ELITE PHARMACEUTICALS INC /NV/ 10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED June 30, 2026 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission File Number 001-15697 Elite Pharmaceuticals, Inc. (Exact name of Registrant as specified in its Charter) Nevada 22-3542636 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 165 Ludlow Avenue Northvale , New Jersey 07647 (Address of principal executive offices) (Zip Code) Registrant’s telephone number, including area code: (201) 750-2646 Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, par value $0.001 per share ELTP OTCQB Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES ☒ NO ☐ Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). YES ☒ NO ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒ Smaller reporting company ☒ Emerging growth company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ☐ NO ☒ The number of shares outstanding of each of the registrant’s classes of common stock, as of August 13, 2026: Common Stock - 1,077,136,442 shares PAGE PART I FINANCIAL INFORMATION F-1 ITEM 1. Financial Statements F-1 Condensed Consolidated Balance Sheets as of June 30, 2026 (Unaudited) and March 31, 2026 F-1 Condensed Consolidated Statements of Operations for the three months ended June 30, 2026 and 2025 (Unaudited) F-2 Condensed Consolidated Statements of Changes in Shareholders’ Equity for the three months ended June 30, 2026 and 2025 (Unaudited) F-3 Condensed Consolidated Statements of Cash Flows for the three months ended June 30, 2026 and 2025 (Unaudited) F-4 Notes to the Unaudited Condensed Consolidated Financial Statements F-5 ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 1 ITEM 3. Quantitative and Qualitative Disclosure About Market Risk 9 ITEM 4. Controls and Procedures 9 PART II OTHER INFORMATION 11 ITEM 1. Legal Proceedings 11 ITEM 1A. Risk Factors 11 ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds 11 ITEM 3. Defaults Upon Senior Securities 11 ITEM 4. Mine Safety Disclosures 11 ITEM 5. Other Information 11 ITEM 6. Exhibits 12 SIGNATURES 13 i PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS ELITE PHARMACEUTICALS, INC. AND SUBSIDIARY CONDENSED CONSOLIDATED BALANCE SHEETS June 30, 2026 March 31, 2026 (Unaudited) ASSETS Current assets: Cash $ 38,940,138 $ 29,797,800 Accounts receivable, net of allowance for expected credit losses of $ 1,280,030 and $ 1,441,523 respectively 50,441,624 59,715,676 Inventory 24,200,388 21,259,898 Prepaid expenses and other current assets 905,552 1,333,177 Total current assets 114,487,702 112,106,551 Property and equipment, net of accumulated depreciation of $ 18,353,218 and $ 18,100,243 respectively 10,737,317 10,181,328 Intangible assets 4,790,790 4,790,790 Finance lease - right-of-use asset, net of accumulated amortization of $ 1,099,587 and $ 984,801 respectively 1,180,377 1,295,163 Operating lease - right-of-use asset 1,404,216 1,529,468 Deferred income tax asset 6,501,308 7,823,039 Other assets: Restricted cash - debt service for NJEDA bonds 475,441 471,520 Security deposits 91,981 91,981 Total other assets 567,422 563,501 Total assets $ 139,669,132 $ 138,289,840 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Accounts payable $ 5,591,368 $ 6,053,444 Accrued expenses 6,429,800 10,194,222 Bonds payable, current portion, net of bond issuance costs 135,822 135,822 Loans payable, current portion 93,904 92,774 Lease obligation - finance lease, current portion 387,847 378,775 Lease obligation - operating lease, current portion 553,534 536,427 Derivative financial instruments - warrants 17,249,339 — Total current liabilities 30,441,614 17,391,464 Long-term liabilities: Bonds payable, net of current portion and bond issuance costs 655,103 651,559 Loans payable, net of current portion and loan costs 2,129,277 2,152,969 Lease obligation - finance lease, net of current portion 746,496 851,640 Lease obligation - operating lease, net of current portion 870,586 1,015,647 Derivative financial instruments - warrants — 17,343,586 Total long-term liabilities 4,401,462 22,015,401 Total liabilities 34,843,076 39,406,865 Commitments and Contingencies (Note 9) - - Shareholders’ equity: Common Stock; par value $ 0.001 ; 1,445,000,000 shares authorized; 1,077,236,442 and 1,077,196,442 shares issued as of June 30, 2026 and March 31, 2026, respectively; 1,077,136,442 and 1,077,096,442 shares outstanding as of June 30, 2026 and March 31, 2026 respectively 1,077,240 1,077,200 Additional paid-in capital 173,976,332 173,943,856 Treasury stock; 100,000 shares as of both June 30, 2026 and March 31, 2026 at cost ( 306,841 ) ( 306,841 ) Accumulated deficit ( 69,920,675 ) ( 75,831,240 ) Total shareholders’ equity 104,826,056 98,882,975 Total liabilities and shareholders’ equity $ 139,669,132 $ 138,289,840 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. F- 1 ELITE PHARMACEUTICALS, INC. AND SUBSIDIARY CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) 2026 2025 For the Three Months Ended June 30, 2026 2025 Revenue $ 32,355,283 $ 40,211,097 Cost of manufacturing 18,847,738 12,985,127 Gross profit 13,507,545 27,225,970 Operating expenses: Research and development 2,032,471 1,674,964 General and administrative 3,549,556 3,404,084 Non-cash compensation through issuance of stock options 28,476 52,329 Depreciation and amortization 367,761 394,886 Total operating expenses 5,978,264 5,526,263 Income from operations 7,529,281 21,699,707 Other income (expense): Change in fair value of derivative financial instruments - warrants 94,247 ( 22,109,537 ) Interest expense and amortization of debt issuance costs ( 73,103 ) ( 158,926 ) Interest income 166,117 4,542 Other income (expense), net 187,261 ( 22,263,921 ) Income (loss) before income taxes 7,716,542 ( 564,214 ) Income tax expense ( 1,805,977 ) ( 5,320,501 ) Net income (loss) $ 5,910,565 $ ( 5,884,715 ) Basic net income (loss) per share $ 0.01 $ ( 0.01 ) Diluted net income (loss) per share $ 0.01 $ ( 0.01 ) Basic weighted average common stock outstanding 1,077,236,002 1,068,363,108 Diluted weighted average common stock outstanding 1,128,661,497 1,068,363,108 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. F- 2 ELITE PHARMACEUTICALS, INC. AND SUBSIDIARY CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (UNAUDITED) Shares Amount Shares Amount Capital Shares Amount Deficit Equity Series J Preferred Stock Common Stock Additional Paid-In Treasury Stock Accumulated Total Shareholders’ Shares Amount Shares Amount Capital Shares Amount Deficit Equity Balance as of March 31, 2026 — $ — 1,077,196,442 $ 1,077,200 $ 173,943,856 100,000 $ ( 306,841 ) $ ( 75,831,240 ) $ 98,882,975 Net income — — — — — — — 5,910,565 5,910,565 Non-cash compensation through the issuance of employee stock options — — — — 28,476 — — — 28,476 Shares issued pursuant to exercise of employee stock options — — 40,000 40 4,000 — — — 4,040 Balance at June 30, 2026 — $ — 1,077,236,442 $ 1,077,240 $ 173,976,332 100,000 $ ( 306,841 ) $ ( 69,920,675 ) $ 104,826,056 Series J Preferred Stock Common Stock Additional Paid-In Treasury Stock Accumulated Total Shareholders’ Shares Amount Shares Amount Capital Shares Amount Deficit Equity Balance as of March 31, 2025 — $ — 1,068,463,108 $ 1,068,467 $ 173,457,329 100,000 $ ( 306,841 ) $ ( 120,703,926 ) $ 53,515,029 Balance — $ — 1,068,463,108 $ 1,068,467 $ 173,457,329 100,000 $ ( 306,841 ) $ ( 120,703,926 ) $ 53,515,029 Net loss — — — — — — — ( 5,884,715 ) ( 5,884,715 ) Net income (loss) — — — — — — — ( 5,884,715 ) ( 5,884,715 ) Non-cash compensation through the issuance of employee stock options — — — — 52,329 — — — 52,329 Balance at June 30, 2025 — $ — 1,068,463,108 $ 1,068,467 $ 173,509,658 100,000 $ ( 306,841 ) $ ( 126,588,641 ) $ 47,682,643 Balance — $ — 1,068,463,108 $ 1,068,467 $ 173,509,658 100,000 $ ( 306,841 ) $ ( 126,588,641 ) $ 47,682,643 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. F- 3 ELITE PHARMACEUTICALS, INC. AND SUBSIDIARY CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) 2026 2025 For the Three Months Ended June 30 2026 2025 CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $ 5,910,565 $ ( 5,884,715 ) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 252,975 275,413 (Recovery) provision for losses on accounts receivable ( 161,493 ) 211,425 Amortization of operating leases - right-of-use assets 125,252 113,385 Amortization of finance leases - right-of-use assets 114,786 119,473 Amortization of debt discount - bonds offering costs 3,544 3,545 Change in fair value of derivative financial instruments - warrants ( 94,247 ) 22,109,537 Deferred tax expense 1,321,731 4,884,535 Non-cash compensation through the issuance of employee stock options 28,476 52,329 Change in operating assets and liabilities: Accounts receivable 9,435,545 ( 7,223,068 ) Inventory ( 2,940,490 ) ( 3,116,352 ) Prepaid expenses and other current assets 427,625 428,454 Accounts payable ( 462,076 ) 2,131,285 Accrued expenses ( 3,764,422 ) 786,516 Deferred revenue — ( 3,334 ) Lease obligations - operating leases ( 127,954 ) ( 112,586 ) Net cash provided by operating activities 10,069,817 14,775,842 CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property and equipment ( 808,964 ) ( 218,204 ) Net cash used in investing activities ( 808,964 ) ( 218,204 ) CASH FLOWS FROM FINANCING ACTIVITIES: Payments of related party loans payable — ( 4,000,000 ) Payments on principal on finance lease obligations ( 96,072 ) ( 92,177 ) Proceeds from exercise of stock options 4,040 — Loan payments ( 22,562 ) ( 38,507 ) Net cash used in financing activities ( 114,594 ) ( 4,130,684 ) Net change in cash and restricted cash 9,146,259 10,426,954 Cash and restricted cash, beginning of period 30,269,320 11,769,161 Cash and restricted cash, end of period $ 39,415,579 $ 22,196,115 Supplemental disclosure of cash and non-cash transactions: Cash paid for interest $ 27,170 $ 158,926 Cash paid for income taxes $ 19,547 $ — Reconciliation of cash and restricted cash Cash $ 38,940,138 $ 21,737,797 Restricted cash - debt service for NJEDA bonds 475,441 458,318 Total cash and restricted cash shown in statement of cash flows $ 39,415,579 $ 22,196,115 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. F- 4 ELITE PHARMACEUTICALS, INC. AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Overview Elite Pharmaceuticals, Inc. (the “Company” or “Elite”) was incorporated on October 1, 1997 under the laws of the State of Delaware, and its wholly-owned subsidiary Elite Laboratories, Inc. (“Elite Labs”) was incorporated on August 23, 1990 under the laws of the State of Delaware. On January 5, 2012, Elite Pharmaceuticals was reincorporated under the laws of the