Elite Pharmaceuticals Q2 2024 Earnings Call Transcript

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Provided by Quartr
November 15, 2023

There are 3 speakers on the call.

Operator

Morning, ladies and gentlemen, and welcome to the Elite Pharmaceuticals Conference Call. At this time, all lines have been placed on a listen only mode. Before management begins speaking, the conference has the following statement. Elite would like to remind their listeners that remarks made during this call may contain forward looking statements that involve risks and uncertainties are subject to change at any time, including, but not limited to, statements about Elite's expectations regarding forward operating results. Forward looking statements are made pursuant to Safe Harbor provisions of the federal securities laws and represent management's current expectations.

Operator

Actual results may differ materially. Elite disclaims any obligation to update or revise its forward looking statements except as required by law. More complete information regarding forward looking statements, risks and uncertainties can be found in reports Elite files with the SEC, which are available on Elite's website at elitepharma.com under the Investor Relations section. Elite encourages you to review these documents carefully. With that covered, it is now my pleasure to turn the floor over to your host, Mr.

Operator

Nasrat Hakim, President and Chief Executive Officer of Elite Pharmaceuticals. Sir, the floor is yours.

Speaker 1

Thank you, Matthew, and good morning, ladies and gentlemen. Thank you for joining us today. My name is Masrat Hakim. I am Elite's Chairman and CEO. This is our earnings call.

Speaker 1

Our CFO, Carter Diboomerang Ward We'll give you a summary of the company's financials, after which I'll give you an update and answer some of the questions

Speaker 2

Thank you, Scott. Good morning, everybody. Let me just start by, I guess, reintroducing myself. My name is Herbert. This is my second tour of duty here at Elite.

Speaker 2

Some of you longer term investors may remember me, But I was the CFO here from 2,009 to 2021 for 12 years And then I rejoined Elite about 2 months ago and Very, very happy to be back home with me, hentai here at Elite and hoping that I can do my best to contribute to future So yesterday, we filed our 10 Q. It's the Q2 of our 2020 fiscal year. Our Fiscal years as always they end March 31. So March 31, 2024 is our 2020 For fiscal year September 30, this quarter is the Q2 of that year. As I've done Before, I'm going to provide some context, some color to the financial statements.

Speaker 2

And as I go through My comments here, I'll be I received a bunch of questions overnight and I'll do my best to answer those as well. Let's start with the P and L. And total revenues for the quarter were $14,200,000 and you can compare that to $8,600,000 for September 2022 quarter 2022 quarter and also $9,000,000 for the June 2023 quarter. So that's a year on year increase of 65% and a 58% increase since our last quarter, The June 23 quarter. Operating income was $1,900,000 profit.

Speaker 2

Compare that to a profit of $1,100,000 last year $1,600,000 for the last quarter. That's a 73% year on year increase and a 19% increase since the last quarter. It's pretty clear that the increases are the result of one very big event that happened Actually in April of this year, the beginning of our fiscal year and that's the launch of the Elite label. Nasrat is going to talk a lot about the products, the pipeline and all of those things. I'm not going to go into that type of detail here.

Speaker 2

But from the finance side, It's pretty clear that this launch, the Elite label being in the market has made a significant positive contribution to our financial condition. There's no doubt about that. Going back, pull up the history books and I looked at the last 5 years of revenue, 2019, fiscal 2019 for the entire year, we didn't even have $8,000,000 in revenue, dollars 7,600,000 for that year. And then it went $18,000,000 $25,000,000 $32,000,000 and last year March 2023, we were at $34,000,000 And that's for the entire year for the full 12 months. We are already halfway only halfway through the year 6 months we're already at I see.

Speaker 2

So going down the P and L there's a large number and I did get a question on that. So might as well answer That question and I got a question says, what is the income tax benefit income and why Was it recorded in this quarter? So if you look down the P and L, the $13,700,000 Income tax benefit. So that means there's an income item. It's a non cash revenue item and this relates to Neve operating losses, NOLs that we've been accumulating for the past 20 or so years, their tax reductions on Future tax returns when we file it, we can deduct prior year losses and offset Against any income taxes that we would owe currently, this is what's known as the deferred tax Asset on the balance sheet, it's always been there except up until now we had to make a reserve against it.

