARMACEUTICALS, INC.

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Intangible assets

Finance lease - right-of-use asset

Finance lease - right-of-use asset, net of accumulated amortization of $ 984,801 and $ 508,470 , respectively

Operating lease - right-of-use asset

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Total other assets

$ 138,289,840

LIABILITIES AND SHAREHOLDERS’ EQUITY

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Accrued expenses

Deferred revenue, current portion

Deferred revenue

Bonds payable, current portion, net of bond issuance costs

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Long-term liabilities:

Deferred revenue, net of current portion

Bonds payable, net of current portion and bond issuance costs

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( 120,703,926 )

Total shareholders’ equity

shareholders’ equity

Total liabilities and shareholders’ equity

$ 138,289,840

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

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Manufacturing fees

$ 147,810,122

Licensing fees

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Income from operations

Other (expense) income:

Other income (expense):

Change in fair value of derivative financial instruments - warrants

( 18,901,185 )

( 5,776,297 )

Change in fair value of stock-based liabilities

( 5,743,468 )

Interest expense and amortization of debt issuance costs

Gain from settlement agreements

Interest income

Other expense, net

Other income (expense), net

( 19,652,608 )

Income (loss) before income taxes

Income tax expense

( 11,941,798 )

(Loss) income before income taxes

Income tax (expense) benefit

( 4,262,519 )

Net (loss) income

Net income (loss)

$ ( 4,314,659 )

Basic net (loss) income per share

Diluted net (loss) income per share

Basic net income (loss) per share

Diluted net income (loss) per share

Basic weighted average common stock outstanding

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1,068,290,368

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

The accompanying notes are an integral part of

these consolidated financial statements.

PHARMACEUTICALS, INC.

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Treasury Stock

Total Shareholders’

Shareholders’

Balance as of March 31, 2024

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$ ( 116,389,267 )

( 4,314,659 )

Non-cash compensation through the issuance of employee stock options

Shares issued in payment of salaries

Shares issued in payment of consultants

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$ ( 120,703,926 )

( 4,314,659 )

Net income (loss)

( 4,314,659 )

Non-cash compensation through the issuance of employee stock options

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$ ( 75,831,240 )

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

The accompanying notes

are an integral part of these consolidated financial statements.

PHARMACEUTICALS, INC.

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CASH FLOWS FROM OPERATING ACTIVITIES:

Net (loss) income

Net income (loss)

$ ( 4,314,659 )

Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization

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Loss on asset disposal

Non-cash compensation accrued

Change in fair value of derivative financial instruments - warrants

Change in fair value of stock-based liabilities

( 7,855,607 )

Deferred tax expense (benefit)

( 19,989,074 )

Gain on settlement of Common Stock to consultant

( 1,761,792 )

Deferred tax expense

Non-cash compensation through the issuance of employee stock options

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Lease obligations - operating leases

Interest expense on finance lease liability

Net cash provided by (used in) operating activities

( 3,235,115 )

Net cash provided by operating activities

CASH FLOWS FROM INVESTING ACTIVITIES:

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Payment of bond principal

Proceeds from related party loans payable

Payments of related party loans payable

( 4,000,000 )

Payments on principal on finance lease obligations

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Loan payments

Net cash (used in) provided by financing activities

Net cash used in financing activities

( 4,322,309 )

Net change in cash and restricted cash

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Finance directors and officers insurance premium

Stock issued in satisfaction of accrued directors salaries and consultant fees

Recognition of finance lease right of use asset and lease liabilities entered into

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Total cash and restricted cash shown in statement of cash flows

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

The accompanying notes

are an integral part of these consolidated financial statements.

PHARMACEUTICALS, INC.

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such products.

of Consolidation and Basis of Presentation

of Presentation

accompanying audited consolidated financial statements have been prepared in accordance with generally accepted accounting principles

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estimates and assumptions affecting amounts reported in the Company’s consolidated financial statements.

Reclassification

items in prior consolidated financial statements have been reclassified to conform to the current presentation.

The presentation of the

consolidated statements of cash flows has been modified to separately present the change in the security deposits for the year ended

March 31, 2024.

Additionally, the presentation of Note 4 has been modified to separately disclose accrued interest related to the Company’s

related party loan.

Lastly, the presentation of Note 14 has been modified to separately disclose the gain from settlement agreements

apart of significant non-cash items.

These reclassifications had no effect on the reported results of operations.

preparation of consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions.

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at the date of the consolidated financial statements, as well as reported amounts of revenues and expenses during the reporting period.

Such management estimates and assumptions include, but are not limited to, chargeback liabilities related to revenue recognition, standalone

selling price for each distinct performance obligation included in customer contracts with multiple performance obligations, valuation of intangible assets, the useful life of property and equipment and identifiable intangible

assets, stock-based compensation expense, and income taxes.

The Company continuously evaluates its estimates, which are based on the

information that is currently available to the Company and on various other assumptions that it believes to be reasonable under the circumstances.

Actual results could differ from those estimates.

Such management estimates and assumptions include, but are not limited to, chargeback liabilities related to revenue recognition, valuation

of intangible assets, the useful life of property and equipment and identifiable intangible assets, stock-based compensation expense,

and income taxes.

The Company continuously evaluates its estimates, which are based on the information that is currently available to

the Company and on various other assumptions that it believes to be reasonable under the circumstances.

Actual results could differ from

those estimates.

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

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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 Application

(“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.

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.

The Company paused

further development of NDAs and has not engaged in business activities.

Accordingly during fiscal years ended March 31, 2025 and 2024,

the Company has only engaged in business activities in a single operating segment.

ELITE PHARMACEUTICALS, INC.

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 consolidated financial statements.

Company previously determined that its reportable segments were products whose marketing approvals were secured via an Abbreviated New

Drug Application (“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.

The Company identifies

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.

Company has paused further development of NDAs and has not engaged in business activities for several years, and does not intend to engage

in business activities related to the development of NDAs for the foreseeable future.

Therefore, as of March 31, 2026, the Company has

determined that it operates in a 1 single operating and reportable segment.

information by operating segment is not presented below since the chief operating decision maker does not review this information by

The ANDA segment follows the same accounting policies used in the preparation of the Company’s consolidated financial

Please see Note 14 for further details.

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including co-development projects, joint ventures and other collaborations.

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

PHARMACEUTICALS, INC.

AND SUBSIDIARY

TO CONSOLIDATED FINANCIAL STATEMENTS

ASC 606, Revenue from Contracts 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

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its own or by license to other companies) generic and proprietary controlled-release pharmaceutical products.

Company recognizes manufacturing fees related to revenue generated from wholesale customers and from direct sale customers.

represent customers that purchase the Company’s products and sell them to end customers such as hospitals, group purchasing organizations,

institutions, and pharmacies.