State of Nevada. Elite Labs engages primarily in researching, developing, licensing, manufacturing, and sales of generic, oral dose pharmaceuticals. The Company is equipped to manufacture controlled-release products on a contract basis for third parties and itself, if and when the product candidates are approved. These products include drugs that cover therapeutic areas for allergy, bariatric, attention deficit, infection and Parkinson's disease. Research and development activities are performed with an objective of developing product candidates that will secure marketing approvals from the United States Food and Drug Administration (“FDA”), and thereafter, commercially exploiting such products. Basis of Presentation The accompanying unaudited condensed consolidated financial statements of the Company are presented in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC. The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Elite Labs. All significant intercompany accounts and transactions have been eliminated in consolidation. Certain information or footnote disclosures normally included in condensed financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s Form 10-K as filed with the SEC on June 29, 2026. The interim results for the three months ended June 30, 2026 are not necessarily indicative of the results to be expected for the fiscal year ending March 31, 2027 or for any future periods. The Company’s significant accounting policies and recent accounting standards are summarized in Note 1 of the Company’s consolidated financial statements for the year ended March 31, 2026. There were no significant changes to these accounting policies during the three months ended June 30, 2026. Use of Estimates The preparation of the unaudited condensed consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed 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, 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. Segment Information Financial Accounting Standards Board (“FASB”) Accounting Standards Codification 280 (“ASC 280”), Segment Reporting , establishes standards for reporting information about operating segments. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”), or decision-making group, in deciding how to allocate resources and in assessing performance. F- 5 ELITE PHARMACEUTICALS, INC. AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) The Company’s CODM is the Chief Executive Officer, who reviews the financial performance and the results of operations of the segments prepared in accordance with GAAP when making decisions about allocating resources and assessing performance of the Company. The Company identifies its operating and reportable segments based on the financial information regularly reviewed by its CODM for purposes of assessing operating performance, allocating resources, and making strategic decisions. The Company’s operations consist of its generic pharmaceuticals product portfolio whose marketing approvals were secured via an Abbreviated New Drug Application (“ANDA”). The CODM evaluates the business, manages resources, and reviews financial results of the Company on a consolidated basis. Additionally, the Company’s ANDA products share similar economic characteristics, operating processes, and regulatory environments, and are managed as a single business unit. Accordingly, as of June 30, 2026, the Company has determined that it operates in a 1 single operating and reportable segment. Asset information by operating segment is not presented below since the chief operating decision maker does not review this information by segment. The ANDA segment follows the same accounting policies used in the preparation of the Company’s consolidated financial statements. Please see Note 14 for further details. Revenue Recognition The Company primarily generates revenue from manufacturing fees and direct sales to pharmaceutical distributors for pharmacies and institutions. Manufacturing fees include the development of pain management products, manufacturing of a line of generic pharmaceutical products with approved ANDA, through the manufacture of formulations and the development of new products. The Company also generates revenue from licensing fees from the commercialization of products either by license and the collection of royalties, or the expansion of licensing agreements with other pharmaceutical companies, including co-development projects, joint ventures and other collaborations. Under ASC 606, Revenue from 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 those goods or services. The Company recognizes revenues following the five-step model prescribed under ASC 606: (i) identify contract(s) with a customer; (ii) identify the performance obligation(s) in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligation(s) in the contract; and (v) recognize revenues when (or as) the Company satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. Sales, value add, and other taxes collected on behalf of third parties are excluded from revenue. Nature of goods and services The Company is equipped to manufacture controlled-release products on a contract basis for third parties, if, and when, the products are approved. These products include products using controlled-release drug technology. The Company also develops and markets (either on its own or by license to other companies) generic and proprietary controlled-release pharmaceutical products. The Company recognizes 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. The 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. F- 6 ELITE PHARMACEUTICALS, INC. AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) The 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 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 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. Disaggregation of revenue In the following table, revenue is disaggregated by type of revenue generated by the Company. The Company recognizes revenue at a point in time for all performance obligations. Selected information on the Company’s reportable segment and the reconciliation of operating income by segment to income from operations and to income (loss) before income taxes are disclosed within Note 14. The 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. Additionally, The Company enters into licensing and development agreements, which may include multiple revenue generating activities, including milestones payments, licensing fees, product sales and services. The following table summarizes manufacturing fees by sales channel and revenues from licensing fees for the three months ended June 30, 2026 and 2025: SCHEDULE OF DISAGGREGATION OF REVENUE 2026 2025 For the Three Months Ended June 30, 2026 2025 Direct sales to Wholesalers $ 16,403,265 $ 19,032,232 Indirect sales to Wholesalers 15,731,055 20,745,531 Total ANDA revenue 32,134,320 39,777,763 Licensing Fees 220,963 433,334 Total revenue $ 32,355,283 $ 40,211,097 The 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 three months ended June 30, 2026 and 2025: 2026 2025 For the Three Months Ended June 30, 2026 2025 Scheduled Products - Manufacturing Fees $ 27,809,738 $ 38,913,885 Scheduled Products - Licensing Fees 220,963 - Unscheduled Products - Manufacturing Fees 4,324,582 863,878 Unscheduled Products - Licensing Fees - 433,334 Total Revenue $ 32,355,283 $ 40,211,097 F- 7 ELITE PHARMACEUTICALS, INC. AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Restricted Cash As of June 30, 2026 and March 31, 2026, the Company had $ 475,441 and $ 471,520 , of restricted cash, respectively, related to debt service reserve in regard to the New Jersey Economic Development Authority (“NJEDA”) bonds (see Note 6). Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. Due to temporary differences in the timing of recognition of items included in income for accounting and tax purposes, deferred tax assets or liabilities are recorded to reflect the impact arising from these differences on future tax payments. Where applicable, the Company records a valuation allowance to reduce any deferred tax assets that it determines will not be realizable in the future. The Company recognizes the benefit of an uncertain tax position that it has taken or expects to take on income tax returns it files if such tax position is more likely than not to be sustained on examination by the taxing authorities, based on the technical merits of the position. These tax benefits are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution. The Company operates in multiple tax jurisdictions within the United States of America. The Company remains subject to examination in all tax jurisdiction until the applicable statutes of limitation expire. As of June 30, 2026, a summary of the tax years that remain subject to examination in the Company’s major tax jurisdictions are: United States – Federal, 2022 and forward, and State, 2022 and forward. The Company did not have any unrecognized tax positions for the three months ended June 30, 2026 and 2025. Earnings (Loss) Per Share The 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 denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. In the accompanying financial 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 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 and stock options were dilutive for the three months ended June 30, 2026, and are therefore included in the diluted EPS calculation for that period. For the three months ended June 30, 2026, there were no potentially diluted shares excluded from the calculation of diluted EPS. As the Company was in a net loss position for the three months ended June 30, 2025, the potential dilution from the Series J 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 income (loss) per share as their inclusion would have been antidilutive. F- 8 ELITE PHARMACEUTICALS, INC. AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) The following is the computation of net income (loss) per share applicable to common shareholders for the periods indicated: SCHEDULE OF EARNINGS (LOSS) PER SHARE APPLICABLE TO COMMON SHAREHOLDERS 2026 2025 For the Three Months Ended June 30, 2026 2025 Numerator Net income (loss) - basic $ 5,910,565 $ ( 5,884,715 ) Effect of dilutive instrument on net income ( 94,247 ) — Net income (loss) - diluted $ 5,816,318 $ ( 5,884,715 ) Denominator Weighted average shares of Common Stock outstanding - basic 1,077,236,002 1,068,363,108 Dilutive effect of stock options and convertible securities 51,425,495 — Weighted average shares of Common Stock outstanding - diluted 1,128,661,497 1,068,363,108 Net income (loss) per share Basic $ 0.01 $ ( 0.01 ) Diluted $ 0.01 $ ( 0.01 ) Recently Issued Accounting Pronouncements - Adopted In 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 606. 