----

----

|   |
|--------|

| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|---|-----------------------------------------------------------------------------------------|

| For the quarterly period ended |             September 30, 2009 |
|--------------------------------|---------------------------------------------------------------------------------------|

|   |         or                                            |
|--------|------------------------------------------------------------------------------------------|
|   |                                                                                     |
| o      | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |

| For the transition period ended                                                               to |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Commission File Number: 333-45241                                                 |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                        |
| ELITE PHARMACEUTICALS, INC.                         |
| (Exact name of registrant as specified in its charter)                                                                                                                      |

| Delaware                                                       |   |                                       | 22-3542636 |
|----------------------------------------------------------------|--------|--------------------------------------------|------------|
| (State or other jurisdiction of incorporation or organization) |   | (I.R.S. Employer Identification No.)       |
|                                                           |   |                                       |
| 165 Ludlow Avenue, Northvale, New Jersey                       |   |        07647 |
| (Address of principal executive offices)                       |   | (Zip Code)                                 |

| (201) 750-2646                                                                                                                                                                                              |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                          (Registrant’s telephone number, including area code) |

|                      |                |                    |                        |
|---------------------------|---------------------|-------------------------|-----------------------------|
| Large Accelerated filer o | Accelerated Filer o | Non-Accelerated Filer o | Smaller Reporting Company x |

|   | Yes o No x |
|--------|-----------------|

----

|                            |                                                                                                                                                 |   |   |     |
|---------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|----------|
|                            |                                                                                                                                                 |   |   | Page No. |
| PART I - FINANCIAL INFORMATION  |                                                                                                                                                 |   |
|                            |                                                                                                                                                 |   |   |     |
| Item 1.                         | Financial Statements                                                                                                                                 |   |   |
|                            |                                                                                                                                                 |   |   |     |
|                            | Condensed Consolidated Balance Sheets as of September 30, 2009 (unaudited) and March 31, 2009 (audited)                                              |   | F-1    |
|                            |                                                                                                                                                 |   |   |     |
|                            | Condensed Consolidated Statements of Operations for the three and six months ended September 30, 2009 (unaudited) and September 30, 2008 (unaudited) |   | F-3    |
|                            |                                                                                                                                                 |   |   |     |
|                            | Condensed Consolidated Statement of Changes in Stockholders’ Equity for the six months ended September 30, 2009 (unaudited)                    |   | F-4    |
|                            |                                                                                                                                                 |   |   |     |
|                            | Condensed Consolidated Statements of Cash Flows for the six months ended September 30, 2009 (unaudited) and September 30, 2008 (unaudited)           |   | F-6    |
|                            |                                                                                                                                                 |   |   |     |
|                            | Notes to Condensed Consolidated Financial Statements                                                                                                 |   | F-7    |
|                            |                                                                                                                                                 |   |   |     |
| Item 2.                         | Management’s Discussion and Analysis of Financial Condition and Results of Operations                                                          |   | 1      |
|                            |                                                                                                                                                 |   |   |     |
| Item 3.                         | Quantitative and Qualitative Disclosures About Market Risk                                                                                           |   | 9      |
|                            |                                                                                                                                                 |   |   |     |
| Item 4. Controls and Procedures |                                                                                                                                                 | 9      |
|                            |                                                                                                                                                 |   |   |     |
| PART II - OTHER INFORMATION     |                                                                                                                                                 |   |
|                            |                                                                                                                                                 |   |   |     |
| Item 1.                         | Legal Proceedings                                                                                                                                    |   | 9      |
| Item 1A.                        | Risk Factors                                                                                                                                         |   | 10     |
| Item 2                          | Unregistered Sales of Equity Securities and Use of Proceeds                                                                                          |   | 19     |
| Item 3.                         | Defaults upon Senior Securities                                                                                                                      |   | 19     |
| Item 4.                         | Submission of Matters to a Vote of Security Holders                                                                                                  |   | 19     |
| Item 5.                         | Other Information                                                                                                                                    |   | 19     |
| Item 6.                         | Exhibits                                                                                                                                             |   | 20     |
|                            |                                                                                                                                                 |   |   |     |
| SIGNATURES                      |                                                                                                                                                 | 21     |

----

|                                                                                                                   |   |                         |       |   |                    |   |
|------------------------------------------------------------------------------------------------------------------------|--------|------------------------------|------------|--------|-------------------------|--------|
| ASSETS                                                                                                                 |   |
|                                                                                                                   |   |                         |       |   |                    |   |
|                                                                                                                   |   | September 30,2009(Unaudited) |       |   | March 31, 2009(Audited) |   |
| CURRENT ASSETS                                                                                                         |   |                         |       |   |                    |   |
| Cash and cash equivalents                                                                                              |   | $                            | 180,443    |   |                    | $      | 282,578 |   |
| Accounts receivable                                                                                                    |   |                         | 357,148    |   |                    |   | 1,177 |   |
| Inventories (net of reserve of 494,425 and nil, respectively)                                                          |   |                         | 1,454,889  |   |                    |   | 1,703,766 |   |
| Prepaid expenses and other current assets                                                                              |   |                         | 121,920    |   |                    |   | 331,622 |   |
|                                                                                                                   |   |                         |       |   |                    |   |   |   |
| Total current assets                                                                                                   |   |                         | 2,114,400  |   |                    |   | 2,319,143 |   |
|                                                                                                                   |   |                         |       |   |                    |   |   |   |
| PROPERTY AND EQUIPMENT, net of accumulated depreciation and amortization                                               |   |                         | 4,335,485  |   |                    |   | 4,575,487 |   |
|                                                                                                                   |   |                         |       |   |                    |   |   |   |
| INTANGIBLE ASSETS – net of accumulated amortization                                                              |   |                         | 23,977     |   |                    |   | 27,743 |   |
|                                                                                                                   |   |                         |       |   |                    |   |   |   |
| OTHER ASSETS                                                                                                           |   |                         |       |   |                    |   |   |   |
| Accrued interest receivable                                                                                            |   |                         | 9,916      |   |                    |   | 8,539 |   |
| Deposit on equipment                                                                                                   |   |                         | —    |   |                    |   | 14,073 |   |
| Investment in Novel Laboratories, Inc.                                                                                 |   |                         | 3,329,322  |   |                    |   | 3,329,322 |   |
| Security deposits                                                                                                      |   |                         | 14,652     |   |                    |   | 13,488 |   |
| Restricted cash – debt service for EDA bonds                                                                     |   |                         | 113,434    |   |                    |   | 327,435 |   |
| EDA Bond offering costs, net of accumulated amortization of $57,701 and $49,534, for September and March, respectively |   |                         | 296,750    |   |                    |   | 304,918 |   |
|                                                                                                                   |   |                         |       |   |                    |   |   |   |
| Total other assets                                                                                                     |   |                         | 3,764,074  |   |                    |   | 3,997,775 |   |
|                                                                                                                   |   |                         |       |   |                    |   |   |   |
| TOTAL ASSETS                                                                                                           |   | $                            | 10,237,936 |   |                    | $      | 10,920,148 |   |