Direct sales customers purchase products directly from the Company.

Company provides for chargebacks to wholesalers for sales to various end-customers to include, but not limited to, hospitals, group purchasing

organizations, and pharmacies.

Chargebacks represent the difference between the price the wholesaler pays and the price that the end-customer

pays for a product.

The Company’s estimate for chargebacks is developed based upon management’s assumption of anticipated

claims as well as historical information.

Chargebacks represent variable consideration within the Company’s contracts and therefore

as such, revenue recognized is limited to the amount for which a significant reversal of revenue related to this variable consideration

is not probable.

Company recognizes revenue when the customer obtains control of the Company’s product based on the contractual shipping terms of

the contract, at which time the performance obligation is deemed to be completed.

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 partner.

The Company is primarily responsible for ensuring that

the product is produced in accordance with the related supply agreement, and fulfilling the promise to deliver the product and bearing

the risk of loss while the inventory is in-transit to the purchaser or commercial partner.

Revenue is measured as the amount of consideration

the Company expects to receive in exchange for transferring products to a customer.

the Company expects to receive from the sale of its products, including Elite-labeled pharmaceutical products, and is recorded at net

realizable value which consists of gross amounts invoiced reduced by contractual reductions, including, without limitation, chargebacks,

discounts and program rebates, as applicable.

Company enters into licensing and development agreements, which may include multiple revenue generating activities, including milestones

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conditions and internally approved pricing guidelines related to the performance obligations.

ELITE PHARMACEUTICALS, INC.

PHARMACEUTICALS, INC.

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

TO CONSOLIDATED FINANCIAL STATEMENTS

Company recognizes revenue from non-refundable upfront payments at a point in time, typically upon fulfilling the delivery of the associated

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of a reversal of revenue, which typically occurs near or upon achievement of the event.

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

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.

determining the transaction price of a contract, an adjustment is made if payment from a customer occurs either significantly before

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

Sale of product under the Elite label

Company began sales of products under the Company’s own label on April 1, 2023.

License agreements will remain in place for select

With this transition, the Company recognizes manufacturing fees related to revenue generated from wholesale customers and from

direct sale customers.

Wholesalers represent customers that purchase the Company’s products and sell them to end customers such

as hospitals, group purchasing organizations, institutions, and pharmacies.

Direct sales customers purchase products directly from the

Company recognizes revenue when the customer obtains control of the Company’s product based on the contractual shipping terms,

at which time the performance obligation is deemed to be completed.

The Company is primarily responsible for fulfilling the promise to

deliver the product and bears risk of loss while the inventory is in-transit to the purchaser.

Revenue is measured as the amount of consideration

earned from the sale of Elite labeled pharmaceutical products are recorded at their net realizable value which consists of gross amounts

invoiced reduced by contractual reductions, including, without limitation, chargebacks, discounts and program rebates, as applicable.

Company provides for chargebacks to wholesalers for sales to various end-customers to include, but not limited to, hospitals, group

purchasing organizations, and pharmacies.

Chargebacks represent the difference between the price the wholesaler pays and the price

that the end-customer pays for a product.

The company’s estimate for chargebacks is developed based upon management’s

assumption of anticipated claims as well as historical information.

Disaggregation

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the Company has only engaged in business activities in a single operating segment.

The table also includes a reconciliation of the disaggregated

revenue with the reportable segment:

information on reportable segments and the reconciliation of operating income by segment to income from operation and to income (loss)

before income taxes are disclosed within Note 14.

Company disaggregates manufacturing fees revenue by sales channel, consisting of revenues from direct and indirect wholesalers, which

have different cash flows and contract economics as margins generated differ between direct and indirect revenues.

Additionally, although

the underlying arrangements are substantially similar, pricing to direct wholesalers yields higher margins than pricing to indirect wholesalers,

while the timing and uncertainty of cash flows do not differ materially.

The following table summarizes manufacturing fees by sales channel

for the fiscal years ended March 31, 2026 and 2025:

SCHEDULE OF DISAGGREGATION OF REVENUE

For the Years Ended March 31,

Manufacturing fees

Licensing fees

Direct sales to Wholesalers

Indirect sales to Wholesalers

Total Manufacturing Fees

$ 147,810,122

Company’s revenue-generating products consist of two categories:

(i) products containing an active ingredient listed by the United

States Drug Enforcement Agency as a scheduled substance under the Controlled Substances Act of 1970 (“Scheduled Products”)

and (ii) products not containing such a scheduled active ingredient (“Unscheduled Products”).

The following table summarizes

the breakdown of revenues by product category for the fiscal years ended March 31, 2026 and 2025:

For the Years Ended March 31,

Scheduled Products – Manufacturing Fees

$ 141,465,975

Scheduled Products – Licensing Fees

Unscheduled Products – Manufacturing Fees

Unscheduled Products – Licensing Fees

Total Revenue

information on reportable segments and reconciliation of operating income by segment to income from operations before income taxes are

disclosed within Note 14.

ELITE PHARMACEUTICALS, INC.

$ 148,870,119

PHARMACEUTICALS, INC.

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

TO CONSOLIDATED FINANCIAL STATEMENTS

consists of cash on deposit with banks and money market instruments.

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

of March 31, 2025, and March 31, 2024, the Company had $ 453,776 and $ 432,832 , of restricted cash, respectively, related to debt service

reserve in regard to the New Jersey Economic Development Authority (“NJEDA”) bonds (see Note 5).

of March 31, 2026 and 2025, the Company had $ 471,520 and $ 453,776 , of restricted cash, respectively, related to debt service reserve

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

Receivable and Allowance for Expected Credit Losses

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gain or loss, if any, is recognized in income.

PHARMACEUTICALS, INC.

AND SUBSIDIARY

TO CONSOLIDATED FINANCIAL STATEMENTS

Company capitalizes certain costs to acquire intangible assets;

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indicate impairment may have occurred.

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;

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;

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.

ELITE PHARMACEUTICALS, INC.

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

the year ended March 31, 2025, the Company determined indicators of impairment occurred related to the Dantrolene and Phentermine

intangible assets, both ANDA products, and recorded impairment expense of $ 1,603,426 .

There were no

such impairment recorded during the year ended March 31, 2024.

June 17, 2024, the Company and Nostrum Laboratories Inc.