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. The Company adopted the ASU during the three months ending June 30, 2026 and the adoption did not have a material impact on the unaudited condensed consolidated financial statements. Recently Issued Accounting Pronouncements - Not Yet Adopted In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. In January 2025, the FASB issued ASU No. 2025-01, Income Statement - 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 unaudited condensed consolidated financial statements. In May 2025, the FASB issued ASU 2025-04, Compensation-Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606): Clarifications to Share-Based Consideration Payable to a Customer to reduce diversity in practice and improve the decision usefulness and operability of the guidance for share-based consideration payable to a customer in conjunction with selling goods or services. The ASU is effective for fiscal years beginning after December 15, 2026 with updates to be applied on a retrospective or modified retrospective basis. Early adoption is permitted. The Company is evaluating the impact that this standard will have on the Company’s unaudited condensed consolidated financial statements. F- 9 ELITE PHARMACEUTICALS, INC. AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) In 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. 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 unaudited condensed consolidated financial statements. Management has evaluated recently issued accounting pronouncements outside of those mentioned above and does not believe that any of these pronouncements will have a significant impact on the Company’s unaudited condensed consolidated financial statements and related disclosures. NOTE 2. INVENTORY Inventory consisted of the following: SCHEDULE OF INVENTORY June 30, 2026 March 31, 2026 Finished goods $ 7,956,873 $ 5,389,291 Work-in-progress 2,133,372 3,267,705 Raw materials 14,110,143 12,602,902 Inventory $ 24,200,388 $ 21,259,898 NOTE 3. PROPERTY AND EQUIPMENT, NET Property and equipment consisted of the following: SCHEDULE OF PROPERTY AND EQUIPMENT June 30, 2026 March 31, 2026 Land, building and improvements $ 11,907,253 $ 11,649,918 Laboratory, manufacturing, warehouse and transportation equipment 16,253,263 15,701,634 Office equipment and software 373,601 373,601 Furniture and fixtures 556,418 556,418 Property and equipment, gross 29,090,535 28,281,571 Less: Accumulated depreciation ( 18,353,218 ) ( 18,100,243 ) Property and equipment, net $ 10,737,317 $ 10,181,328 Depreciation expense was $ 252,975 and $ 275,413 for the three months ended June 30, 2026 and 2025, respectively. NOTE 4. INTANGIBLE ASSETS The following table summarizes the Company’s intangible assets as of and for the periods ended June 30, 2026 and March 31, 2026: SCHEDULE OF INTANGIBLE ASSETS June 30, 2026 Estimated Useful Life Gross Carrying Amount Additions Impairment losses Accumulated Amortization Net Book Value ANDA acquisition costs Indefinite $ 4,790,790 $ — $ — $ — $ 4,790,790 $ 4,790,790 $ — $ — $ — $ 4,790,790 F- 10 ELITE PHARMACEUTICALS, INC. AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) March 31, 2026 Estimated Useful Life Gross Carrying Amount Additions Impairment losses Accumulated Amortization Net Book Value Patent application costs - * $ 289,039 $ — $ ( 289,039 ) $ — $ — ANDA acquisition costs Indefinite 5,348,763 — ( 557,973 ) — 4,790,790 $ 5,637,802 $ — $ ( 847,012 ) $ — $ 4,790,790 * 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. The Company tests its intangible assets for impairment at least annually (as of March 31st) and whenever events or circumstances indicate that impairment may have occurred. Indicators of impairment may include, among others: a significant decline in expected future cash flows; a sustained, significant decline in stock price and market capitalization; a significant adverse change in legal factors or business climate; unanticipated competition; and slower growth rates. No such impairment was recorded during the three months ended June 30, 2026 and 2025. * 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. NOTE 5. ACCRUED EXPENSES As of June 30, 2026 and March 31, 2026, the Company’s accrued expenses consisted of the following: SCHEDULE OF ACCRUED EXPENSES June 30, 2026 March 31, 2026 Co-development profit split $ 2,776,060 $ 2,616,950 Employee bonuses 1,580,813 5,285,256 Income tax 1,058,880 594,181 Legal and professional expense 174,224 282,672 Audit fees 250,000 500,000 Director dues 22,500 22,500 Salaries and fees payable 73,907 273,059 Other accrued expenses 493,416 619,604 Total accrued expenses $ 6,429,800 $ 10,194,222 NOTE 6. NJEDA BONDS During 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, 2012 . During July 2014, the Company retired all the outstanding Series B Notes, at par, along with all accrued interest due and owed. In relation to the Series A Notes, the Company is required to maintain a debt service reserve fund. The debt service reserve is classified as restricted cash on the accompanying unaudited condensed consolidated balance sheets. The NJEDA Bonds require the Company to make an annual principal payment on September 1st based on the amount specified in the loan documents and semi-annual interest payments on March 1st and September 1st, equal to interest due on the outstanding principal. The annual interest rate on the Series A Note is 6.5 %. The NJEDA Bonds are collateralized by a first lien on the Company’s facility and equipment acquired with the proceeds of the original and refinanced bonds. The bonds mature on September 1, 2030. F- 11 ELITE PHARMACEUTICALS, INC. AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) The following tables summarize the Company’s bonds payable liability: SCHEDULE OF BONDS PAYABLE LIABILITY June 30, 2026 March 31, 2026 Gross bonds payable NJEDA Bonds - Series A Notes $ 850,000 $ 850,000 Less: Current portion of bonds payable (prior to deduction of bond offering costs) ( 150,000 ) ( 150,000 ) Long-term portion of bonds payable (prior to deduction of bond offering costs) $ 700,000 $ 700,000 Bond offering costs $ 354,454 $ 354,454 Less: Accumulated amortization ( 295,379 ) ( 291,835 ) Bond offering costs, net $ 59,075 $ 62,619 Current portion of bonds payable - net of bond offering costs Current portions of bonds payable $ 150,000 $ 150,000 Less: Bonds offering costs to be amortized in the next 12 months ( 14,178 ) ( 14,178 ) Current portion of bonds payable, net of bond offering costs $ 135,822 $ 135,822 Long term portion of bonds payable - net of bond offering costs Long term portion of bonds payable $ 700,000 $ 700,000 Less: Bond offering costs to be amortized subsequent to the next 12 months ( 44,897 ) ( 48,441 ) Long term portion of bonds payable, net of bond offering costs $ 655,103 $ 651,559 Amortization expense was $ 3,544 and $ 3,545 for the three months ended June 30, 2026 and 2025, respectively. Interest payable was $ 18,417 and $ 4,604 as of June 30, 2026 and March 31, 2026, respectively. Interest expense was $ 13,813 and $ 16,087 for the three months ended June 30, 2026 and 2025, respectively. Maturities of bonds for the next five years are as follows: SCHEDULE OF MATURITIES OF BONDS Years ending March 31, Amount Remainder of 2027 $ 150,000 2028 160,000 2029 170,000 2030 180,000 2031 190,000 Total $ 850,000 NOTE 7. LOANS PAYABLE Loans payable consisted of the following: SCHEDULE OF LOANS PAYABLE June 30, 2026 March 31, 2026 Mortgage loan payable 4.75 % interest and maturing June 2032 $ 2,223,181 $ 2,245,743 Less: Current portion of loans payable ( 93,904 ) ( 92,774 ) Long-term portion of loans payable $ 2,129,277 $ 2,152,969 The interest expense associated with the loans payable was $ 27,170 and $ 28,797 for the three months ended June 30, 2026 and 2025, respectively. F- 12 ELITE PHARMACEUTICALS, INC. AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Loan principal payments for the next five years are as follows: SCHEDULE OF LOAN PRINCIPAL PAYMENTS Future principal balances Years ending March 31, Amount Remainder of 2027 $ 70,212 2028 94,433 2029 98,447 2030 103,817 2031 109,482 Thereafter 1,746,790 Total remaining principal balance $ 2,223,181 NOTE 8. RELATED PARTY LOANS 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. For the three months ended June 30, 2026 there was no interest expense on the Hakim Promissory Note. For the three months ended June 30, 2025, interest expense on the Hakim Promissory Note totaled $ 50,000 and was recorded on the unaudited condensed 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 June 2, 2025. On June 30, 2023, the Company entered into a collateralized promissory note with Davis Caskey (the “Caskey Promissory Note”). The Caskey Promissory Note had a principal balance of $ 1,000,000 and an interest rate of 9 % for the first year and 10 % for an optional second year. For the three months ended June 30, 2026 there was no interest expense on the Caskey Promissory Note. For the three months ended June 30, 2025, interest on the Caskey Promissory Note totaled $25,000 and was recorded on the unaudited condensed 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 June 26, 2025. F- 13 ELITE PHARMACEUTICALS, INC. AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 9. COMMITMENTS AND CONTINGENCIES Occasionally, the Company may be involved in claims and legal proceedings arising from the ordinary course of its business. The Company records a provision for a liability when it believes that it is both probable that a liability has been incurred, and the amount can be reasonably estimated. If these estimates and assumptions change or prove to be incorrect, it could have a material impact on the Company’s consolidated financial statements. Contingencies are inherently unpredictable, and the assessments of the value can involve a series of complex judgments about future events and can rely heavily on estimates and assumptions. On 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. 