----

|                                                                                                                                                                                                                      |   |                          |        |   |                    |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------|-------------|--------|-------------------------|--------|
|                                                                                                                                                                                                                      |   | September 30, 2009(Unaudited) |        |   | March 31, 2009(Audited) |   |
| CURRENT LIABILITIES                                                                                                                                                                                                       |   |                          |        |   |                    |   |
| Current portion of EDA Bonds                                                                                                                                                                                              |   | $                             | 225,000     |   |                    | $      | 210,000 |   |
| Short term loans and current portion of long-term debt                                                                                                                                                                    |   |                          | 93,159      |   |                    |   | 10,788 |   |
| Accounts payable and accrued expenses                                                                                                                                                                                     |   |                          | 1,085,709   |   |                    |   | 981,058 |   |
| Preferred share derivative interest payable                                                                                                                                                                               |   |                          | 334,760     |   |                    |   | — |   |
| Dividends payable                                                                                                                                                                                                         |   |                          | —     |   |                    |   | 358,621 |   |
| Total Current Liabilities                                                                                                                                                                                                 |   |                          | 1,738,628   |   |                    |   | 1,560,467 |   |
|                                                                                                                                                                                                                      |   |                          |        |   |                    |   |   |   |
| LONG TERM LIABILITIES                                                                                                                                                                                                     |   |                          |        |   |                    |   |   |   |
| EDA bonds – net of current portion                                                                                                                                                                                  |   |                          | 3,160,000   |   |                    |   | 3,385,000 |   |
| Long-term debt, less current portion                                                                                                                                                                                      |   |                          | 25,852      |   |                    |   | 31,600 |   |
| Derivative Liability – Preferred Shares                                                                                                                                                                             |   |                          | 6,208,785   |   |                    |   | — |   |
| Derivative Liability – Warrants                                                                                                                                                                                     |   |                          | 6,023,258   |   |                    |   | — |   |
| Total Long-Term Liabilities                                                                                                                                                                                               |   |                          | 15,417,895  |   |                    |   | 3,416,600 |   |
|                                                                                                                                                                                                                      |   |                          |        |   |                    |   |   |   |
| Total Liabilities                                                                                                                                                                                                         |   |                          | 17,156,523  |   |                    |   | 4,977,067 |   |
|                                                                                                                                                                                                                      |   |                          |        |   |                    |   |   |   |
| COMMITMENTS AND CONTINGENCIES:                                                                                                                                                                                            |   |                          |        |   |                    |   |   |   |
|                                                                                                                                                                                                                      |   |                          |        |   |                    |   |   |   |
| STOCKHOLDERS (DEFICIT) EQUITY                                                                                                                                                                                             |   |                          |        |   |                    |   |   |   |
| Preferred Stock - $0.01 par value;                                                                                                                                                                                        |   |                          |        |   |                    |   |   |   |
| Authorized 4,483,442 shares (originally 5,000,000 shares of which 516,558 shares of Series A Convertible Preferred Stock were retired) and 0 shares outstanding as of September 30, 2009 and March 31, 2009, respectively |   |                          | —     |   |                    |   | — |   |
|                                                                                                                                                                                                                      |   |                          |        |   |                    |   |   |   |
| Authorized 10,000 Series B convertible Preferred Stock – issued and outstanding 896 and 1,046 shares, respectively – Reclassified as a liability as of 4/1/09                                                 |   |                          | —     |   |                    |   | 11 |   |
|                                                                                                                                                                                                                      |   |                          |        |   |                    |   |   |   |
| Authorized 20,000 Series C convertible Preferred Stock – issued and outstanding 5,418 and 1,3705 shares, respectively – Reclassified as a liability as of 4/1/09                                              |   |                          | —     |   |                    |   | 137 |   |
|                                                                                                                                                                                                                      |   |                          |        |   |                    |   |   |   |
| Authorized 30,000 Series D convertible Preferred Stock – issued and outstanding 9,009 and 9,154 shares, respectively – Reclassified as a liability as of 4/1/09                                               |   |                          | —     |   |                    |   | 91 |   |
|                                                                                                                                                                                                                      |   |                          |        |   |                    |   |   |   |
| Common Stock - $0.01 par value;                                                                                                                                                                                           |   |                          |        |   |                    |   |   |   |
| Authorized 210,000,000 shares as of September 30, 2009 and March 31, 2009                                                                                                                                                 |   |                          |        |   |                    |   |   |   |
|                                                                                                                                                                                                                      |   |                          |        |   |                    |   |   |   |
| Issued and outstanding – 74,469,508 shares and 60,839,374 shares, respectively                                                                                                                                      |   |                          | 744,695     |   |                    |   | 608,394 |   |
|                                                                                                                                                                                                                      |   |                          |        |   |                    |   |   |   |
| Subscription receivable                                                                                                                                                                                                   |   |                          | (75,000     | )      |                    |   | (75,000 | ) |
|                                                                                                                                                                                                                      |   |                          |        |   |                    |   |   |   |
| Additional paid-in capital                                                                                                                                                                                                |   |                          | 89,156,632  |   |                    |   | 95,718,082 |   |
|                                                                                                                                                                                                                      |   |                          |        |   |                    |   |   |   |
| Accumulated deficit                                                                                                                                                                                                       |   |                          | (96,438,073 | )      |                    |   | (90,001,793 | ) |
|                                                                                                                                                                                                                      |   |                          |        |   |                    |   |   |   |
| Treasury stock, at cost (100,000 shares)                                                                                                                                                                                  |   |                          | (306,841    | )      |                    |   | (306,841 | ) |
|                                                                                                                                                                                                                      |   |                          |        |   |                    |   |   |   |
| Total Stockholders Equity                                                                                                                                                                                                 |   |                          | (6,918,587  | )      |                    |   | 5,493,081 |   |
|                                                                                                                                                                                                                      |   |                          |        |   |                    |   |   |   |
| TOTAL LIABILITIES AND STOCKHOLDERS (DEFICIT) EQUITY                                                                                                                                                                       |   | $                             | 10,237,936  |   |                    | $      | 10,920,148 |   |