(“Nostrum”) entered into an Asset Purchase Agreement (the “Asset

Purchase Agreement”), pursuant to which Nostrum was obligated to (i) sell to the Company all of its rights in and to the approved

abbreviated new drug applications (ANDAs) for generic Norco® (Hydrocodone Bitartrate and Acetaminophen tablets, USP CII), generic

Percocet® (Oxycodone Hydrochloride and Acetaminophen, USP CII), and generic Dolophine® (Methadone Hydrochloride tablets), each

a “Product”, and (ii) grant to the Company a royalty-free, non-exclusive perpetual license to use the manufacturing technology,

proprietary information, processes, techniques, protocols, methods, know-how, and improvements necessary or used to manufacture each

Product in accordance with the applicable ANDA, in exchange for $ 900,000 in cash (the “Transaction”).

The Asset Purchase

Agreement includes customary representations and warranties and various customary covenants.

The closing of the Transaction occurred

on June 21, 2024.

following table summarizes the Company’s intangible assets as of and for the periods ended March 31, 2025 and March 31, 2024:

SCHEDULE OF INTANGIBLE ASSETS

March 31, 2025

Estimated Useful Life

Gross Carrying

Impairment losses

Accumulated Amortization

Net Book Value

Patent application costs

ANDA acquisition costs

( 1,603,426 )

$ ( 1,603,426 )

March 31, 2024

Estimated Useful Life

Gross Carrying

Impairment losses

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).

and Development

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These tax benefits are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution.

ELITE PHARMACEUTICALS, INC.

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Company operates in multiple tax jurisdictions within the United States of America.

21 unchanged sentences

for forfeitures as they occur.

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.

The Company records earned but unissued stock-based compensation in accrued expenses.

Income Per Share Attributable to Common Shareholders

Company follows ASC 260, Earnings Per Share , which requires presentation of basic and diluted (loss) income per share (“EPS”)

(Loss) Per Share

Company follows ASC 260, Earnings Per Share , which requires presentation of basic and diluted income (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

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In the accompanying financial

statements, basic (loss) income per share is computed by dividing net (loss) income by the weighted average number of shares of Common

statements, basic income (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of Common

Stock outstanding during the period.

the Company was in a net loss position for the year ended March 31, 2025, the potential dilution from the warrants converting into 79,008,661

shares of Common Stock and the stock options converting into 15,640,000 shares of Common Stock for these periods have been excluded from

the number of shares used in calculating diluted net (loss) income per share as their inclusion would have been antidilutive.

exercise of the warrants would have an antidilutive effect for the year ended March 31, 2024.

The computation of diluted net income (loss) per share includes the assumed exercise of options

and warrants if the effect is dilutive.

The assumed exercise of the Series J Warrants was dilutive for the year ended March 31, 2026,

and is therefore included in the diluted EPS calculation for that period.

PHARMACEUTICALS, INC.

AND SUBSIDIARY

TO CONSOLIDATED FINANCIAL STATEMENTS

the Company was in a net loss position for the year ended March 31, 2025, the potential dilution from the Series J Warrants converting

into 79,008,661 shares of Common Stock and the stock options being exercised for 15,640,000 shares of Common Stock for these periods

have been excluded from the number of shares used in calculating diluted net income (loss) per share as their inclusion would have been

antidilutive.

following is the computation of earnings per share applicable to common shareholders for the periods indicated:

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For the Years Ended March 31,

Net (loss) income - basic and diluted

Net income (loss) - basic

$ ( 4,314,659 )

Effect of dilutive instrument on net income - warrants

( 7,855,607 )

Net income (loss) - diluted

$ ( 4,314,659 )

Weighted average shares of Common Stock outstanding - basic

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1,068,290,368

Dilutive effect of stock options

Dilutive effect of stock options and convertible securities

Weighted average shares of Common Stock outstanding - diluted

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1,068,290,368

Net (loss) income per share

ELITE PHARMACEUTICALS, INC.

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Net income (loss) per share

Value of Financial Instruments

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hierarchy under ASC 820 are described as follows:

Unadjusted quoted prices in active markets for identical assets or liabilities that are accessible at the measurement date.

Level 2 – Inputs

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 – Inputs

that are unobservable for the asset or liability.

on a Recurring Basis

following table presents information about the Company’s liabilities measured at fair value on a recurring basis, aggregated by

the level in the fair value hierarchy within which those measurements fell:

SCHEDULE OF LIABILITIES MEASURED AT FAIR VALUE ON A RECURRING BASIS

Fair Value Measurement Using

Amount at Fair Value

March 31, 2025

Derivative financial instruments - warrants

March 31, 2024

Derivative financial instruments - warrants

Note 10 for specific inputs used in determining fair value.

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.

carrying amounts of the Company’s financial assets and liabilities, such as cash, accounts receivable, prepaid expenses and other

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Based upon current borrowing rates with similar maturities the carrying value of long-term debt, and related party loans payable approximates

PHARMACEUTICALS, INC.

AND SUBSIDIARY

TO CONSOLIDATED FINANCIAL STATEMENTS

Non-Financial

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assets such as intangible assets and property and equipment are measured at fair value only when an impairment loss is recognized.

During the year ended

March 31, 2025, the Company determined indicators of impairment occurred related to the Dantrolene and Phentermine intangible assets,

both ANDA products, and recorded impairment expense of $ 1,603,426 .

There were no such impairment recorded during the year ended March 31,

Note 4 for additional information for the impairment loss recorded in relation to the Company’s intangible assets.

Company records treasury stock at the cost to acquire it and includes treasury stock as a component of shareholders’ equity.

Asset and Lease Liability

Company accounts for leases in accordance with ASU 2016-02, “Leases” (Topic 842) (“ASU 2016-02”).

Company accounts for leases in accordance with ASC 842, Leases (Topic 842) (“ASC 842”).

lessee should recognize the lease liability to make lease payments and the right-of-use asset representing its right to use the underlying

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basis over the lease term.

ELITE PHARMACEUTICALS, INC.

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

the leases with a term of twelve months or less, a lessee is permitted to make an accounting policy election by class of underlying asset

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Adopted Accounting Pronouncements

November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segments , which aims to

improve financial reporting by requiring disclosure of incremental segment information on an annual and interim basis for all public

entities to enable investors to develop more decision-useful financial analyses.

Currently, Topic 280 requires that a public entity disclose

certain information about its reportable segments.

Topic 280 also requires other specified segment items and amounts to be disclosed

under certain circumstances.

The amendments in this ASU do not change or remove those disclosure requirements and do not change how a

public entity identifies its operating segments, aggregates those operating segments, or applies the quantitative thresholds to determine

its reportable segments.

This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal

years beginning after December 15, 2024.

Early adoption is permitted.

As of March 31, 2025, this ASU became effective and the Company’s

management adopted this ASU in its financial statements and related disclosures.

See Note 14 for related disclosures.

