Cover
Cover - shares | 6 Months Ended | |
Sep. 30, 2023 | Nov. 14, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2023 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2024 | |
Current Fiscal Year End Date | --03-31 | |
Entity File Number | 001-15697 | |
Entity Registrant Name | ELITE PHARMACEUTICALS, INC. | |
Entity Central Index Key | 0001053369 | |
Entity Tax Identification Number | 22-3542636 | |
Entity Incorporation, State or Country Code | NV | |
Entity Address, Address Line One | 165 LUDLOW AVENUE | |
Entity Address, City or Town | NORTHVALE | |
Entity Address, State or Province | NJ | |
Entity Address, Postal Zip Code | 07647 | |
City Area Code | 201 | |
Local Phone Number | 750-2646 | |
Title of 12(b) Security | Common Stock, par value $0.001 per share | |
Trading Symbol | ELTP | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 1,013,915,081 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Sep. 30, 2023 | Mar. 31, 2023 |
Current assets: | ||
Cash | $ 8,653,903 | $ 7,832,247 |
Accounts receivable, net of allowance for expected credit losses of $125,000 and $0 as of September 30, 2023 and March 31, 2023, respectively | 10,495,061 | 3,094,549 |
Inventory | 15,224,384 | 9,550,716 |
Prepaid expenses and other current assets | 355,561 | 1,032,785 |
Total current assets | 34,728,909 | 21,510,297 |
Property and equipment, net of accumulated depreciation of $15,241,857 and $14,586,335, respectively | 9,769,981 | 10,426,158 |
Intangible assets, net of accumulated amortization of $-0- | 6,341,228 | 6,341,228 |
Operating lease - right-of-use asset | 1,899 | 13,062 |
Deferred income tax asset | 19,433,168 | 2,171,821 |
Other assets: | ||
Restricted cash - debt service for NJEDA bonds | 422,750 | 412,434 |
Security deposits | 21,018 | 21,018 |
Total other assets | 443,768 | 433,452 |
Total assets | 70,718,953 | 40,896,018 |
Current liabilities: | ||
Accounts payable | 3,608,993 | 2,446,810 |
Accrued expenses | 11,158,268 | 5,047,726 |
Deferred revenue, current portion | 13,333 | 13,333 |
Bonds payable, current portion, net of bond issuance costs | 115,822 | 110,822 |
Loans payable, current portion | 179,325 | 200,032 |
Related party loans payable (Note 7) | 4,000,000 | |
Lease obligation - operating lease, current portion | 2,163 | 14,914 |
Total current liabilities | 19,077,904 | 7,833,637 |
Long-term liabilities: | ||
Deferred revenue, net of current portion | 12,222 | 18,890 |
Bonds payable, net of current portion and bond issuance costs | 902,568 | 1,029,018 |
Loans payable, net of current portion and loan costs | 2,452,384 | 2,532,502 |
Derivative financial instruments - warrants | 3,179,428 | 521,711 |
Total long-term liabilities | 6,546,602 | 4,102,121 |
Total liabilities | 25,624,506 | 11,935,758 |
Shareholders’ equity: | ||
Common stock; par value $0.001; 1,445,000,000 shares authorized; 1,014,015,081 shares issued and 1,013,915,081 shares outstanding as of September 30, 2023 and March 31, 2023 | 1,014,019 | 1,014,019 |
Additional paid-in capital | 164,808,757 | 164,750,980 |
Treasury stock; 100,000 shares as of September 30, 2023 and March 31, 2023, respectively, at cost | (306,841) | (306,841) |
Accumulated deficit | (120,421,488) | (136,497,898) |
Total shareholders’ equity | 45,094,447 | 28,960,260 |
Total liabilities and shareholders’ equity | $ 70,718,953 | $ 40,896,018 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) | Sep. 30, 2023 | Mar. 31, 2023 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivable, current | $ 125,000 | $ 0 |
Accumulated depreciation | 15,241,857 | 14,586,335 |
Intangible assets accumulated amortization | $ 0 | $ 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 1,445,000,000 | 1,445,000,000 |
Common stock, shares issued | 1,014,015,081 | 1,014,015,081 |
Common stock, shares outstanding | 1,013,915,081 | 1,013,915,081 |
Treasury stock, shares | 100,000 | 100,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenue: | ||||
Manufacturing fees | $ 13,507,870 | $ 7,187,363 | $ 21,417,107 | $ 13,514,504 |
Licensing fees | 649,315 | 1,398,400 | 1,720,154 | 2,744,167 |
Total revenue | 14,157,185 | 8,585,763 | 23,137,261 | 16,258,671 |
Cost of manufacturing | 7,710,106 | 4,761,329 | 11,939,627 | 8,436,390 |
Gross profit | 6,447,079 | 3,824,434 | 11,197,634 | 7,822,281 |
Operating expenses: | ||||
Research and development | 2,618,349 | 1,227,269 | 3,761,894 | 2,182,712 |
General and administrative | 1,533,208 | 1,190,523 | 3,194,912 | 2,908,627 |
Non-cash compensation through issuance of stock options | 42,777 | 5,973 | 57,777 | 11,295 |
Depreciation and amortization | 327,240 | 319,552 | 655,522 | 615,846 |
Total operating expenses | 4,521,574 | 2,743,317 | 7,670,105 | 5,718,480 |
Income from operations | 1,925,505 | 1,081,117 | 3,527,529 | 2,103,801 |
Other income (expense): | ||||
Change in fair value of derivative financial instruments - warrants | (2,468,350) | 688,319 | (2,657,717) | 188,176 |
Change in fair value of stock-based liabilities | (2,066,820) | (2,066,820) | ||
Interest expense and amortization of debt issuance costs | (130,438) | (242,753) | (249,850) | (459,540) |
Interest income | 7,320 | 43 | 10,836 | 172 |
Other expense, net | (4,658,288) | 445,609 | (4,963,551) | (271,192) |
(Loss) income before income taxes | (2,732,783) | 1,526,726 | (1,436,022) | 1,832,609 |
Income tax benefit (expense) | 17,667,384 | (11,587) | 17,512,432 | (11,587) |
Net income attributable to common shareholders | $ 14,934,601 | $ 1,515,139 | $ 16,076,410 | $ 1,821,022 |
Basic net income per share attributable to common shareholders | $ 0.01 | $ 0 | $ 0.02 | $ 0 |
Diluted net income per share attributable to common shareholders | $ 0.01 | $ 0 | $ 0.02 | $ 0 |
Basic weighted average Common Stock outstanding | 1,013,915,081 | 1,012,228,256 | 1,013,915,081 | 1,011,762,632 |
Diluted weighted average Common Stock outstanding | 1,019,316,919 | 1,012,228,256 | 1,016,944,870 | 1,011,762,632 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($) | Preferred Stock [Member] Series J Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Treasury Stock, Common [Member] | Retained Earnings [Member] | Total |
Beginning balance, value at Mar. 31, 2022 | $ 1,011,385 | $ 164,577,227 | $ (306,841) | $ (140,059,744) | $ 25,222,027 | |
Beginning balance, shares at Mar. 31, 2022 | 1,011,381,988 | 100,000 | ||||
Net income | 305,883 | 305,883 | ||||
Non-cash compensation through the issuance of employee stock options | 5,322 | 5,322 | ||||
Ending balance, value at Jun. 30, 2022 | $ 1,011,385 | 164,582,549 | $ (306,841) | (139,753,861) | 25,533,232 | |
Ending balance, shares at Jun. 30, 2022 | 1,011,381,988 | 100,000 | ||||
Beginning balance, value at Mar. 31, 2022 | $ 1,011,385 | 164,577,227 | $ (306,841) | (140,059,744) | 25,222,027 | |
Beginning balance, shares at Mar. 31, 2022 | 1,011,381,988 | 100,000 | ||||
Net income | 1,821,022 | |||||
Ending balance, value at Sep. 30, 2022 | $ 1,014,019 | 164,722,951 | $ (306,841) | (138,238,722) | 27,191,407 | |
Ending balance, shares at Sep. 30, 2022 | 1,014,015,081 | 100,000 | ||||
Beginning balance, value at Jun. 30, 2022 | $ 1,011,385 | 164,582,549 | $ (306,841) | (139,753,861) | 25,533,232 | |
Beginning balance, shares at Jun. 30, 2022 | 1,011,381,988 | 100,000 | ||||
Net income | 1,515,139 | 1,515,139 | ||||
Non-cash compensation through the issuance of employee stock options | 5,974 | 5,974 | ||||
Share issued in payment of director salaries | $ 1,379 | 58,621 | 60,000 | |||
Shares issued in payment of director salaries, shares | 1,378,608 | |||||
Shares issued in payment of consultants | $ 1,255 | 75,807 | 77,062 | |||
Shares issued in payment of consultants, shares | 1,254,485 | |||||
Ending balance, value at Sep. 30, 2022 | $ 1,014,019 | 164,722,951 | $ (306,841) | (138,238,722) | 27,191,407 | |
Ending balance, shares at Sep. 30, 2022 | 1,014,015,081 | 100,000 | ||||
Beginning balance, value at Mar. 31, 2023 | $ 1,014,019 | 164,750,980 | $ (306,841) | (136,497,898) | 28,960,260 | |
Beginning balance, shares at Mar. 31, 2023 | 1,013,915,081 | 100,000 | ||||
Net income | 1,141,809 | 1,141,809 | ||||
Non-cash compensation through the issuance of employee stock options | 15,000 | 15,000 | ||||
Ending balance, value at Jun. 30, 2023 | $ 1,014,019 | 164,765,980 | $ (306,841) | (135,356,089) | 30,117,069 | |
Ending balance, shares at Jun. 30, 2023 | 1,013,915,081 | 100,000 | ||||
Beginning balance, value at Mar. 31, 2023 | $ 1,014,019 | 164,750,980 | $ (306,841) | (136,497,898) | 28,960,260 | |
Beginning balance, shares at Mar. 31, 2023 | 1,013,915,081 | 100,000 | ||||
Net income | 16,076,410 | |||||
Ending balance, value at Sep. 30, 2023 | $ 1,014,019 | 164,808,757 | $ (306,841) | (120,421,488) | 45,094,447 | |
Ending balance, shares at Sep. 30, 2023 | 1,013,915,081 | 100,000 | ||||
Beginning balance, value at Jun. 30, 2023 | $ 1,014,019 | 164,765,980 | $ (306,841) | (135,356,089) | 30,117,069 | |
Beginning balance, shares at Jun. 30, 2023 | 1,013,915,081 | 100,000 | ||||
Net income | 14,934,601 | 14,934,601 | ||||
Non-cash compensation through the issuance of employee stock options | 42,777 | 42,777 | ||||
Ending balance, value at Sep. 30, 2023 | $ 1,014,019 | $ 164,808,757 | $ (306,841) | $ (120,421,488) | $ 45,094,447 | |
Ending balance, shares at Sep. 30, 2023 | 1,013,915,081 | 100,000 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 16,076,410 | $ 1,821,022 |
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | ||
Depreciation and amortization | 655,522 | 615,846 |
Bad debt expense | 30,798 | |
Amortization of operating leases - right-of-use assets | 11,163 | 56,272 |
Change in fair value of derivative financial instruments - warrants | 2,657,717 | (188,176) |
Change in fair value of stock-based liabilities | 2,066,820 | |
Non-cash compensation through the issuance of employee stock options | 57,777 | 11,296 |
Non-cash rent expense and lease accretion | 655 | 602 |
Deferred income tax asset | (17,261,347) | |
Change in operating assets and liabilities: | ||
Accounts receivable | (7,431,310) | (1,171,625) |
Inventory | (5,673,668) | (727,116) |
Prepaid expenses and other current assets | 677,224 | 307,098 |
Accounts payable, accrued expenses and other current liabilities | 5,205,905 | 274,453 |
Deferred revenue | (6,668) | (6,670) |
Lease obligations - operating leases | (12,751) | (55,104) |
Net cash (used in) provided by operating activities | (2,945,753) | 937,898 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of property and equipment | (5,199,696) | |
Net cash used in investing activities | (5,199,696) | |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Payment of bond principal | (125,000) | (115,000) |
Proceeds from related party loans payable | 4,000,000 | |
Proceeds from loans payable | 14,550,000 | |
Loan payments | (97,275) | (153,400) |
Net cash provided by financing activities | 3,777,725 | 14,281,600 |
Net change in cash and restricted cash | 831,972 | 10,019,802 |
Cash and restricted cash, beginning of period | 8,244,681 | 8,940,396 |
Cash and restricted cash, end of period | 9,076,653 | 18,960,198 |
Supplemental disclosure of cash and non-cash transactions: | ||
Cash paid for interest | 119,412 | 459,540 |
Cash paid for income taxes | 127,522 | |
Stock issued in payment of Directors fees, salaries and consulting expenses | $ 137,067 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Sep. 30, 2023 | Jun. 30, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Pay vs Performance Disclosure [Table] | ||||||
Net Income (Loss) Attributable to Parent | $ 14,934,601 | $ 1,141,809 | $ 1,515,139 | $ 305,883 | $ 16,076,410 | $ 1,821,022 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Sep. 30, 2023 | |
Insider Trading Arrangements [Line Items] | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 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 and infection. 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, 2023. The interim results for the six months ended September 30, 2023 are not necessarily indicative of the results to be expected for the fiscal year ending March 31, 2024 or for any future periods. Segment Information Financial Accounting Standards Board (“FASB”) Accounting Standards Codification 280 (“ASC 280”), Segment Reporting The Company’s chief operating decision maker is the Chief Executive Officer, who reviews the financial performance and the results of operations of the segments prepared in accordance with GAAP when making decisions about allocating resources and assessing performance of the Company. The Company has determined that its reportable segments are products whose marketing approvals were secured via an Abbreviated New Drug Application (“ANDA”) and products whose marketing approvals were secured via a New Drug Application (“NDA”). ANDA products are referred to as generic pharmaceuticals and NDA products are referred to as branded pharmaceuticals. There are currently no intersegment revenues. Asset information by operating segment is not presented below since the chief operating decision maker does not review this information by segment. The reporting segments follow the same accounting policies used in the preparation of the Company’s condensed unaudited consolidated financial statements. Please see Note 15 for further details. Revenue Recognition The Company generates revenue from manufacturing and licensing fees and sales of generic pharmaceuticals bearing the Elite label 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. Revenues earned from the sale of Elite label products are recorded at their net realizable value which consists of gross amounts invoiced reduced by contractual reductions, including, without limitation, chargebacks, discounts and program rebates, as applicable. ELITE PHARMACEUTICALS, INC. AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Under ASC 606, Revenue from Contacts with Customers Nature of goods and services The following is a description of the Company’s goods and services from which the Company generates revenue, as well as the nature, timing of satisfaction of performance obligations, and significant payment terms for each, as applicable: a) Manufacturing Fees The Company is equipped to manufacture controlled-release products on a contract basis for third parties, if, and when, the products are approved. These products include products using controlled-release drug technology. The Company also develops and markets (either on its own or by license to other companies) generic and proprietary controlled-release pharmaceutical products. The Company recognizes revenue when the customer obtains control of the Company’s product based on the contractual shipping terms of the contract, at which time the performance obligation is deemed to be completed. The Company is primarily responsible for fulfilling the promise to provide the product, is responsible to ensure that the product is produced in accordance with the related supply agreement and bears risk of loss while the inventory is in-transit to the commercial partner. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products to a customer. b) License Fees The Company enters into licensing and development agreements, which may include multiple revenue generating activities, including milestones payments, licensing fees, product sales and services. The Company analyzes each element of its licensing and development agreements in accordance with ASC 606 to determine appropriate revenue recognition. The terms of the license agreement may include payment to the Company of licensing fees, non-refundable upfront license fees, milestone payments if specified objectives are achieved, and/or royalties on product sales. If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price based on the estimated relative standalone selling prices of the promised products or services underlying each performance obligation. The Company determines standalone selling prices based on the price at which the performance obligation is sold separately. If the standalone selling price is not observable through past transactions, the Company estimates the standalone selling price taking into account available information such as market conditions and internally approved pricing guidelines related to the performance obligations. The Company recognizes revenue from non-refundable upfront payments at a point in time, typically upon fulfilling the delivery of the associated intellectual property to the customer. For those milestone payments which are contingent on the occurrence of particular future events (for example, payments due upon a product receiving FDA approval), the Company determined that these need to be considered for inclusion in the calculation of total consideration from the contract as a component of variable consideration using the most-likely amount method. As such, the Company assesses each milestone to determine the probability and substance behind achieving each milestone. Given the inherent uncertainty of the occurrence of future events, the Company will recognize revenue from the milestone when there is not a high probability of a reversal of revenue, which typically occurs near or upon achievement of the event. ELITE PHARMACEUTICALS, INC. AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Significant management judgment is required to determine the level of effort required under an arrangement and the period over which the Company expects to complete its performance obligations under the arrangement. If the Company cannot reasonably estimate when its performance obligations either are completed or become inconsequential, then revenue recognition is deferred until the Company can reasonably make such estimates. Revenue is then recognized over the remaining estimated period of performance using the cumulative catch-up method. When determining the transaction price of a contract, an adjustment is made if payment from a customer occurs either significantly before or significantly after performance, resulting in a significant financing component. Applying the practical expedient in ASC 606-10-32-18, the Company does not assess whether a significant financing component exists if the period between when the Company performs its obligations under the contract and when the customer pays is one year or less. None of the Company’s contracts contained a significant financing component as of September 30, 2023. In accordance with ASC 606-10-55-65, royalties are recognized when the subsequent sale of the customer’s products occurs. c) Sale of product under the Elite label The Company began direct sales of products under the Company’s own label on April 1, 2023. License agreements will remain in place for select products. With this transition, however, a large portion of the manufacturing and license fees now reported will be replaced with revenues from sales of Elite labeled pharmaceutical products to distributors for pharmacies and institutions. 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. The table also includes a reconciliation of the disaggregated revenue with the reportable segments: SCHEDULE OF DISAGGREGATION OF REVENUE For the Three Months Ended September 30, For the Six Months Ended September 30, 2023 2022 2023 2022 NDA: Manufacturing fees $ - $ $ - $ Licensing fees $ — $ — $ — $ — Total NDA revenue — — — — ANDA: Manufacturing fees $ 13,507,870 $ 7,187,363 $ 21,417,107 $ 13,514,504 Licensing fees 649,315 1,398,400 1,720,154 2,744,167 Total ANDA revenue 14,157,185 8,585,763 23,137,261 16,258,671 Total revenue $ 14,157,185 $ 8,585,763 $ 23,137,261 $ 16,258,671 Selected information on reportable segments and reconciliation of operating income by segment to income from operations before income taxes are disclosed within Note 15. Cash Cash consists of cash on deposit with banks and money market instruments. The Company places its cash with high-quality, U.S. financial institutions and, to date has not experienced losses on any of its balances. Restricted Cash As of September 30, 2023, and March 31, 2023, the Company had $ 422,750 412,434 ELITE PHARMACEUTICALS, INC. AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Accounts Receivable and Allowance for Expected Credit Losses Accounts receivable are comprised of balances due from customers, net of estimated allowances for expected credit losses, and other contractual deductions, including, without limitation, chargebacks, discounts and program rebates. In determining collectability, historical trends are evaluated, and specific customer issues are reviewed on a periodic basis to arrive at appropriate allowances. The allowance for expected credit losses is based on the probability of future collection under the current expected credited loss (“CECL”) impairment model under Accounting Standards Update (“ASU”) 2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Assets, which was adopted by the Company on February 1, 2023, as discussed below within Recently Adopted Accounting Pronouncements. Under the CECL impairment model, the Company determines its allowance by applying a loss-rate method based on an aging schedule using the Company’s historical loss rate. The Company also considers reasonable and supportable current information in determining its estimated loss rates, such as external forecasts, macroeconomic trends or other factors including customers’ credit risk and historical loss experience. The adequacy of the allowance is evaluated on a regular basis. Account balances are written off after all means of collection are exhausted and the balance is deemed uncollectible. Subsequent recoveries are credited to the allowance. Changes in the allowance are recorded as adjustments to credit losses in the period incurred. Prior to April 1, 2023, trade receivables were presented net of allowance for expected credit losses based on the credit risk of specific clients, past collection history, and management’s evaluation of other risks. Expected credit losses stemming from unbilled receivables expected to be billed between March 31, 2024 and March 31, 2028 include additional risk premiums estimated based on factors such as projected inflation, projected decreases in GDP, and projected unemployment. Inventory Inventory is recorded at the lower of cost or net realizable value on specific identification by lot number basis. Long-Lived Assets The Company periodically evaluates the fair value of long-lived assets, which include property and equipment and intangibles, whenever events or changes in circumstances indicate that its carrying amounts may not be recoverable. Property and equipment are stated at cost. Depreciation is provided on the straight-line method based on the estimated useful lives of the respective assets which range from three to forty years. Major repairs or improvements are capitalized. Minor replacements and maintenance and repairs which do not improve or extend asset lives are expensed currently. Upon retirement or other disposition of assets, the cost and related accumulated depreciation are removed from the accounts and the resulting gain or loss, if any, is recognized in income. Intangible Assets The Company capitalizes certain costs to acquire intangible assets; if such assets are determined to have a finite useful life they are amortized on a straight-line basis over the estimated useful life. Costs to acquire indefinite lived intangible assets, such as costs related to ANDAs are capitalized accordingly. The Company tests its intangible assets for impairment at least annually (as of March 31st) and whenever events or circumstances change that indicate impairment may have occurred. A significant amount of judgment is involved in determining if an indicator of impairment has occurred. Such indicators may include, among others and without limitation: a significant decline in the Company’s expected future cash flows; a sustained, significant decline in the Company’s stock price and market capitalization; a significant adverse change in legal factors or in the business climate of the Company’s segments; unanticipated competition; and slower growth rates. During the year ended March 31, 2023, the Company determined indicators of impairment occurred and recorded impairment expense of $ 292,807 no ELITE PHARMACEUTICALS, INC. AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) The following table summarizes the Company’s intangible assets as of and for the periods ended September 30, 2023 and March 31, 2023: SCHEDULE OF INTANGIBLE ASSETS September 30, 2023 Estimated Gross Useful Carrying Impairment Accumulated Net Book Life Amount losses Amortization Value Patent application costs * $ 289,039 $ — $ — $ 289,039 ANDA acquisition costs Indefinite 6,052,189 — — 6,052,189 $ 6,341,228 $ — $ — $ 6,341,228 March 31, 2023 Estimated Gross Useful Carrying Impairment Accumulated Net Book Life Amount losses Amortization Value Patent application costs * $ 465,684 $ (176,645 ) $ — $ 289,039 ANDA acquisition costs Indefinite 6,168,351 (116,162 ) — 6,052,189 $ 6,634,035 $ (292,807 ) $ — $ 6,341,228 Research and Development Research and development expenditures are charged to expenses as incurred. 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 condensed consolidated financial statements. Contingencies are inherently unpredictable, and the assessments of the value can involve a series of complex judgments about future events and can rely heavily on estimates and assumptions. 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. 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 September 30, 2023, a summary of the tax years that remain subject to examination in our major tax jurisdictions are: United States – Federal, 2016 and forward. The Company did not record unrecognized tax positions for the six months ended September 30, 2023. ELITE PHARMACEUTICALS, INC. AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Warrants and Preferred Shares The accounting treatment of warrants and preferred share series issued is determined pursuant to the guidance provided by ASC 470, Debt Distinguishing Liabilities from Equity Derivatives and Hedging The exercise price is subject to adjustment for any issuances or deemed issuances of Common Stock or Common Stock equivalents at an effective price below the then exercise price. Such exercise price adjustment feature prohibits the Company from being able to conclude the warrants are indexed to its own stock and thus such warrants are classified as liabilities and measured initially and subsequently at fair value. The Series J Warrants also provide for other standard adjustments upon the happening of certain customary events. Stock-Based Compensation The Company accounts for stock-based compensation in accordance with ASC 718, Compensation-Stock Compensation In accordance with the Company’s Director compensation policy and certain employment contracts, director’s fees and a portion of employee’s salaries are to be paid via the issuance of shares of the Company’s Common Stock (“Common Stock”), in lieu of cash, with the valuation of such share being calculated on a quarterly basis and equal to the average closing price of the Company’s Common Stock. The Company records earned but unissued stock-based compensation in accrued expenses. Sale of ANDA During the quarter ended December 31, 2022, the Company entered into an agreement with Pyros Pharmaceuticals, Inc. (“Pyros”) pursuant to which the Company sold to Pyros its rights in and to the Company’s approved abbreviated new drug applications (ANDAs) for its generic Sabril drug. The Company sold its rights to Pyros for $ 1,000,000 In conjunction with the sale of its Product to Pyros, the Company executed a Manufacturing and Supply Agreement (the “Pyros Agreement”) with Pyros. Under the terms of the Pyros Agreement, the Company will receive an agreed-upon price per drug for the manufacturing and packaging of Sabril over a term of three years. Revenue per the Pyros Agreement will be recognized as control of the manufactured and supplied drugs is transferred to Pyros (at the time of delivery). Earnings Per Share Attributable to Common Shareholders The Company follows ASC 260, Earnings Per Share As the average market price of common stock for the three and six months ended September 30, 2023 and 2022 did not exceed the exercise price of the warrants, the potential dilution from the warrants converting into 79,008,661 ELITE PHARMACEUTICALS, INC. AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) The following is the computation of earnings per share applicable to common shareholders for the periods indicated: SCHEDULE OF EARNINGS (LOSS) PER SHARE APPLICABLE TO COMMON SHAREHOLDERS 2023 2022 2023 2022 For the Three Months Ended September 30, For the Six Months Ended September 30, 2023 2022 2023 2022 Numerator Net income - basic $ 14,934,601 $ 1,515,139 $ 16,076,410 $ 1,821,022 Effect of dilutive instrument on net income — 688,319 — 188,176 Net income - diluted $ 14,934,601 $ 2,203,458 $ 16,076,410 $ 2,009,198 Denominator Weighted average shares of Common Stock outstanding - basic 1,013,915,081 1,012,228,256 1,013,915,081 1,011,762,632 Dilutive effect of stock options and convertible securities 5,401,838 — 3,029,789 — Weighted average shares of Common Stock outstanding - diluted 1,019,316,919 1,012,228,256 1,016,944,870 1,011,762,632 Net income per share Basic $ 0.01 $ 0.00 $ 0.02 $ 0.00 Diluted $ 0.01 $ 0.00 $ 0.02 $ 0.00 Fair Value of Financial Instruments ASC 820, Fair Value Measurements and Disclosures ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy under ASC 820 are described as follows: ● Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities that are accessible at the measurement date. ● Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or corroborated by observable market data by correlation or other means. ● Level 3 – Inputs that are unobservable for the asset or liability. ELITE PHARMACEUTICALS, INC. AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Measured on a Recurring Basis The following table presents information about our liabilities measured at fair value on a recurring basis, aggregated by the level in the fair value hierarchy within which those measurements fell: 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 April 1, 2023 $ 521,711 $ — $ — $ 521,711 Change in fair value of derivative financial instruments - warrants 2,657,717 — — 2,657,717 Balance as of September 30, 2023 $ 3,179,428 $ — $ — $ 3,179,428 Fair Value Measurement Amount at Fair Value Level 1 Level 2 Level 3 Balance as of April 1, 2022 $ 936,837 $ — $ — $ 936,837 Change in fair value of derivative financial instruments - warrants (188,176 ) — — (188,176 ) Balance as of September 30, 2022 $ 748,661 $ — $ — $ 748,661 See Note 11 for specific inputs used in determining fair value. The carrying amounts of the Company’s financial assets and liabilities, such as cash, accounts receivable, prepaid expenses and other current assets, accounts payable and accrued expenses, approximate their fair values because of the short maturity of these instruments. Based upon current borrowing rates with similar maturities the carrying value of long-term debt approximates fair value. Non-Financial Assets that are Measured at Fair Value on a Non-Recurring Basis Non-financial assets such as intangible assets, and property and equipment are measured at fair value only when an