----

|                                                                                                                 |   |                            |       |   |                          |   |       |   |   |   |       |   |
|----------------------------------------------------------------------------------------------------------------------|--------|---------------------------------|------------|--------|-------------------------------|--------|------------|--------|--------|--------|------------|--------|
|                                                                                                                 |   | THREE MONTHS ENDEDSEPTEMBER 30, |       |   | SIX MONTHS ENDEDSEPTEMBER 30, |   |
|                                                                                                                 |   | 2009                            |       |   | 2008                          |   |       | 2009   |   |   | 2008       |   |
| REVENUES                                                                                                             |   |                            |       |   |                          |   |       |   |   |   |       |   |
| Manufacturing Fees                                                                                                   |   |                            | 538,941    |   |                          |   | 405,005    |   |   | $      | 1,204,005  |   |   | $ | 1,093,292 |   |
| Royalties                                                                                                            |   |                            | 237,275    |   |                          |   | 70,187     |   |   |   | 386,086    |   |   |   | 158,578 |   |
|                                                                                                                 |   |                            |       |   |                          |   |       |   |   |   |       |   |   |   |   |   |
| Total Revenues                                                                                                       |   |                            | 776,216    |   |                          |   | 475,192    |   |   |   | 1,590,091  |   |   |   | 1,251,870 |   |
|                                                                                                                 |   |                            |       |   |                          |   |       |   |   |   |       |   |   |   |   |   |
| Costs of Revenues                                                                                                    |   |                            | 453,029    |   |                          |   | 399,571    |   |   |   | 1,003,043  |   |   |   | 1,001,496 |   |
| Inventory Adjustment                                                                                                 |   |                            | —    |   |                          |   |       |   |   |   | 311,986    |   |   |   |   |   |
| Gross Profit                                                                                                         |   |                            | 323,187    |   |                          |   | 75,621     |   |   |   | 275,062    |   |   |   | 250,374 |   |
|                                                                                                                 |   |                            |       |   |                          |   |       |   |   |   |       |   |   |   |   |   |
| COST OF OPERATIONS                                                                                                   |   |                            |       |   |                          |   |       |   |   |   |       |   |   |   |   |   |
| Research and development                                                                                             |   |                            | 259,326    |   |                          |   | 1,196,711  |   |   |   | 510,418    |   |   |   | 2,543,690 |   |
| General and administrative                                                                                           |   |                            | 393,140    |   |                          |   | 645,106    |   |   |   | 789,678    |   |   |   | 1,274,273 |   |
| Depreciation and amortization                                                                                        |   |                            | 49,230     |   |                          |   | 130,257    |   |   |   | 174,772    |   |   |   | 260,514 |   |
| Total Cost of Operations                                                                                             |   |                            | 701,696    |   |                          |   | 1,972,074  |   |   |   | 1,474,867  |   |   |   | 4,078,477 |   |
|                                                                                                                 |   |                            |       |   |                          |   |       |   |   |   |       |   |   |   |   |   |
| LOSS FROM OPERATIONS                                                                                                 |   |                            | (378,509   | )      |                          |   | (1,896,453 | )      |   |   | (1,199,805 | )      |   |   | (3,828,103 |   |
|                                                                                                                 |   |                            |       |   |                          |   |       |   |   |   |       |   |   |   |   |   |
| OTHER INCOME / (EXPENSES)                                                                                            |   |                            |       |   |                          |   |       |   |   |   |       |   |   |   |   |   |
| Interest income                                                                                                      |   |                            | 4          |   |                          |   | 8,318      |   |   |   | 2,012      |   |   |   | 30,101 |   |
| Interest expense                                                                                                     |   |                            | (61,212    | )      |                          |   | (64,054    | )      |   |   | (133,200   | )      |   |   | (162,254 | ) |
|     Non-cash compensation through issuance of stock options and warrants                              |   |                            | (29,190    | )      |                          |   | (285,624   | )      |   |   | (84,553    | )      |   |   | (592,173 | ) |
| Change in fair value of outstanding warrant derivatives                                                              |   |                            | (1,520,822 | )      |                          |   | —    |   |   |   | (1,366,496 | )      |   |   | — |   |
| Change in fair value of preferred share derivatives                                                                  |   |                            | (1,383,231 | )      |                          |   | —    |   |   |   | 1,178,296  |   |   |   | — |   |
|     Interest expense attributable to dividends accrued to preferred share derivative liabilities |   |                            | (299,352   | )      |                          |   | —    |   |   |   | (658,373   | )      |   |   | — |   |
|     Discount in Series E issuance attributable to beneficial conversion features                      |   |                            | —    |   |                          |   | —    |   |   |   | (258,700   | )      |   |   | — |   |
| Total Other Income / (Expense)                                                                                       |   |                            | (3,293,803 | )      |                          |   | (341,360   | )      |   |   | (1,321,014 | )      |   |   | (691,326 | ) |
|                                                                                                                 |   |                            |       |   |                          |   |       |   |   |   |       |   |   |   |   |   |
| INCOME / (LOSS) BEFORE PROVISION FOR INCOME TAXES                                                                    |   |                            | (3,672,312 | )      |                          |   | (2,237,813 | )      |   |   | (2,520,823 | )      |   |   | (4,519,429 | ) |
|                                                                                                                 |   |                            |       |   |                          |   |       |   |   |   |       |   |   |   |   |   |
| Provision for Income Taxes                                                                                           |   |                            | —    |   |                          |   | —    |   |   |   | —    |   |   |   | 3,120 |   |
| NET INCOME / (LOSS)                                                                                                  |   |                            | (3,672,312 | )      |                          |   | (2,237,813 | )      |   |   | (2,520,819 | )      |   |   | (4,522,549 | ) |
|                                                                                                                 |   |                            |       |   |                          |   |       |   |   |   |       |   |   |   |   |   |
| Preferred Stock Dividends                                                                                            |   |                            | —    |   |                          |   | (558,282   | )      |   |   | —    |   |   |   | (1,112,189 | ) |
| NET INCOME / (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS                                                              |   |                            | (3,672,313 | )      |                          | $      | (2,796,095 | )      |   | $      | (2,520,819 | )      |   | $ | (5,643,738 | ) |
|                                                                                                                 |   |                            |       |   |                          |   |       |   |   |   |       |   |   |   |   |   |
| BASIC AND DILUTED LOSS PER COMMON SHARE                                                                              |   | $                               | (0.05      | )      |                          | $      | (0.11      | )      |   | $      | (0.04      | )      |   | $ | (0.23 | ) |
|                                                                                                                 |   |                            |       |   |                          |   |       |   |   |   |       |   |   |   |   |   |
| WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING – BASIC                                                   |   |                            | 74,075,307 |   |                          |   | 24,523,192 |   |   |   | 70,232,854 |   |   |   | 23,918,539 |   |

----

|                                                                                                   |   |                    |    |   |                    |   |    |                    |   |   |         |   |   |   |    |   |   |   |    |   |   |   |    |   |
|--------------------------------------------------------------------------------------------------------|--------|-------------------------|---------|--------|-------------------------|--------|---------|-------------------------|--------|--------|--------------|--------|--------|--------|---------|--------|--------|--------|---------|--------|--------|--------|---------|--------|
|                                                                                                   |   | Series BPreferred Stock |    |   | Series CPreferred Stock |   |    | Series DPreferred Stock |   |   | Common Stock |   |
|                                                                                                   |   | Shares                  |    |   | Amount                  |   |    | Shares                  |   |   | Amount       |   |   | Shares |    |   | Amount |   |    | Shares |   |   | Amount  |   |
| Balance at March 31, 2009                                                                              |   |                    | 1,046   |   |                    |   | 11      |                    |   |   | 13,705       |   |   |   | 137     |   |   |   | 9,154   |   |   |   | 91      |   |   |   | 60,839,374 |   |   |   | 608,394 |   |
|                                                                                                   |   |                    |    |   |                    |   |    |                    |   |   |         |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Cumulative effect of reclassification of preferred stock and warrants                                  |   |                    |    |   |                    |   | (11     | )                       |   |   |         |   |   |   | (137    | )      |   |   |    |   |   |   | (91     | )      |   |   | — |   |   |   | — |   |
|                                                                                                   |   |                    |    |   |                    |   |    |                    |   |   |         |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Proceeds received in exchange for beneficial conversion features embedded in Series E preferred shares |   |                    | — |   |                    |   | — |                    |   |   | —      |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
|                                                                                                   |   |                    |    |   |                    |   |    |                    |   |   |         |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Conversion of Series B, Series C and Series D preferred shares into common                             |   |                    | (150    | )      |                    |   |    |                    |   |   | (8,827       | )      |   |   |    |   |   |   | (145    | )      |   |   |    |   |   |   | 5,378,009 |   |   |   | 53,780 |   |
|                                                                                                   |   |                    |    |   |                    |   |    |                    |   |   |         |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Costs associated with raising capital                                                                  |   |                    | — |   |                    |   | — |                    |   |   | —      |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
|                                                                                                   |   |                    |    |   |                    |   |    |                    |   |   |         |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Non-cash compensation through Issuance of stock options and warrants                                   |   |                    | — |   |                    |   | — |                    |   |   | —      |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
|                                                                                                   |   |                    |    |   |                    |   |    |                    |   |   |         |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Net Income for the six months ended September 30, 2009                                                 |   |                    | — |   |                    |   | — |                    |   |   | —      |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
|                                                                                                   |   |                    |    |   |                    |   |    |                    |   |   |         |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Dividends                                                                                              |   |                    | — |   |                    |   | — |                    |   |   | —      |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 4,006,339 |   |   |   | 40,063 |   |
|                                                                                                   |   |                    |    |   |                    |   |    |                    |   |   |         |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Common shares issued in lieu of cash in payment of preferred share derivative interest expense         |   |                    | — |   |                    |   | — |                    |   |   | —      |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 4,245,785 |   |   |   | 42,458 |   |
|                                                                                                   |   |                    |    |   |                    |   |    |                    |   |   |         |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |   |   |   |   |
|                                                                                                   |   |                    |    |   |                    |   |    |                    |   |   |         |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |   |   |   |   |
| Balance at Sept 30, 2009                                                                               |   |                    | 896     |   |                    |   | — |                    |   |   | 5,418        |   |   |   | — |   |   |   | 9,009   |   |   |   | — |   |   |   | 74,469,507 |   |   |   | 744,659 |   |

