Under the alliance, Epic and its employees and consultants are and will continue using a portion of the Registrant’s facility located at New Jersey, for the purpose of developing new generic drug products at Epic’s cost and expense, other than facility related expenses.
Moreover, at least eight additional generic drug products will be developed by Epic at Elite’s facility with the intent of filing abbreviated new drug applications for obtaining FDA approval of such generic drugs.
Elite will be entitled to 15% of the profits generated from the sales of such additional generic drug products upon approval by the FDA. Epic and Elite will share with each other certain resources, technology and know-how in the development of drug products, which Elite believes will benefit the continued development of its current drug products.
Epic will be entitled to receive additional shares of Elite’s Common Stock and warrants to purchase shares of it’s Common Stock upon achievement of certain milestones relating to the eight additional generic drug products being developed together.
In order to provide Elite with the additional capital necessary for the product development and synergies presented by the strategic relationship with Epic, Epic agreed to invest $3.75m in Elite through the purchase of Elite’s Series E Preferred Stock and common stock warrants.
In the October 30 closing, Epic invested the first $1m of this total amount, and acquired 1,000 shares of Series E preferred stock, which is presently convertible into 20m shares of common stock.