Speaker 2

So we had to bring that asset down to 0. The definition on asset is our right to a future benefit, But accounting rules required that since we were in a loss position, since the metrics were not showing enough profits to be able to use this benefit going forward, We had to make a reserve against that bringing it down to 0. Things are different now however. We're now profitable. We have metrics that are showing profits going forward.

Speaker 2

And now those same accounting rules Acquire that we removed that reserve. We released the reserve is what it's called and we recorded it, meaning we're going to get a future benefit from these prior year losses within the terms of the internal revenue code. So now this is a technical One time entry and results in a large non cash below the line income item on our P and L. So that's exactly what it is. It's not going to repeat.

Speaker 2

It's a one time thing, technical accounting stuff. But the technical way here really is that our metrics have changed. They changed from in the past ongoing losses to now profits. And now Tax adoption does have value to Elite going forward, so it's showing up as a balance sheet item. I think I'm going to play the P and L statement and it was increased revenues were fantastic.

Speaker 2

However, I see gross profit margins Experience a small dip compared to previous quarters and then mentioning the fiscal 2023, we had a 49% Gross profit margin and this quarter we had for the 6 months we had 48%. So Really didn't have much of a drop in profit margin But the only thing is we have much higher volumes. We're selling our label now to a lot of whole Sailors who are giving these volumes to us significant margins and there's discounts and chargebacks and things like that, Which have a negative effect on our margins, but really we're holding on to the margin pretty well and increasing our volumes significantly. So it's a good thing. So now moving away from the The P and L, we go to cash flow.

Speaker 2

We had an operating burn for the 6 months End of September 30 this year of $2,900,000 And I did get a question on that and they were talking about So we have strong revenues. We have profits. Why the cash burn? And some of these profits are growing company And cash burn is quite normal when you're in rapid growth phases. If you look at the cash flow statement, the answer jumps right off the page of you.

Speaker 2

When we look at our increase in accounts receivable and our increase in incentive origination, together that was around $13,100,000 increases and this is causing a cash burn. This is a classic of growth requiring increased working capital launches require upfront working capital. We're no exception. We have to buy inventory in advance, A lot of time months in advance to be able to manufacture on time. We're giving terms, payment terms.

Speaker 2

So we're collecting over 60 days or so, so it takes a while for the money to start coming back in, very standard stuff here. We've primed our operations with increased inventory, receivables went up, but the cash flow will catch up as those assets turnover And that's what's happening. So all of this is nothing to it's very much expected. Then let's move on to the balance sheet. I got a few questions there.

Speaker 2

And first, I just To say on the balance sheet, our working capital has increased by almost $2,000,000 in the past 6 months. So working capital is current assets minus current liabilities. It's a major metric as far as liquidity is concerned. That's a more than 14% increase just in these 6 months. The profits drive working capital.

Speaker 2

Our financials clearly demonstrate this. Got a couple of questions. It says, although sales were very strong, accounts receivable quite high at almost 70%. Please comment and again this is kind of goes hand in hand with what I just said about the cash burn, the cash flow statement. Generally, we're seeing this on wholesalers.

Speaker 2

Generally, terms are roughly 60 days, 45 to 60 days or so. So Whereas in the past, we were selling we were licensing out and the terms were 30 days. So that's going to lead to an increase in your receivables. Again, the number to look at is really the turn of the receivables And that's happening. Got another question here on the balance sheet.

Speaker 2

Is there a plan to pay down debt and what is the plan or expectation for paying down debt? And Well, we don't really have that as much debt as it may seem. If you go into the balance sheet and you look, first of all, we have accounts payable, Which is just trade payables and we turn that over every 30 to 45 days. So that's normal operations. Then you look at the accrued expenses, which are $11,100,000 and I think it's noted before in the financial statements.

Speaker 2

Half of that $6,400,000 non cash and really the amount that's showing on the balance sheet is based on the stock price. So this stock price has gone up a lot For this quarter and thankfully it's still going up. So that makes that liability Stock salaries and stock for the directors, for the director fees, which have ended by the way, First of all, we still have that to be accrued until we issue those shares, which we expect to do this year. So there's a lot of non cash there. There's a profit split, which is due to Mika, which I got another question John, that I'll talk to you about in a second.

Speaker 2

That's $3,400,000 and there's rules. Then the other part of our debt is a loan From Nasrat and David Kasky, one of our directors of $4,000,000 which helped us provide the working capital for the launch. That's going to be paid within terms. And then the other 2 items on debt is we have a bank a term loan with a bank East West Bank and we're going to pay that within terms. I think that expires in 2027.