----

|                                                                                                   |   |                   |    |   |                      |   |       |           |   |   |               |   |   |                          |     |   |   |   |
|--------------------------------------------------------------------------------------------------------|--------|------------------------|---------|--------|---------------------------|--------|------------|----------------|--------|--------|--------------------|--------|--------|-------------------------------|----------|--------|--------|--------|
|                                                                                                   |   | SubscriptionReceivable |    |   | Additional Paidin Capital |   |       | Treasury Stock |   |   | AccumulatedDeficit |   |   | Stockholders (Deficit) Equity |     |
|                                                                                                   |   | Shares                 |    |   | Amount                    |   |
| Balance at March 31, 2009                                                                              |   |                   | (75,000 | )      |                      |   | 95,718,092 |           |   |   | (100,000           | )      |   |                          | (306,841 | )      |   |   | (90,001,793 | ) |   |   | 5,943,081 |   |
|                                                                                                   |   |                   |    |   |                      |   |       |           |   |   |               |   |   |                          |     |   |   |   |   |   |   |   |   |   |
| Cumulative effect of reclassification of preferred stock and warrants                                  |   |                   | — |   |                      |   | (7,143,892 | )              |   |   | —            |   |   |                          | —  |   |   |   | (3,915,462 | ) |   |   | (11,059,593 | ) |
|                                                                                                   |   |                   |    |   |                      |   |       |           |   |   |               |   |   |                          |     |   |   |   |   |   |   |   |   |   |
| Proceeds received in exchange for beneficial conversion features embedded in Series E preferred shares |   |                   | — |   |                      |   | 258,700    |           |   |   | —            |   |   |                          | —  |   |   |   | — |   |   |   | 258,700 |   |
|                                                                                                   |   |                   |    |   |                      |   |       |           |   |   |               |   |   |                          |     |   |   |   |   |   |   |   |   |   |
| Conversion of Series B, Series C and Series D preferred shares into common                             |   |                   | — |   |                      |   | 14,000     |           |   |   | —            |   |   |                          | —  |   |   |   | — |   |   |   | 67,780 |   |
|                                                                                                   |   |                   |    |   |                      |   |       |           |   |   |               |   |   |                          |     |   |   |   |   |   |   |   |   |   |
| Costs associated with raising capital                                                                  |   |                   | — |   |                      |   | (351,362   | )              |   |   | —            |   |   |                          | —  |   |   |   | — |   |   |   | (351,362 | ) |
|                                                                                                   |   |                   |    |   |                      |   |       |           |   |   |               |   |   |                          |     |   |   |   |   |   |   |   |   |   |
| Non-cash compensation through Issuance of stock options and warrants                                   |   |                   | — |   |                      |   | 84,553     |           |   |   | —            |   |   |                          | —  |   |   |   | — |   |   |   | 84,553 |   |
|                                                                                                   |   |                   |    |   |                      |   |       |           |   |   |               |   |   |                          |     |   |   |   |   |   |   |   |   |   |
| Net Income for the six months ended September 30, 2009                                                 |   |                   | — |   |                      |   | —    |           |   |   | —            |   |   |                          | —  |   |   |   | (2,520,819 | ) |   |   | (2,520,819 | ) |
|                                                                                                   |   |                   |    |   |                      |   |       |           |   |   |               |   |   |                          |     |   |   |   |   |   |   |   |   |   |
| Dividends                                                                                              |   |                   | — |   |                      |   | 318,958    |           |   |   | —            |   |   |                          | —  |   |   |   | — |   |   |   | 359,021 |   |
|                                                                                                   |   |                   |    |   |                      |   |       |           |   |   |               |   |   |                          |     |   |   |   |   |   |   |   |   |   |
| Common shares issued in lieu of cash in payment of preferred share derivative interest expense         |   |                   | — |   |                      |   | 257,594    |           |   |   | —            |   |   |                          | —  |   |   |   | — |   |   |   | 300,052 |   |
|                                                                                                   |   |                   |    |   |                      |   |       |           |   |   |               |   |   |                          |     |   |   |   |   |   |   |   |   |   |
| Balance at Sept 30, 2009                                                                               |   |                   | (75,000 | )      |                      |   | 89,156,633 |           |   |   | (100,000           | )      |   |                          | (306,841 | )      |   |   | (96,438,073 | ) |   |   | (6,918,587 | ) |

----

|                                                                                           |   |                           |       |   |            |   |
|------------------------------------------------------------------------------------------------|--------|--------------------------------|------------|--------|-----------------|--------|
|                                                                                           |   | SIX MONTHS ENDED SEPTEMBER 30, |       |
|                                                                                           |   | 2009(Unaudited)                |       |   | 2008(Unaudited) |   |
| CASH FLOWS FROM OPERATING ACTIVITIES                                                           |   |                           |       |   |            |   |
| Net Loss                                                                                       |   | $                              | (2,520,819 | )      |            | $      | (4,522,549 | ) |
| Adjustments to reconcile net loss to cash used in operating activities:                        |   |                           |       |   |            |   |   |   |
| Depreciation and amortization                                                                  |   |                           | 251,936    |   |            |   | 260,514 |   |
| Inventory adjustment                                                                           |   |                           | 311,986    |   |            |   | — |   |
| Change in fair value of warrant derivative liability                                           |   |                           | 1,366,496  |   |            |   | — |   |
| Change in fair value of preferred shares derivative liability                                  |   |                           | (1,178,296 | )      |            |   | — |   |
| Discount in Series E issuance attributable to embedded beneficial conversion feature           |   |                           | 258,700    |   |            |   | — |   |
| Preferred shares derivative interest accrued                                                   |   |                           | 658,373    |   |            |   | — |   |
| Non-cash compensation satisfied by the issuance of common stock, options and warrants          |   |                           | 84,553     |   |            |   | 592,173 |   |
| Changes in assets and liabilities:                                                             |   |                           |       |   |            |   |   |   |
| Accounts and interest receivable                                                               |   |                           | (357,348   | )      |            |   | (258,419 | ) |
| Inventories                                                                                    |   |                           | (63,109    | )      |            |   | 410,905 |   |
| Prepaid expenses and other current assets                                                      |   |                           | 12,211     |   |            |   | 52,296 |   |
| Security deposit                                                                               |   |                           | 12,909     |   |            |   | — |   |
| Accounts payable, accrued expenses and other current liabilities                               |   |                           | 105,224    |   |            |   | 190,827 |   |
| NET CASH USED IN OPERATING ACTIVITIES                                                          |   |                           | (1,057,184 | )      |            |   | (3,274,253 | ) |
|                                                                                           |   |                           |       |   |            |   |   |   |
| CASH FLOWS FROM INVESTING ACTIVITIES                                                           |   |                           |       |   |            |   |   |   |
| Purchases of property and equipment                                                            |   |                           | —    |   |            |   | (75,558 | ) |
| (Deposits) to / Withdrawals from restricted cash                                               |   |                           | 214,002    |   |            |   | (3,326 | ) |
| NET CASH USED IN INVESTING ACTIVITIES                                                          |   |                           | 214,002    |   |            |   | (78,884 | ) |
|                                                                                           |   |                           |       |   |            |   |   |   |
| CASH FLOWS FROM FINANCING ACTIVITIES                                                           |   |                           |       |   |            |   |   |   |
| Dividends paid                                                                                 |   |                           | —    |   |            |   | (126,603 | ) |
| Proceeds from issuance of Series D 8% Convertible Preferred Stock and Warrants                 |   |                           | —    |   |            |   | 1,777,000 |   |
| Proceeds from issuance of Series E Preferred Stock and Warrants                                |   |                           | 1,000,000  |   |            |   | — |   |
| NJEDA bond principal payments                                                                  |   |                           | (210,000   | )      |            |   | (200,000 | ) |
| Other loan payments                                                                            |   |                           | (48,953    | )      |            |   | (4,821 | ) |
| Costs associated with raising capital                                                          |   |                           | —    |   |            |   | (263,753 | ) |
| NET CASH PROVIDED BY FINANCING ACTIVITIES                                                      |   |                           | 741,047    |   |            |   | 1,181,823 |   |
|                                                                                           |   |                           |       |   |            |   |   |   |
| NET CHANGE IN CASH AND CASH EQUIVALENTS                                                        |   |                           | (102,135   | )      |            |   | (2,171,314 | ) |
|                                                                                           |   |                           |       |   |            |   |   |   |
| CASH AND CASH EQUIVALENTS – beginning of period                                          |   |                           | 282,578    |   |            |   | 3,702,615 |   |
| CASH AND CASH EQUIVALENTS – end of period                                                |   | $                              | 180,443    |   |            | $      | 1,531,301 |   |
|                                                                                           |   |                           |       |   |            |   |   |   |
| SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION                                              |   |                           |       |   |            |   |   |   |
| Cash paid for interest                                                                         |   |                           | 133,200    |   |            |   | 130,472 |   |
| Cash paid for income taxes                                                                     |   |                           | —    |   |            |   | 3,120 |   |
|                                                                                           |   |                           |       |   |            |   |   |   |
| SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES                                        |   |                           |       |   |            |   |   |   |
| Accrued dividends                                                                              |   |                           | —    |   |            |   | 36,800 |   |
| Consulting services paid by issuance of 125,000 shares of common stock                         |   |                           | —    |   |            |   | 101,250 |   |
| Common shares issued in lieu of cash in payment of preferred share derivative interest expense |   |                           | 299,460    |   |            |   | — |   |
| Accrued preferred share derivative interest expense                                            |   |                           | 334,760    |   |            |   | — |   |