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 12, 2026. Elite’s launch of a generic OxyContin ® will depend on the approval by the FDA. Operating Leases The 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. The NBV Pompano Office Lease has a term of three years , ending on September 30, 2027 . The Company entered into a lease agreement for a portion of a one-story warehouse, located at 144 Ludlow Avenue, Northvale, New Jersey (the “144 Ludlow Ave. Lease”). The lease agreement began on January 22, 2024, and has a term of five years . The 144 Ludlow Ave. Lease will expire on December 31, 2028. The Company assesses whether an arrangement is a lease or contains a lease at inception. For arrangements considered leases or that contain a lease that is accounted for separately, the Company determines the classification and initial measurement of the right-of-use asset and lease liability at the lease commencement date, which is the date that the underlying asset becomes available for use. The Company has elected to account for non-lease components associated with its leases and lease components as a single lease component. The Company recognizes a right-of-use asset, which represents the Company’s right to use the underlying asset for the lease term, and a lease liability, which represents the present value of the Company’s obligation to make payments arising over the lease term. The present value of the lease payments is calculated using either the implicit interest rate in the lease or an incremental borrowing rate. 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. Finance Leases In November 2023, the Company entered into a finance lease for equipment (the “Waters Equipment Lease”). The Waters Equipment Lease is related to lab equipment with an acquisition cost of $ 499,775 , with the Company taking ownership of the asset on December 1, 2023. The Waters Equipment Lease has a term of five years, ending on November 29, 2028 . 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. In February 2024, the Company entered into a finance lease for warehouse equipment (the “Warehouse Equipment Lease”). The Warehouse Equipment Lease is related to warehouse equipment with an acquisition cost of $ 37,500 , with the Company taking ownership of the asset during February 2024. 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. In February 2024, the Company entered into a finance lease for equipment (the “February 2024 Equipment Lease”). The February 2024 Equipment Lease is related to manufacturing equipment with an acquisition cost of $ 455,000 , with the Company taking ownership of the asset during February 2024. The February 2024 Equipment Lease has a term of five years, ending in February 2029 . The Company will retain ownership of the equipment at lease termination. F- 14 ELITE PHARMACEUTICALS, INC. AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) In March 2024, the Company entered into three separate finance leases for manufacturing assets (the “March 2024 Equipment Leases”). The March 2024 Equipment Leases are related to manufacturing equipment and vault installed at the Company’s facility located at 144 Ludlow Avenue, Northvale NJ with an aggregate acquisition cost of $ 1,085,177 . Each of the separate leases included in the March 2024 Equipment Leases has a term of five years , ending in March 2029 . The Company will retain ownership of all related assets at lease termination. In 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 to warehouse and laboratory equipment with an aggregate acquisition cost of $ 153,745 . One 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. A lease is classified as a finance lease if any of the following criteria are met: (i) ownership of the underlying asset transfers to the Company by the end of the lease term; (ii) the lease contains an option to purchase the underlying asset that the Company is reasonably expected to exercise; (iii) the lease term is for a major part of the remaining economic life of the underlying asset; (iv) the present value of the sum of lease payments and any residual value guaranteed by the Company equals or exceeds substantially all of the fair value of the underlying asset; or (v) the underlying asset is of a specialized nature that it is expected to have no alternative use to the lessor at the end of the lease term. A lease that does not meet any of the criteria to be classified as a finance lease is classified as an operating lease. As the Company expects to exercise the option to purchase the asset at the end of the lease term, the Waters equipment lease was determined to be a finance lease. The finance lease is included on the consolidated balance sheets as Finance lease - right-of-use asset and Lease obligation - finance lease. The finance lease costs are split between Depreciation and amortization expense related to 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. Rent expense is recorded on the straight-line basis and in cost of manufacturing in the unaudited condensed consolidated statements of operations. Rent expense is as follows: SCHEDULE OF RENT EXPENSE STRAIGHT-LINE BASIS Lease 2026 2025 For the Three Months Ended June 30, Lease 2026 2025 Ludlow-144 $ 158,317 $ 154,777 NBV-610 4,563 7,303 Rent expense 4,563 7,303 The table below shows the future minimum rental payments, exclusive of taxes, insurance and other costs: SCHEDULE OF FUTURE MINIMUM RENTAL PAYMENTS Years ending March 31, Operating Lease Amount Financing Lease Amount Total Remainder of 2027 $ 501,723 $ 359,494 $ 861,217 2028 666,207 479,337 1,145,544 2029 440,159 438,045 878,204 2030 — 13,740 13,740 Total future minimum lease payments 1,608,089 1,290,616 2,898,705 Less: interest ( 183,969 ) ( 156,273 ) ( 340,242 ) Present value of lease payments $ 1,424,120 $ 1,134,343 $ 2,558,463 The weighted-average remaining lease term and the weighted-average discount rate of our leases were as follows: SCHEDULE OF WEIGHTED -AVERAGE REMAINING TERM AND THE WEIGHTED-AVERAGE DISCOUNT RATE For the Three Months Ended June 30, Lease Term and Discount Rate 2026 2025 Remaining lease term (years) Operating leases 2.4 3.4 Finance leases 2.7 3.6 Discount rate Operating leases 10.0 % 10.0 % Finance leases 9.5 % 9.5 % NOTE 10. PREFERRED STOCK Series J convertible preferred stock On April 28, 2017, the Company created the Series J Convertible Preferred Stock (“Series J Preferred”) in conjunction with the Certificate of Designations. A total of 50 shares of Series J Preferred were authorized, zero shares are issued and outstanding, with a stated value of $ 1,000,000 per share and a par value of $ 0.01 . F- 15 ELITE PHARMACEUTICALS, INC. AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 11. DERIVATIVE FINANCIAL INSTRUMENTS – WARRANTS The Company evaluates and accounts for its freestanding instruments in accordance with ASC 815, Accounting for Derivative Instruments and Hedging Activities . The Company issued warrants, with a term of ten years , to affiliates in connection with an exchange agreement dated April 28, 2017. The warrants are exercisable from the date of issuance, commencing April 28, 2020. The 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 June 30, 2026 and March 31, 2026. As a result of the net cash settlement at the option of the holder, such warrants are classified as liabilities and measured initially and subsequently at fair value. The fair value of the Series J Warrants was calculated using a Black-Scholes model. The following assumptions were used in the Black-Scholes model to calculate the fair value of the Series J Warrants: SCHEDULE OF FAIR VALUE OF WARRANTS ISSUED June 30, 2026 March 31, 2026 Fair value of the Company’s Common Stock $ 0.3651 $ 0.3601 Volatility 50.90 % 63.96 % Initial exercise price $ 0.1521 $ 0.1521 Warrant term (in years) 0.8 1.1 Risk free rate 3.47 % 3.47 % The changes in warrants (Level 3 financial instruments) measured at fair value on a recurring basis were as follows for the periods ended three months ended June 30, 2026 and 2025: SCHEDULE OF CHANGES IN WARRANTS MEASURED AT FAIR VALUE ON A RECURRING BASIS Balance at March 31, 2025 $ 25,199,193 Change in fair value of derivative financial instruments - warrants 22,109,537 Balance at June 30, 2025 $ 47,308,730 Balance at March 31, 2026 $ 17,343,586 Change in fair value of derivative financial instruments - warrants ( 94,247 ) Balance at June 30, 2026 17,249,339 Measured on a Recurring Basis The 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 Amount at Fair Value Level 1 Level 2 Level 3 Balance as of March 31, 2026 $ 17,343,586 $ — $ — $ 17,343,586 Change in fair value of derivative financial instruments - warrants ( 94,247 ) — — ( 94,247 ) Balance as of June 30, 2026 $ 17,249,339 $ — $ — $ 17,249,339 Fair Value Measurement Amount at Fair Value Level 1 Level 2 Level 3 Balance as of March 31, 2025 $ 25,199,193 $ — $ — $ 25,199,193 Change in fair value of derivative financial instruments - warrants 22,109,537 — — 22,109,537 Balance as of June 30, 2025 $ 47,308,730 $ — $ — $ 47,308,730 F- 16 ELITE PHARMACEUTICALS, INC. AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 12. STOCK-BASED COMPENSATION Under its 2014 Equity Incentive Plan and its 2024 Equity Incentive Plan, the Company did grant and may grant stock options to officers, selected employees, as well as members of the Board of Directors and advisory board members. On July 1, 2024 the Company restated the 2014 Equity Incentive Plan to increase the shares reserved under the option plan by 12,730,000 . Under the 2024 Equity Incentive Plan, 80,000,000 options are available for grant. All options have generally been granted at a price equal to or greater than the fair market value of the Company’s Common Stock at the date of the grant. Generally, options are granted with a vesting period of up to three years and expire ten years from the date of grant. The fair value of option awards is estimated on the date of grant using the Black-Scholes option-pricing model. The exercise price of each award is generally not less than the per share fair value in effect as of that award date. The determination of fair value using the Black-Scholes model is affected by the Company’s share fair value as well as assumptions regarding a number of complex and subjective variables, including expected price volatility, risk-free interest rate and projected employee share option exercise behaviors. The Company estimates its expected volatility by using a combination of historical share price volatilities of similar companies within the Company’s industry. The expected term of the Company’s stock options for employees has been determined utilizing the “simplified” method for awards, since the Company does not have sufficient exercise history to estimate term of its historical option awards. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve. Expected dividend yield is zero based on the fact that the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future. A summary of the activity of Company’s 2024 Equity Incentive plan and prior equity incentive plans for the three months ended June 30, 2026 is as follows: SCHEDULE OF STOCK OPTION PLAN Shares Weighted Average Weighted Average Remaining Contractual Aggregate Underlying Exercise Term Intrinsic Options Price (in years) Value Outstanding at March 31, 2026 6,906,666 $ 0.07 6.8 $ 2,002,996 Granted — $ — — $ — Exercised ( 40,000 ) $ 0.10 — $ — Expired and Forfeited — $ — — $ — Outstanding at June 30, 2026 6,866,666 $ 0.07 6.6 $ 2,026,965 Exercisable at June 30, 2026 5,400,000 $ 0.06 6.4 $ 1,627,492 The aggregate intrinsic value for outstanding options is calculated as the difference between the exercise price of the underlying awards and the quoted price of the Company’s Common Stock as of June 30, 2026 of $ 0.37 for those awards with strike prices lower than the quoted price of the Company’s Common Stock as of June 30, 2026. As of June 30, 2026, there was $ 23,183 in unrecognized stock-based compensation expense that will be recognized over a weighted average 0.27 year period. NOTE 13. CONCENTRATIONS AND CREDIT RISK Revenues Two customers accounted for approximately 73 % of the Company’s revenues for the three months ended June 30, 2026. These customers accounted for approximately 60 % and 13 % of revenues, respectively. Three customers accounted for approximately 76 % of the Company’s revenues for the three months ended June 30, 2025. These three customers accounted for approximately 51 %, 15 % and 10 % of revenues, respectively. F- 17 ELITE PHARMACEUTICALS, INC. AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Accounts Receivable Two customers accounted for approximately 76 % of the Company’s accounts receivable as of June 30, 2026. These two customers accounted for approximately 66 % and 10 % of receivables, respectively. Three customers accounted for approximately 77 % of the Company’s accounts receivable as of June 30, 2025. These three customers accounted for approximately 54 %, 12 % and 11 % of accounts receivable, respectively. Purchasing Three suppliers accounted for approximately 78 % of the Company’s purchases of raw materials for the three months ended June 30, 2026. These three suppliers accounted for approximately 32 %, 31 %, and 14 % of purchasing, respectively. Three suppliers accounted for approximately 75 % of the Company’s purchases of raw materials for the three months ended June 30, 2025. These three suppliers accounted for approximately 31 %, 25 %, and 19 % of purchasing, respectively. NOTE 14. SEGMENT RESULTS FASB ASC 280-10-50 requires use of the “management approach” model for segment reporting. The management approach is based on the way a company’s management organized segments within the company for making operating decisions and assessing performance. Reportable segments are based on products and services, geography, legal structure, management structure, or any other manner in which management disaggregates a company. Consolidated 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. The following represents selected information for the Company’s reportable segment: SCHEDULE OF SELECTED INFORMATION FOR REPORTABLE SEGMENTS 2026 2025 For the Three Months Ended June 30, 2026 2025 Operating Income by Segment ANDA $ 11,475,074 $ 25,551,006 Operating income by Segment $ 11,475,074 $ 25,551,006 F- 18 ELITE PHARMACEUTICALS, INC. AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) The table below reconciles the Company’s operating income by segment to income (loss) before income taxes as reported in the Company’s condensed consolidated statements of operations: SCHEDULE OF OPERATING INCOME BY SEGMENT TO INCOME FROM OPERATIONS 2026 2025 For the Three Months Ended June 30, 2026 2025 Operating income by segment $ 11,475,074 $ 25,551,006 Corporate unallocated costs ( 3,549,556 ) ( 3,404,084 ) Depreciation and amortization expense ( 367,761 ) ( 394,886 ) Non-cash compensation through issuance of stock options ( 28,476 ) ( 52,329 ) Income from operations 7,529,281 21,699,707 Interest income 166,117 4,542 Interest expense and amortization of debt issuance costs ( 73,103 ) ( 158,926 ) Change in fair value of derivative instruments 94,247 ( 22,109,537 ) Income (loss) before income taxes $ 7,716,542 $ ( 564,214 ) NOTE 15. RELATED PARTY AGREEMENTS Mikah Pharma, LLC Agreements In May 2020, Praxgen (formerly known as SunGen Pharma LLC), pursuant to an asset purchase agreement, assigned its rights and obligations under the Praxgen Agreement for Amphetamine IR and Amphetamine ER to Mikah Pharma LLC (“Mikah”). The ANDAs for Amphetamine IR and Amphetamine ER are now registered under Elite’s name. Mikah will now be Elite’s partner with respect to Amphetamine IR and ER and will assume all the rights and obligations for these products from Praxgen. Mikah was founded in 2009 by Nasrat Hakim, a related party and the Company’s President, Chief Executive Officer and Chairman of the Board. In June 2021, the Company entered into a development and license agreement with Mikah, pursuant to which Mikah will engage in the research, development, sales and licensing of generic pharmaceutical products. In addition, Mikah will collaborate to develop and commercialize generic products including formulation development, analytical method development, manufacturing, sales and marketing of generic products. Initially two generic products were identified for the parties to develop. As of June 30, 2026 and March 31, 2026, the Company owed an aggregate of $ 2,776,060 and $ 2,616,950 , respectively, to Mikah in accordance with the agreements, with such amount being recorded as an accrued expense on the unaudited condensed consolidated balance sheets. NOTE 16. INCOME TAXES The determination of income tax expense in the accompanying unaudited condensed consolidated statements of income is based on the effective tax rate for the year, adjusted for the impact of any discrete items which are accounted for in the period in which they occur. The Company’s income tax expense was $ 1,805,977 and $ 5,320,501 for the three months ended June 30, 2026 and 2025, respectively. The Company recorded tax expense of approximately 23.4 % and ( 943.0 )% of income before income tax expense, for the three months ended June 30, 2026 and 2025, respectively. The Company’s effective tax rate is subject to volatility as changes in the fair value adjustments in the Company’s derivative liabilities significantly impact pre-tax earnings. NOTE 17. SUBSEQUENT EVENTS On August 4, 2026, the Company issued a press release to announce the launch of Elite’s generic version of Requip XL® (Ropinirole Extended-Release Tablets USP), with strengths of 2 mg, 4 mg, 6 mg, 8 mg, and 12 mg tablets. Ropinirole belongs to a class of drugs known as a non-ergoline dopamine agonist used to treat Parkinson’s disease. This product is marketed and sold under the Elite Laboratories, Inc. label. F- 19 ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion of our financial condition and results of operations for the three months ended June 30, 2026 and 2025 should be read in conjunction with our unaudited condensed consolidated financial statements and the notes to those statements that are included elsewhere in this report. Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including those set forth under Item 1A. Risk Factors appearing in our Annual Report on Form 10-K for the year ended March 31, 2026. We use words such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “could,” and similar expressions to identify forward-looking statements. Unless expressly indicated or the context requires otherwise, the terms “Elite”, the “Company”, “we”, “us”, and “our” refer to Elite Pharmaceuticals, Inc. and subsidiary. Background Elite Pharmaceuticals, Inc., a Nevada corporation (the “Company”, “Elite”, “Elite Pharmaceuticals”, the “registrant”, “we”, “us” or “our”) was incorporated on October 1, 1997 under the laws of the State of Delaware, and its wholly-owned subsidiary, Elite Laboratories, Inc. (“Elite Labs”), was incorporated on August 23, 1990 under the laws of the State of Delaware. On January 5, 2012, Elite Pharmaceuticals was reincorporated under the laws of the State of Nevada. We are a specialty pharmaceutical company principally engaged in the development and manufacture of oral, controlled-release products, and the manufacture of generic pharmaceuticals. Our strategy includes developing generic versions of controlled-release drug products with high barriers to entry. We occupy manufacturing, warehouse, laboratory and office space at 135, 144 and 165 Ludlow Avenue in Northvale, NJ (the “Northvale Facility”). The Northvale Facility operates under Current Good Manufacturing Practice and is a United States Drug Enforcement Agency registered facility for research, development, and manufacturing. We are also party to an operating lease for office space at Pompano Beach, Florida. Strategy We focus our efforts on the following areas: (i) manufacturing of a line of generic pharmaceutical products with approved Abbreviated New Drug Applications (“ANDAs”); (ii) development of additional generic pharmaceutical products; (iii) development of the other product candidates in our pipeline including products co-developed with partners; (iv) commercial exploitation of our products either by sales under our own label, license and the collection of royalties, or through the manufacture of our formulations; and (v) development of new products for sale under our own label, and the expansion of our licensing agreements with other pharmaceutical companies, including co-development projects, joint ventures and other collaborations. We continue to evaluate opportunities for the development of various types of drug products, including branded drug products which require New Drug Applications (“NDAs”) under Section 505(b)(1) or 505(b)(2) of the Drug Price Competition and Patent Term Restoration Act of 1984 as well as generic drug products which require ANDAs. We believe that our business strategy enables us to reduce our risk by having a diverse product portfolio. Recent Developments On April 2, 2026, we announced the commercial launch of our generic methadone hydrochloride 5 mg and 10 mg tablets. The product is marketed and sold under the Elite Labs label and represents an expansion of the Company’s generic product portfolio. On June 1, 2026, we 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. On June 15, 2026, we reported positive results from a pivotal bioequivalence study for an undisclosed anticonvulsant generic drug product. On August 4, 2026, the Company issued a press release to announce the launch of Elite’s generic version of Requip XL® (Ropinirole Extended-Release Tablets USP), with strengths of 2 mg, 4 mg, 6 mg, 8 mg, and 12 mg tablets. Ropinirole belongs to a class of drugs known as a non-ergoline dopamine agonist used to treat Parkinson’s disease. This product is marketed and sold under the Elite Laboratories, Inc. label. 