Correspondence from ELITE PHARMACEUTICALS INC /NV/ (ELTP)
ELITE PHARMACEUTICALS INC /NV/
Date: March 18, 2026 · CIK: 0001053369 · Accession: 0001493152-26-011126
AI Filing Summary & Sentiment
Reasoning
File numbers found in text: 001-15697
Referenced dates: March 4, 2026
Letter
VIA EDGAR Division of Corporation Finance Office of Life Sciences F Street N.E. Washington, D.C. 20549 Attn: Frank Wyman and Angela Connell Re: Elite Pharmaceuticals, Inc. Form 10-K for the Fiscal Year Ended March 31, 2025 Filed June 30, 2025 File No. 001-15697
Dear Mr. Wyman and Ms. Connell:
We are providing this response letter on behalf of our client, Elite Pharmaceuticals, Inc. (the "Company" or "Elite"), with respect to the staff (the "Staff") of the Securities and Exchange Commission's comment letter dated March 4, 2026, regarding the above-referenced Form 10-K. For your convenience, the Staff's comments have been reproduced below, followed by the Company's response. Capitalized terms used and not defined in this response letter have the meanings given to such terms in the Form 10-K.
Form 10-K for the Fiscal Year Ended March 31, 2025
Notes to Consolidated Financial Statements
Note 1. Summary of Significant Accounting Policies
Revenue Recognition, page F-8
1. We note your disaggregation of revenue disclosure provided on page F-9 as well as the information provided in your February 20, 2024 response letter, specifically your response to comment four. You state that you disaggregate your revenue based on type of good or service (e.g., manufacturing and license fees) and regulatory pathway (e.g., ANDA vs NDA). Please address the following:
● Given that you have paused further development of NDAs and do not appear to have engaged in business activities in this segment since 2021, explain to us how disaggregation by regulatory pathway provides a meaningful level of disaggregation of your revenues.
U.S. Securities and Exchange Commission
March 18, 2026
Page
● In your February 20, 2024 response to prior comment four, you stated that when determining the level of revenue disaggregation, you considered the categories noted in ASC 606-10-55-91 - one of which was sales channel. Given that you began selling products under your own label in 2023 and now recognize manufacturing fees generated from both wholesale customers and direct sale customers, explain to us how you determined that disaggregation by sales channel wouldn't provide meaningful information to investors. Please also provide us with a breakdown of your manufacturing fees by customer type/sales channel for the periods presented.
● Tell us how your existing disclosure complies with the requirements of ASC 280-10-50-40, which requires disclosure of your revenues by product/service or each group of similar products/services. In this regard, your risk factor disclosure on page 26 indicates that you track revenues by product or product family and that your top four products based on active pharmaceutical ingredient account for over 90% of your net revenues. Provide us with a breakdown or your revenues by each individual product, product family or therapeutic category for the periods presented with a view towards future disclosure.
RESPONSE: We respectfully acknowledge the Staff's comment and respond as follows.
The Company disaggregated revenue by regulatory pathway (ANDA versus NDA) in prior periods because, historically, those categories reflected distinct economic characteristics, including differences in development risk, regulatory approval timelines, pricing, and margin profiles. However, the Company acknowledges that it paused further development of NDA products in 2021 and has not engaged in active commercial NDA-related business activities since that time.
Accordingly, for the periods presented, revenue associated with NDA-related activities is zero, and the Company agrees that disaggregation by regulatory pathway no longer provides a meaningful depiction of how economic factors affect the nature, amount, timing, or uncertainty of revenue, as contemplated by ASC 606-10-50-5 and ASC 606-10-55-91.
With a view toward future disclosure, the Company intends to remove regulatory pathway as a disaggregation category and instead focus its revenue disaggregation on categories that more directly reflect current revenue-generating activities and economic characteristics.
In determining the appropriate level of revenue disaggregation, the Company considered the categories described in ASC 606-10-55-91, specifically sales channel. While the Company began selling certain products under its own label in 2023 and currently earns manufacturing fees from intermediary customers, the Company's management concluded that disaggregation by sales channel would provide more meaningful information to investors for the following reasons:
● Manufacturing services provided to customers, which consist of intermediaries (i.e. direct and indirect wholesalers), are substantially similar in nature, involve the same manufacturing processes, and are subject to similar contractual terms. No goods are sold directly to consumers. All goods are sold through intermediaries.