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|                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|---------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| NOTE 1     - | BASIS OF PRESENTATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                                  | The information in this Form 10-Q Report includes the results of operations of Elite Pharmaceuticals, Inc. and its consolidated subsidiaries (collectively the “Registrant”) including its wholly-owned subsidiaries, Elite Laboratories, Inc. (“Elite Labs”) and Elite Research, Inc. (“ERI”) for the three andsix months ended September 30, 2009 and 2008. The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to rules and regulations of the Securities and Exchange Commission in accordance with accounting principles generally accepted for interim financial statement presentation. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In theopinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the condensed consolidated financial position, results of operations and cash flows of the Registrant for the periods presented have been included.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                                  | The financial results for the interim periods are not necessarily indicative of the results to be expected for the full year or future interim periods.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                                  | The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Registrant’s Annual Report on Form 10-K for the year ended March 31, 2009. With the exception of the Registrant adopting the requirements of EITF 07-5 with regardsto the accounting for warrants and convertible instruments with anti-dilutive properties, there have been no changes in significant accounting policies since March 31, 2009. Please refer to Note 2 of the financial statements in this report for a description of the change in accounting policy related to the adoption of the requirements of EITF 07-5.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                                  | The Registrant does not anticipate being profitable for fiscal year ending March 31, 2010; therefore a current provision for income tax was not established for the three and six months ended September 30, 2009. Only the minimum liability required for state corporation taxes is reflected.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|                                  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                                  | The accompanying unaudited condensed consolidated financial statements were prepared on the assumption that the Registrant will continue as a going concern. The Registrant continues to generate losses and negative cash flow from operations and does not anticipate being profitable for fiscal year 2010. Therefore Elite continues to requireadditional financing to ensure that we will be able to meet our expenditures to develop and commercialize our products. As of September 30, 2009, we had cash and cash equivalents of $180,443. We believe that our existing cash and cash equivalents plus revenues from sale of our Lodrane 24® and Lodrane 24D® products and proceeds received from the second closing under the Epic Strategic Alliance Agreement, which occurred on October 30, 2009, will be sufficient to fund our anticipated operating expensesand capital requirements through March 2010. We will require additional funding in order to continue to operate thereafter. If the third closing of the transactions contemplated by the Epic Strategic Alliance Agreement is not closed on a timely basis, or if another financing or strategic alternative providing sufficient resources to allow us to continue operations is not consummated upon exhaustion of our current capital, we will be required to cease operations and liquidate our assets. No assurance can be giventhat we will be able to consummate the third closing under the Epic Strategic Alliance Agreement on a timely basis, or consummate such other financing or strategic alternative in the time necessary to avoid the cessation of our operations and liquidation of our assets. Moreover, even if we consummate the third closing under the Epic Strategic Alliance Agreement, or such other financing or strategic alternative, we may be required to seek additional capital in the future and there can be no assurances that theRegistrant will be able to obtain such additional capital on favorable terms, if at all. |

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|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                          |
|----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------|
| NOTE 2 - | CHANGE IN ACCOUNTING PRINCIPAL AND DERIVATIVE LIABILITIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                          |
|     | The following discussion of derivative liabilities consists of the following sections:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|     | ●                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Overview of Derivative Liability accounting                   |
|     | ●                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Preferred Stock Derivative Liabilities                        |
|     | ●                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Warrant Derivative Liabilities                                |
|     | ●                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Beneficial Conversion Feature of Series E Preferred Stock     |
|     | ●                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Summary of effects of derivatives on the financial statements |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                          |
|     | In June 2008, the FASB finalized Emerging Issues Task Force (“EITF”) 07-5, “Determining Whether an Instrument (or Embedded Feature) is indexed to an Entity’s Own Stock”, effective for fiscal years beginning after December 15, 2008. Under EITF 07-5, instruments which do not have fixed settlement provisions aredeemed to be derivative instruments. The conversion features within, and the detachable warrants issued with the Registrant’s Series B, Series C, Series D and Series E preferred stock, do not have fixed settlement provisions because their conversion and exercise prices may be lowered if the Registrant issues securities at lower prices in the future. The Registrant was required to include the reset provisions in order to protect the preferred share and warrant holders from potential dilution associated withfuture financings for the fiscal year beginning April 1, 2009. In accordance with EITF 07-5, the preferred shares and warrants were recognized as a derivative instrument and have been re-characterized as derivative liabilities at their fair value. “Accounting for Derivative Instruments and Hedging Activities” (“FAS 133”) requires that the fair value of these liabilities be re-measured at the end of every reporting period, with the change in value reported in the statement of operations.EITF 07-5 requires that the cumulative effect of this change in accounting principal, for all periods prior the period of implementation, be recognized as an adjustment in the opening balance of retained earnings/(accumulated deficit) |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                          |
|     | In addition, the Series E Preferred shares included an option, exercisable from the issuance date, to convert to common shares at a price which was below the share price on the date of issuance. The excess of value based on the share price over the cost of shares, based on the option price represents a beneficial conversion feature existingon the issue date. In accordance with EITF 98-5, the beneficial conversion feature was valued separately at issuance and allocated to additional paid in capital. As the options which comprise the beneficial conversion feature were exercisable when issued, a discount resulting from and in the full amount of the beneficial conversion feature was recorded at the time of issuance.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |

----

|   | Preferred Stock Derivative Liabilities                                                                                                                                                                                                                                                                                |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | The portion of derivative liabilities related to the Series B, Series C, Series D and Series E preferred shares was valued at the market value of the underlying common shares, into which the preferred shares may be converted. Such valuation as of the beginning and end of the period are summarized as follows: |

| PREFERRED STOCK DERIVATIVE LIABILITY AS OF APRIL 1, 2009  |   |
|-----------------------------------------------------------|--------|
|                                                      |   | Series B |   |   | Series C |   |   | Series D |   |   | Series E |   |   | Total |   |
| Preferred shares Outstanding                              |   |   | 1,046 |   |   |   | 13,705 |   |   |   | 9,154 |   |   |   | — |   |   |   | 23,905 |   |
|                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Underlying common shares into which Preferred may convert |   |   | 670,230 |   |   |   | 8,512,422 |   |   |   | 45,772,205 |   |   |   | — |   |   |   | 54,954,857 |   |
|                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Closing price on valuation date                           |   | $ | 0.13 |   |   | $ | 0.13 |   |   | $ | 0.13 |   |   | $ | 0.13 |   |   | $ | 0.13 |   |
|                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Preferred stock derivative liability at April 1, 2009     |   | $ | 87,130 |   |   | $ | 1,106,615 |   |   | $ | 5,950,386 |   |   | $ | — |   |   | $ | 7,144,131 |   |