impairment loss is recognized. The Company did not record an impairment charge related to these assets in the periods presented. Financial Instruments — Credit Losses (ASU 2016-13) In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (“CECL”). The amendments in this update introduce a new accounting model to measure credit losses for financial assets measured at amortized cost. The FASB has also issued additional ASUs to clarify the scope and provide additional guidance for ASU 2016-13. Credit losses for financial assets measured at amortized cost should be determined based on the total current expected credit losses over the life of the financial asset or group of financial assets. In effect, the financial asset or group of financial assets should be presented at the net amount expected to be collected. Credit losses will no longer be recorded under the current incurred loss model for financial assets measured at amortized cost. The amendments also modify the accounting for available-for-sale debt securities whereby credit losses will be recorded through an allowance for credit losses rather than a write-down to the security’s cost basis, which allows for reversals of credit losses when estimated credit losses decline. Credit losses for available-for-sale debt securities should be measured in a manner similar to current GAAP. The amendments were effective on April 1, 2023 for the Company, and must be applied using a modified retrospective approach with a cumulative-effect adjustment through retained earnings as of the beginning of the fiscal year upon adoption as required. While the standard modifies the measurement of the allowance for credit losses, it does not alter the credit risk of our trade or unbilled receivables. The impact of applying the CECL methodology upon adoption effective on April 1, 2023 was immaterial to the Company’s consolidated financial statements. The Company’s quantitative allowance for credit loss estimates under CECL was determined using the loss rate method, which is impacted by certain forecasted economic factors. In addition to the Company’s quantitative allowance for credit losses, the Company also incorporates qualitative adjustments that may relate to unique risks, changes in current economic conditions that may not be reflected in quantitatively derived results, or other relevant factors to further inform the Company’s estimate of the allowance for credit losses. ELITE PHARMACEUTICALS, INC. AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Additionally, due to the expansion of the time horizon over which the Company is required to estimate future credit losses, the Company may experience increased volatility in its future provisions for credit losses. Factors that could contribute to such volatility include, but are not limited to, changes in the composition and credit quality of customer base, economic conditions and forecasts, the allowance for credit loss models that are used, the data that is included in the models, the associated qualitative allowance framework, and the Company’s estimation techniques. The Company has historical collections of customer payments averaging approximately 99.96 23.1 125,000 0.54 0.54 Treasury Stock The Company records treasury stock at the cost to acquire it and includes treasury stock as a component of shareholders’ equity. Recently Issued Accounting Pronouncements Management has evaluated recently issued accounting pronouncements and does not believe that any of these pronouncements will have a significant impact on our consolidated financial statements and related disclosures. |
INVENTORY
INVENTORY | 6 Months Ended |
Sep. 30, 2023 | |
Inventory Disclosure [Abstract] | |
INVENTORY | NOTE 2. INVENTORY Inventory consisted of the following: SCHEDULE OF INVENTORY September 30, 2023 March 31, 2023 Finished goods $ 6,654,206 $ 2,352,330 Work-in-progress 1,355,355 1,791,311 Raw materials 7,214,823 5,407,075 Inventory $ 15,224,384 $ 9,550,716 |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 6 Months Ended |
Sep. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | NOTE 3. PROPERTY AND EQUIPMENT, NET Property and equipment consisted of the following: SCHEDULE OF PROPERTY AND EQUIPMENT September 30, 2023 March 31, 2023 Land, building and improvements $ 10,764,515 $ 10,768,181 Laboratory, manufacturing, warehouse and transportation equipment 13,361,690 13,364,512 Office equipment and software 373,601 395,563 Furniture and fixtures 512,032 484,237 Property and equipment, gross 25,011,838 25,012,493 Less: Accumulated depreciation (15,241,857 ) (14,586,335 ) Property and equipment, net $ 9,769,981 $ 10,426,158 Depreciation expense was $ 327,240 316,007 655,522 608,755 ELITE PHARMACEUTICALS, INC. AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) |
ACCRUED EXPENSES
ACCRUED EXPENSES | 6 Months Ended |
Sep. 30, 2023 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES | NOTE 4. ACCRUED EXPENSES As of September 30, 2023 and March 31, 2023, the Company’s accrued expenses consisted of the following: SUMMARY OF ACCRUED EXPENSES September 30, 2023 March 31, 2023 Salaries and fees payable in common stock $ 6,405,153 $ 4,125,000 Salaries and fees payable 250,000 — Co-development profit split 3,388,800 — Income tax — 414,989 Consultant contract fees 10,000 193,333 Audit fees 100,000 125,000 Director dues 75,000 70,000 Legal and professional expense 70,000 — Employee bonuses 494,315 — Other accrued expenses 365,000 119,404 Total accrued expenses $ 11,158,268 $ 5,047,726 |
NJEDA BONDS
NJEDA BONDS | 6 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
NJEDA BONDS | NOTE 5. NJEDA BONDS In relation to the Series A Notes, the Company is required to maintain a debt service reserve. The debt service reserve is classified as restricted cash on the accompanying unaudited 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 following tables summarize the Company’s bonds payable liability: SCHEDULE OF BONDS PAYABLE LIABILITY September 30, 2023 March 31, 2023 Gross bonds payable NJEDA Bonds - Series A Notes $ 1,245,000 $ 1,245,000 Less: Current portion of bonds payable (prior to deduction of bond offering costs) (130,000 ) (125,000 ) Long-term portion of bonds payable (prior to deduction of bond offering costs) $ 1,115,000 $ 1,120,000 Bond offering costs $ 354,454 $ 354,454 Less: Accumulated amortization (256,390 ) (249,294 ) Bond offering costs, net $ 98,064 $ 105,160 Current portion of bonds payable - net of bond offering costs Current portions of bonds payable $ 130,000 $ 125,000 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 $ 115,822 $ 110,822 Long term portion of bonds payable - net of bond offering costs Long term portion of bonds payable $ 990,000 $ 1,120,000 Less: Bond offering costs to be amortized subsequent to the next 12 months (87,432 ) (90,982 ) Long term portion of bonds payable, net of bond offering costs $ 902,568 $ 1,029,018 Amortization expense was $ 3,548 3,539 7,096 7,085 6,067 6,744 19,553 21,476 39,785 43,577 ELITE PHARMACEUTICALS, INC. AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Maturities of bonds for the next five years are as follows: SCHEDULE OF MATURITIES OF BONDS Years ending March 31, Amount 2024 $ 125,000 2025 130,000 2026 140,000 2027 150,000 Thereafter 700,000 Total $ 1,245,000 |
LOANS PAYABLE
LOANS PAYABLE | 6 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
LOANS PAYABLE | NOTE 6. LOANS PAYABLE On April 2, 2022, the Company and Elite Labs entered into a Loan and Security Agreement (the “EWB Loan Agreement”) with East West Bank (“EWB”). Pursuant to the EWB Loan Agreement, the Company and Elite Labs received one term loan for a principal amount of $ 12,000,000 2,000,000 9.73 1.73 five years May 1, 2027 8.87 0.87 May 1, 2027 40,120 The EWB Loans are secured by a security interest in the personal property of the Company and Elite Labs. The EWB Loan Agreement contains customary representations, warranties and covenants. These covenants include, but are not limited to, maintaining maximum leverage ratios of 3.50 to 1.00, minimum liquidity of $5,000,000, minimum cash of $1,000,000, a fixed charge coverage ratio of 1.25 to 1.00 and restrictions on mergers or sales of assets and debt borrowings. In place of the EWB Term Loan, the Company has entered into a collateralized promissory note with individual lenders with rates comparable to the EWB Term Loan but with less restrictive covenants (a “Promissory Note”). As of June 2, 2023, a Promissory Note was placed with Nasrat Hakim, CEO and Chairman of the Board of Directors, for $ 3,000,000 9 10 Loans payable consisted of the following: SCHEDULE OF LOANS PAYABLE September 30, 2023 March 31, 2023 Mortgage loan payable 4.75 $ 2,457,472 $ 2,472,923 Equipment and insurance financing loans payable, between 7.10 12.02 174,237 259,611 Less: Current portion of loans payable (179,325 ) (200,032 ) Long-term portion of loans payable $ 2,452,384 $ 2,532,502 The interest expense associated with the loans payable was $ 93,832 and $ 83,686 for the three months ended September 30, 2023 and 2022, and $ 171,070 261,265 for the six months ended September 30, 2023 and 2022, respectively. Loan principal payments for the next five years are as follows: SCHEDULE OF LOAN PRINCIPAL PAYMENTS Years ending March 31, Amount 2024 (excluding the six months ended September 30, 2023) $ 90,374 2025 182,170 2026 119,497 2027 94,612 2028 99,205 2029 and thereafter 2,045,851 Total remaining principal balance $ 2,631,709 ELITE PHARMACEUTICALS, INC. AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) |
RELATED PARTY LOANS
RELATED PARTY LOANS | 6 Months Ended |
Sep. 30, 2023 | |
Related Party Transactions [Abstract] | |
RELATED PARTY LOANS | NOTE 7. RELATED PARTY LOANS The Company has entered into a collateralized promissory note with individual lenders with rates comparable to the EWB Term Loan but with less covenants (the “Hakim Promissory Note”). These covenants include filing timely tax returns and financial statements, and an agreement not to sell, lease, or transfer a substantial portion of the Company’s assets during the term of the Hakim Promissory Note. On June 2, 2023, the Company entered into a Promissory Note with Nasrat Hakim, CEO and Chairman of the Board of Directors, pursuant to which the Company borrowed funds in the aggregate principal amount of $ 3,000,000 9 10 67,500 On July 1, 2022, the EWB provided a mortgage loan (“EWB Mortgage Loan”) in the amount of $ 2.55 10 bears interest at a rate of 4.75% fixed for 5 years then adjustable at the Wall Street Journal Prime Rate (“WSJP”) plus 0.5% with floor rate of 4.5% 13,251 The EWB Mortgage Loan contains customary representations, warranties and covenants. These covenants include maintaining a minimum debt coverage ratio of 1.50 to 1.00 tested annually and a minimum trailing 12-month debt coverage ratio of 1.50 to 1.00. As of the date of this filing, the Company was in compliance with each financial covenant On June 30, 2023, the Company entered into a collateralized promissory note with Davis Caskey (the “Caskey Promissory Note”). The Caskey Promissory Note has a principal balance of $ 1,000,000 9 10 22,500 |
DEFERRED REVENUE
DEFERRED REVENUE | 6 Months Ended |
Sep. 30, 2023 | |
Deferred Revenue | |
DEFERRED REVENUE | NOTE 8. DEFERRED REVENUE Deferred revenues in the aggregate amount of $ 25,555 as of September 30, 2023, were comprised of a current component of $ 13,333 and a long-term component of $ 12,222 32,223 as of March 31, 2023, were comprised of a current component of $ 13,333 and a long-term component of $ 18,890 . These amounts represent the unamortized balance of a $ 200,000 advance payment received for a TAGI Pharma licensing agreement with a fifteen-year term beginning in September 2010 and ending in August 2025 . These advance payments were recorded as deferred revenue when received and are earned, on a straight-line basis over the life of the licenses. The current component is equal to the amount of revenue to be earned during the 12-month period immediately subsequent to the balance sheet date and the long-term component is equal to the amount of revenue to be earned thereafter. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 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 condensed consolidated financial statements. Contingencies are inherently unpredictable, and the assessments of the value can involve a series of complex judgments about future events and can rely heavily on estimates and assumptions. Operating Leases The Company entered into an operating lease for a portion of a one-story warehouse, located at 135 Ludlow Avenue, Northvale, New Jersey (the “Ludlow Ave. lease”) which began in 2010. On June 30, 2021, the Company exercised a renewal option, with such option including a term that begins on January 1, 2022 and expires on December 31, 2026. The Ludlow Ave. lease was terminated on July 1, 2022, when the Company purchased the underlying property. In October 2020, the Company entered into an operating lease for office space in Pompano Beach, Florida (the “Pompano Office Lease”). The Pompano Office Lease is for approximately 1,275 The Pompano Office Lease has a term of three years, ending on October 31, 2023. The Pompano Office Lease was extended for one additional year on November 1, 2023 ending on October 31, 2024. 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. ELITE PHARMACEUTICALS, INC. AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 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. Lease assets and liabilities are classified as follows on the condensed consolidated balance sheet: SCHEDULE OF LEASE ASSETS AND LIABILITIES Lease Classification September 30, 2023 Assets Operating Operating lease – right-of-use asset $ 1,899 Total leased assets $ 1,899 Liabilities Current Operating Lease obligation – operating lease $ 2,163 Long-term Operating Lease obligation – operating lease, net of current portion — Total lease liabilities $ 2,163 Rent expense is recorded on the straight-line basis. Rent expense under the 135 Ludlow Ave. modified lease was $ 0 0 58,248 Rent expense under the Pompano Office Lease for the three months ended September 30, 2023 and 2022 was $ 6,519 6,330 13,038 12,660 The table below shows the future minimum rental payments, exclusive of taxes, insurance and other costs, under the Pompano Office Lease: SCHEDULE OF FUTURE MINIMUM RENTAL PAYMENTS Years ending March 31, Amount 2024 (excluding the six months ended September 30, 2023) $ 2,163 Total future minimum lease payments 2,163 Less: interest — Present value of lease payments $ 2,163 ELITE PHARMACEUTICALS, INC. AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) The weighted-average remaining lease term and the weighted-average discount rate of our lease was as follows: SCHEDULE OF WEIGHTED -AVERAGE REMAINING TERM AND THE WEIGHTED-AVERAGE DISCOUNT RATE Lease Term and Discount Rate September 30, 2023 Remaining lease term (years) Operating leases 1.1 Discount rate Operating leases 6 % |
PREFERRED STOCK
PREFERRED STOCK | 6 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
PREFERRED STOCK | 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 zero 1,000,000 0.01 |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS – WARRANTS | 6 Months Ended |
Sep. 30, 2023 | |
Derivative Financial Instruments Warrants | |