U.S. Securities and Exchange Commission
March 18, 2026
Page
● Revenue from both direct and indirect wholesalers is recognized at a point in time upon transfer of control of manufactured products. However, revenues from direct and indirect wholesalers have different cash flows and contract economics as margins generated differ between direct and indirect revenues. Although the underlying arrangements are substantially similar, pricing to direct wholesalers yields higher margins than pricing to indirect wholesalers, while the timing and uncertainty of cash flows do not differ materially.
Accordingly, the Company concluded that disaggregation by sales channel better achieves the disclosure objective of ASC 606-10-50-5 than disaggregation by type of good or service.
Notwithstanding the above, and in response to the Staff's request, the Company has prepared the following quantitative breakdown of manufacturing fees by customer type for the periods presented:
For the Years Ended March 31,
Direct Wholesalers $ 48,008,986 $ 31,633,315
Indirect Wholesalers 33,977,093 22,487,416
Total Manufacturing Fees $ 81,986,079 $ 54,120,731
The Company will include enhanced revenue disaggregation disclosures in future filings, as appropriate, based on its then-current business model.
ASC 280-10-50-40 requires disclosure of the revenues from external customers for each product and service or each group of similar products and services unless it is impracticable to do so. The Company believes its existing disclosure, which disaggregates revenue by type of good or service (manufacturing fees and license fees), satisfies this requirement, as these categories represent the Company's primary revenue-generating activities and groups of similar services.
Although the Company internally tracks revenues by product, such information is proprietary and commercially sensitive. Disclosure of such information in combination with market data regarding sales volume of the Company's products that is publicly available from third parties, would result in competitive harm to the Company.
Notwithstanding the above, and in response to the Staff's request, the Company has prepared the following quantitative breakdown of revenues by (i) products containing an active ingredient listed by the United States Drug Enforcement Agency as a scheduled substance under the Controlled Substances Act of 1970 ("Scheduled Products") and (ii) products not containing such a scheduled active ingredient ("Unscheduled Products") for the periods presented:
For the Years Ended March 31,
Scheduled Products – Manufacturing Fees $ 74,756,506 $ 48,426,996
Scheduled Products – Licensing Fees 248,789 1,352,760
Unscheduled Products – Manufacturing Fees 7,229,573 5,693,735
Unscheduled Products – Licensing Fees 1,809,061 1,151,637
Total Revenue $ 84,043,929 $ 56,625,128
U.S. Securities and Exchange Commission
March 18, 2026
Page
The Company believes such disclosure, in combination with the related disclosures in its Annual Report on Form 10-K for the fiscal year ended March 31, 2025, meets the requirements of ASC 280-10-50-40 and balances the needs of investors for information regarding the Company and its financial performance with the need of the Company to protect its proprietary and competitively sensitive information. The Company intends to provide a breakdown of revenues by Scheduled Products and Unscheduled Products in applicable future filings, in a form substantially similar to the form provided above.
Note 14. Segment Results, page F-23
2. You disclose that Consolidated Loss from Operations is the measure of segment profit or loss that is regularly reviewed by your CODM and that this measure is reported in your Consolidated Statements of Operations. Your disclosure on page F-24, however, of Operating Income by Segment does not tie to your Consolidated Statements of Operations. With a view towards future disclosure, clarify for us your measure of segment profit or loss and provide us with the components of such measure and illustrate how it ties to your Consolidated Statements of Operations. Please also ensure that all of the information required by ASC 280-10-50-22 is disclosed in your future filings.
RESPONSE: The Company acknowledges the Staff's comment and clarifies that the Chief Operating Decision Maker ("CODM") regularly reviews Consolidated Income from Operations as the measure of segment profit or loss, which is reported in the Company's Consolidated Statements of Operations.