Issued Accounting Pronouncements Not Yet Effective

December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to income tax disclosures , which enhances the

disclosure requirements for the income tax rate reconciliation, domestic and foreign income taxes paid, requiring disclosure of disaggregated

income taxes paid by jurisdiction, unrecognized tax benefits, and modifies other income tax-related disclosures.

The amendments are effective

for annual periods beginning after December 15, 2024.

Early adoption is permitted and should be applied prospectively.

The Company is

currently evaluating the effect of adopting this guidance on its consolidated financial statements.

Improvements to Income Tax Disclosures , which requires public

entities, on an annual basis, to provide disclosure of specific categories in the rate reconciliation, as well as disclosure of income

taxes paid disaggregated by jurisdiction.

ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption

The Company adopted ASU 2023-09 for the year ended March 31, 2026, and applied the new disclosure requirements prospectively

to the current annual period.

Prior period disclosures have not been adjusted to reflect the new disclosure requirements.

Income Taxes in the accompanying notes to the consolidated financial statements for further detail.

Issued Accounting Pronouncements

November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures

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2025-01, Income Statement

- Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40), Clarifying the Effective Date .

requires public companies to disclose, in interim and reporting periods, additional information about certain expenses in the financial

ASU 2024-03, as clarified by ASU 2025-01, is effective for public entities for annual periods beginning after December 15,

2026, and interim reporting periods beginning after December 15, 2027.

Early adoption is permitted and is effective on either a prospective

basis or retrospective basis.

The Company is currently evaluating the impact that the updated standard will have on the Company’s

disclosures within the consolidated financial statements.

- Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40), Clarifying the Effective Date (“ASU-2024-03”).

ASU 2024-03 requires public companies to disclose, in interim and reporting periods, additional information about certain expenses in

the financial statements.

ASU 2024-03, as clarified by ASU 2025-01, is effective for public entities for annual periods beginning after

December 15, 2026, and interim reporting periods beginning after December 15, 2027.

Early adoption is permitted and is effective on either

a prospective basis or retrospective basis.

The Company is currently evaluating the impact that the updated standard will have on the

Company’s disclosures within the consolidated financial statements.

May 2025, the FASB issued ASU 2025-04, Compensation-Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic

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financial statements.

July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts

Receivable and Contract Assets .

The ASU introduces a practical expedient and an accounting policy election to simplify the estimation

of expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under ASC

The practical expedient allows entities to assume that conditions at the balance sheet date remain unchanged for the asset’s

remaining life when preparing forecasts as part of estimating expected credit losses.

The ASU is effective for fiscal years beginning

after December 15, 2025, and is to be adopted on a prospective basis.

Early adoption is permitted.

The Company is currently evaluating

the impact of this standard on its consolidated financial statements.

December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270)—Narrow-Scope Improvements .

The ASU clarifies the

scope of interim reporting guidance, reorganizes disclosure requirements for ease of navigation, and introduces a principle requiring

disclosure of material events occurring after the last annual reporting period but before interim financial statements are issued.

ASU does not create new disclosure requirements but improves clarity and consistency in presentation.

The ASU is effective for interim

periods within fiscal years beginning after December 15, 2027.

Early adoption is permitted.

The Company is currently evaluating the impact

this standard will have on the Company’s consolidated financial statements.

ELITE PHARMACEUTICALS, INC.

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

has evaluated recently issued accounting pronouncements outside of those mentioned above and does not believe that any of these pronouncements

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Raw materials

ELITE PHARMACEUTICALS, INC.

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

PROPERTY AND EQUIPMENT, NET

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expense was $ 1,071,543 and $ 1,226,399 for the years ended March 31, 2026 and 2025, respectively.

INTANGIBLE ASSETS

following table summarizes the Company’s intangible assets as of and for the periods ended March 31, 2026 and 2025:

SCHEDULE OF INTANGIBLE ASSETS

March 31, 2026

Gross Carrying

Patent application costs

$ ( 289,039 )

ANDA acquisition costs

$ ( 847,012 )

March 31, 2025

Gross Carrying

Patent application costs

ANDA acquisition costs

( 1,603,426 )

$ ( 1,603,426 )

* Patent application costs were incurred in relation to the Company’s abuse deterrent

opioid technology.

Amortization of the patent costs would have begun upon the issuance of marketing authorization by the FDA.

the year ended March 31, 2026, these costs were impaired in full as discussed above.

June 17, 2024, the Company and Nostrum Laboratories Inc.

(“Nostrum”) entered into an Asset Purchase Agreement (the “Asset

Purchase Agreement”), pursuant to which Nostrum was obligated to (i) sell to the Company all of its rights in and to the approved

abbreviated new drug applications (ANDAs) for generic Norco® (Hydrocodone Bitartrate and Acetaminophen tablets, USP CII), generic

Percocet® (Oxycodone Hydrochloride and Acetaminophen, USP CII), and generic Dolophine® (Methadone Hydrochloride tablets), each

a “Product”, and (ii) grant to the Company a royalty-free, non-exclusive perpetual license to use the manufacturing technology,

proprietary information, processes, techniques, protocols, methods, know-how, and improvements necessary or used to manufacture each

Product in accordance with the applicable ANDA, in exchange for $ 900,000 in cash (the “Transaction”).

The Asset Purchase

Agreement includes customary representations and warranties and various customary covenants.

The closing of the Transaction occurred

on June 21, 2024.

ELITE PHARMACEUTICALS, INC.

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

the year ended March 31, 2026, the Company determined indicators of impairment occurred related to the Loxapine intangible asset, an

ANDA product, and recorded impairment expense of $ 557,973 .

Additionally, the patent related to the Company’s abuse deterrent opioid

technology expired during the year ended March 31, 2026, before marketing authorization was obtained from the FDA, and as such the Company

impaired this intangible asset in full in the amount of $ 289,039 .

the year ended March 31, 2025, the Company determined indicators of impairment occurred related to the Dantrolene and Phentermine intangible

assets, both ANDA products, and recorded impairment expense of $ 1,603,426 .

Patent application costs were incurred in relation to the Company’s abuse deterrent opioid technology.

Amortization of the patent

costs would have begun upon the issuance of marketing authorization by the FDA.

During the year ended March 31, 2026, these costs were

impaired in full as discussed above.

ACCRUED EXPENSES

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Director dues

Consultant contract fees

Salaries and fees payable

2 unchanged sentences

Total accrued expenses

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 consolidated balance sheets.

August 2005, the Company refinanced a prior 1999 bond issue occurring in 1999 through the issuance of Series A and B Notes new tax-exempt

bonds (the “NJEDA Bonds”).

The refinancing involved borrowing $ 4,155,000 , evidenced by a 6.5 % Series A Note in the principal

amount of $ 3,660,000 maturing on September 1, 2030 and a 9 % Series B Note in the principal amount of $ 495,000 maturing on September 1,

During July 2014, the Company retired all the 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 fund.