|   | As of April 1, 2009, the total preferred stock derivative liability was $7,144,131. This amount represents the cumulative effect of the change in accounting principal for all periods prior to April 1, 2009 and in accordance with generally accepted accounting principles, is recognized as an adjustment in the opening accumulated deficit balance. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| PREFERRED STOCK DERIVATIVE LIABILITY AS OF SEPTEMBER 30, 2009                                |   |
|----------------------------------------------------------------------------------------------|--------|
|                                                                                         |   | Series B |   |   | Series C |   |   | Series D |   |   | Series E |   |   | Total |   |
| Preferred shares Outstanding                                                                 |   |   | 896 |   |   |   | 5,418 |   |   |   | 9,009 |   |   |   | 1,000 |   |   |   | 16,358 |   |
|                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Underlying common shares into which Preferred may convert                                    |   |   | 574,076 |   |   |   | 3,365,217 |   |   |   | 45,047,194 |   |   |   | 20,000,000 |   |   |   | 68,986,498 |   |
|                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Closing price on valuation date                                                              |   | $ | 0.09 |   |   | $ | 0.09 |   |   | $ | 0.09 |   |   | $ | 0.09 |   |   | $ | 0.09 |   |
|                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Preferred stock derivative liability at September 30, 2009                                   |   | $ | 51,667 |   |   | $ | 302,870 |   |   | $ | 4,054,248 |   |   | $ | 1,800,000 |   |   | $ | 6,208,784 |   |
| Series E liability at issue date (related to beneficial conversion option                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 258,700 |   |   |   | 258,700 |   |
| Change in preferred stock derivative liability for the six months ended September 30, 2009   |   | $ | (35,463 | ) |   | $ | (803,745 | ) |   | $ | (1,880,388 | ) |   | $ | 1,541,300 |   |   | $ | (1,178,296 | ) |
| Change in preferred stock derivative liability for the 3 months ended June 30, 2009          |   |   | (46,945 | ) |   |   | (871,050 | ) |   |   | (2,784,832 | ) |   |   | 1,141,300 |   |   |   | (2,561,527 | ) |
|                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Change in preferred stock derivative liability for the three months ended September 30, 2009 |   | $ | 11,482 |   |   | $ | 67,305 |   |   | $ | 904,444 |   |   | $ | 400,000 |   |   | $ | 1,383,231 |   |

|   | The change of $1,383,231 and $(1,178,296) in value of the preferred stock derivative liability occurring during the three and six months ended September 30, 2009, respectively, is included in the amount reported in the “Other Income / (Expense)” section of the statement of operations. Increases in value are reported as otherexpenses and decreases in value are reported as other income. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | Warrant Derivative Liabilities                                                                                                                                                        |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | The portion of derivative liabilities related to outstanding warrants was valued using the Black-Scholes option valuation model and the following assumptions on the following dates: |

|                                                                               |   | April 12009 |            | June 302009 |            | September 302009 |   |
|------------------------------------------------------------------------------------|--------|-------------|-----------------|-------------|-----------------|------------------|--------|
| Risk-Free interest rate                                                            |   |        | 2               | %           | 2               | %                |   | 2 | % |
| Expected volatility                                                                |   |        | 118%- 137       | %           | 116% - 153      | %                |   | 120% - 165 | % |
| Expected life (in years)                                                           |   |        | 3.2 – 5.2 |        | 3.0 – 7.0 |             |   | 2.7 – 6.7 |   |
| Expected dividend yield                                                            |   |        | —         |        | —         |             |   | — |   |
| Number of warrants                                                                 |   |        | 45,469,740      |        | 85,469,740      |             |   | 85,469,740 |   |
|                                                                               |   |        |            |        |            |             |   |   |   |
| Fair value – Warrant Derivative Liability                                    |   | $           | 3,915,462       |        | 4,502,436       |             | $      | 6,023,258 |   |
|                                                                               |   |        |            |        |            |             |   |   |   |
| Derivative warrant liability recorded at issue date of Series E Preferred Shares   |   |        | —         |        | 741,300         |             |   |   |   |
|                                                                               |   |        |            |        |            |             |   |   |   |
| Change in Warrant Derivative Liability for the three months ended                  |   |        | —         |        | (154,326        | )                |   | 1,520,822 |   |
|                                                                               |   |        |            |        |            |             |   |   |   |
| Change in Warrant Derivative Liability for the six months ended September 30, 2009 |   |        |            |        |            |             | $      | 1,366,496 |   |

|   | The risk free interest rate was based on rates established by the Federal Reserve. The expected volatility was based on the historical volatility of the Registrant’s share price for periods equal to the expected life of the outstanding warrants at each valuation date. The expected dividend rate was based on the fact that the Registranthas not historically paid dividends on common stock and does not expect to pay dividends on common stock in the future. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | The warrant derivative liability as of April 1, 2009 was $3,915,462. This amount represents the cumulative effect of the change in accounting principal for all periods prior to April 1, 2009 and as per the requirements of EITF 07-5, is recognized as an adjustment in the opening accumulated deficit balance.                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | The increase of $1,520,822 and $1,366,496 in value of the warrant derivative liability occurring during the three and six months ended September 30, 2009, respectively, is reported in the “Other Income (Expenses)” section of the statement of operations.                                                                                                                                                                                                      |

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|   | Beneficial Conversion Features of Series E Preferred Shares                                                                                                                                                                                                                                                                                                                                                                                       |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | The Series E Preferred shares included an option, exercisable from the issuance date, to convert to common shares at a price of $0.05 per share. The share price on the date of issuance was $0.09. The difference of $0.04 between the share price and option price represents a beneficial conversion feature existing on the issue date.                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   | In accordance with EITF 98-5, the beneficial conversion feature was valued separately and allocated to additional paid in capital. The beneficial conversion feature was valued at $258,700, calculated using the relative fair value method, as required by FAS 14, allocating the proceeds of $1 million from issuance of the Series E Preferredshares to the conversion option and detachable warrants included with such issuance as follows: |

| Allocation % attributable to the Preferred shares conversion option                                                              |   |   |       |   |   |
|----------------------------------------------------------------------------------------------------------------------------------|--------|--------|------------|--------|--------|
| Proceeds from issuance of Series E preferred shares                                                                              |   | $      | 1,000,000  |   |   |
| Value of warrants issued with Series E preferred shares (see below for a description of the method of valuation)                 |   |   | 2,865,486  |   |   |
| Total of proceeds plus warrants                                                                                                  |   |   | 3,865,486  |   |   |
| Allocation % attributable to Preferred Shares conversion option (quotient of the proceeds divided by the proceeds plus warrants) |   |   | 25.9       | %      |   |
| Amount of proceeds attributed to conversion option                                                                               |   | $      | 258,700    |   |   |
|                                                                                                                             |   |   |       |   |   |
| Gross value of beneficial conversion feature                                                                                     |   |   |       |   |   |
| Share price as of issue date                                                                                                     |   | $      | 0.09       |   |   |
| Conversion option price                                                                                                          |   | $      | 0.05       |   |   |
| Beneficial conversion feature per share                                                                                          |   | $      | 0.04       |   |   |
| Number of common shares                                                                                                          |   |   | 20,000,000 |   |   |
| Gross value of beneficial conversion feature                                                                                     |   | $      | 800,000    |   |   |
|                                                                                                                             |   |   |       |   |   |
| Beneficial conversion option recorded (lesser of the gross value or the amount of proceeds attributed to the conversion option)  |   | $      | 258,700    |   |   |

|   | The warrants issued with the Series E Preferred shares were valued using the Black Scholes option valuation model, with the following assumptions: |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------|

| Risk-free interest rate  |   | 2%         |   |   |
|--------------------------|--------|------------|--------|--------|
| Expected volatility      |   | 115.2%     |   |   |
| Expected life (in years) |   | 7          |   |   |
| Number of warrants       |   | 40 million |   |   |
| Fair value               |   | $2,865,486 |   |   |

|   | A beneficial conversion option is required to be recognized as a discount and amortized from the date of issuance to the earliest conversion date. As the conversion options were exercisable on their issue date, the full value assigned to the conversion option was charged to interest expense. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | Summary of effects of derivatives on the financial statements |
|--------|---------------------------------------------------------------|