The Company notes that the presentation of Operating Income by Segment in Note 14 did not clearly reconcile to the Consolidated Statements of Operations. The Company will include Income (Loss) from Operations as a line item within the segment results table to facilitate reconciliation in future filings as follows:
For the Years Ended March 31,
Operating income by segment $ 32,121,818 $ 19,473,752
Corporate unallocated costs (9,001,930 ) (7,145,114 )
Impairment of intangible assets (1,603,426 ) -
Depreciation and amortization expense (1,688,429 ) (1,379,948 )
Significant non-cash items (227,565 ) (159,921 )
Income from operations 19,600,468 10,788,769
Change in fair value of derivative instruments (18,901,185 ) (5,776,297 )
Change in fair value of stock-based liabilities - (5,743,468 )
Interest expense and amortization of debt issuance costs (772,367 ) (588,622 )
Gain from settlement agreements - 1,761,792
Interest income 20,944 20,918
(Loss) income before income taxes $ (52,140 ) $ 463,092
The Company believes the existing disclosures are in compliance with ASC 280-10-50-22. The Company will also ensure that all disclosures required by ASC 280-10-50-22, including reconciliations in accordance with ASC 280-10-50-30, to consolidated results, are provided in future filings.
U.S. Securities and Exchange Commission
March 18, 2026
Page
3. As a related matter, with a view towards future disclosure, provide us with the information required by ASC 280-10-50-26A through 50-26C as it relates to significant segment expenses and other segment items.
RESPONSE: The Company acknowledges the Staff's comment and confirms there are no significant segment expenses or other segment items that are separately provided to the CODM beyond research and development and general and administrative expenses. The CODM does not receive segment-level information related to depreciation, amortization, capital expenditures, or other non-cash items, and therefore such items are excluded.
Going forward, the Company will enhance its segment disclosures to explicitly address the requirements of ASC 280-10-50-26A through 50-26C, including clarifying that significant segment expenses are presented in the Consolidated Statements of Operations and that no additional significant segment expenses or other segment items are separately disclosed because such information is not regularly reviewed by the CODM.
Please contact Carter Ward, the Chief Financial Officer of the Company, at 201-367-7855, or me at 215-981-4065, if you have any questions about this response.
Respectfully
Submitted,
/s/
Mark T. Wilhelm
Show Raw Text
CORRESP
1
filename1.htm
Troutman
Pepper Locke LLP
3000
Two Logan Square
Eighteenth
and Arch Streets
Philadelphia,
PA 19103
March
18, 2026
VIA
EDGAR
U.S.
Securities and Exchange Commission
Division
of Corporation Finance
Office
of Life Sciences
100
F Street N.E.
Washington,
D.C. 20549
Attn:
Frank Wyman and Angela Connell
Re:
Elite
Pharmaceuticals, Inc.
Form
10-K for the Fiscal Year Ended March 31, 2025
Filed
June 30, 2025
File
No. 001-15697
Dear
Mr. Wyman and Ms. Connell:
We
are providing this response letter on behalf of our client, Elite Pharmaceuticals, Inc. (the "Company" or "Elite"),
with respect to the staff (the "Staff") of the Securities and Exchange Commission's comment letter dated March 4, 2026,
regarding the above-referenced Form 10-K. For your convenience, the Staff's comments have been reproduced below, followed by the
Company's response. Capitalized terms used and not defined in this response letter have the meanings given to such terms in the
Form 10-K.
Form
10-K for the Fiscal Year Ended March 31, 2025
Notes
to Consolidated Financial Statements
Note
1. Summary of Significant Accounting Policies
Revenue
Recognition, page F-8
1.
We note your disaggregation of revenue disclosure provided on page F-9 as well as the information provided in your February 20, 2024
response letter, specifically your response to comment four. You state that you disaggregate your revenue based on type of good or service
(e.g., manufacturing and license fees) and regulatory pathway (e.g., ANDA vs NDA). Please address the following:
● Given
that you have paused further development of NDAs and do not appear to have engaged in business
activities in this segment since 2021, explain to us how disaggregation by regulatory pathway
provides a meaningful level of disaggregation of your revenues.
U.S.
Securities and Exchange Commission
March
18, 2026
Page
2
● In
your February 20, 2024 response to prior comment four, you stated that when determining the
level of revenue disaggregation, you considered the categories noted in ASC 606-10-55-91
- one of which was sales channel. Given that you began selling products under your own label
in 2023 and now recognize manufacturing fees generated from both wholesale customers and
direct sale customers, explain to us how you determined that disaggregation by sales channel
wouldn't provide meaningful information to investors. Please also provide us with a
breakdown of your manufacturing fees by customer type/sales channel for the periods presented.