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

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by a first lien on the Company’s facility and equipment acquired with the proceeds of the original and refinanced bonds.

mature on September 1, 2030.

ELITE PHARMACEUTICALS, INC.

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plus 0.5% with floor rate of 4.5%.

The total transaction costs associated with the EWB Mortgage Loan incurred as of March 31, 2025, were

$ 13,251 , which are being amortized on a monthly basis over ten years, beginning in July 2022.

The EWB Mortgage Loan contains customary

representations, warranties and covenants.

These covenants include maintaining a minimum debt coverage ratio of 1.50 to 1.00 tested annually

and a minimum trailing 12-month debt coverage ratio of 1.50 to 1.00.

As of the date of this filing, the Company was in compliance with

each financial covenant.

The EWB Mortgage Loan contains customary representations, warranties and covenants.

These covenants

include maintaining a minimum debt coverage ratio of 1.50 to 1.00 tested annually and a minimum trailing 12-month debt coverage ratio

of 1.50 to 1.00.

As of the date of this filing, the Company was in compliance with each financial covenant.

Company has entered into a collateralized promissory note with individual lenders (a “Promissory Note”).

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regarding the Promissory Note.

ELITE PHARMACEUTICALS, INC.

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

payable consisted of the following:

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Long-term portion of loans payable

ELITE PHARMACEUTICALS, INC.

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

interest expense associated with the loans payable was $ 111,361 and $ 128,234 for the years ended March 31, 2026 and 2025, respectively.

5 unchanged sentences

RELATED PARTY LOANS PAYABLE

Company has entered into a collateralized promissory note with individual lenders (the “Hakim Promissory Note”).

These covenants

include filing timely tax returns and financial statements, and an agreement not to sell, lease, or transfer a substantial portion of

the Company’s assets during the term of the Hakim Promissory Note.

On June 2, 2023, the Company entered into a Promissory Note

with Nasrat Hakim, CEO and Chairman of the Board of Directors, pursuant to which the Company borrowed funds in the aggregate principal

amount of $ 3,000,000 .

The Hakim Promissory Note has an interest rate of 9 % for the first year and 10 % for an optional second year and

the proceeds were used for working capital and other business purposes.

The original maturity date of the Hakim Promissory Note was June

2, 2024, with an optional second year extension.

The second year extension was exercised pursuant to the terms of the Hakim Promissory

For the years ended March 31, 2025 and 2024, interest expense on the Hakim Promissory Note totaled $ 292,500 and $ 270,000 , respectively,

recorded on the Consolidated Statements of Operations in interest expense and amortization of debt issuance costs.

On June 2, 2025, the

Hakim Promissory Note was paid in full and no balance was outstanding as of this date.

Company has entered into a collateralized promissory note with individual lenders with rates comparable to the mortgage loan, dated July

1, 2022, provided by East West Bank to the Company but with fewer covenants.

These covenants include filing timely tax returns and financial

statements, and an agreement not to sell, lease, or transfer a substantial portion of the Company’s assets during the term of the

Hakim Promissory Note.

On June 2, 2023, the Company entered into a Promissory Note with Nasrat Hakim, President, Chief Executive Officer

and Chairman of the Board of Directors of the Company (the “Board”), pursuant to which the Company borrowed funds in the

aggregate principal amount of $ 3,000,000 (the “Hakim Promissory Note”).

The Hakim Promissory Note had an interest rate of

9 % for the first year and 10 % for an optional second year and the proceeds were used for working capital and other business purposes.

The original maturity date of the Hakim Promissory Note was June 2, 2024, with an optional second year extension.

The second year extension

was exercised pursuant to the terms of the Hakim Promissory Note.

For the years ended March 31, 2026 and 2025, interest expense on the

Hakim Promissory Note totaled $ 50,000 and $ 292,500 , respectively, recorded on the Consolidated Statements of Operations in interest expense

and amortization of debt issuance costs.

On June 2, 2025, the Hakim Promissory Note was paid in full and no balance was outstanding as

of this date.

June 30, 2023, the Company entered into a collateralized promissory note with Davis Caskey (the “Caskey Promissory Note”).

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recorded on the Consolidated Statements of Operations in interest expense and amortization of debt issuance costs.

On June 26, 2025, the Caskey Promissory Note was paid in full and no balance was outstanding as of this date.

On June 26, 2025,

the Caskey Promissory Note was paid in full and no balance was outstanding as of this date.

COMMITMENTS AND CONTINGENCIES

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about future events and can rely heavily on estimates and assumptions.

August 17, 2023, Elite filed a paragraph IV certification with its ANDA to generic Oxycontin and after Elite got acceptance of the ANDA

by the FDA on September 19, 2023, Elite sent the patentee and NDA holder a Notice Letter as required under the Hatch-Waxman Act.

14, 2023, a patent infringement suit was filed in the District Court of New Jersey by Purdue Pharma.

Elite has obtained several agreements

with Purdue to stay the litigation, with the latest being a stipulation and order submitted on March 19, 2025 lifting the existing stipulated

An amended complaint was filed by Purdue on April 18, 2025.

Elite’s launch of a generic Oxycontin will depend on the approval

by the FDA and the outcome of various litigation involving Purdue or the expiry of the patents listed on the Orange Book.

31, 2025, the results of such proceedings cannot be predicted with certainty and are neither probable nor estimable.

August 17, 2023, Elite filed a paragraph IV certification with its ANDA to generic OxyContin ® and after Elite got acceptance

of the ANDA by the FDA on September 19, 2023, Elite sent the patentee and NDA holder a Notice Letter as required under the Hatch-Waxman

On November 14, 2023, a patent infringement suit was filed in the District Court of New Jersey by Purdue Pharma.

The Parties agreed to a stipulated dismissal of the case and the judge signed the order dismissing the case on June

ELITE PHARMACEUTICALS, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

launch of a generic OxyContin ® will depend on the approval by the FDA and the outcome of various litigation involving

Purdue or the expiry of the patents listed on the Orange Book.

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 the Company taking occupancy on November 1, 2020.

The Pompano Office Lease was for approximately 1,275 square feet of office space, with the Company taking occupancy on November 1, 2020.

The Pompano Office Lease had a term of three years , ending on October 31, 2023 .

2 unchanged sentences

Accordingly, the Pompano Office Lease expired at the end of the renewal term on October 31, 2024.

Company entered into an operating lease for new office space in North Bay Village, Pompano FL (the “NBV Pompano Office Lease”).

Company entered into an operating lease for office space in North Bay Village, Pompano FL (the “NBV Pompano Office Lease”).