1 Commercial Products We own, license, contract manufacture or have contractual rights to receive royalties from the following products currently approved for commercial sale: Product Branded Product Equivalent Therapeutic Category Launch Date Phentermine HCl 37.5mg tablets (“Phentermine 37.5mg”) Adipex-P® Bariatric April 2011 Phendimetrazine Tartrate 35mg tablets (“Phendimetrazine 35mg”) Bontril® Bariatric November 2012 Phentermine HCl 15mg and 30mg capsules (“Phentermine 15mg” and “Phentermine 30mg”) Adipex-P® Bariatric April 2013 Naltrexone HCl 50mg tablets (“Naltrexone 50mg”) Revia® Pain September 2013 Isradipine 2.5mg and 5mg capsules (“Isradipine 2.5mg” and “Isradipine 5mg”) N/A Cardiovascular January 2015 Trimipramine Maleate Immediate Release 25mg, 50mg and 100mg capsules (“Trimipramine 25mg”, “Trimipramine 50mg”, “Trimipramine 100mg”) Surmontil® Antidepressant May 2017 Dextroamphetamine Saccharate, Amphetamine Aspartate, Dextroamphetamine Sulfate, Amphetamine Sulfate Immediate Release 5mg, 7.5mg, 10mg, 12.5mg, 15mg, 20mg and 30mg tablets (“Amphetamine IR 5mg”, “Amphetamine IR 7.5mg”, “Amphetamine IR 10mg”, “Amphetamine IR 12.5mg”, “Amphetamine IR 15mg”, “Amphetamine IR 20mg” and “Amphetamine IR 30mg”) Adderall® Central Nervous System (“CNS”) Stimulant April 2019 Dantrolene Sodium Capsules 25mg, 50mg and 100mg (“Dantrolene 25mg”, “Dantrolene 50mg”, “Dantrolene 100mg”) Dantrium® Muscle Relaxant June 2019 Dextroamphetamine Saccharate, Amphetamine Aspartate, Dextroamphetamine Sulfate, Amphetamine Sulfate Extended Release 5mg, 10mg, 15mg, 20mg, 25mg, and 30mg capsules (“Amphetamine ER 5mg”, “Amphetamine ER 10mg”, “Amphetamine ER 15mg”, “Amphetamine ER 20mg”, “Amphetamine ER 25mg”, and “Amphetamine ER 30mg”) Adderall XR® Central Nervous System (“CNS”) Stimulant March 2020 Loxapine Succinate 5mg, 10mg, 25mg and 50gm capsules (“Loxapine 5mg”, “Loxapine 10mg”, “Loxapine 25mg”, and Loxapine 50mg”) Loxapine® Antipsychotic May 2021 Methotrexate Sodium 2.5mg tablets (“Methotrexate 2.5mg”) Otrexup PF® Antimetabolite August 2024 Acetaminophen and Codeine Phosphate 300mg/15mg, 300mg/30mg, 300mg/60mg tablets (“APAP Codeine 300mg/15mg”, “APAP Codeine 300mg/30mg”, and “APAP Codeine 300mg/60mg”) Tylenol® with Codeine Pain October 2024 Acetaminophen and Hydrocodone Bitartrate 325mg/2.5mg, 325mg/5mg, 325mg/7.5mg and 325mg/10mg tablets (“APAP Hydrocodone 325mg/2.5mg”, “APAP Hydrocodone 325mg/5mg”, APAP Hydrocodone 325mg/7.5mg and APAP Hydrocodone 325mg/10mg”) Norco® Pain December 2024 Lisdexamfetamine Dimesylate 10mg, 20mg, 30mg, 40mg, 50mg, 60mg and 70mg capsules (“Lisdex 10mg”, “Lisdex 20mg”, “Lisdex 30mg”, “Lisdex 40mg”, “Lisdex 50mg”, “Lisdex 60mg” and “Lisdex 70mg”) Vyvanse® ADHD December 2024 Oxycodone Hydrochloride and Acetaminophen 5mg/325mg, 7.5mg/325mg and 10mg/325mg tablets (“Oxy APAP 5/325”, “Oxy APAP 7.5/325” and “Oxy APAP 10/325”) Percocet® Pain April 2025 Methadone Hydrochloride 5mg and 10mg tablets (“Methadone 5mg” and “Methadone 10mg”) Dolophine® Pain April 2026 Ropinirole Extended Release 2mg, 4mg, 6mg and 12mg tablets (“Ropinirole 2mg”, “Ropinirole 4mg”, “Ropinirole 6mg” and “Ropinirole 12mg”) Requip XL® Non-Ergoline Dopamine Agonist July 2026 2 Products Under FDA Review SequestOx™ - Immediate Release Oxycodone with sequestered Naltrexone SequestOx™ is our abuse-deterrent candidate for the management of moderate to severe pain where the use of an opioid analgesic is appropriate. SequestOx™ is an immediate-release Oxycodone Hydrochloride containing sequestered Naltrexone which incorporates 5mg, 10mg, 15mg, 20mg and 30mg doses of oxycodone into capsules. In January 2016, the Company submitted a 505(b)(2) NDA for SequestOx™, after receiving a waiver of the $2.3 million filing fee from the FDA. In March 2016, the Company received notification of the FDA’s acceptance of this filing and that such filing has been granted priority review by the FDA with a target action under the Prescription Drug User Fee Act (“PDUFA”) of July 14, 2016. On July 15, 2016, the FDA issued a Complete Response Letter, (“CRL”), regarding the NDA. The CRL stated that the review cycle for the SequestOx™ NDA was complete and the application is not ready for approval in its present form. On July 7, 2017, the Company reported topline results from a pivotal bioequivalence fed study for SequestOx™. The mean Tmax (the amount of time that a drug is present at the maximum concentration in serum) of SequestOx™ was 4.6 hr. with a range of 0.5 hr. to 12 hr. and the mean Tmax of the comparator, Roxicodone®, was 3.4 hr. with a range of 0.5 hr. to 12 hr. A key objective for the study was to determine if the reformulated SequestOx™ had a similar Tmax to the comparator when taken with a high fat meal. Based on these results, the Company paused clinical trials for this formulation of SequestOx™. On January 30, 2018, the Company reported positive topline results from a pilot study conducted for a modified SequestOx™ wherein, based on the results of this pilot study, the modified SequestOx™ formulation is expected to achieve bioequivalence with a Tmax range equivalent to the reference product when conducted in a pivotal trial under fed conditions. The Company has provided the pilot data to the FDA, requesting clarification as to the requirements for resubmission of the NDA. The FDA has provided guidance for repeated bio-equivalence studies in order to bridge the new formulation to the original SequestOx™ studies. Due to the prohibitive cost of such repeated bio-equivalence studies and the uncertain commercial viability given the regulatory and competitive landscape, the Company has paused development of this product candidate. There can be no assurances of the Company conducting future clinical trials, or if such trials are conducted, there can be no assurances of the success of any future clinical trials, or if such trials are successful, there can be no assurances that an intended future resubmission of the NDA product filing, if made, will be accepted by or receive marketing approval from the FDA. In addition, even if marketing authorization is received, there can be no assurances that there will be future revenues or profits, or that any such future revenues or profits would be in amounts that provide adequate return on the significant investments made to secure this marketing authorization. Generic Products Filed Currently the Company has filed the following ANDA’s which have been accepted for review by the FDA: ● Generic dopamine agonist accepted for review in December 2022 ● Generic opiate analgesic for pain management accepted for review in September 2023 Approved Product Not Yet Commercialized Doxycycline Hyclate Tablets The Company received approval in April 2022 from the FDA of an ANDA for a generic version of an antibiotic product, Doxycycline Hyclate Tablets. The product is jointly owned by Elite and Praxgen Pharmaceuticals LLC, formerly SunGen Pharma LLC, (“Praxgen”). There can be no assurances in relation to the above approved products not yet commercialized, that there will be future revenues or profits, or that any such future revenues or profits would be in amounts that provide adequate return on the significant investment made to secure the marketing authorizations. 3 Discontinued and Transferred Products As part of standard operating practices, the Company, from time to time, as relevant, conducts evaluations of all ANDAs owned, consisting, without limitation, of ANDAs acquired or approved prior to the quarter ended June 30, 2026 and ANDAs acquired or approved during the quarter ended June 30, 2026. Such evaluations include, without limitation, costs and benefits analyses relating to each ANDA owned, with such costs including those fees required under the FDA’s Generic Drug User Fee Amendment which is significantly influenced by the number of ANDAs owned, and other costs and benefits taking into consideration various specific market factors for each ANDA. Those ANDAs with a cost/benefit profile not consistent with management criteria for continuation are identified for disposition and effort is made to determine the optimal course of action to achieve disposition of the ANDA. The Company did not discontinue or transfer any ANDA during the quarter ended June 30, 2026. Critical Accounting Estimates Our management’s discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with United States generally accepted accounting principles (“GAAP”). The preparation of our condensed consolidated financial statements and related disclosures requires us to make estimates, assumptions and judgments that affect the reported amount of assets, liabilities, costs and expenses and related disclosures. Our critical accounting estimates are those estimates that involve a significant level of uncertainty at the time the estimate was made, and changes in them have had or are reasonably likely to have a material effect on our financial condition or results of operations. Accordingly, actual results could differ materially from our estimates. The following discussion addresses our most critical accounting estimates, which are those that are both important to the portrayal of our financial condition and results of operations and that require significant judgment or use of complex estimates. Revenue Recognition - Manufacturing Fees The Company’s revenues are offset by variable consideration, which may include, without limitation, chargebacks, distribution fees, rebates, group purchasing organization fees, prompt payment cash discounts, consideration payable to the customer, billbacks, Medicaid and other government pricing programs, price protection and shelf stock adjustments, sales returns and profit shares. The Company’s estimates for variable consideration are adjusted as required at each reporting period for specific known developments that may result in a change in the amount of total consideration it expects to receive as well as updating estimate assumptions to reflect current and/or historical trends. Like most competitors in this market, our marketing partners also give credits for chargebacks to wholesalers that have contracts with our marketing partners, prospectively, for their sales to hospitals, group purchasing organizations, pharmacies, or other customers. We do the same in the case of prospective direct sales made by us. A chargeback is the difference between the price the wholesaler pays and the price that the wholesaler’s end-customer pays for a product. Although, our marketing partners establish, and prospectively we would also establish reserves based on prior experience and best estimates of the impact that these policies may have in subsequent periods, we cannot ensure that such reserves established are adequate or that actual product returns, rebates, allowances, and chargebacks will not exceed estimates. Differences between established reserves and actual amounts of such credits and charges, could result in a material adverse effect on our business, financial condition, results of operations, cash flow and stock price. 