and the company managed to trade over 4 million shares on the market.In fact, the up move started after Elite Pharmaceuticals announced its quarterly results. According to the announcement, consolidated revenues for Q3 of 2010 have increased by 34% as compared to last year’s third quarter. The company also reported that this year it has generated positive cash flow from operations and part of it has already been invested in some previously announced purchases.
Apart from the financial results, ELTP announced it has been in discussions to license its once daily oxycodone product to a European marketing partner and the company was to provide an update on its recent developments at the beginning of this week. Though, the conference news has not been published yet.
Still, the positive revenues release inspired investors and ELTP started to climb up. Actually, the same thing happened last month, when Elite Pharmaceuticals announced it has signed a development and supply agreement for a generic intermediate of a prescription product. Being reported, the news has immediately ensured the up move of ELTP, however, the company’s final product was just a future projection.
Elite Pharmaceuticals, Inc. develops oral sustained and controlled release products. Despite the fact that the company announced higher revenues, its liabilities are approximately $7 million higher than its total assets and the total stockholders’ deficit points over $6.5 million. Besides, by end-December the long-term liabilities of Elite exceeded $12 million.[BANNER]
According to its 10-Q report, ELTP did not have sufficient funds available to make its principal payments due on September 1, 2010, totaling $200k and requested that the Trustee withdraws such funds from the debt service reserve. However, the company’s request was denied and accordingly the principal payment was not made. The management of Elite stated that it may have access to funds through the exercise of outstanding stock options and warrants, though it is not guaranteed. In that case, the company’s revenues might not be sufficient to cover its liabilities and ELTP should find another way to raise additional capital.