The Company took occupancy on October 1, 2024.

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The present value of the lease payments is calculated using either the implicit interest rate in the lease or an incremental borrowing

Operating leases are included in operating lease right-of-use assets and lease liabilities in the consolidated balance sheets.

Lease expense for operating expense payment is recognized on a straight-line basis over the lease term.

November 2023, the Company entered into a finance lease for equipment (the “Waters Equipment Lease”).

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during February 2024.

The Warehouse Equipment Lease has a term of two years , ending in February 2026.

The Company also has the option

to purchase the asset at the end of the lease term for the amount of $ 1 , which is probable to be exercised.

The Warehouse Equipment Lease had a term of two years , which ended in February 2026 .

The Company had the option

to purchase the asset at the end of the lease term for the amount of $ 1 , which the Company exercised.

February 2024, the Company entered into a finance lease for equipment (the “February 2024 Equipment Lease”).

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July 2024, the Company entered into two separate finance leases for manufacturing assets (the “July 2024 Equipment Leases”).

The July 2024 Equipment Leases are related warehouse and laboratory equipment with an aggregate acquisition cost of $ 153,745 .

Each of the separate leases included in the July 2024 Equipment Lease have a term of five years , ending in July 2029.

The Company will

retain ownership of all related assets at lease terminations .

The July 2024 Equipment Leases are related to warehouse and laboratory equipment with an aggregate acquisition cost of $ 153,745 .

of the July 2024 Equipment Leases has a term of five years , ending in July 2029 , and the other lease has a term of two years , ending

in July 2026 .

The Company will retain ownership of all related assets at lease terminations.

ELITE PHARMACEUTICALS, INC.

19 unchanged sentences

The finance lease costs are split between Depreciation and amortization expense related to

the asset and Interest expense and amortization of debt issuance costs on the lease liability, using the effective rate charged by the

The Company has elected to account for lease and non-lease components separately.

assets and liabilities are classified as follows on the consolidated balance sheet:

SCHEDULE OF LEASE ASSETS AND LIABILITIES

For the Years Ended March 31,

Classification

Finance lease – right-of-use asset

Operating lease – right-of-use asset

Total leased assets

Lease obligation – finance lease

Lease obligation – operating lease

Lease obligation – finance lease, net of current portion

Lease obligation – operating lease, net of current portion

Total lease liabilities

expense is recorded on the straight-line basis and is recorded in general and administrative expense in the consolidated statements of

the asset and interest expense on the lease liability, using the effective rate charged by the lessor.

The Company has elected to account

for lease and non-lease components separately.

expense is recorded on the straight-line basis and is recorded in cost of manufacturing and general and administrative expense in the

consolidated statements of operations.

Rent expense is as follows:

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Present value of lease payments

ELITE PHARMACEUTICALS, INC.

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

weighted-average remaining lease term and the weighted-average discount rate of the Company’s leases were as follows:

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described in this note below.

ELITE PHARMACEUTICALS, INC.

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Company has 79,008,661 total warrants to purchase shares of Common Stock outstanding with a weighted average exercise price of $ 0.1521

as of March 31, 2025 and March 31, 2024.

as of March 31, 2026 and 2025.

April 28, 2017, the Company entered into an Exchange Agreement with Hakim, the Chairman of the Board, President, and Chief Executive

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Risk free rate

ELITE PHARMACEUTICALS, INC.

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

changes in warrants (Level 3 financial instruments) measured at fair value on a recurring basis were as follows:

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Change in fair value of derivative financial instruments - warrants

( 7,855,607 )

Balance at March 31, 2026

SHAREHOLDERS’ EQUITY

of Common Stock Activity

November 22, 2023, the Company issued 1,642,971 shares of Common Stock in payment of director fees to be paid via the issuance of common

stock, with such shares having an aggregate value on the date of original accrual of $ 60,000 and which were owed for periods prior to

the current fiscal year and accrued as of the date of share issuance.

The price of the Company’s Common Stock on November 22, 2023,

was $ 0.1533 per share.

The aggregate value of the shares on the date of their issuance was $ 257,867 .

December 29, 2023, the Company issued 2,223,147 shares of Common Stock in payment of consultant fees to be paid via the issuance of common

stock, with such shares having an aggregate value on the date of original accrual of $ 153,333 and which were owed for periods prior to

the current fiscal year and accrued as of the date of share issuance.

The price of the Company’s Common Stock on December 29, 2023,

was $ 0.14 per share.

The aggregate value of the shares on the date of their issuance was $ 311,238 .

March 29, 2024, the Company issued 957,541 shares of Common Stock in payment of consultant fees to be paid via the issuance of common

stock, with such shares having an aggregate value on the date of original accrual of $ 33,998 .

The price of the Company’s Common

Stock on March 29, 2024, was $ 0.1543 per share.

The aggregate value of the shares on the date of their issuance was $ 147,749 .

March 29, 2024, the Company issued 49,534,368 shares of Common Stock in payment of salaries, with such shares having an aggregate value

on the date of original accrual of $ 3,125,000 .

The price of the Company’s Common Stock on March 29, 2024, was $ 0.1543 per share.

The aggregate value of the shares on the date of their issuance was $ 7,643,153 .

STOCK-BASED COMPENSATION

of the compensation paid by the Company to employees consists of the granting of options to purchase Common Stock.

Director Compensation

Company’s Director compensation policy, instituted in October 2009, further revised in January 2016, and ceased issuance in November

2023, 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.

of March 31, 2025, there was no common stock owed to Directors as the amount outstanding was paid during fiscal year 2024.

of March 31, 2024, the Company accrued director’s fees totaling $ 22,500 , which will be paid via cash payments totaling $ 22,500

and the issuance of shares of Common Stock, 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.

SCHEDULE OF STOCK BASED COMPENSATION

Balance of common stock owed at April 1, 2023

Awarded shares

Change in fair value of stock-based liabilities

Issuance of common stock on November 22, 2023

Settlement of non-cash liability

on a Recurring Basis

following table presents information about the Company’s liabilities measured at fair value on a recurring basis, aggregated by

the level in the fair value hierarchy within which those measurements fell:

SCHEDULE OF LIABILITIES MEASURED AT FAIR VALUE ON A RECURRING BASIS

Amount at Fair Value

Balance as of March 31, 2025

Change in fair value of derivative financial instruments - warrants

( 7,855,607 )

Balance of common stock owed at March 31, 2024

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.

( 7,855,607 )

Balance as of March 31, 2026

Amount at Fair Value

Balance as of March 31, 2024

Change in fair value of derivative financial instruments - warrants

Balance as of March 31, 2025

ELITE PHARMACEUTICALS, INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

of March 31, 2024, the Company accrued no additional salaries owed to the Company’s President, Chief Executive Officer and certain

other employees which will be paid via the issuance of shares of Common Stock.