Speaker 2

And then we have our bonds way back from 2,005 that we're paying within terms and I think the last payment is 2,030. So When you look at it, we really don't have much debt at all. We are very strong. Our balance sheet It is very strong. We are very unusual in this segment just because how low the debt is.

Speaker 2

So then another question, it's kind of related to the balance sheet. I might as well get onto that as talking about what makes up $3,400,000 accrued expense to Mika, that has to do with the agreement originally with SunGen Back in, I believe, 2017, 2018, it was a codevelopment essentially of our mixed amphetamine products. Half of the profits earned are shared With at that time SunGen in the last few years, Mika had bought out SunGen Life Sciences. This is we would either have to pay it to Sundance or we would have to pay it through Mika. Mika gives us a little better payment terms.

Speaker 2

So We haven't paid as of the balance sheet date, we haven't paid yet that amount, but it's accrued. It would have to be paid anyway and the plans are to get current with Mika and on these profit splits By the end of this fiscal year. Let me see. I think I got into all the The questions that I was asked, just to sum things up. Elite is a much different company than it was when I left And it's much different when even from a year ago.

Speaker 2

And this is thanks to the successful launch of Elite Elite label last April. Our revenues are up 65%. Our operating profits are up 73%. Our 6 months revenue are more than triple where we were 5 years ago for a full year. Our working capital is increasing.

Speaker 2

Our debt is low. Our balance sheet is strong and strengthening. Much has changed for the better for the much better over the past year. So now our

Speaker 1

Carter covered the financials very thoroughly. So I'll only say a couple of high level words about financials before I talk about the sales and distribution, the commercial products, facility, R and D and then we'll go to Q and A. Our revenues are growing. Our investment in R and D The NASDAQ merger or acquisition. Last year was our best year in revenues ever.

Speaker 1

We generated $34,000,000 That was when multiple companies were selling Elite's product including Linnet. The sales and distribution agreement between Elite and Lannett was terminated 2 quarters ago. In the last two quarters, we've generated $23,000,000 in revenues. This is at the time where most experts thought we were going to have a major dip by switching between companies because The DEA did not give us enough for them to launch both. We had to finish one to start the other and still we came up with $23,000,000 in revenues.

Speaker 1

We are on target to have a record breaking year in revenues, definitely north of $40,000,000 And today, We command a larger market share of the amphetamine IR and AR market Then, Lynette, that is a serious noteworthy achievement. With the implementation of Prosper agreement as of January 1, 2024, And the R and D needle mover products will be approved in 2024. It is my expectation That this trend will continue in calendar year 2024 2025 and beyond. Our business model is looking great for 2024 2025. If you look at just 2023, January through December, that alone will be way north of 45,000,000 The next 2 years are going to be a lot of that.

Speaker 1

The products that are currently bringing in revenues are the nickel amphetamine IR and ER. These were Elite's largest products last year. I expect them to continue to be our largest products this year Under a lease label. We have contracts in place and we expect to maintain our double digit market share. Managing the DA quota has been a challenge.

Speaker 1

However, Elite has been able to manage through this challenge very well to date. Amphetamine IR remains on the FDA shortage list And both products are in demand. The rest of our commercial portfolio contains the bariatric products, centipramine and 10 diametrazine weight loss products. Isradipine a hypertension product? Tremipramine, antidepressant and nils pain product, loxetine for schizophrenia and agitation Adentraline as a muscle relaxant.

Speaker 1

All are being sold on that Elite label as of April 1, 2023. And frankly, Gurkul is doing a better job at selling our product than any of our partners has ever done. We have also Two products that are not being sold at this time, an antibiotic, vacycline And a pain management, a part of codeine. We do not have any plans to sell these products in the near future. 1, Because we have a partnership with Prexigen and doxycycline and we haven't resolved the issues with doxycycline.

Speaker 1

And 2, 85 with chlorine is an opioid and there are a lot of problems associated with that at this time. With opioids not the product. As far as the manufacturing, packaging, holding and testing facility is concerned, An increase in sales and distribution requires more testing, more employees and more storage space and more equipment. So we have upgraded and purchased several pieces of equipment to keep up with the sales to have backup units. As I have discussed with you before, the capacity and size of our facility have been on my mind for a while now.