● Tell
us how your existing disclosure complies with the requirements of ASC 280-10-50-40, which
requires disclosure of your revenues by product/service or each group of similar products/services.
In this regard, your risk factor disclosure on page 26 indicates that you track revenues
by product or product family and that your top four products based on active pharmaceutical
ingredient account for over 90% of your net revenues. Provide us with a breakdown or your
revenues by each individual product, product family or therapeutic category for the periods
presented with a view towards future disclosure.
RESPONSE:
We respectfully acknowledge the Staff's comment and respond as follows.
The
Company disaggregated revenue by regulatory pathway (ANDA versus NDA) in prior periods because, historically, those categories reflected
distinct economic characteristics, including differences in development risk, regulatory approval timelines, pricing, and margin profiles.
However, the Company acknowledges that it paused further development of NDA products in 2021 and has not engaged in active commercial
NDA-related business activities since that time.
Accordingly,
for the periods presented, revenue associated with NDA-related activities is zero, and the Company agrees that disaggregation by regulatory
pathway no longer provides a meaningful depiction of how economic factors affect the nature, amount, timing, or uncertainty of revenue,
as contemplated by ASC 606-10-50-5 and ASC 606-10-55-91.
With
a view toward future disclosure, the Company intends to remove regulatory pathway as a disaggregation category and instead focus its
revenue disaggregation on categories that more directly reflect current revenue-generating activities and economic characteristics.
In
determining the appropriate level of revenue disaggregation, the Company considered the categories described in ASC 606-10-55-91, specifically
sales channel. While the Company began selling certain products under its own label in 2023 and currently earns manufacturing fees from
intermediary customers, the Company's management concluded that disaggregation by sales channel would provide more meaningful information
to investors for the following reasons:
● Manufacturing
services provided to customers, which consist of intermediaries (i.e. direct and indirect
wholesalers), are substantially similar in nature, involve the same manufacturing processes,
and are subject to similar contractual terms. No goods are sold directly to consumers. All
goods are sold through intermediaries.
U.S.
Securities and Exchange Commission
March
18, 2026
Page
3
● Revenue
from both direct and indirect wholesalers is recognized at a point in time upon transfer
of control of manufactured products. However, revenues from direct and indirect wholesalers
have different cash flows and contract economics as margins generated differ between direct
and indirect revenues. Although the underlying arrangements are substantially similar, pricing
to direct wholesalers yields higher margins than pricing to indirect wholesalers, while the
timing and uncertainty of cash flows do not differ materially.
Accordingly,
the Company concluded that disaggregation by sales channel better achieves the disclosure objective of ASC 606-10-50-5 than disaggregation
by type of good or service.
Notwithstanding
the above, and in response to the Staff's request, the Company has prepared the following quantitative breakdown of manufacturing
fees by customer type for the periods presented:
For
the Years Ended March 31,
2025
2024
Direct Wholesalers
$ 48,008,986
$ 31,633,315
Indirect Wholesalers
33,977,093
22,487,416
Total Manufacturing
Fees
$ 81,986,079
$ 54,120,731
The
Company will include enhanced revenue disaggregation disclosures in future filings, as appropriate, based on its then-current business
model.
ASC
280-10-50-40 requires disclosure of the revenues from external customers for each product and service or each group of similar products
and services unless it is impracticable to do so. The Company believes its existing disclosure, which disaggregates revenue by type of
good or service (manufacturing fees and license fees), satisfies this requirement, as these categories represent the Company's
primary revenue-generating activities and groups of similar services.
Although
the Company internally tracks revenues by product, such information is proprietary and commercially sensitive. Disclosure of such information
in combination with market data regarding sales volume of the Company's products that is publicly available from third parties,
would result in competitive harm to the Company.
Notwithstanding
the above, and in response to the Staff's request, the Company has prepared the following quantitative breakdown of revenues by
(i) products containing an active ingredient listed by the United States Drug Enforcement Agency as a scheduled substance under the Controlled
Substances Act of 1970 ("Scheduled Products") and (ii) products not containing such a scheduled active ingredient ("Unscheduled
Products") for the periods presented:
For
the Years Ended March 31,
2025
2024
Scheduled Products – Manufacturing
Fees
$ 74,756,506
$ 48,426,996
Scheduled Products – Licensing Fees
248,789
1,352,760
Unscheduled Products – Manufacturing
Fees
7,229,573
5,693,735
Unscheduled Products
– Licensing Fees
1,809,061
1,151,637
Total Revenue
$ 84,043,929
$ 56,625,128
U.S.