On March 29, 2024 the Company paid off its balance of

accrued salaries to the president through the issuance of 49,534,368 shares of common stock.

SCHEDULE OF STOCK BASED COMPENSATION

Balance of common stock owed at April 1, 2023

Awarded shares

Change in fair value of stock-based liabilities

Common stock issued

( 8,068,142 )

Settlement of non-cash liability

( 1,761,792 )

Balance of common stock owed at March 31, 2024

of March 31, 2025, the Company accrued no additional salaries owed to the Company’s President, Chief Executive Officer and certain

other employees.

November 6, 2023, the Company entered into a Settlement Agreement with a former executive who was terminated on February 7, 2022.

employment agreement with the former executive included annual compensation of $ 250,000 which was to be paid via the issuance of shares

of Common Stock.

At the date of the former executive’s termination an aggregate of 14,892,580 shares of Common Stock (the “Deferred

Shares”) were due to the former executive, with such number of shares representing an aggregate of $ 1,000,000 in compensation earned

pursuant to the relevant employment agreement at an annual rate of $ 250,000 .

Pursuant to the Settlement Agreement, the former executive

irrevocably elected to relinquish all rights and claims to the Deferred Shares.

The Company is released of any obligation to issue the

Deferred Shares and further acknowledges that no Deferred Shares will be issued to or received by the former employee.

The price of the

Company’s Common Stock on November 6, 2023 was $ 0.1183 per share and the value of the Deferred Shares on this date was $ 1,761,792 .

The Company recorded other income from gain on settlement agreement for this amount on the Consolidated Statements of Operations.

December 29, 2023, the Company issued 2,223,147 shares of Common Stock in satisfaction of accrued consultant fees.

March 29, 2024, the Company issued 957,541 shares of Common Stock in satisfaction of accrued consultant fees.

STOCK-BASED COMPENSATION

its 2014 Equity Incentive Plan and its 2024 Equity Incentive Plan, the Company did grant and may grant stock options to officers, selected

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that the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future.

grant date fair value of option awards is determined using the Black Scholes option-pricing model.

The following assumptions were used

for the years ended March 31, 2025 and 2024 :

SCHEDULE OF GRANT DATE FAIR VALUE OF OPTION AWARDS

March 31, 2025

March 31, 2024

Term (in years)

Exercise Price

$ 0.08 -$ 0.16

Dividend Yield

Expected Volatility

Risk Free Rate

4.27 %- 4.69 %

ELITE PHARMACEUTICALS, INC.

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

summary of the activity of Company’s 2024 Equity Incentive plan and prior equity incentive plans for the year ended March 31, 2026

1 unchanged sentence

SCHEDULE OF STOCK OPTION PLAN

Shares Underlying Options

Weighted Average Exercise Price

Weighted Average Remaining Contractual

Underlying Options

Exercise Price

Weighted Average

Remaining Contractual

Term (in years)

Aggregate Intrinsic Value

Aggregate Intrinsic

Outstanding at March 31, 2025

( 8,733,334 )

Expired and Forfeited

6 unchanged sentences

based compensation expense that will be recognized over a weighted average 0.49 year period.

weighted-average grant-date fair value of stock options granted during the year ended March 31, 2025 was $ 0.2028 .

The total intrinsic

value of options exercised during the year ended March 31, 2025 was $ 19,845 .

total intrinsic value of options exercised during the year ended March 31, 2026 was $ 2,826,120 .

CONCENTRATIONS AND CREDIT RISK

3 unchanged sentences

customers accounted for approximately 58 % of the Company’s revenues for the year ended March 31, 2025.

These three customers accounted

These two customers accounted

for approximately 39 % and 19 % of revenue each, respectively.

customers accounted for approximately 75 % of the Company’s accounts receivable as of March 31, 2025.

These three customers

accounted for approximately 46 % , 19 % , and 10 % of accounts receivable each, respectively.

ELITE PHARMACEUTICALS, INC.

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

customer accounted for approximately 69 % of the Company’s accounts receivable as of March 31, 2026.

customers accounted for approximately 75 % of the Company’s accounts receivable as of March 31, 2025.

These two customers accounted

These three customers accounted

for approximately 46 %, 19 %, and 10 % of accounts receivable each, respectively.

2 unchanged sentences

suppliers accounted for approximately 69 % of the Company’s purchases of raw materials for the year ended March 31, 2025.

two customers accounted for approximately 49 %, and 13 %, of purchasing each, respectively.

three customers accounted for approximately 43 %, 13 %, and 13 %, of purchasing each, respectively.

SEGMENT RESULTS

4 unchanged sentences

management disaggregates a company.

loss from operations, which is reported in the accompanying consolidated statements of operations, is the measure of segment profit or

loss that is regularly reviewed by the CODM.

This enables the CEO to assess the overall level of available resources and determine how

best to deploy these resources across research and development projects in line with the long-term company-wide strategic goals.

reporting segments follow the same accounting policies used in the preparation of the Company’s consolidated financial statements.

ELITE PHARMACEUTICALS, INC.

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

following represents selected information for the Company’s reportable segments:

income from operations, which is reported in the accompanying consolidated statements of operations, is the measure of segment profit

or loss that is regularly reviewed by the CODM.

This enables the CODM to assess the overall level of available resources and determine

how best to deploy these resources across research and development projects in line with the long-term company-wide strategic goals.

There are no significant segment expenses or other segment items that are separately provided to the CODM beyond research and development

and general and administrative expenses.

The CODM does not receive segment level information related to depreciation, amortization, capital

expenditures, or other non-cash items, and therefore such items are excluded.

The ANDA segment follows the same accounting policies used

in the preparation of the Company’s consolidated financial statements.

following represents selected information for the Company’s reportable segment:

SCHEDULE OF SELECTED INFORMATION FOR REPORTABLE SEGMENTS

2 unchanged sentences

Operating income by Segment

Company notes that there was no revenue related to the NDA segment for the years ended March 31, 2025 and 2024.

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

Company’s consolidated statements of operations:

table below reconciles the Company’s operating income by segment to income from operations and to income (loss) before income taxes

as reported in the Company’s consolidated statements of operations:

SCHEDULE OF OPERATING INCOME BY SEGMENT TO INCOME FROM OPERATIONS

4 unchanged sentences

( 9,001,930 )

Interest income

Interest expense and amortization of debt issuance costs

Impairment of intangible assets

4 unchanged sentences

Significant non-cash items

Gain from settlement agreements

Income from operations

Change in fair value of derivative instruments

( 18,901,185 )

( 5,776,297 )

Change in fair value of stock-based liabilities

( 5,743,468 )

(Loss) income before income taxes

Interest expense and amortization of debt issuance costs

Interest income

Income (loss) before income taxes

ELITE PHARMACEUTICALS, INC.