DERIVATIVE FINANCIAL INSTRUMENTS – WARRANTS | 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, as further described in this note below. The Company has 79,008,661 0.1521 On April 28, 2017, the Company entered into an Exchange Agreement with Hakim, the Chairman of the Board, President, and Chief Executive Officer of the Company, pursuant to which the Company issued to Hakim 24.0344 79,008,661 158,017,321 6,474,674 The Series J Warrants are exercisable for a period of 10 0.1521 The fair value of the Series J Warrants was calculated using a Black-Scholes model instead of a Monte Carlo Simulation because the probability with the shareholder approval provisions was no longer a factor. The following assumptions were used in the Black-Scholes model to calculate the fair value of the Series J Warrants: SCHEDULE OF FAIR VALUE OF WARRANTS ISSUED September 30, 2023 March 31, 2023 Fair value of the Company’s Common Stock $ 0.0938 $ 0.0290 Volatility 72.51 % 74.37 % Initial exercise price $ 0.1521 $ 0.1521 Warrant term (in years) 3.6 4.1 Risk free rate 4.70 % 3.55 % ELITE PHARMACEUTICALS, INC. AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) The changes in warrants (Level 3 financial instruments) measured at fair value on a recurring basis for the six months ended September 30, 2023 were as follows: SCHEDULE OF CHANGES IN WARRANTS MEASURED AT FAIR VALUE ON A RECURRING BASIS Balance at March 31, 2023 $ 521,711 Change in fair value of derivative financial instruments - warrants 2,657,717 Balance at September 30, 2023 $ 3,179,428 |
SHAREHOLDERS_ EQUITY
SHAREHOLDERS’ EQUITY | 6 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
SHAREHOLDERS’ EQUITY | NOTE 12. SHAREHOLDERS’ EQUITY Lincoln Park Capital Transaction - July 8, 2020 Purchase Agreement On July 8, 2020, the Company entered into a purchase agreement (the “2020 LPC Purchase Agreement”), and a registration rights agreement, with Lincoln Park Capital Fund, LLC (“Lincoln Park”), pursuant to which Lincoln Park has committed to purchase up to $ 25.0 0.001 The Company did not issue any shares of its Common Stock pursuant to the 2020 LPC Purchase Agreement during the three and six months ended September 30, 2023 and 2022. In addition, there were no shares issued to Lincoln Park as additional commitment shares, pursuant to the 2020 LPC Purchase Agreement. The 2020 LPC Purchase Agreement expired on August 1, 2023. Summary of Common Stock Activity During the six months ended September 30, 2023 and 2022, the Company did not issue any shares of Common Stock. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 6 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | NOTE 13. STOCK-BASED COMPENSATION Part of the compensation paid by the Company to its Directors and employees consists of the issuance of Common Stock or via the granting of options to purchase Common Stock. Stock-based Director Compensation The Company’s Director compensation policy, instituted in October 2009 and further revised in January 2016, includes provisions that a portion of director’s fees are to be paid via the issuance of shares of the Company’s Common Stock, in lieu of cash, with the valuation of such shares being calculated on quarterly basis and equal to the average closing price of the Company’s Common Stock. During the six months ended September 30, 2023, the Company accrued director’s fees totaling $ 227,915 75,000 152,915 SCHEDULE OF STOCK BASED COMPENSATION Balance of common stock owed at April 1, 2023 $ 60,000 Awarded shares — Change in fair value of stock-based liabilities 92,915 Balance of common stock owed at September 30, 2023 $ 152,915 Stock-based Employee/Consultant Compensation Employment contracts with the Company’s President and Chief Executive Officer and certain other employees and engagement contracts with certain consultants include provisions for a portion of each employee’s salaries or consultant’s fees to be paid via the issuance of shares of the Company’s Common Stock, in lieu of cash, with the valuation of such shares being calculated on a quarterly basis and equal to the average closing price of the Company’s Common Stock. SCHEDULE OF STOCK BASED COMPENSATION Balance of common stock owed at April 1, 2023 $ 4,278,333 Awarded shares — Change in fair value of stock-based liabilities 1,973,905 Balance of common stock owed at September 30, 2023 $ 6,252,238 During the six months ended September 30, 2023, the Company accrued no 6,252,238 ELITE PHARMACEUTICALS, INC. AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Options Under its 2014 Stock Option Plan and prior options plans, the Company may grant stock options to officers, selected employees, as well as members of the Board of Directors and advisory board members. All options have generally been granted at a price equal to or greater than the fair market value of the Company’s Common Stock at the date of the grant. Generally, options are granted with a vesting period of up to three years and expire ten years from the date of grant. 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 our 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. The grant date fair value of option awards is determined using the Black Scholes option-pricing model. The following assumptions were used for the three and six months ended September 30, 2023 and year ended March 31, 2023: SCHEDULE OF GRANT DATE FAIR VALUE OF OPTION AWARDS September 30, 2023 March 31, 2023 Term (in years) 10 10 Exercise Price $ 0.08 0.09 $ 0.03 0.04 Dividend Yield — — Expected Volatility 80 % 79 80 Risk Free Rate 4.27 4.32 2.99 4.01 A summary of the activity of Company’s 2014 Stock Option Plan for the six months ended September 30, 2023 is as follows: SCHEDULE OF STOCK OPTION PLAN Shares Weighted Average Weighted Average Remaining Aggregate Underlying Exercise Contractual Intrinsic Options Price Term (in years) Value Outstanding at March 31, 2023 15,370,000 $ 0.07 7.4 $ — Granted 4,000,000 $ 0.09 10.0 $ — Expired and Forfeited (3,840,000 ) $ 0.07 1.8 $ — Outstanding at September 30, 2023 15,530,000 $ 0.05 9.2 $ 717,706 Exercisable at September 30, 2023 343,334 $ 0.19 4.9 $ 978 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 September 30, 2023 and March 31, 2023 of $ 0.04 0.03 164,105 1.2 On September 5, 2023, options were granted to the Chief Financial Officer pursuant to the 2014 Plan to purchase an aggregate of 3,000,000 0.0898 The options granted will vest one third for each of the next three years upon the anniversary date of the grant and have a ten-year expiration date. On September 19, 2023, options were granted to one employee pursuant to the 2014 Plan to purchase an aggregate of 1,000,000 0.0819 The options granted will vest one third for each of the next three years upon the anniversary date of the grant and have a ten-year expiration date. The weighted-average grant-date fair value of stock options granted during the six months ended September 30, 2023 under the 2014 Plan was $ 0.0734 |
CONCENTRATIONS AND CREDIT RISK
CONCENTRATIONS AND CREDIT RISK | 6 Months Ended |
Sep. 30, 2023 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATIONS AND CREDIT RISK | NOTE 14. CONCENTRATIONS AND CREDIT RISK Revenues Three customers accounted for approximately 67 % of the Company’s revenues for the six months ended September 30, 2023. These three customers accounted for approximately 35 %, 22 %, and 10 % of revenues each, respectively. Two 96 85 11 Accounts Receivable Two customers accounted for approximately 78 % of the Company’s accounts receivable as of September 30, 2023. These two customers accounted for approximately 41 % and 37 % of accounts receivable each, respectively. Two 97 79 18 Purchasing One 37 One 62 |
SEGMENT RESULTS
SEGMENT RESULTS | 6 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
SEGMENT RESULTS | NOTE 15. SEGMENT RESULTS FASB ASC 280-10-50 requires use of the “management approach” model for segment reporting. The management approach is based on the way a company’s management organized segments within the company for making operating decisions and assessing performance. Reportable segments are based on products and services, geography, legal structure, management structure, or any other manner in which management disaggregates a company. The Company has determined that its reportable segments are ANDAs for generic products and NDAs for branded products. The Company identified its reporting segments based on the marketing authorization relating to each and the financial information used by its chief operating decision maker to make decisions regarding the allocation of resources to and the financial performance of the reporting segments. Asset information by operating segment is not presented below since the chief operating decision maker does not review this information by segment. The reporting segments follow the same accounting policies used in the preparation of the Company’s unaudited condensed consolidated financial statements. ELITE PHARMACEUTICALS, INC. AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) The following represents selected information for the Company’s reportable segments: SCHEDULE OF SELECTED INFORMATION FOR REPORTABLE SEGMENTS 2023 2022 2023 2022 For the Three Months Ended September 30, For the Six Months Ended September 30, 2023 2022 2023 2022 Operating Income by Segment ANDA $ 3,828,730 $ 2,186,932 $ 7,435,740 $ 4,118,625 Operating income by Segment $ 3,828,730 $ 2,186,932 $ 7,435,740 $ 4,118,625 The Company notes that there was no revenue related to the NDA segment for the three and six months ended September 30, 2023 and 2022. The table below reconciles the Company’s operating income by segment to income before income taxes as reported in the Company’s unaudited condensed consolidated statements of operations: SCHEDULE OF OPERATING INCOME BY SEGMENT TO INCOME FROM OPERATIONS 2023 2022 2023 2022 For the Three Months Ended September 30, For the Six Months Ended September 30, 2023 2022 2023 2022 Operating income by segment $ 3,828,730 $ 2,186,932 $ 7,435,740 $ 4,118,625 Corporate unallocated costs (1,533,208 ) (587,700 ) (3,194,912 ) (1,086,925 ) Interest income 7,320 43 10,836 172 Interest expense and amortization of debt issuance costs (130,438 ) (242,753 ) (249,850 ) (459,540 ) Depreciation and amortization expense (327,240 ) (319,552 ) (655,522 ) (615,846 ) Significant non-cash items (42,777 ) (198,563 ) (57,777 ) (312,053 ) Change in fair value of derivative instruments (2,468,350 ) 688,319 (2,657,717 ) 188,176 Change in fair value of stock-based liabilities (2,066,820 ) — (2,066,820 ) — Income before income taxes $ (2,732,783 ) $ 1,526,726 $ (1,436,022 ) $ 1,832,609 |
RELATED PARTY AGREEMENTS WITH M
RELATED PARTY AGREEMENTS WITH MIKAH PHARMA, LLC | 6 Months Ended |
Sep. 30, 2023 | |
Related Party Agreements With Mikah Pharma Llc | |
RELATED PARTY AGREEMENTS WITH MIKAH PHARMA, LLC | NOTE 16. RELATED PARTY AGREEMENTS WITH MIKAH PHARMA, LLC 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 September 30, 2023, the Company has accrued $ 3,373,800 |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 17. INCOME TAXES The Company’s income tax benefit was $ 17.5 0.0 The Company’s income tax benefit was $ 17.7 0.0 for the three months ended September 30, 2023 and 2022 , respectively. During the six months ended September 30, 2023 , the Company recorded a discrete tax benefit of $ 17.3 Prior to September 2023, the Company’s net deferred tax assets were largely offset by a valuation allowance. The Company prepares a quarterly analysis of its deferred tax assets which consists of positive and negative evidence, including its cumulative income (loss) position, revenue growth, continuing and improved profitability, and expectations regarding future profitability. For the three months ended September 30, 2023, the Company recorded a net valuation allowance release of $ 2,044,144 21 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Sep. 30, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 18. SUBSEQUENT EVENTS The Company has evaluated subsequent events from the balance sheet date through November 14, 2023 and note no material subsequent events were identified. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | 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, 2023. The interim results for the six months ended September 30, 2023 are not necessarily indicative of the results to be expected for the fiscal year ending March 31, 2024 or for any future periods. |
Segment Information | Segment Information Financial Accounting Standards Board (“FASB”) Accounting Standards Codification 280 (“ASC 280”), Segment Reporting The Company’s chief operating decision maker is the Chief Executive Officer, who reviews the financial performance and the results of operations of the segments prepared in accordance with GAAP when making decisions about allocating resources and assessing performance of the Company. The Company has determined that its reportable segments are products whose marketing approvals were secured via an Abbreviated New Drug Application (“ANDA”) and products whose marketing approvals were secured via a New Drug Application (“NDA”). ANDA products are referred to as generic pharmaceuticals and NDA products are referred to as branded pharmaceuticals. There are currently no intersegment revenues. Asset information by operating segment is not presented below since the chief operating decision maker does not review this information by segment. The reporting segments follow the same accounting policies used in the preparation of the Company’s condensed unaudited consolidated financial statements. Please see Note 15 for further details. |
Revenue Recognition | Revenue Recognition The Company generates revenue from manufacturing and licensing fees and sales of generic pharmaceuticals bearing the Elite label 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. Revenues earned from the sale of Elite label products are recorded at their net realizable value which consists of gross amounts invoiced reduced by contractual reductions, including, without limitation, chargebacks, discounts and program rebates, as applicable. ELITE PHARMACEUTICALS, INC. AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Under ASC 606, Revenue from Contacts with Customers |