Speaker 1

Even though we can supply our customers' demands today by running the facility Every day on a shift and a half of the week, we don't have the space To store each product is a controlled substance. So let me explain that. When you buy the API and IPI, The active pharmaceutical ingredients and the inactive pharmaceutical ingredients, they come in pockets and you mix them and blend them and you make your tablets and capsules. And then you put them in bottles and you package them. The bottling and package takes massive amount of space Compared to the raw materials and the tablets and capsules that are now bottled.

Speaker 1

Now because these are controlled substances, you have to put them in vaults. So the more you make, the more vote space you need. And that is becoming an issue. Before we were making them and shipping them to Lannett and others. Now it's our distribution, it's our facility and we need to resolve that problem very soon.

Speaker 1

So we have been exploring options For manufacturing and storage capacity as I've updated you on before, one option is to rent or buy a warehouse that we can retrofit into a manufacturing facility. There'll be duplicate of the current facility where you have equipment and personnel and packaging lines and lending and laboratory and what have you. And that has tremendous advantage in that if there's a catastrophe on one side, you have business continuity where you have another side to continue your But it has the disadvantage of being very expensive to duplicate the equipment and it also is very expensive to run clinical trials transfer the extended release products. So another option would be to do something similar, Get another facility retrofitted, but only transfer the IR products instant release, because the instant release products Do not require clinical trials. They just require that you manufacture the lot, place it on stability, show that it's equivalent to where you manufacture somewhere else, file a CDE theory and transfer it.

Speaker 1

The process takes few months and it doesn't cost much. It's all internal. But it still costs a lot of money to buy a plant, duplicate equipment and all of that. So for option 1 and option 2, the cost Estimate is between $25,000,000 to $35,000,000 Option 3 Was what we decided to do, so let me walk you through that since it is going to be a part of the company. Our current facility is about the manufacturing facility is 36,000 square feet.

Speaker 1

If you are facing the facility on one side, you enter the APIs and IPIG, you enter all the components from there, the trucks come in and that's where you put in. The middle of the facility is where you do all of your manufacturing And the right side of the facility is where you package and get the product out. So what I thought will be inexpensive for us to do and help release the company is if we take the final part out where all the finished product, Enough space for expanding manufacturing for the future. And now we have a new facility where we have 2 packaging lines instead So we have unlimited capacity. We have a much larger vault and we have storage for the non control substances.

Speaker 1

So that was the option we decided to go with. And we were lucky enough to find a facility within a mile From North Wales, which means our staff can actually they don't have to quit and will hire somebody else to work in Philadelphia and Long Island. They are next door, so we can retain the current staff. They just move next door and continue working for Elite. Management gets to keep an eye On the staff and the cost is only about 10th of starting a manufacturing facility about $2,500,000 I am happy to report that I got the approval of the Board of Directors and signed the letter of intent on Monday.

Speaker 1

We are in the middle of negotiating the details. And I expect that by mid next year, We will move into the new facility. So We have our products. We have our sales and marketing that's selling the products and generating today's revenues. We have set up the facility To be good to go for the next 5 years at least.

Speaker 1

Now we need a pipeline in order to keep the businesses growing And in case anything happens or somebody enters the market and our share gets reduced, that does not affect the company. In fact, We want to increase our share in sales and marketing by introducing other products and that's where R and D comes in. We will definitely continue to invest In product development, our goal is to commercialize a new competitive product And diversify our portfolio. Commercial product line is nothing but an R and D Line that made it to the market. Okay.

Speaker 1

So I'm always thinking R and D is an extension of the market because that's all it is. They are The commercial part today, they are the ones who are bringing the revenues and the R and D, it was the one that's going to bring the revenues in the future. So investing all the profits we have into R and D is the right So let me walk you through what happens when we file an ANDA, So I can update you on the ANDAs that are in the queue. After everything is done and we compile an ANDA And you do the clinical trials and the research and get to the point where it's filed with FDA, you have to send it through FDA's gateway. It's an electronic means for them to receive it from you.

Speaker 1

Once we do that, the FDA will look at all the sequences and say, okay, you got all the So we acknowledge that we received it. Then they give themselves 45 days In order to look at the components of the ANDA and make sure that you covered everything, that it's linked properly, that All the parts of it that are critical are there. Ananda has 5 parts, module 1 through 5. Module 2 is for the clinical trials. Module 5 is also for the clinical trials.