4 Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. Where applicable, the Company records a valuation allowance to reduce any deferred tax assets that it determines will not be realizable in the future. Results of Operations The following set forth our results of operations for the periods presented. The period-to-period comparison of financial results is not necessarily indicative of future results. t hree months ended June 30, 2026 compared to the three months ended June 30, 2025 Revenue, Cost of manufacturing and Gross profit: For the Three Months Ended June 30, Change 2026 2025 Dollars Percentage Revenue $ 32,355,283 $ 40,211,097 $ (7,855,814 ) (20 )% Cost of manufacturing 18,847,738 12,985,127 5,862,611 45 % Gross profit $ 13,507,545 $ 27,225,970 $ (13,718,425 ) (50 )% Gross profit - percentage 42 % 68 % Total revenues for the three months ended June 30, 2026 decreased by $7.9 million or 20%, to $32.4 million, as compared to $40.2 million, for the corresponding period of the prior year. This decrease is primarily due to a decrease in manufacturing fees revenue of $7.6 million, primarily due to increased market competition, as compared to the comparable period of the prior year, resulting in decreased average net prices being achieved from the sales of Elite label products, including, without limitation lower net sales prices of the Lisdexamfetamine product line. Additionally, licensing fees revenue decreased by $0.2 million, primarily due to the comparable period of the prior year including licensing fee revenues from the Precision Dose License agreement which expired in September 2025 and accordingly had no material effect on license fees revenues during the three months ended June 30, 2026. Cost of manufacturing consists of manufacturing and assembly costs. Our cost of manufacturing increased by $5.9 million or 45%, to $18.8 million as compared to $13.0 million for the corresponding period in the prior fiscal year. These costs have a strong positive correlation with manufacturing operations and the increase was due to an increased volume of products sold during the three months ended June 30, 2026, as compared to the comparable period of the prior fiscal year, especially and without limitation in sales volumes generated by Elite’s Lisdexamfetamine, Amphetamine IR and Amphetamine ER product lines. Our gross profit margin was 42% during the three months ended June 30, 2026 as compared to 68% during the comparable period of the prior fiscal year. The decrease is primarily due to the decrease in average net prices resulting from increased market competition during the three months ended June 30, 2026, as compared to the comparable period of the prior year. Operating expenses: For the Three Months Ended June 30, Change 2026 2025 Dollars Percentage Operating expenses: Research and development $ 2,032,471 $ 1,674,964 $ 357,507 21 % General and administrative 3,549,556 3,404,084 145,472 4 % Non-cash compensation 28,476 52,329 (23,853 ) (46 )% Depreciation and amortization 367,761 394,886 (27,125 ) (7 )% Total operating expenses $ 5,978,264 $ 5,526,263 $ 452,001 8 % 5 Operating expenses for the three months ended June 30, 2026 increased by $0.5 million, or 8%, to $6.0 million as compared to $5.5 million for the corresponding period in the prior fiscal year, largely due to increases in research and development expenses of $0.4 million and general and administrative expenses of $0.1 million. Research and development costs during the three months ended June 30, 2026 were $2.0 million, an increase of $0.4 million, or 21 %, from approximately $1.7 million of such costs for the comparable period of the prior year. The increase was the result of costs incurred in relation to the successful pivotal bio equivalence study and ANDA filed during the three months ended June 30, 2026. In addition, the number, timing and nature of product development activities always has a significant effect on research and development expenses incurred during any period. General and administrative expenses for the three months ended June 30, 2026 were $3.5 million as compared to $3.4 million for the corresponding period in the prior fiscal year, an increase of $0.1 million or approximately 4 %. This increase is due primarily to general increases in costs of human resources, legal, consulting, regulatory, other professional services and overhead operating costs as compared to the comparable period of the prior year. As a result of the foregoing, our income from operations during the three months ended June 30, 2026 was $7.5 million, compared to income from operations of $21.7 million for the comparable period of the prior fiscal year. Other income (expense): For the Three Months Ended June 30, Change 2026 2025 Dollars Percentage Other income (expense): Change in fair value of derivative financial instruments - warrants $ 94,247 $ (22,109,537 ) $ 22,203,784 (100 )% Interest expense and amortization of debt issuance costs (73,103 ) (158,926 ) 85,823 (54 )% Interest income 166,117 4,542 161,575 3557 % Other income (expense), net $ 187,261 $ (22,263,921 ) $ 22,451,182 (101 )% Net other income (expenses) for the three months ended June 30, 2026 was a net other income of $0.2 million, an increase in other income of $22.5 million from a net other expense of $22.3 million for the comparable period of the prior fiscal year. The increase in other income was primarily due to increases in other income relating to the change in fair value of derivative financial instruments of $22.3 million and interest income of $0.2 million, and decreases in interest expense of $0.1 million, as compared to the comparable period of the prior year. The change in the fair value of derivative instruments is determined in large part by the change in the closing price of the Company’s Common Stock as of the end of the period, as compared to the closing price at the beginning of the period. There is a strong correlation between changes in the closing price of the Company’s Common Stock and other income (expense) recorded, with increases in the closing price resulting in other expenses and decreases in closing price resulting in other income. The closing price of the Company’s common stock as of June 30, 2026 was essentially unchanged from the closing price at the beginning of the three months ended June 30, 2026, therefore, reflecting the impact of other factors, resulted in a small other income being recorded, while the closing price as of June 30, 2025 was $0.30 higher than the closing price at the beginning of the three month period ended June 30, 2025, resulting in a large other expense being recorded. The decrease in interest expense is primarily related to the Company servicing a lesser principal amount of loans payable during the three months ended June 30, 2026 as compared to the comparable period of the prior year. As a result of the foregoing, our net income before income taxes for the three months ended June 30, 2026 was $7.7 million, compared to net loss before income taxes of $0.6 million for the comparable period of the prior fiscal year. 6 Liquidity and Capital Resources Capital Resources June 30, 2026 March 31, 2026 Change Current assets $ 114,487,702 $ 112,106,551 $ 2,381,151 Current liabilities $ 30,441,614 $ 17,391,464 $ 13,050,150 Working capital $ 84,046,088 $ 94,715,087 $ (10,668,999 ) Our working capital (total current assets less total current liabilities) decreased by $10.7 million from $94.7 million as of March 31, 2026 to $84.0 million as of June 30, 2026, with such decrease being due to the reclassification of derivative financial instruments - warrants, valued at $17.3 million, from non-current liabilities as of March 31, 2026 to current liabilities as of June 30, 2026. Summary of Cash Flows: For the Three Months Ended June 30, 2026 2025 Net cash provided by operating activities $ 10,069,817 $ 14,775,842 Net cash used in investing activities $ (808,964 ) $ (218,204 ) Net cash used in financing activities $ (114,594 ) $ (4,130,684 ) Net cash provided by operating activities for the three months ended June 30, 2026 was $10.1 million, which included, without limitation, net income of $5.9 million, decreased by the change in fair value of derivative financial instruments-warrants of $0.1 million, recovery for losses on accounts receivable of $0.2 million, decrease in deferred tax of $1.3 million, increased by other non-cash expenses totaling $0.3 million and increased by changes in operating assets and liabilities totaling $2.6 million. Net cash provided by operating activities during the comparable period in the prior fiscal year was $14.8 million, which included, without limitation, net loss of $5.9 million, increased by the change in fair value of derivative financial instruments - warrants of $22.1 million, deferred tax expenses of $4.9 million, and reduced by the change in operating assets and liabilities totaling $7.1 million. Net cash used in investing activities for the three months ended June 30, 2026 was comprised of purchases of property and equipment of approximately $0.8 million. Net cash used in investing activities during the comparable period in the prior fiscal year was comprised of purchases of property and equipment of approximately $0.2 million. Net cash used in financing activities was $0.1 million for the three months ended June 30, 2026, primarily related to payments on finance lease obligations, compared to net cash used in financing activities of $4.1 million for the corresponding period of the prior year. Net cash used in financing activities of $4.1 million during the prior fiscal year was due to payments of loan principal totaling $4.0 million and payments on principal on finance lease obligations of $0.1 million. East West Bank On July 1, 2022, East West Bank (“EWB”) provided a mortgage loan (“EWB Mortgage Loan”) in the amount of $2.55 million for the purchase of the property at 135-137 Ludlow Avenue, which was