Nature of goods and services | Nature of goods and services The following is a description of the Company’s goods and services from which the Company generates revenue, as well as the nature, timing of satisfaction of performance obligations, and significant payment terms for each, as applicable: a) Manufacturing Fees The Company is equipped to manufacture controlled-release products on a contract basis for third parties, if, and when, the products are approved. These products include products using controlled-release drug technology. The Company also develops and markets (either on its own or by license to other companies) generic and proprietary controlled-release pharmaceutical products. The Company recognizes revenue when the customer obtains control of the Company’s product based on the contractual shipping terms of the contract, at which time the performance obligation is deemed to be completed. The Company is primarily responsible for fulfilling the promise to provide the product, is responsible to ensure that the product is produced in accordance with the related supply agreement and bears risk of loss while the inventory is in-transit to the commercial partner. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring products to a customer. b) License Fees The Company enters into licensing and development agreements, which may include multiple revenue generating activities, including milestones payments, licensing fees, product sales and services. The Company analyzes each element of its licensing and development agreements in accordance with ASC 606 to determine appropriate revenue recognition. The terms of the license agreement may include payment to the Company of licensing fees, non-refundable upfront license fees, milestone payments if specified objectives are achieved, and/or royalties on product sales. If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price based on the estimated relative standalone selling prices of the promised products or services underlying each performance obligation. The Company determines standalone selling prices based on the price at which the performance obligation is sold separately. If the standalone selling price is not observable through past transactions, the Company estimates the standalone selling price taking into account available information such as market conditions and internally approved pricing guidelines related to the performance obligations. The Company recognizes revenue from non-refundable upfront payments at a point in time, typically upon fulfilling the delivery of the associated intellectual property to the customer. For those milestone payments which are contingent on the occurrence of particular future events (for example, payments due upon a product receiving FDA approval), the Company determined that these need to be considered for inclusion in the calculation of total consideration from the contract as a component of variable consideration using the most-likely amount method. As such, the Company assesses each milestone to determine the probability and substance behind achieving each milestone. Given the inherent uncertainty of the occurrence of future events, the Company will recognize revenue from the milestone when there is not a high probability of a reversal of revenue, which typically occurs near or upon achievement of the event. ELITE PHARMACEUTICALS, INC. AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Significant management judgment is required to determine the level of effort required under an arrangement and the period over which the Company expects to complete its performance obligations under the arrangement. If the Company cannot reasonably estimate when its performance obligations either are completed or become inconsequential, then revenue recognition is deferred until the Company can reasonably make such estimates. Revenue is then recognized over the remaining estimated period of performance using the cumulative catch-up method. When determining the transaction price of a contract, an adjustment is made if payment from a customer occurs either significantly before or significantly after performance, resulting in a significant financing component. Applying the practical expedient in ASC 606-10-32-18, the Company does not assess whether a significant financing component exists if the period between when the Company performs its obligations under the contract and when the customer pays is one year or less. None of the Company’s contracts contained a significant financing component as of September 30, 2023. In accordance with ASC 606-10-55-65, royalties are recognized when the subsequent sale of the customer’s products occurs. c) Sale of product under the Elite label The Company began direct sales of products under the Company’s own label on April 1, 2023. License agreements will remain in place for select products. With this transition, however, a large portion of the manufacturing and license fees now reported will be replaced with revenues from sales of Elite labeled pharmaceutical products to distributors for pharmacies and institutions. |
Disaggregation of revenue | 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. The table also includes a reconciliation of the disaggregated revenue with the reportable segments: SCHEDULE OF DISAGGREGATION OF REVENUE For the Three Months Ended September 30, For the Six Months Ended September 30, 2023 2022 2023 2022 NDA: Manufacturing fees $ - $ $ - $ Licensing fees $ — $ — $ — $ — Total NDA revenue — — — — ANDA: Manufacturing fees $ 13,507,870 $ 7,187,363 $ 21,417,107 $ 13,514,504 Licensing fees 649,315 1,398,400 1,720,154 2,744,167 Total ANDA revenue 14,157,185 8,585,763 23,137,261 16,258,671 Total revenue $ 14,157,185 $ 8,585,763 $ 23,137,261 $ 16,258,671 Selected information on reportable segments and reconciliation of operating income by segment to income from operations before income taxes are disclosed within Note 15. |
Cash | Cash Cash consists of cash on deposit with banks and money market instruments. The Company places its cash with high-quality, U.S. financial institutions and, to date has not experienced losses on any of its balances. |
Restricted Cash | Restricted Cash As of September 30, 2023, and March 31, 2023, the Company had $ 422,750 412,434 ELITE PHARMACEUTICALS, INC. AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) |
Accounts Receivable and Allowance for Expected Credit Losses | Accounts Receivable and Allowance for Expected Credit Losses Accounts receivable are comprised of balances due from customers, net of estimated allowances for expected credit losses, and other contractual deductions, including, without limitation, chargebacks, discounts and program rebates. In determining collectability, historical trends are evaluated, and specific customer issues are reviewed on a periodic basis to arrive at appropriate allowances. The allowance for expected credit losses is based on the probability of future collection under the current expected credited loss (“CECL”) impairment model under Accounting Standards Update (“ASU”) 2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Assets, which was adopted by the Company on February 1, 2023, as discussed below within Recently Adopted Accounting Pronouncements. Under the CECL impairment model, the Company determines its allowance by applying a loss-rate method based on an aging schedule using the Company’s historical loss rate. The Company also considers reasonable and supportable current information in determining its estimated loss rates, such as external forecasts, macroeconomic trends or other factors including customers’ credit risk and historical loss experience. The adequacy of the allowance is evaluated on a regular basis. Account balances are written off after all means of collection are exhausted and the balance is deemed uncollectible. Subsequent recoveries are credited to the allowance. Changes in the allowance are recorded as adjustments to credit losses in the period incurred. Prior to April 1, 2023, trade receivables were presented net of allowance for expected credit losses based on the credit risk of specific clients, past collection history, and management’s evaluation of other risks. Expected credit losses stemming from unbilled receivables expected to be billed between March 31, 2024 and March 31, 2028 include additional risk premiums estimated based on factors such as projected inflation, projected decreases in GDP, and projected unemployment. |
Inventory | Inventory Inventory is recorded at the lower of cost or net realizable value on specific identification by lot number basis. |
Long-Lived Assets | Long-Lived Assets The Company periodically evaluates the fair value of long-lived assets, which include property and equipment and intangibles, whenever events or changes in circumstances indicate that its carrying amounts may not be recoverable. Property and equipment are stated at cost. Depreciation is provided on the straight-line method based on the estimated useful lives of the respective assets which range from three to forty years. Major repairs or improvements are capitalized. Minor replacements and maintenance and repairs which do not improve or extend asset lives are expensed currently. Upon retirement or other disposition of assets, the cost and related accumulated depreciation are removed from the accounts and the resulting gain or loss, if any, is recognized in income. |
Intangible Assets | Intangible Assets The Company capitalizes certain costs to acquire intangible assets; if such assets are determined to have a finite useful life they are amortized on a straight-line basis over the estimated useful life. Costs to acquire indefinite lived intangible assets, such as costs related to ANDAs are capitalized accordingly. The Company tests its intangible assets for impairment at least annually (as of March 31st) and whenever events or circumstances change that indicate impairment may have occurred. A significant amount of judgment is involved in determining if an indicator of impairment has occurred. Such indicators may include, among others and without limitation: a significant decline in the Company’s expected future cash flows; a sustained, significant decline in the Company’s stock price and market capitalization; a significant adverse change in legal factors or in the business climate of the Company’s segments; unanticipated competition; and slower growth rates. During the year ended March 31, 2023, the Company determined indicators of impairment occurred and recorded impairment expense of $ 292,807 no ELITE PHARMACEUTICALS, INC. AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) The following table summarizes the Company’s intangible assets as of and for the periods ended September 30, 2023 and March 31, 2023: SCHEDULE OF INTANGIBLE ASSETS September 30, 2023 Estimated Gross Useful Carrying Impairment Accumulated Net Book Life Amount losses Amortization Value Patent application costs * $ 289,039 $ — $ — $ 289,039 ANDA acquisition costs Indefinite 6,052,189 — — 6,052,189 $ 6,341,228 $ — $ — $ 6,341,228 March 31, 2023 Estimated Gross Useful Carrying Impairment Accumulated Net Book Life Amount losses Amortization Value Patent application costs * $ 465,684 $ (176,645 ) $ — $ 289,039 ANDA acquisition costs Indefinite 6,168,351 (116,162 ) — 6,052,189 $ 6,634,035 $ (292,807 ) $ — $ 6,341,228 |
Research and Development | Research and Development Research and development expenditures are charged to expenses as incurred. |
Contingencies | 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 condensed consolidated financial statements. Contingencies are inherently unpredictable, and the assessments of the value can involve a series of complex judgments about future events and can rely heavily on estimates and assumptions. |
Income Taxes | 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. 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 September 30, 2023, a summary of the tax years that remain subject to examination in our major tax jurisdictions are: United States – Federal, 2016 and forward. The Company did not record unrecognized tax positions for the six months ended September 30, 2023. ELITE PHARMACEUTICALS, INC. AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) |
Warrants and Preferred Shares | Warrants and Preferred Shares The accounting treatment of warrants and preferred share series issued is determined pursuant to the guidance provided by ASC 470, Debt Distinguishing Liabilities from Equity Derivatives and Hedging The exercise price is subject to adjustment for any issuances or deemed issuances of Common Stock or Common Stock equivalents at an effective price below the then exercise price. Such exercise price adjustment feature prohibits the Company from being able to conclude the warrants are indexed to its own stock and thus such warrants are classified as liabilities and measured initially and subsequently at fair value. The Series J Warrants also provide for other standard adjustments upon the happening of certain customary events. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for stock-based compensation in accordance with ASC 718, Compensation-Stock Compensation In accordance with the Company’s Director compensation policy and certain employment contracts, director’s fees and a portion of employee’s salaries are to be paid via the issuance of shares of the Company’s Common Stock (“Common Stock”), in lieu of cash, with the valuation of such share being calculated on a quarterly basis and equal to the average closing price of the Company’s Common Stock. The Company records earned but unissued stock-based compensation in accrued expenses. |
Sale of ANDA | Sale of ANDA During the quarter ended December 31, 2022, the Company entered into an agreement with Pyros Pharmaceuticals, Inc. (“Pyros”) pursuant to which the Company sold to Pyros its rights in and to the Company’s approved abbreviated new drug applications (ANDAs) for its generic Sabril drug. The Company sold its rights to Pyros for $ 1,000,000 In conjunction with the sale of its Product to Pyros, the Company executed a Manufacturing and Supply Agreement (the “Pyros Agreement”) with Pyros. Under the terms of the Pyros Agreement, the Company will receive an agreed-upon price per drug for the manufacturing and packaging of Sabril over a term of three years. Revenue per the Pyros Agreement will be recognized as control of the manufactured and supplied drugs is transferred to Pyros (at the time of delivery). |
Earnings Per Share Attributable to Common Shareholders | Earnings Per Share Attributable to Common Shareholders The Company follows ASC 260, Earnings Per Share As the average market price of common stock for the three and six months ended September 30, 2023 and 2022 did not exceed the exercise price of the warrants, the potential dilution from the warrants converting into 79,008,661 ELITE PHARMACEUTICALS, INC. AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) The following is the computation of earnings per share applicable to common shareholders for the periods indicated: SCHEDULE OF EARNINGS (LOSS) PER SHARE APPLICABLE TO COMMON SHAREHOLDERS 2023 2022 2023 2022 For the Three Months Ended September 30, For the Six Months Ended September 30, 2023 2022 2023 2022 Numerator Net income - basic $ 14,934,601 $ 1,515,139 $ 16,076,410 $ 1,821,022 Effect of dilutive instrument on net income — 688,319 — 188,176 Net income - diluted $ 14,934,601 $ 2,203,458 $ 16,076,410 $ 2,009,198 Denominator Weighted average shares of Common Stock outstanding - basic 1,013,915,081 1,012,228,256 1,013,915,081 1,011,762,632 Dilutive effect of stock options and convertible securities 5,401,838 — 3,029,789 — Weighted average shares of Common Stock outstanding - diluted 1,019,316,919 1,012,228,256 1,016,944,870 1,011,762,632 Net income per share Basic $ 0.01 $ 0.00 $ 0.02 $ 0.00 Diluted $ 0.01 $ 0.00 $ 0.02 $ 0.00 |
Fair Value of Financial Instruments | Fair Value of Financial Instruments ASC 820, Fair Value Measurements and Disclosures ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy under ASC 820 are described as follows: ● Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities that are accessible at the measurement date. ● Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability; and inputs that are derived principally from or corroborated by observable market data by correlation or other means. ● Level 3 – Inputs that are unobservable for the asset or liability. ELITE PHARMACEUTICALS, INC. AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Measured on a Recurring Basis The following table presents information about our liabilities measured at fair value on a recurring basis, aggregated by the level in the fair value hierarchy within which those measurements fell: 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 April 1, 2023 $ 521,711 $ — $ — $ 521,711 Change in fair value of derivative financial instruments - warrants 2,657,717 — — 2,657,717 Balance as of September 30, 2023 $ 3,179,428 $ — $ — $ 3,179,428 Fair Value Measurement Amount at Fair Value Level 1 Level 2 Level 3 Balance as of April 1, 2022 $ 936,837 $ — $ — $ 936,837 Change in fair value of derivative financial instruments - warrants (188,176 ) — — (188,176 ) Balance as of September 30, 2022 $ 748,661 $ — $ — $ 748,661 See Note 11 for specific inputs used in determining fair value. The carrying amounts of the Company’s financial assets and liabilities, such as cash, accounts receivable, prepaid expenses and other current assets, accounts payable and accrued expenses, approximate their fair values because of the short maturity of these instruments. Based upon current borrowing rates with similar maturities the carrying value of long-term debt approximates fair value. Non-Financial Assets that are Measured at Fair Value on a Non-Recurring Basis Non-financial assets such as intangible assets, and property and equipment are measured at fair value only when an impairment loss is recognized. The Company did not record an impairment charge related to these assets in the periods presented. |