|                                                                                       |   | DerivativeLiabilities |       |   | AccumulatedDeficitandPaid-in Capital |   |        | Other Income/(Expense) |   |
|--------------------------------------------------------------------------------------------|--------|-----------------------|------------|--------|--------------------------------------|--------|-------------|------------------------|--------|
| Cumulative effect of change in accounting principle - Preferred Stock Derivative Liability |   | $                     | 7,144,131  |   |                                 | $      | (7,144,131  | )                      |   | $ | — |   |
|                                                                                       |   |                  |       |   |                                 |   |        |                   |   |   |   |   |
| Cumulative effect of change in accounting principle - Warrant Derivative Liability         |   |                  | 3,915,462  |   |                                 |   | (3,915,462  | )                      |   |   | — |   |
|                                                                                       |   |                  |       |   |                                 |   |        |                   |   |   |   |   |
| Beneficial conversion feature of Series E                                                  |   |                  | —    |   |                                 |   | 258,700     |                   |   |   | — |   |
|                                                                                       |   |                  |       |   |                                 |   |        |                   |   |   |   |   |
| Warrants issued with Series E                                                              |   |                  | 741,300    |   |                                 |   | —     |                   |   |   | — |   |
|                                                                                       |   |                  |       |   |                                 |   |        |                   |   |   |   |   |
| Amortization of beneficial conversion of Series E as interest expense                      |   |                  | 258,700    |   |                                 |   | —     |                   |   |   | (258,700 | ) |
|                                                                                       |   |                  |       |   |                                 |   |        |                   |   |   |   |   |
| Change in value of preferred stock derivative liability                                    |   |                  | (1,178,296 | )      |                                 |   | —     |                   |   |   | 1,178,296 |   |
|                                                                                       |   |                  |       |   |                                 |   |        |                   |   |   |   |   |
| Change in value of warrants derivative liability                                           |   |                  | 1,366,496  |   |                                 |   | —     |                   |   |   | (1,366,496 | ) |
|                                                                                       |   |                  |       |   |                                 |   |        |                   |   |   |   |   |
| Preferred stock derivatives converted into common shares                                   |   |                  | (15,750    | )      |                                 |   | 15,750      |                   |   |   | — |   |
|                                                                                       |   |                  |       |   |                                 |   |        |                   |   |   |   |   |
| Net Effect of Derivatives                                                                  |   |                  | 12,232,043 |   |                                 |   | (10,785,143 | )                      |   |   | (446,900 | ) |

| NOTE 3 - | INVENTORIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|----------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|     | Inventories are recorded at the lower of cost or market. As of September 30, 2009 the Company had inventory valuation reserve totaling $494,425 resulting in a charge to operations of $311,986 during the six months ended September 30, 2009.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| NOTE 4 - | PREFERRED SHARE DERIVATIVE INTEREST PAYABLE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|     | Preferred share derivative interest payable as of September 30, 2009 consisted of $298,760 in derivative interest earned and accrued during the quarter ended September 30, 2009 plus $18,000 in preferred dividends earned during the quarter ended December 31, 2008, but not previously paid, plus $18,000 in dividends earned during the quarterended March 31, 2009, but not previously paid. The derivative interest relating to the quarter ended September 30, 2009 was paid via the issuance of 4,245,518 shares of common stock in October 2009. The Registrant expects to also pay the dividends relating to the quarters ended December 31, 2008 and March 31, 2009 via the issuance of common shares and is in the process of executing the necessary waivers to do so. The Registrant expects to have such required waivers executed subsequent to the filing of this Report.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| NOTE 5 - | NJEDA BONDS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|     | On September 2, 1999, the Company completed the issuance of tax exempt bonds by the New Jersey Economic Development Authority (“NJEDA” or the “Authority”). The aggregate proceeds from the issuance of the fifteen year term bonds were $3,000,000. Interest on the bonds accrues at 7.75% per annum. A portion of the proceedswere used by the Company to refinance its land and building, and the remaining proceeds used for the purchase of manufacturing equipment and building improvements. On August 31, 2005, the Company successfully completed a refinancing of the 1999 bond issue through the issuance of new tax-exempt bonds (the “Bonds”). The refinancing involved borrowing $4,155,000, evidenced by a 6.5% Series A Note in the principal amount of $3,660,000 maturing on September 1, 2030 and a 9% Series B Note in the principalamount of $495,000 maturing on September 1, 2012. The net proceeds, after payment of issuance costs, were used (i) to redeem the outstanding tax-exempt Bonds originally issued by the Authority on September 2, 1999, (ii) refinance other equipment financing and (iii) for the purchase of certain equipment to be used in the manufacture of pharmaceutical products. Interest is payable semiannually on March 1 and September 1 of each year. The Bonds are collateralized by a first lien on the Company’s facility andequipment acquired with the proceeds of the original and refinanced Bonds. The related Indenture requires the maintenance of a $415,500 Debt Service Reserve Fund consisting of $366,000 from the Series A Notes proceeds and $49,500 from the Series B Notes proceeds. The Debt Service Reserve is maintained in restricted cash accounts that are classified in Other Assets. $1,274,311 of the proceeds was deposited in a short-term restricted cash account to fund the purchase of manufacturing equipment and development ofthe Company’s facility. As of September 30, 2009, all of these proceeds were utilized to upgrade the Company’s manufacturing facilities and for the purchase of manufacturing and laboratory equipment. Bond issue costs of $354,000 were paid from the bond proceeds and are being amortized over the life of the bonds. Amortization of bond financing costs amounted to $7,065 and $7,092 for the six months ended September 30, 2009 and 2008, respectively. |

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| NOTE 6 - | STOCKHOLDERS’ EQUITY                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|----------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|     | The adoption of EITF 07-5 resulted in a cumulative effect adjustment of $11,059,593 to the opening balance in the accumulated deficit account. This amount represents the cumulative effect on equity of the reclassification of the Series B, Series C, and Series D preferred shares and the outstanding warrants as derivative liabilities, pursuantto the requirements of EITF 07-5.                                                                                                                                                                                                                                                                                                                                                                                    |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|     | Please refer to Note 2 for a discussion of the change in accounting principle and derivative liabilities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|     | Options                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|     | At September 30, 2009, the Registrant had 2,512,000 options outstanding with exercise prices ranging from $0.06 to $3.00 per share; each option representing the right to purchase one share of Common Stock.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| NOTE 7 - | PER SHARE INFORMATION                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|     | Basic earnings per share of common stock (“Basic EPS”) is computed by dividing the net (loss) income by the weighted-average number of shares of common stock outstanding. Diluted earnings per share of common stock (“Diluted EPS”) is computed by dividing the net (loss) income by the weighted-average number of sharesof common stock, and dilutive common stock equivalents and convertible securities then outstanding. SFAS No. 128 requires the presentation of both Basic and Diluted EPS, if such Diluted EPS is not anti-dilutive, on the face of Company’s Condensed Statements of Operations. Diluted earnings per share is not presented because the effect of the Company’s common stock equivalents is anti-dilutive. |

|                                                  |   | For the ThreeMonths EndedSeptember 30, 2009 |       |   | For the Six MonthsEnded September30, 2008 |   |
|-------------------------------------------------------|--------|---------------------------------------------|------------|--------|-------------------------------------------|--------|
| Numerator                                             |   |                                        |       |   |                                      |   |
| Net Income (loss) attributable to common shareholders |   | $                                           | (3,672,313 | )      |                                      | $      | (2,520,819 | ) |
|                                                  |   |                                        |       |   |                                      |   |   |   |
| Denominator                                           |   |                                        |       |   |                                      |   |   |   |
| Weighted-average shares of common stock outstanding   |   |                                        | 74,075,307 |   |                                      |   | 70,232,854 |   |
|                                                  |   |                                        |       |   |                                      |   |   |   |
| Net (loss) income per share                           |   |                                        |       |   |                                      |   |   |   |
| Basic                                                 |   | $                                           | (0.05      | )      |                                      | $      | (0.04 | ) |