formerly a lease held by the Company. The EWB Mortgage Loan matures in ten years and bears interest at a fixed rate of 4.75% fixed for the first five years then adjustable at WSJP plus 0.5% with floor rate of 4.5%. The total transaction costs associated with the EWB Mortgage Loan incurred as of June 30, 2026, 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 June 30, 2026, and through the date of filing of this Quarterly Report on Form 10-Q, the Company was not aware of the existence of any violations of financial covenants included in the EWB Mortgage Loan. 7 NJEDA Bonds On August 31, 2005, the Company successfully completed a refinancing of a prior 1999 bond issue (the “1999 Bonds”) through the issuance of 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. The net proceeds, after payment of issuance costs, were used (i) to redeem the outstanding tax-exempt 1999 Bonds originally issued by the New Jersey Economic Development Authority on September 2, 1999, (ii) to refinance other equipment financing and (iii) for the purchase of certain equipment to be used in the manufacture of pharmaceutical products. As of June 30, 2026, all of the proceeds were utilized by the Company for such stated purposes. Interest is payable semi-annually on March 1 and September 1. The NJEDA Bonds are collateralized by a first lien on the Company’s facility and equipment acquired with the proceeds of the 1999 Bonds and NJEDA Bonds. The related Indenture requires the maintenance of a debt service reserve fund of $366,000 in relation to the Series A Notes. Bond issue costs of $354,454 were paid from the proceeds of the NJEDA Bonds and are being amortized over the life of the NJEDA bonds. Amortization of bond issuance costs amounted to $3,544 for the three months ended June 30, 2026. The NJEDA Bonds require the Company to make an annual principal payment on September 1st of varying amounts as specified in the loan documents and semi-annual interest payments on March 1st and September 1st, equal to interest due on the outstanding principal at the applicable rate for the semi-annual period just ended. In addition, the Company had previously received Notices of Default from the Trustee of the NJEDA Bonds as a result of the utilization of the debt service reserve fund being used to pay interest payments as well as the Company’s failure to make scheduled principal payments. All monetary defaults were cured during Fiscal Year 2015 and the Company is current on all NJEDA Bond interest and principal payments. As of the date of filing of this Quarterly Report on Form 10-Q, there are no interest or principal amounts in arrears. 8 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK As a smaller reporting company, we are not required to provide the information required by this Item. ITEM 4. CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), refers to controls and procedures that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities Exchange Commission’s (the “SEC”) rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. As required by Rules 13a-15(b) and 15d-15(b) of the Exchange Act, our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures based on the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission on Internal Control (“COSO”), as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of June 30, 2026 to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and such information is accumulated and communicated to management as appropriate to allow timely decisions regarding required disclosures. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. As of June 30, 2026, we identified the following control deficiencies that we believe constituted individually, and in the aggregate, material weaknesses in the design and operation components of our internal controls within the COSO framework: ● We 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; ● We failed to maintain effective control activities over our control environment, risk assessment, information technology and monitoring components and; ● We 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. Management’s Report on Internal Control Over Financial Reporting Internal control over financial reporting refers to the process designed by, or under the supervision of, our Chief Executive Officer and Chief Financial Officer, and effected by our Board, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles, and includes those policies and procedures that: (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements. 9 Internal control over financial reporting may not prevent or detect all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are achieved. Further, the design of a control system must be balanced against resource constraints, and therefore the benefits of controls must be considered relative to their costs. Given the inherent limitations in all systems of controls, no evaluation of controls can provide absolute assurance all control issues and instances of fraud, if any, within a company have been detected. These inherent limitations include the realities that judgments in decision making can be faulty and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions or the degree of compliance with policies or procedures may deteriorate. Accordingly, given the inherent limitations in a system of internal control, financial statement misstatements due to error or fraud may occur and may not be detected. Our disclosure controls and procedures are designed to provide reasonable, not absolute, assurance of achieving their objectives. We conduct periodic evaluations of our systems of controls to enhance, where necessary, our control policies and procedures. Management is responsible for establishing and maintaining adequate internal control over our financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting. Management has used the framework set forth in the report entitled “Internal Control—Integrated Framework (2013)” published by the Committee of Sponsoring Organizations of the Treadway Commission to evaluate the effectiveness of our internal control over financial reporting. Based on its evaluation, utilizing those criteria, management has determined that, as of June 30, 2026, because of the material weaknesses described below, our internal control over financial reporting was not effective. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. As of June 30, 2026, we identified the following control deficiencies that we believe constituted individually, and in the aggregate, material weaknesses in the design and operation components of our internal controls within the COSO framework: The deficiencies in our internal controls over financial reporting and disclosure controls and procedures are described above and our efforts to remediate these deficiencies are described below. Please also see “Risk Factors” in Item 1A of our Annual Report on Form 10-K for the period ended March 31, 2026. Changes in Internal Controls Over Financial Reporting During the three months ended June 30, 2026, as a result of reviews and assessments of internal controls over financial reporting conducted by the Company’s Chief Financial Officer, the Company identified material weaknesses in internal controls over financial reporting as further detailed above and began remediation efforts which are detailed below, with such activities expected to result in further changes in internal control over financial reporting as necessary to remediate the identified material weaknesses. Remediation efforts to address material weaknesses in internal controls over financial reporting We 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. 10 PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS Pending Litigation On August 17, 2023, the Company filed a Paragraph IV certification with its ANDA to generic OxyContin® and after the Company received 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. 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 12, 2026. Elite’s launch of a generic OxyContin® will depend on approval by the FDA and the outcome of various litigation involving Purdue or the expiry of the patents listed on the Orange Book. In the ordinary course of business, we may be subject to litigation from time to time. There is no current, pending or, to our knowledge, threatened litigation or administrative action to which we are a party or of which our property is the subject (including litigation or actions involving our officers, directors, affiliates, or other key personnel, or holders of record or beneficially of more than 5% of any class of our voting securities, or any associate of any such party) which in our opinion has, or is expected to have, a material adverse effect upon our business, prospects financial condition or operations. A significant increase in the number of claims or an increase in amounts owing under successful claims could materially adversely affect our business, financial condition, results of operations and cash flows. ITEM 1A. RISK FACTORS There have been no material changes in the risk factors described in our Annual Report on Form 10-K for the fiscal year ended March 31, 2026. ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS None. ITEM 3. DEFAULTS UPON SENIOR SECURITIES None. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. ITEM 5. OTHER INFORMATION During the fiscal quarter ended June 30, 2026, none of the Company’s directors or officers (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934, as amended) adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K of the Securities Act of 1933, as amended). 11 ITEM 6. EXHIBITS Exhibit No. Description 31.1 Certification of Chief Executive Officer pursuant to Exchange Act Rule 13a-14(a) and Rule 15d-14(a)* 31.2 Certification of Chief Financial Officer pursuant to Exchange Act Rule 13a-14(a) and Rule 15d-14(a)* 32.1 Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002** 32.2 Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002** 101.INS Inline XBRL Instance Document 101.SCH Inline XBRL Taxonomy Schema Document 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document 104 Cover Page Interactive Data File (embedded within the Inline XBRL document) * Filed herewith. ** Furnished herewith. 12 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. ELITE PHARMACEUTICALS, INC. August 13, 2026 By: /s/ Nasrat Hakim Nasrat Hakim Chief Executive Officer, President and Chairman of the Board of Directors (Principal Executive Officer) August 13, 2026 By: /s/ Carter Ward Carter Ward Chief Financial Officer (Principal Accounting Officer and Principal Financial Officer) 13