Financial Instruments — Credit Losses (ASU 2016-13) | Financial Instruments — Credit Losses (ASU 2016-13) In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (“CECL”). The amendments in this update introduce a new accounting model to measure credit losses for financial assets measured at amortized cost. The FASB has also issued additional ASUs to clarify the scope and provide additional guidance for ASU 2016-13. Credit losses for financial assets measured at amortized cost should be determined based on the total current expected credit losses over the life of the financial asset or group of financial assets. In effect, the financial asset or group of financial assets should be presented at the net amount expected to be collected. Credit losses will no longer be recorded under the current incurred loss model for financial assets measured at amortized cost. The amendments also modify the accounting for available-for-sale debt securities whereby credit losses will be recorded through an allowance for credit losses rather than a write-down to the security’s cost basis, which allows for reversals of credit losses when estimated credit losses decline. Credit losses for available-for-sale debt securities should be measured in a manner similar to current GAAP. The amendments were effective on April 1, 2023 for the Company, and must be applied using a modified retrospective approach with a cumulative-effect adjustment through retained earnings as of the beginning of the fiscal year upon adoption as required. While the standard modifies the measurement of the allowance for credit losses, it does not alter the credit risk of our trade or unbilled receivables. The impact of applying the CECL methodology upon adoption effective on April 1, 2023 was immaterial to the Company’s consolidated financial statements. The Company’s quantitative allowance for credit loss estimates under CECL was determined using the loss rate method, which is impacted by certain forecasted economic factors. In addition to the Company’s quantitative allowance for credit losses, the Company also incorporates qualitative adjustments that may relate to unique risks, changes in current economic conditions that may not be reflected in quantitatively derived results, or other relevant factors to further inform the Company’s estimate of the allowance for credit losses. ELITE PHARMACEUTICALS, INC. AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Additionally, due to the expansion of the time horizon over which the Company is required to estimate future credit losses, the Company may experience increased volatility in its future provisions for credit losses. Factors that could contribute to such volatility include, but are not limited to, changes in the composition and credit quality of customer base, economic conditions and forecasts, the allowance for credit loss models that are used, the data that is included in the models, the associated qualitative allowance framework, and the Company’s estimation techniques. The Company has historical collections of customer payments averaging approximately 99.96 23.1 125,000 0.54 0.54 |
Treasury Stock | Treasury Stock The Company records treasury stock at the cost to acquire it and includes treasury stock as a component of shareholders’ equity. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements Management has evaluated recently issued accounting pronouncements and does not believe that any of these pronouncements will have a significant impact on our consolidated financial statements and related disclosures. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
SCHEDULE OF 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. The table also includes a reconciliation of the disaggregated revenue with the reportable segments: SCHEDULE OF DISAGGREGATION OF REVENUE For the Three Months Ended September 30, For the Six Months Ended September 30, 2023 2022 2023 2022 NDA: Manufacturing fees $ - $ $ - $ Licensing fees $ — $ — $ — $ — Total NDA revenue — — — — ANDA: Manufacturing fees $ 13,507,870 $ 7,187,363 $ 21,417,107 $ 13,514,504 Licensing fees 649,315 1,398,400 1,720,154 2,744,167 Total ANDA revenue 14,157,185 8,585,763 23,137,261 16,258,671 Total revenue $ 14,157,185 $ 8,585,763 $ 23,137,261 $ 16,258,671 |
SCHEDULE OF INTANGIBLE ASSETS | The following table summarizes the Company’s intangible assets as of and for the periods ended September 30, 2023 and March 31, 2023: SCHEDULE OF INTANGIBLE ASSETS September 30, 2023 Estimated Gross Useful Carrying Impairment Accumulated Net Book Life Amount losses Amortization Value Patent application costs * $ 289,039 $ — $ — $ 289,039 ANDA acquisition costs Indefinite 6,052,189 — — 6,052,189 $ 6,341,228 $ — $ — $ 6,341,228 March 31, 2023 Estimated Gross Useful Carrying Impairment Accumulated Net Book Life Amount losses Amortization Value Patent application costs * $ 465,684 $ (176,645 ) $ — $ 289,039 ANDA acquisition costs Indefinite 6,168,351 (116,162 ) — 6,052,189 $ 6,634,035 $ (292,807 ) $ — $ 6,341,228 |
SCHEDULE OF EARNINGS (LOSS) PER SHARE APPLICABLE TO COMMON SHAREHOLDERS | The following is the computation of earnings per share applicable to common shareholders for the periods indicated: SCHEDULE OF EARNINGS (LOSS) PER SHARE APPLICABLE TO COMMON SHAREHOLDERS 2023 2022 2023 2022 For the Three Months Ended September 30, For the Six Months Ended September 30, 2023 2022 2023 2022 Numerator Net income - basic $ 14,934,601 $ 1,515,139 $ 16,076,410 $ 1,821,022 Effect of dilutive instrument on net income — 688,319 — 188,176 Net income - diluted $ 14,934,601 $ 2,203,458 $ 16,076,410 $ 2,009,198 Denominator Weighted average shares of Common Stock outstanding - basic 1,013,915,081 1,012,228,256 1,013,915,081 1,011,762,632 Dilutive effect of stock options and convertible securities 5,401,838 — 3,029,789 — Weighted average shares of Common Stock outstanding - diluted 1,019,316,919 1,012,228,256 1,016,944,870 1,011,762,632 Net income per share Basic $ 0.01 $ 0.00 $ 0.02 $ 0.00 Diluted $ 0.01 $ 0.00 $ 0.02 $ 0.00 |
SCHEDULE OF LIABILITIES MEASURED AT FAIR VALUE ON A RECURRING BASIS | The following table presents information about our liabilities measured at fair value on a recurring basis, aggregated by the level in the fair value hierarchy within which those measurements fell: 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 April 1, 2023 $ 521,711 $ — $ — $ 521,711 Change in fair value of derivative financial instruments - warrants 2,657,717 — — 2,657,717 Balance as of September 30, 2023 $ 3,179,428 $ — $ — $ 3,179,428 Fair Value Measurement Amount at Fair Value Level 1 Level 2 Level 3 Balance as of April 1, 2022 $ 936,837 $ — $ — $ 936,837 Change in fair value of derivative financial instruments - warrants (188,176 ) — — (188,176 ) Balance as of September 30, 2022 $ 748,661 $ — $ — $ 748,661 |
INVENTORY (Tables)
INVENTORY (Tables) | 6 Months Ended |
Sep. 30, 2023 | |
Inventory Disclosure [Abstract] | |
SCHEDULE OF INVENTORY | Inventory consisted of the following: SCHEDULE OF INVENTORY September 30, 2023 March 31, 2023 Finished goods $ 6,654,206 $ 2,352,330 Work-in-progress 1,355,355 1,791,311 Raw materials 7,214,823 5,407,075 Inventory $ 15,224,384 $ 9,550,716 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 6 Months Ended |
Sep. 30, 2023 | |
Property, Plant and Equipment [Abstract] | |
SCHEDULE OF PROPERTY AND EQUIPMENT | Property and equipment consisted of the following: SCHEDULE OF PROPERTY AND EQUIPMENT September 30, 2023 March 31, 2023 Land, building and improvements $ 10,764,515 $ 10,768,181 Laboratory, manufacturing, warehouse and transportation equipment 13,361,690 13,364,512 Office equipment and software 373,601 395,563 Furniture and fixtures 512,032 484,237 Property and equipment, gross 25,011,838 25,012,493 Less: Accumulated depreciation (15,241,857 ) (14,586,335 ) Property and equipment, net $ 9,769,981 $ 10,426,158 |
ACCRUED EXPENSES (Tables)
ACCRUED EXPENSES (Tables) | 6 Months Ended |
Sep. 30, 2023 | |
Payables and Accruals [Abstract] | |
SUMMARY OF ACCRUED EXPENSES | As of September 30, 2023 and March 31, 2023, the Company’s accrued expenses consisted of the following: SUMMARY OF ACCRUED EXPENSES September 30, 2023 March 31, 2023 Salaries and fees payable in common stock $ 6,405,153 $ 4,125,000 Salaries and fees payable 250,000 — Co-development profit split 3,388,800 — Income tax — 414,989 Consultant contract fees 10,000 193,333 Audit fees 100,000 125,000 Director dues 75,000 70,000 Legal and professional expense 70,000 — Employee bonuses 494,315 — Other accrued expenses 365,000 119,404 Total accrued expenses $ 11,158,268 $ 5,047,726 |
NJEDA BONDS (Tables)
NJEDA BONDS (Tables) | 6 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
SCHEDULE OF BONDS PAYABLE LIABILITY | The following tables summarize the Company’s bonds payable liability: SCHEDULE OF BONDS PAYABLE LIABILITY September 30, 2023 March 31, 2023 Gross bonds payable NJEDA Bonds - Series A Notes $ 1,245,000 $ 1,245,000 Less: Current portion of bonds payable (prior to deduction of bond offering costs) (130,000 ) (125,000 ) Long-term portion of bonds payable (prior to deduction of bond offering costs) $ 1,115,000 $ 1,120,000 Bond offering costs $ 354,454 $ 354,454 Less: Accumulated amortization (256,390 ) (249,294 ) Bond offering costs, net $ 98,064 $ 105,160 Current portion of bonds payable - net of bond offering costs Current portions of bonds payable $ 130,000 $ 125,000 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 $ 115,822 $ 110,822 Long term portion of bonds payable - net of bond offering costs Long term portion of bonds payable $ 990,000 $ 1,120,000 Less: Bond offering costs to be amortized subsequent to the next 12 months (87,432 ) (90,982 ) Long term portion of bonds payable, net of bond offering costs $ 902,568 $ 1,029,018 |
SCHEDULE OF MATURITIES OF BONDS | Maturities of bonds for the next five years are as follows: SCHEDULE OF MATURITIES OF BONDS Years ending March 31, Amount 2024 $ 125,000 2025 130,000 2026 140,000 2027 150,000 Thereafter 700,000 Total $ 1,245,000 |
LOANS PAYABLE (Tables)
LOANS PAYABLE (Tables) | 6 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
SCHEDULE OF LOANS PAYABLE | Loans payable consisted of the following: SCHEDULE OF LOANS PAYABLE September 30, 2023 March 31, 2023 Mortgage loan payable 4.75 $ 2,457,472 $ 2,472,923 Equipment and insurance financing loans payable, between 7.10 12.02 174,237 259,611 Less: Current portion of loans payable (179,325 ) (200,032 ) Long-term portion of loans payable $ 2,452,384 $ 2,532,502 |
SCHEDULE OF LOAN PRINCIPAL PAYMENTS | Loan principal payments for the next five years are as follows: SCHEDULE OF LOAN PRINCIPAL PAYMENTS Years ending March 31, Amount 2024 (excluding the six months ended September 30, 2023) $ 90,374 2025 182,170 2026 119,497 2027 94,612 2028 99,205 2029 and thereafter 2,045,851 Total remaining principal balance $ 2,631,709 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 6 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
SCHEDULE OF LEASE ASSETS AND LIABILITIES | Lease assets and liabilities are classified as follows on the condensed consolidated balance sheet: SCHEDULE OF LEASE ASSETS AND LIABILITIES Lease Classification September 30, 2023 Assets Operating Operating lease – right-of-use asset $ 1,899 Total leased assets $ 1,899 Liabilities Current Operating Lease obligation – operating lease $ 2,163 Long-term Operating Lease obligation – operating lease, net of current portion — Total lease liabilities $ 2,163 |
SCHEDULE OF FUTURE MINIMUM RENTAL PAYMENTS | The table below shows the future minimum rental payments, exclusive of taxes, insurance and other costs, under the Pompano Office Lease: SCHEDULE OF FUTURE MINIMUM RENTAL PAYMENTS Years ending March 31, Amount 2024 (excluding the six months ended September 30, 2023) $ 2,163 Total future minimum lease payments 2,163 Less: interest — Present value of lease payments $ 2,163 |
SCHEDULE OF WEIGHTED -AVERAGE REMAINING TERM AND THE WEIGHTED-AVERAGE DISCOUNT RATE | The weighted-average remaining lease term and the weighted-average discount rate of our lease was as follows: SCHEDULE OF WEIGHTED -AVERAGE REMAINING TERM AND THE WEIGHTED-AVERAGE DISCOUNT RATE Lease Term and Discount Rate September 30, 2023 Remaining lease term (years) Operating leases 1.1 Discount rate Operating leases 6 % |
DERIVATIVE FINANCIAL INSTRUME_2
DERIVATIVE FINANCIAL INSTRUMENTS – WARRANTS (Tables) | 6 Months Ended |
Sep. 30, 2023 | |
SCHEDULE OF CHANGES IN WARRANTS MEASURED AT FAIR VALUE ON A RECURRING BASIS | The changes in warrants (Level 3 financial instruments) measured at fair value on a recurring basis for the six months ended September 30, 2023 were as follows: SCHEDULE OF CHANGES IN WARRANTS MEASURED AT FAIR VALUE ON A RECURRING BASIS Balance at March 31, 2023 $ 521,711 Change in fair value of derivative financial instruments - warrants 2,657,717 Balance at September 30, 2023 $ 3,179,428 |
Warrant [Member] | |
SCHEDULE OF FAIR VALUE OF WARRANTS ISSUED | SCHEDULE OF FAIR VALUE OF WARRANTS ISSUED September 30, 2023 March 31, 2023 Fair value of the Company’s Common Stock $ 0.0938 $ 0.0290 Volatility 72.51 % 74.37 % Initial exercise price $ 0.1521 $ 0.1521 Warrant term (in years) 3.6 4.1 Risk free rate 4.70 % 3.55 % |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 6 Months Ended |
Sep. 30, 2023 | |
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |
SCHEDULE OF STOCK BASED COMPENSATION | SCHEDULE OF STOCK BASED COMPENSATION Balance of common stock owed at April 1, 2023 $ 4,278,333 Awarded shares — Change in fair value of stock-based liabilities 1,973,905 Balance of common stock owed at September 30, 2023 $ 6,252,238 |
SCHEDULE OF GRANT DATE FAIR VALUE OF OPTION AWARDS | The grant date fair value of option awards is determined using the Black Scholes option-pricing model. The following assumptions were used for the three and six months ended September 30, 2023 and year ended March 31, 2023: SCHEDULE OF GRANT DATE FAIR VALUE OF OPTION AWARDS September 30, 2023 March 31, 2023 Term (in years) 10 10 Exercise Price $ 0.08 0.09 $ 0.03 0.04 Dividend Yield — — Expected Volatility 80 % 79 80 Risk Free Rate 4.27 4.32 2.99 4.01 |
SCHEDULE OF STOCK OPTION PLAN | SCHEDULE OF STOCK OPTION PLAN Shares Weighted Average Weighted Average Remaining Aggregate Underlying Exercise Contractual Intrinsic Options Price Term (in years) Value Outstanding at March 31, 2023 15,370,000 $ 0.07 7.4 $ — Granted 4,000,000 $ 0.09 10.0 $ — Expired and Forfeited (3,840,000 ) $ 0.07 1.8 $ — Outstanding at September 30, 2023 15,530,000 $ 0.05 9.2 $ 717,706 Exercisable at September 30, 2023 343,334 $ 0.19 4.9 $ 978 |
Director [Member] | |
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |
SCHEDULE OF STOCK BASED COMPENSATION | SCHEDULE OF STOCK BASED COMPENSATION Balance of common stock owed at April 1, 2023 $ 60,000 Awarded shares — Change in fair value of stock-based liabilities 92,915 Balance of common stock owed at September 30, 2023 $ 152,915 |