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Strategy

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|   | ● | develop new products;                       |
|--------|---------|---------------------------------------------|
|   | ● | obtain regulatory approval of our products; |

|   | ● | manage our growth, control expenditures and align costs with revenues; |
|--------|---------|------------------------------------------------------------------------|
|   | ● | attract, retain and motivate qualified personnel; and                  |

|   | ● | respond to competitive developments. |
|--------|---------|--------------------------------------|

----

----

|   | ● | ineffectiveness of our product candidate or perceptions by physicians that the product candidate is not safe or effective for a particular indication; |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | ● | inability to manufacture sufficient quantities of the product candidate for use in clinical trials;                                                    |

|   | ● | delay or failure in obtaining approval of our clinical trial protocols from the FDA or institutional review boards; |
|--------|---------|---------------------------------------------------------------------------------------------------------------------|
|   | ● | slower than expected rate of patient recruitment and enrollment;                                                    |

|   | ● | inability to adequately follow and monitor patients after treatment; |
|--------|---------|----------------------------------------------------------------------|
|   | ● | difficulty in managing multiple clinical sites;                      |

|   | ● | unforeseen safety issues;            |
|--------|---------|--------------------------------------|
|   | ● | government or regulatory delays; and |

|   | ● | clinical trial costs that are greater than we currently anticipate. |
|--------|---------|---------------------------------------------------------------------|

----

|   | ● | collaborations and licensing arrangements may be terminated, in which case we will experience increased operating expenses and capital requirements if we elect to pursue further development of the related product candidate; |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | ● | collaborators and licensees may delay clinical trials and prolong clinical development, under-fund a clinical trial program, stop a clinical trial or abandon a product candidate;                                              |

|   | ● | expected revenue might not be generated because milestones may not be achieved and product candidates may not be developed;                   |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------|
|   | ● | collaborators and licensees could independently develop, or develop with third parties, products that could compete with our future products; |

|   | ● | the terms of our contracts with current or future collaborators and licensees may not be favorable to us in the future;                                                                                                                                      |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | ● | a collaborator or licensee with marketing and distribution rights to one or more of our products may not commit enough resources to the marketing and distribution of our products, limiting our potential revenues from the commercialization of a product; |

|   | ● | disputes may arise delaying or terminating the research, development or commercialization of our product candidates, or result in significant and costly litigation or arbitration;                                                                                                                                                                                                                                                                                                              |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | ● | one or more third-party developers could obtain approval for a similar product prior to the collaborator or licensee resulting in unforeseen price competition in connection with the development product; and                                                                                                                                                                                                                                                                                   |
|   | ● | Epic may decide that the further or continuing development of one or more of the eight designated drug products being developed by Epic at our Facility is no longer commercially feasible, delaying a potential source of revenue to us pursuant to the Epic Strategic Alliance Agreement; in addition, there can be no assurance that any drug productdesignated by the parties as a replacement would be as strong a candidate for commercial viability as the drug product that it replaced. |

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|   | ● | obtaining new patents on drugs whose original patent protection is about to expire; |
|--------|---------|-------------------------------------------------------------------------------------|
|   | ● | filing patent applications that are more complex and costly to challenge;           |

|   | ● | filing suits for patent infringement that automatically delay approval of the FDA;                                                             |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------|
|   | ● | filing citizens’ petitions with the FDA contesting approval of the generic versions of products due to alleged health and safety issues; |

|   | ● | developing controlled-release or other “next-generation” products, which often reduce demand for the generic version of the existing product for which we may be seeking approval; |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | ● | changing product claims and product labeling;                                                                                                                                                  |

|   | ● | developing and marketing as over-the-counter products those branded products which are about to face generic competition; and       |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------|
|   | ● | making arrangements with managed care companies and insurers to reduce the economic incentives to purchase generic pharmaceuticals. |

|   | ● | acceptable evidence of safety and efficacy;      |
|--------|---------|--------------------------------------------------|
|   | ● | relative convenience and ease of administration; |

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|   | ● | the prevalence and severity of any adverse side effects; |
|--------|---------|----------------------------------------------------------|
|   | ● | availability of alternative treatments;                  |

|   | ● | pricing and cost effectiveness;                      |
|--------|---------|------------------------------------------------------|
|   | ● | effectiveness of sales and marketing strategies; and |

|   | ● | ability to obtain sufficient third-party coverage or reimbursement. |
|--------|---------|---------------------------------------------------------------------|

|   | ● | greater possibility for disruption due to transportation or communication problems; |
|--------|---------|-------------------------------------------------------------------------------------|
|   | ● | the relative instability of some foreign governments and economies;                 |

|   | ● | interim price volatility based on labor unrest, materials or equipment shortages, export duties, restrictions on the transfer of funds, or fluctuations in currency exchange rates; and |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | ● | uncertainty regarding recourse under dependable legal system for the enforcement of contracts and other rights.                                                                         |

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|   | ● | Results of our clinical trials;               |
|--------|---------|-----------------------------------------------|
|   | ● | Approval or disapproval of our ANDAs or NDAs; |

|   | ● | Announcements of innovations, new products or new patents by us or by our competitors; |
|--------|---------|----------------------------------------------------------------------------------------|
|   | ● | Governmental regulation;                                                               |

|   | ● | Patent or proprietary rights developments; |
|--------|---------|--------------------------------------------|
|   | ● | Proxy contests or litigation;              |

|   | ● | News regarding the efficacy of, safety of or demand for drugs or drug technologies;   |
|--------|---------|---------------------------------------------------------------------------------------|
|   | ● | Economic and market conditions, generally and related to the pharmaceutical industry; |

|   | ● | Healthcare legislation;                                  |
|--------|---------|----------------------------------------------------------|
|   | ● | Changes in third-party reimbursement policies for drugs; |

|   | ● | Fluctuations in our operating results;                                                                            |
|--------|---------|-------------------------------------------------------------------------------------------------------------------|
|   | ● | Commercial success of the eight drug products of Epic identified under the Epic Strategic Alliance Agreement; and |

|   | ● | Our ability to consummate the second and third closings of the transactions contemplated by the Epic Strategic Alliance Agreement |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------|

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|   | ● | Control of the market for the security by one or a few broker-dealers;     |
|--------|---------|----------------------------------------------------------------------------|
|   | ● | “Boiler room” practices involving high-pressure sales tactics; |

|   | ● | Manipulation of prices through prearranged matching of purchases and sales; |
|--------|---------|-----------------------------------------------------------------------------|
|   | ● | The release of misleading information;                                      |

|   | ● | Excessive and undisclosed bid-ask differentials and markups by selling broker-dealers; and                                                                             |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | ● | Dumping of securities by broker-dealers after prices have been manipulated to a desired level, which hurts the price of the stock and causes investors to suffer loss. |

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|          |                                                                                                |
|---------------|-----------------------------------------------------------------------------------------------------|
| ExhibitNumber | Description                                                                                         |
|          |                                                                                                |
| 10.1          | Employment Agreement with Chris Dick, President & COO dated November 13, 2009                   |
|          |                                                                                                |
| 10.2          | Employment Agreement with Carter J. Ward, Chief Financial Officer, dated November 13, 2009          |
|          |                                                                                                |
| 31.1          | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|          |                                                                                                |
| 31.2          | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|          |                                                                                                |
| 32.1          | Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|          |                                                                                                |
| 32.2          | Certification by Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |

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|   |              |   |                          |   |
|--------|-------------------|--------|-------------------------------|--------|
|   |              |   | ELITE PHARMACEUTICALS, INC.   |   |
|   |              |   |                          |   |
| Date:  | November 13, 2009 |   | /s/ Jerry Treppel             |   |
|   |              |   | Jerry Treppel                 |   |
|   |              |   | Chief Executive Officer       |   |
|   |              |   | (Principal Executive Officer) |

| Date:  | November 13, 2009 |   | /s/ Carter J. Ward                           |   |
|--------|-------------------|--------|----------------------------------------------|--------|
|   |              |   | Carter J. Ward                               |   |
|   |              |   | Chief Financial Officer                      |   |
|   |              |   | (Principal Financial and Accounting Officer) |