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

RELATED PARTY AGREEMENTS

13 unchanged sentences

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

of March 31, 2025, the Company owes an aggregate of $ 2,617,210 to Mikah in accordance with the agreements, with such amount being recorded

as an accrued expense on the consolidated balance sheets.

contracts with certain consultants include provisions for a portion of the 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.

On December 29, 2023, the Company issued 2,223,147 shares of Common

Stock in satisfaction of accrued consultant fees owed to one consultant.

(loss) income before income taxes for the years ended March 31, 2025 and 2024 were $ ( 0.1 )

million and $ 0.5

million, respectively.

ELITE PHARMACEUTICALS, INC.

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

of March 31, 2026 and 2025, the Company owed an aggregate of $ 2,616,950 and $ 2,617,210 , respectively, to Mikah in accordance with the

agreements, with such amounts being recorded as an accrued expense on the consolidated balance sheets.

earnings (loss) before income taxes for the years ended March 31, 2026 and 2025 were $ 56.8 million and $ ( 0.1 ) million, respectively.

of the provision for income taxes were (amounts in thousands):

6 unchanged sentences

State and local

Total deferred provision (benefit)

Provision (benefit) for income taxes

Reconciliation

of the federal statutory rate to the Company’s effective tax rate were:

Total deferred provision

Provision for income taxes

ELITE PHARMACEUTICALS, INC.

AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

reconciliation between the Company’s effective tax rate and the federal statutory rate for the year ended March 31, 2026 is as

follows (amounts in thousands of dollars):

SCHEDULE OF EFFECTIVE INCOME TAX RATE RECONCILIATION

Federal Statutory Tax Rate

State and Local Income Taxes, Net of Federal Income Tax Effect (a)

Foreign Tax Effects

Effect of Changes in Tax Law or Rates Enacted in the Current Period

Effect of Cross-Border Tax Laws

Federal R&D Credits

Prior year deferred true-up

Changes in Valuation Allowance

Nontaxable or Nondeductible Items

Non-deductible change in fair value of derivative financial instruments

Non-deductible change in fair value of stock-based liabilities

Officer’s compensation

Other permanent items

Changes in Unrecognized Tax Benefits

Other Adjustments

Effective Tax Rate

(a) State taxes in

New Jersey and Florida made up the majority (greater than 50 percent) of the tax effect in this category.

reconciliation between the Company’s effective tax rate and the federal statutory rate for the year ended March 31, 2025 is as

For the Year Ended March 31 (in thousands)

Federal income tax rate

Federal Statutory Tax Rate

State and local taxes, net of federal benefit

State and Local Income Taxes, Net of Federal Income Tax Effect

Non-deductible change in fair value of derivative financial instruments

2 unchanged sentences

Prior year deferred true-up

Federal R&D Credits

Change in valuation allowance

Changes in Valuation Allowance

Effective tax rate

Effective Tax Rate

ELITE PHARMACEUTICALS, INC.

15 unchanged sentences

Net deferred tax asset

Company’s income tax expense (benefit) was $ 4.3 million and $ ( 19.6 ) million for the years ended March 31, 2025 and 2024, respectively.

During the year ended March 31, 2024, the Company recorded tax benefit of $ 21.9 million related to the Company’s release of the

valuation allowance against deferred tax assets related to U.S.

federal net operating losses carryforwards and research and development

tax credits, which are expected to be realized based on demonstrated current profitability and its expectations of forecasted income.

of March 31, 2025, the Company has a federal net operating loss carry forward of $ 50.8 million, of which, $ 33.5 million are subject to

expire at various dates between 2034 and 2037 and $17.3 million can be carried forward indefinitely with limitation of 80% of taxable

As of March 31, 2025, the Company’s federal and state income taxes due were $ 0.0 million and $ 0.3 million, respectively.

Company’s income tax expense was $ 11.9 million and $ 4.3 million for the years ended March 31, 2026 and 2025, respectively.

of March 31, 2026, the Company has a federal net operating loss carry forward of $ 11.9 million of which $ 10 million can be carried forward

indefinitely with limitation of 80% of taxable income and the remaining $ 1.9 million will expire in 2037 and has no limitation .

March 31, 2026, the Company’s has a federal research credits carryforward of $ 5.7 million which will begin to expire in 2032 .

of March 31, 2026, the Company’s federal and state income taxes due were $ 0 and $ 1.4 million, respectively.

Company’s policy for recording interest and penalties associated with unrecognized tax benefits is to record such interest and

penalties as a component of income tax expense.

There were no amounts accrued for interest or penalties for the

year ended March 31, 2025.

There were no amounts accrued for interest or penalties for the year ended March 31,

Management does not expect any material changes in its unrecognized tax benefits in the next year.

2 unchanged sentences

2022 and its state tax returns are open to examination from 2021.

July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the United States.

The OBBBA permanently extends certain

provisions of the Tax Cuts and Jobs Act, modifies aspects of the international tax framework, and restores favorable tax treatment for

certain business provisions, including the immediate expensing of domestic research and development expenditures.

resulting in a decrease

in our deferred tax assets of approximately $ 3.1 million, primarily due to the immediate expensing of domestic research and development

expenditures.

amounts of cash income taxes paid by the Company were as follows:

OF INCOME TAXES PAID

(in thousands)

March 31, 2026

State and Local:

All Other States

Income taxes, net of amounts refunded

SUBSEQUENT EVENTS

April 30, 2025, the Company announced that it is developing niche generic products and has launched Elite’s generic version of

Percocet® (oxycodone hydrochloride and acetaminophen tablets, USP CII) 5mg/325mg, 7.5mg/325mg and 10mg/325mg tablets.

Oxycodone HCl

and acetaminophen is indicated for the relief of moderate to moderately severe pain.

June 2, 2025, the Hakim Promissory Note was paid in full, in accordance with its terms and conditions.

2025, the Caskey Promissory Note was paid in full, in accordance with its terms and conditions.

April 2, 2026, the Company announced the commercial launch of our generic methadone hydrochloride 5 mg and 10 mg tablets.

is marketed and sold under the Elite Labs label.

June 1, 2026, the Company reported that it had filed an Abbreviated New Drug Application with the US Food and Drug Administration for

a generic version of an undisclosed drug product in the class of medications called anticoagulants.

On June 12, 2026, pursuant

to a stipulated dismissal agreed to by both parties, the District Court of New Jersey signed an order dismissing the patent infringement

suit filed by Purdue Pharma against the Company in November 2023.

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