SEGMENT RESULTS (Tables)
SEGMENT RESULTS (Tables) | 6 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
SCHEDULE OF SELECTED INFORMATION FOR REPORTABLE SEGMENTS | The following represents selected information for the Company’s reportable segments: SCHEDULE OF SELECTED INFORMATION FOR REPORTABLE SEGMENTS 2023 2022 2023 2022 For the Three Months Ended September 30, For the Six Months Ended September 30, 2023 2022 2023 2022 Operating Income by Segment ANDA $ 3,828,730 $ 2,186,932 $ 7,435,740 $ 4,118,625 Operating income by Segment $ 3,828,730 $ 2,186,932 $ 7,435,740 $ 4,118,625 |
SCHEDULE OF OPERATING INCOME BY SEGMENT TO INCOME FROM OPERATIONS | The table below reconciles the Company’s operating income by segment to income before income taxes as reported in the Company’s unaudited condensed consolidated statements of operations: SCHEDULE OF OPERATING INCOME BY SEGMENT TO INCOME FROM OPERATIONS 2023 2022 2023 2022 For the Three Months Ended September 30, For the Six Months Ended September 30, 2023 2022 2023 2022 Operating income by segment $ 3,828,730 $ 2,186,932 $ 7,435,740 $ 4,118,625 Corporate unallocated costs (1,533,208 ) (587,700 ) (3,194,912 ) (1,086,925 ) Interest income 7,320 43 10,836 172 Interest expense and amortization of debt issuance costs (130,438 ) (242,753 ) (249,850 ) (459,540 ) Depreciation and amortization expense (327,240 ) (319,552 ) (655,522 ) (615,846 ) Significant non-cash items (42,777 ) (198,563 ) (57,777 ) (312,053 ) Change in fair value of derivative instruments (2,468,350 ) 688,319 (2,657,717 ) 188,176 Change in fair value of stock-based liabilities (2,066,820 ) — (2,066,820 ) — Income before income taxes $ (2,732,783 ) $ 1,526,726 $ (1,436,022 ) $ 1,832,609 |
SCHEDULE OF DISAGGREGATION OF R
SCHEDULE OF DISAGGREGATION OF REVENUE (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Manufacturing fees | $ 13,507,870 | $ 7,187,363 | $ 21,417,107 | $ 13,514,504 |
Licensing fees | 649,315 | 1,398,400 | 1,720,154 | 2,744,167 |
Total revenue | 14,157,185 | 8,585,763 | 23,137,261 | 16,258,671 |
New Drug Applications [Member] | ||||
Manufacturing fees | ||||
Licensing fees | ||||
Total revenue | ||||
Abbreviated New Drug Applications [Member] | ||||
Manufacturing fees | 13,507,870 | 7,187,363 | 21,417,107 | 13,514,504 |
Licensing fees | 649,315 | 1,398,400 | 1,720,154 | 2,744,167 |
Total revenue | $ 14,157,185 | $ 8,585,763 | $ 23,137,261 | $ 16,258,671 |
SCHEDULE OF INTANGIBLE ASSETS (
SCHEDULE OF INTANGIBLE ASSETS (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Mar. 31, 2023 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 6,341,228 | $ 6,634,035 |
Reductions | (292,807) | |
Accumulated Amortization | 0 | 0 |
Net Book Value | 6,341,228 | 6,341,228 |
Patent Application Costs [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 289,039 | 465,684 |
Reductions | (176,645) | |
Accumulated Amortization | ||
Net Book Value | 289,039 | 289,039 |
ANDA Acquisition Costs [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 6,052,189 | 6,168,351 |
Reductions | (116,162) | |
Accumulated Amortization | ||
Net Book Value | $ 6,052,189 | $ 6,052,189 |
Estimated Useful Life | Indefinite | Indefinite |
SCHEDULE OF EARNINGS (LOSS) PER
SCHEDULE OF EARNINGS (LOSS) PER SHARE APPLICABLE TO COMMON SHAREHOLDERS (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Accounting Policies [Abstract] | ||||
Net income - basic | $ 14,934,601 | $ 1,515,139 | $ 16,076,410 | $ 1,821,022 |
Effect of dilutive instrument on net income | 688,319 | 188,176 | ||
Net income - diluted | $ 14,934,601 | $ 2,203,458 | $ 16,076,410 | $ 2,009,198 |
Weighted average shares of Common Stock outstanding - basic | 1,013,915,081 | 1,012,228,256 | 1,013,915,081 | 1,011,762,632 |
Dilutive effect of stock options and convertible securities | $ 5,401,838 | $ 3,029,789 | ||
Weighted average shares of Common Stock outstanding - diluted | 1,019,316,919 | 1,012,228,256 | 1,016,944,870 | 1,011,762,632 |
Basic | $ 0.01 | $ 0 | $ 0.02 | $ 0 |
Diluted | $ 0.01 | $ 0 | $ 0.02 | $ 0 |
SCHEDULE OF LIABILITIES MEASURE
SCHEDULE OF LIABILITIES MEASURED AT FAIR VALUE ON A RECURRING BASIS (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Platform Operator, Crypto-Asset [Line Items] | ||||
Derivative liabilities, beginning balance | $ 521,711 | $ 936,837 | ||
Change in fair value of derivative instruments | $ 2,468,350 | $ (688,319) | 2,657,717 | (188,176) |
Derivative liabilities, ending balance | 3,179,428 | 748,661 | 3,179,428 | 748,661 |
Fair Value, Inputs, Level 1 [Member] | ||||
Platform Operator, Crypto-Asset [Line Items] | ||||
Derivative liabilities, beginning balance | ||||
Change in fair value of derivative instruments | ||||
Derivative liabilities, ending balance | ||||
Fair Value, Inputs, Level 2 [Member] | ||||
Platform Operator, Crypto-Asset [Line Items] | ||||
Derivative liabilities, beginning balance | ||||
Change in fair value of derivative instruments | ||||
Derivative liabilities, ending balance | ||||
Fair Value, Inputs, Level 3 [Member] | ||||
Platform Operator, Crypto-Asset [Line Items] | ||||
Derivative liabilities, beginning balance | 521,711 | 936,837 | ||
Change in fair value of derivative instruments | 2,657,717 | (188,176) | ||
Derivative liabilities, ending balance | $ 3,179,428 | $ 748,661 | $ 3,179,428 | $ 748,661 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Mar. 31, 2023 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||
Restricted cash | $ 422,750 | $ 422,750 | $ 422,750 | $ 412,434 | |||
Impairment expense | $ 0 | 292,807 | |||||
Description of tax benefits | These tax benefits are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate resolution | ||||||
Gain loss on disposition of assets | $ 1,000,000 | ||||||
Historical customer payment | 99.96% | ||||||
Revenue | $ 14,157,185 | $ 8,585,763 | $ 23,137,261 | $ 16,258,671 | |||
Estimated allowance | $ 125,000 | ||||||
Revenue percent | 0.54% | ||||||
Credit allowance percent | 0.54% | 0.54% | 0.54% | ||||
Common Stock [Member] | |||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||
Conversion of warrants into stock | 79,008,661 | 79,008,661 | 79,008,661 | 79,008,661 |
SCHEDULE OF INVENTORY (Details)
SCHEDULE OF INVENTORY (Details) - USD ($) | Sep. 30, 2023 | Mar. 31, 2023 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 6,654,206 | $ 2,352,330 |
Work-in-progress | 1,355,355 | 1,791,311 |
Raw materials | 7,214,823 | 5,407,075 |
Inventory | $ 15,224,384 | $ 9,550,716 |
SCHEDULE OF PROPERTY AND EQUIPM
SCHEDULE OF PROPERTY AND EQUIPMENT (Details) - USD ($) | Sep. 30, 2023 | Mar. 31, 2023 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 25,011,838 | $ 25,012,493 |
Less: Accumulated depreciation | (15,241,857) | (14,586,335) |
Property and equipment, net | 9,769,981 | 10,426,158 |
Land, Buildings and Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 10,764,515 | 10,768,181 |
Laboratory Manufacturing Warehouse And Transportation Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 13,361,690 | 13,364,512 |
Office Equipment And Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 373,601 | 395,563 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 512,032 | $ 484,237 |
PROPERTY AND EQUIPMENT, NET (De
PROPERTY AND EQUIPMENT, NET (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 327,240 | $ 316,007 | $ 655,522 | $ 608,755 |
SUMMARY OF ACCRUED EXPENSES (De
SUMMARY OF ACCRUED EXPENSES (Details) - USD ($) | Sep. 30, 2023 | Mar. 31, 2023 |
Payables and Accruals [Abstract] | ||
Salaries and fees payable in common stock | $ 6,405,153 | $ 4,125,000 |
Salaries and fees payable | 250,000 | |
Co-development profit split | 3,388,800 | |
Income tax | 414,989 | |
Consultant contract fees | 10,000 | 193,333 |
Audit fees | 100,000 | 125,000 |
Director dues | 75,000 | 70,000 |
Legal and professional expense | 70,000 | |
Employee bonuses | 494,315 | |
Other accrued expenses | 365,000 | 119,404 |
Total accrued expenses | $ 11,158,268 | $ 5,047,726 |
SCHEDULE OF BONDS PAYABLE LIABI
SCHEDULE OF BONDS PAYABLE LIABILITY (Details) - USD ($) | Sep. 30, 2023 | Mar. 31, 2023 |
Debt Instrument [Line Items] | ||
Less: Bonds offering costs to be amortized in the next 12 months | $ (115,822) | $ (110,822) |
Less: Bond offering costs to be amortized subsequent to the next 12 months | (902,568) | (1,029,018) |
Njeda Bonds Series A Notes [Member] | ||
Debt Instrument [Line Items] | ||
NJEDA Bonds - Series A Notes | 1,245,000 | 1,245,000 |
Less: Current portion of bonds payable (prior to deduction of bond offering costs) | (130,000) | (125,000) |
Long-term portion of bonds payable (prior to deduction of bond offering costs) | 1,115,000 | 1,120,000 |
Bond offering costs | 354,454 | 354,454 |
Less: Accumulated amortization | (256,390) | (249,294) |
Bond offering costs, net | 98,064 | 105,160 |
Njeda Bonds Current [Member] | ||
Debt Instrument [Line Items] | ||
Current portions of bonds payable | 130,000 | 125,000 |
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 | 115,822 | 110,822 |
Njeda Bonds Noncurrent [Member] | ||
Debt Instrument [Line Items] | ||
Long term portion of bonds payable | 990,000 | 1,120,000 |
Less: Bond offering costs to be amortized subsequent to the next 12 months | (87,432) | (90,982) |
Long term portion of bonds payable, net of bond offering costs | $ 902,568 | $ 1,029,018 |
SCHEDULE OF MATURITIES OF BONDS
SCHEDULE OF MATURITIES OF BONDS (Details) - NJEDA Bonds [Member] | Sep. 30, 2023 USD ($) |
Debt Instrument [Line Items] | |
2024 | $ 125,000 |
2025 | 130,000 |
2026 | 140,000 |
2027 | 150,000 |
Thereafter | 700,000 |
Total | $ 1,245,000 |
NJEDA BONDS (Details Narrative)
NJEDA BONDS (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Mar. 31, 2023 | |
Debt Instrument [Line Items] | |||||
Interest expense | $ 130,438 | $ 242,753 | $ 249,850 | $ 459,540 | |
Njeda Bonds Series A Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Annual interest rate | 6.50% | ||||
NJEDA Bonds [Member] | |||||
Debt Instrument [Line Items] | |||||
Amortization expense | 3,548 | 3,539 | $ 7,096 | 7,085 | |
Interest payable | 6,067 | 6,067 | $ 6,744 | ||
Interest expense | $ 19,553 | $ 21,476 | $ 39,785 | $ 43,577 |
SCHEDULE OF LOANS PAYABLE (Deta
SCHEDULE OF LOANS PAYABLE (Details) - USD ($) | Sep. 30, 2023 | Mar. 31, 2023 |
Defined Benefit Plan Disclosure [Line Items] | ||
Less: Current portion of loans payable | $ (179,325) | $ (200,032) |
Long-term portion of loans payable | 2,452,384 | 2,532,502 |
Nonrelated Party [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Mortgage loan payable 4.75% interest and maturing June 2032 | 2,457,472 | 2,472,923 |
Equipment and insurance financing loans payable, between 7.10% and 12.02% interest and maturing between December 2023 and October 2025 | 174,237 | 259,611 |
Less: Current portion of loans payable | (179,325) | (200,032) |
Long-term portion of loans payable | $ 2,452,384 | $ 2,532,502 |
SCHEDULE OF LOANS PAYABLE (De_2
SCHEDULE OF LOANS PAYABLE (Details) (Parenthetical) | Sep. 30, 2023 | Mar. 31, 2023 |
Mortgage Loan [Member] | ||
Debt Instrument [Line Items] | ||
Debt interest rate | 4.75% | 4.75% |
Equipment and Insurance Financing Loan [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Debt interest rate | 7.10% | 7.10% |
Equipment and Insurance Financing Loan [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Debt interest rate | 12.02% | 12.02% |
SCHEDULE OF LOAN PRINCIPAL PAYM
SCHEDULE OF LOAN PRINCIPAL PAYMENTS (Details) - Loans Payable [Member] | Sep. 30, 2023 USD ($) |
Debt Instrument [Line Items] | |
2024 (excluding the six months ended September 30, 2023) | $ 90,374 |
2025 | 182,170 |
2026 | 119,497 |
2027 | 94,612 |
2028 | 99,205 |
2029 and thereafter | 2,045,851 |
Total | $ 2,631,709 |
LOANS PAYABLE (Details Narrativ
LOANS PAYABLE (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||||||
Jul. 02, 2022 | Apr. 02, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Jun. 02, 2023 | Mar. 31, 2023 | |
Line of Credit Facility [Line Items] | ||||||||
Interest Expense, Debt | $ 93,832 | $ 83,686 | $ 171,070 | $ 261,265 | ||||
Promissory Note [Member] | Board of Directors [Member] | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Debt instrument, interest rate, stated percentage | 9% | |||||||
Note payable | $ 3,000,000 | |||||||
Debt instrument, interest rate, effective percentage | 10% | |||||||
Loan and Security Agreement [Member] | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Principal amount | $ 12,000,000 | |||||||
Debt instrument, interest rate, stated percentage | 9.73% | |||||||
Debt term | 5 years | |||||||
Debt maturity date | May 01, 2027 | |||||||
Debt issuance cost | $ 40,120 | |||||||
Debt instrument, description | The EWB Mortgage Loan contains customary representations, warranties and covenants. These covenants include maintaining a minimum debt coverage ratio of 1.50 to 1.00 tested annually and a minimum trailing 12-month debt coverage ratio of 1.50 to 1.00. As of the date of this filing, the Company was in compliance with each financial covenant | The EWB Loans are secured by a security interest in the personal property of the Company and Elite Labs. The EWB Loan Agreement contains customary representations, warranties and covenants. These covenants include, but are not limited to, maintaining maximum leverage ratios of 3.50 to 1.00, minimum liquidity of $5,000,000, minimum cash of $1,000,000, a fixed charge coverage ratio of 1.25 to 1.00 and restrictions on mergers or sales of assets and debt borrowings. | ||||||
Loan and Security Agreement [Member] | Prime Rate [Member] | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Debt instrument, interest rate, stated percentage | 1.73% | |||||||
Loan and Security Agreement [Member] | Revolving Credit Facility [Member] | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Line of credit maximum borrowing capacity | $ 2,000,000 | |||||||
Line of credit, interest rate | 8.87% | |||||||
Line of credit, maturity date | May 01, 2027 | |||||||
Loan and Security Agreement [Member] | Revolving Credit Facility [Member] | Prime Rate [Member] | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Line of credit, interest rate | 0.87% |
RELATED PARTY LOANS (Details Na
RELATED PARTY LOANS (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||||
Jul. 02, 2022 | Apr. 02, 2022 | Sep. 30, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Jun. 02, 2023 | Mar. 31, 2023 | |
EWB Mortgage Loan [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Debt issuance cost | $ 13,251 | $ 13,251 | |||||
Loan and Security Agreement [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Debt term | 5 years | ||||||
Debt issuance cost | $ 40,120 | ||||||
Debt instrument, description | The EWB Mortgage Loan contains customary representations, warranties and covenants. These covenants include maintaining a minimum debt coverage ratio of 1.50 to 1.00 tested annually and a minimum trailing 12-month debt coverage ratio of 1.50 to 1.00. As of the date of this filing, the Company was in compliance with each financial covenant | The EWB Loans are secured by a security interest in the personal property of the Company and Elite Labs. The EWB Loan Agreement contains customary representations, warranties and covenants. These covenants include, but are not limited to, maintaining maximum leverage ratios of 3.50 to 1.00, minimum liquidity of $5,000,000, minimum cash of $1,000,000, a fixed charge coverage ratio of 1.25 to 1.00 and restrictions on mergers or sales of assets and debt borrowings. | |||||
East West Bank (EWB) [Member] | Mortgages [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Proceeds from issuance of debt | $ 2,550,000 | ||||||
Debt term | 10 years | ||||||