Securities and Exchange Commission
March
18, 2026
Page
4
The
Company believes such disclosure, in combination with the related disclosures in its Annual Report on Form 10-K for the fiscal year ended
March 31, 2025, meets the requirements of ASC 280-10-50-40 and balances the needs of investors for information regarding the Company
and its financial performance with the need of the Company to protect its proprietary and competitively sensitive information. The Company
intends to provide a breakdown of revenues by Scheduled Products and Unscheduled Products in applicable future filings, in a form substantially
similar to the form provided above.
Note
14. Segment Results, page F-23
2.
You disclose that Consolidated Loss from Operations is the measure of segment profit or loss that is regularly reviewed by your CODM
and that this measure is reported in your Consolidated Statements of Operations. Your disclosure on page F-24, however, of Operating
Income by Segment does not tie to your Consolidated Statements of Operations. With a view towards future disclosure, clarify for us your
measure of segment profit or loss and provide us with the components of such measure and illustrate how it ties to your Consolidated
Statements of Operations. Please also ensure that all of the information required by ASC 280-10-50-22 is disclosed in your future filings.
RESPONSE:
The Company acknowledges the Staff's comment and clarifies that the Chief Operating Decision Maker ("CODM") regularly
reviews Consolidated Income from Operations as the measure of segment profit or loss, which is reported in the Company's Consolidated
Statements of Operations.
The
Company notes that the presentation of Operating Income by Segment in Note 14 did not clearly reconcile to the Consolidated Statements
of Operations. The Company will include Income (Loss) from Operations as a line item within the segment results table to facilitate reconciliation
in future filings as follows:
For
the Years Ended March 31,
2025
2024
Operating income by segment
$ 32,121,818
$ 19,473,752
Corporate unallocated costs
(9,001,930 )
(7,145,114 )
Impairment of intangible
assets
(1,603,426 )
-
Depreciation and amortization
expense
(1,688,429 )
(1,379,948 )
Significant
non-cash items
(227,565 )
(159,921 )
Income
from operations
19,600,468
10,788,769
Change in fair value of derivative instruments
(18,901,185 )
(5,776,297 )
Change in fair value of stock-based liabilities
-
(5,743,468 )
Interest expense and amortization of debt issuance
costs
(772,367 )
(588,622 )
Gain from settlement agreements
-
1,761,792
Interest income
20,944
20,918
(Loss)
income before income taxes
$ (52,140 )
$ 463,092
The
Company believes the existing disclosures are in compliance with ASC 280-10-50-22. The Company will also ensure that all disclosures
required by ASC 280-10-50-22, including reconciliations in accordance with ASC 280-10-50-30, to consolidated results, are provided in
future filings.
U.S.
Securities and Exchange Commission
March
18, 2026
Page
5
3.
As a related matter, with a view towards future disclosure, provide us with the information required by ASC 280-10-50-26A through 50-26C
as it relates to significant segment expenses and other segment items.
RESPONSE:
The Company acknowledges the Staff's comment and confirms there are no significant segment expenses or other segment items
that are separately provided to the CODM beyond research and development and general and administrative expenses. The CODM does not receive
segment-level information related to depreciation, amortization, capital expenditures, or other non-cash items, and therefore such items
are excluded.
Going
forward, the Company will enhance its segment disclosures to explicitly address the requirements of ASC 280-10-50-26A through 50-26C,
including clarifying that significant segment expenses are presented in the Consolidated Statements of Operations and that no additional
significant segment expenses or other segment items are separately disclosed because such information is not regularly reviewed by the
CODM.
Please
contact Carter Ward, the Chief Financial Officer of the Company, at 201-367-7855, or me at 215-981-4065, if you have any questions about
this response.
Respectfully
Submitted,
/s/
Mark T. Wilhelm
Mark
T. Wilhelm
cc: Carter
Ward, Chief Financial Officer
Elite
Pharmaceuticals, Inc.