Interest rate, description | bears interest at a rate of 4.75% fixed for 5 years then adjustable at the Wall Street Journal Prime Rate (“WSJP”) plus 0.5% with floor rate of 4.5% | ||||||
Nasrat Hakim CEO and Chairman [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Promissory Note | $ 3,000,000 | ||||||
Nasrat Hakim CEO and Chairman [Member] | First Year [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Promissory note, interest rate | 9% | 9% | |||||
Nasrat Hakim CEO and Chairman [Member] | Second Year [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Promissory note, interest rate | 10% | 10% | |||||
Hakim Promissory Note [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Interest expense | 675 | $ 675 | |||||
Davis Caskey [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Promissory Note | $ 1,000,000 | ||||||
Caskey Promissory Note [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Interest expense | $ 225 | $ 225 |
DEFERRED REVENUE (Details Narra
DEFERRED REVENUE (Details Narrative) - USD ($) | 6 Months Ended | |
Sep. 30, 2023 | Mar. 31, 2023 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Deferred Revenue | $ 25,555 | $ 32,223 |
Deferred Revenue, Current | 13,333 | 13,333 |
Deferred Revenue, Noncurrent | 12,222 | $ 18,890 |
TAGI Pharma [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Debt Instrument, Unamortized Premium | $ 200,000 | |
Maturity start date | September 2010 | |
Maturity End date | August 2025 |
SCHEDULE OF LEASE ASSETS AND LI
SCHEDULE OF LEASE ASSETS AND LIABILITIES (Details) - USD ($) | Sep. 30, 2023 | Mar. 31, 2023 |
Commitments and Contingencies Disclosure [Abstract] | ||
Operating lease- right-of-use asset | $ 1,899 | $ 13,062 |
Total leased assets | 1,899 | |
Lease obligation- operating lease | 2,163 | 14,914 |
Lease obligation-operating lease, net of current portion | ||
Total lease liabilities | $ 2,163 | $ 2,163 |
SCHEDULE OF FUTURE MINIMUM RENT
SCHEDULE OF FUTURE MINIMUM RENTAL PAYMENTS (Details) - USD ($) | Sep. 30, 2023 | Mar. 31, 2023 |
Commitments and Contingencies Disclosure [Abstract] | ||
2024 (excluding the six months ended September 30, 2023) | $ 2,163 | |
Total future minimum lease payments | 2,163 | |
Less: interest | ||
Present value of lease payments | $ 2,163 | $ 2,163 |
SCHEDULE OF WEIGHTED -AVERAGE R
SCHEDULE OF WEIGHTED -AVERAGE REMAINING TERM AND THE WEIGHTED-AVERAGE DISCOUNT RATE (Details) | Sep. 30, 2023 |
Commitments and Contingencies Disclosure [Abstract] | |
Remaining lease term (years) Operating leases | 1 year 1 month 6 days |
Discount rate Operating leases | 6% |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details Narrative) | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
Oct. 31, 2020 ft² | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | |
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | |||||
Operating lease, terms | The Pompano Office Lease has a term of three years, ending on October 31, 2023. The Pompano Office Lease was extended for one additional year on November 1, 2023 ending on October 31, 2024. | ||||
Rent expense | $ 0 | $ 0 | $ 0 | $ 58,248 | |
Pompano Office Lease [Member] | |||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | |||||
Rent expense | $ 6,519 | $ 6,330 | $ 13,038 | $ 12,660 | |
Pompano Office Lease [Member] | Property Subject to Operating Lease [Member] | |||||
SEC Schedule, 12-28, Real Estate Companies, Investment in Real Estate and Accumulated Depreciation [Line Items] | |||||
Area of land | ft² | 1,275 |
PREFERRED STOCK (Details Narrat
PREFERRED STOCK (Details Narrative) - Series J Convertible Preferred Stock [Member] | Sep. 30, 2023 USD ($) $ / shares shares |
Class of Stock [Line Items] | |
Preferred stock share authorized | 50 |
Preferred stock, shares issued | 0 |
Preferred stock, shares outstanding | 0 |
Convertible preferred stock stated value | $ | $ 1,000,000 |
Convertible preferred stock par value per share | $ / shares | $ 0.01 |
SCHEDULE OF FAIR VALUE OF WARRA
SCHEDULE OF FAIR VALUE OF WARRANTS ISSUED (Details) | Sep. 30, 2023 | Mar. 31, 2023 |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrant term (in years) | 3 years 7 months 6 days | 4 years 1 month 6 days |
Measurement Input, Share Price [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants and rights outstanding, measurement input | 0.0938 | 0.0290 |
Measurement Input, Price Volatility [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants and rights outstanding, measurement input | 72.51 | 74.37 |
Measurement Input, Exercise Price [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants and rights outstanding, measurement input | 0.1521 | 0.1521 |
Measurement Input, Risk Free Interest Rate [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants and rights outstanding, measurement input | 4.70 | 3.55 |
SCHEDULE OF CHANGES IN WARRANTS
SCHEDULE OF CHANGES IN WARRANTS MEASURED AT FAIR VALUE ON A RECURRING BASIS (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Platform Operator, Crypto-Asset [Line Items] | ||||
Change in fair value of derivative financial instruments - warrants | $ (2,468,350) | $ 688,319 | $ (2,657,717) | $ 188,176 |
Fair Value, Inputs, Level 3 [Member] | ||||
Platform Operator, Crypto-Asset [Line Items] | ||||
Change in fair value of derivative financial instruments - warrants | (2,657,717) | $ 188,176 | ||
Fair Value, Inputs, Level 3 [Member] | Warrant [Member] | ||||
Platform Operator, Crypto-Asset [Line Items] | ||||
Beginning balance | 521,711 | |||
Change in fair value of derivative financial instruments - warrants | 2,657,717 | |||
Ending balance | $ 3,179,428 | $ 3,179,428 |
DERIVATIVE FINANCIAL INSTRUME_3
DERIVATIVE FINANCIAL INSTRUMENTS – WARRANTS (Details Narrative) - USD ($) | Apr. 28, 2017 | Sep. 30, 2023 | Mar. 31, 2023 |
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |||
Exercise price | $ 0.1521 | $ 0.1521 | |
Series J Warrants [Member] | |||
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |||
Exercise price | $ 0.1521 | ||
Warrant expiration period | 10 years | ||
Nasrat Hakim [Member] | Series J Warrants [Member] | |||
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |||
Fair value of the warrants | $ 6,474,674 | ||
Nasrat Hakim [Member] | Series J Convertible Preferred Stock [Member] | |||
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |||
Warrant shares | 79,008,661 | ||
Warrant to purchase shares | 79,008,661 | ||
Conversion of stock, shares issued | 158,017,321 | ||
Chief Executive Officer [Member] | Series J Convertible Preferred Stock [Member] | |||
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |||
Shares issued | 24.0344 |
SHAREHOLDERS_ EQUITY (Details N
SHAREHOLDERS’ EQUITY (Details Narrative) - USD ($) $ / shares in Units, $ in Millions | Jul. 08, 2020 | Sep. 30, 2023 | Mar. 31, 2023 |
Restructuring Cost and Reserve [Line Items] | |||
Common stock, par value per share | $ 0.001 | $ 0.001 | |
Lincoln Park [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Purchase of common stock, amount | $ 25 | ||
Common stock, par value per share | $ 0.001 |
SCHEDULE OF STOCK BASED COMPENS
SCHEDULE OF STOCK BASED COMPENSATION (Details) | 6 Months Ended |
Sep. 30, 2023 USD ($) | |
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |
Balance | |
Balance | 250,000 |
Beginning balance | 4,278,333 |
Awarded shares | |
Change in fair value of stock-based liabilities | 1,973,905 |
Ending balance | 6,252,238 |
Director [Member] | |
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items] | |
Balance | 60,000 |
Awarded shares | |
Change in fair value of non-cash liabilities | 92,915 |
Balance | $ 152,915 |
SCHEDULE OF GRANT DATE FAIR VAL
SCHEDULE OF GRANT DATE FAIR VALUE OF OPTION AWARDS (Details) - $ / shares | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Sep. 30, 2023 | Mar. 31, 2023 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Term | 10 years | 10 years | 10 years |
Dividend Yield | |||
Expected Volatility | 80% | 80% | |
Expected Volatility Minimum | 79% | ||
Expected Volatility Maximum | 80% | ||
Risk Free Rate Minimum | 4.27% | 4.27% | 2.99% |
Risk Free Rate Maximum | 4.32% | 4.32% | 4.01% |
Minimum [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Exercise Price | $ 0.08 | $ 0.08 | $ 0.03 |
Maximum [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Exercise Price | $ 0.09 | $ 0.09 | $ 0.04 |
SCHEDULE OF STOCK OPTION PLAN (
SCHEDULE OF STOCK OPTION PLAN (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | ||
Shares Underlying Options, Outstanding, Beginning Balance | 15,370,000 | |
Weighted Average Exercise Price, Outstanding, Beginning Balance | $ 0.07 | |
Weighted Average Remaining Contractual Term (in years), Outstanding | 9 years 2 months 12 days | 7 years 4 months 24 days |
Aggregate Intrinsic Value, Outstanding, Beginning Balance | ||
Shares Underlying Options, Granted | 4,000,000 | |
Weighted Average Exercise Price, Granted | $ 0.09 | |
Weighted Average Remaining Contractual Term (in years), Granted | 10 years | |
Shares Underlying Options, Expired, and Forfeited | (3,840,000) | |
Weighted Average Exercise Price, Expired and Forfeited | $ 0.07 | |
Weighted Average Remaining Contractual Term (in years), Expired and Forfeited | 1 year 9 months 18 days | |
Shares Underlying Options, Outstanding, Ending Balance | 15,530,000 | 15,370,000 |
Weighted Average Exercise Price, Outstanding, Ending Balance | $ 0.05 | $ 0.07 |
Aggregate Intrinsic Value, Outstanding, Ending Balance | $ 717,706 | |
Shares Underlying Options, Exercisable | 343,334 | |
Weighted Average Exercise Price, Exercisable | $ 0.19 | |
Weighted Average Remaining Contractual Term (in years), Exercisable | 4 years 10 months 24 days | |
Aggregate Intrinsic Value, Outstanding, Exerciseable | $ 978 |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details Narrative) - USD ($) | 6 Months Ended | |||
Sep. 19, 2023 | Sep. 05, 2023 | Sep. 30, 2023 | Mar. 31, 2023 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Outstanding obligation | $ 250,000 | |||
Price difference between exercise price and quoted price | $ 0.04 | $ 0.03 | ||
Unrecognized stock based compensation expense | $ 164,105 | |||
Recognized over period | 1 year 2 months 12 days | |||
Shares underlying options, granted | 4,000,000 | |||
Weighted average exercise price, granted | $ 0.09 | |||
Twenty Nineteen Plan [Member] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Weighted average exercise price, granted | $ 0.0734 | |||
Director [Member] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Accrued director fees | $ 227,915 | |||
Cash payments | 75,000 | |||
Outstanding obligation | 152,915 | $ 60,000 | ||
President and Chief Executive Officer and Other Employees [Member] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Accrued salaries | 0 | |||
Share based compensation | $ 6,252,238 | |||
Chief Financial Officer [Member] | Twenty Nineteen Plan [Member] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Shares underlying options, granted | 3,000,000 | |||
Weighted average exercise price, granted | $ 0.0898 | |||
Vesting description | The options granted will vest one third for each of the next three years upon the anniversary date of the grant and have a ten-year expiration date. | |||
One Employee [Member] | Twenty Nineteen Plan [Member] | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Shares underlying options, granted | 1,000,000 | |||
Weighted average exercise price, granted | $ 0.0819 | |||
Vesting description | The options granted will vest one third for each of the next three years upon the anniversary date of the grant and have a ten-year expiration date. |
CONCENTRATIONS AND CREDIT RISK
CONCENTRATIONS AND CREDIT RISK (Details Narrative) - Integer | 6 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Revenue Benchmark [Member] | ||
Concentration Risk [Line Items] | ||
Number of customers | 3 | 2 |
Revenue Benchmark [Member] | Customers [Member] | Customer Concentration Risk [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 67% | 96% |
Revenue Benchmark [Member] | Customer One [Member] | Customer Concentration Risk [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 35% | 85% |
Revenue Benchmark [Member] | Customer Two [Member] | Customer Concentration Risk [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 22% | 11% |
Revenue Benchmark [Member] | Customer Three [Member] | Customer Concentration Risk [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 10% | |
Accounts Receivable [Member] | ||
Concentration Risk [Line Items] | ||
Number of customers | 2 | 2 |
Accounts Receivable [Member] | Customers [Member] | Customer Concentration Risk [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 78% | 97% |
Accounts Receivable [Member] | Customer One [Member] | Customer Concentration Risk [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 41% | 79% |
Accounts Receivable [Member] | Customer Two [Member] | Customer Concentration Risk [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 37% | 18% |
Purchases [Member] | ||
Concentration Risk [Line Items] | ||
Number of suppliers | 1 | 1 |
Purchases [Member] | Suppliers [Member] | Supplier Concentration Risk [Member] | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 37% | 62% |
SCHEDULE OF SELECTED INFORMATIO
SCHEDULE OF SELECTED INFORMATION FOR REPORTABLE SEGMENTS (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Segment Reporting Information [Line Items] | ||||
Operating income by Segment | $ 1,925,505 | $ 1,081,117 | $ 3,527,529 | $ 2,103,801 |
Abbreviated New Drug Applications [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Operating income by Segment | 3,828,730 | 2,186,932 | 7,435,740 | 4,118,625 |
Business Segment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Operating income by Segment | $ 3,828,730 | $ 2,186,932 | $ 7,435,740 | $ 4,118,625 |
SCHEDULE OF OPERATING INCOME BY
SCHEDULE OF OPERATING INCOME BY SEGMENT TO INCOME FROM OPERATIONS (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Segment Reporting Information [Line Items] | ||||
Operating income by segment | $ 1,925,505 | $ 1,081,117 | $ 3,527,529 | $ 2,103,801 |
Interest income | 7,320 | 43 | 10,836 | 172 |
Depreciation and amortization expense | (327,240) | (319,552) | (655,522) | (615,846) |
(Loss) income before income taxes | (2,732,783) | 1,526,726 | (1,436,022) | 1,832,609 |
Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Operating income by segment | 3,828,730 | 2,186,932 | 7,435,740 | 4,118,625 |
Corporate unallocated costs | (1,533,208) | (587,700) | (3,194,912) | (1,086,925) |
Interest income | 7,320 | 43 | 10,836 | 172 |
Interest expense and amortization of debt issuance costs | (130,438) | (242,753) | (249,850) | (459,540) |
Depreciation and amortization expense | (327,240) | (319,552) | (655,522) | (615,846) |
Significant non-cash items | (42,777) | (198,563) | (57,777) | (312,053) |
Change in fair value of derivative instruments | (2,468,350) | 688,319 | (2,657,717) | 188,176 |
Change in fair value of stock-based liabilities | (2,066,820) | (2,066,820) | ||
(Loss) income before income taxes | $ (2,732,783) | $ 1,526,726 | $ (1,436,022) | $ 1,832,609 |
RELATED PARTY AGREEMENTS WITH_2
RELATED PARTY AGREEMENTS WITH MIKAH PHARMA, LLC (Details Narrative) | 6 Months Ended |
Sep. 30, 2023 USD ($) | |
Mikah Pharma L L C [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Accrued related party notes payable | $ 3,373,800 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||||
Income tax benefit | $ 17,667,384 | $ (11,587) | $ 17,512,432 | $ (11,587) |
Income tax expense | 0 | 0 | ||
Discrete tax benefit | 17,300,000 | |||
Deferred tax assets valuation allowance | $ 2,044,144 | $ 2,044,144 | ||
[custom:EffectiveIncomeTaxRateChangeInValuationAllowance] | 21% |