Speaker 1

Module 3 is for the Chemistry, manufacturing and controls. That's why you have the drug substance and drug product. So they look at all these components and they say fine now it's accepted for review. That's when we will make an announcement that this ANDA has been accepted by FDA and this will be the GDUFA date Well, at least the filing date, okay? So last time we waited and did not announce the opioid till About 30 days, 45 days after we filed it because we did not receive the approval from FDA till then.

Speaker 1

The same thing is going to happen with the 2nd needle mover. As soon as we hear from the FDA in December that it has been Accepted for review, we will issue an announcement, right? So what the FDA does when they receive it and accept it for review, then they start the examination and evaluation process at the end, prosecution Not legible. You do that throughout the entire 10 months. So when we file, we don't go into vacuum for 10 months and then tell you guys, hey, We received the response from IP or not.

Speaker 1

We are actually communicating with them on regular basis, right? So today, We have 3 ANDAs that have been accepted for review and under prosecution by the FDA. And the first one that I will let you know next month that it has been accepted for review, so that will make 4 this year. 1 of the ANDAs is dopamine agonist. And that ANDA that we submitted, the FDA has been corresponding back and forth with us.

Speaker 1

During the evaluation of the ANDA, they found that the microbiological lab that did micro testing on the ANDA was not adequate. So They sent us a note. Now while the analyst is being prosecuted, you cannot go ahead and change things when it gets hit. You have to wait till the end of the 10 month. So they had to wait till October, which was our PDUFA date, tell us go ahead and change the lab, we're in process doing that and we will refile probably within 2 weeks.

Speaker 1

The second ANDA, the antimetabolite ANDA, the FDA is very interested in that because that product is on product shortage. So the FDA is working very closely with us to ensure that it does get approved by the GDUFA date, which is February or before. The 3rd ANDA is the one we received the acceptance for is the opioid. We haven't gotten much response from them yet. It's only within a couple of months.

Speaker 1

I expect next month or the month after they start asking questions. And while we're at it, the 4th ANDA, which is the largest of them, I am expecting that the GDUFA date will be September of 2024 and we will Focus on that and the opioid end the most because they are the ones that are going to be game changers. These two products Other than what we have in the market, which is 3 and 1, the total of 4 that are pending for FDA, we have one more product That we did a pilot study for that's another needle mover and the pilot study gave us guidance on what to do. And I expect that we're going to run the PE study in 2024 and hopefully find that product then. Next after that is the preliminary work and I've made a decision for the company that going forward, We are no longer going to work on small products.

Speaker 1

And what I mean by that is like the Product I was alluding to earlier, the dopamine agonist is a very small product. It takes a lot of effort To work on small products, it takes a lot more effort to work on larger products, but larger products really pay. In way of an example, when I was at Actavis, we had about 2 50 products at the Elizabeth facility. Out of the 250, 12 of them will bring in 80% of the money and the rest were fillers. Well, we're a small company.

Speaker 1

So going forward, every single That we have selected that fit within our technology Either tablets, capsules, extended release, instant release and They need to be either going to be off patent soon or have a very good market. And we have 3 of these products identified That we will be working on for the next generation. And I'll keep you updated on that. These three products that are we're starting on other than the 5, I bet, if you own, are all products that are still on patent for a couple of more years And each and every one of them is a $1,000,000,000 market or above. To wrap it up, This is extremely exciting.

Speaker 1

The company is turning around finally. We are becoming a Fully functional pharmaceutical company with having our own sales and distribution. We are executing on our growth plans, filing new ANDAs, obtaining product approvals and expanding our sales and distribution organization and increasing our revenues. With that, I'll go to Q and A. As always, I know that you submitted questions to Diane.

Speaker 1

Some of them she called out, others she grouped For me to look at and answer, and I did incorporate quite a bit of the answers in my presentation, but I'll address some of questions that you sent me, read them out loud and answer when needed. All right. So the first question, Can you provide PDUFA date insights for opioid analgesic and other filings? It's PDUFA, not PDUFA. And the general rule is that you'll get a response in 10 months.

Speaker 1

The response could be, Hey, you need more work, which is called complete response letter or hey, you're approved. But the FDA is obligated to give you a response in 10 months. What that response is going to be? We don't know. We'll wait till the FDA says that.

Speaker 1

But the general rule for everybody in the industry, 10 months and you will get an answer. Now after the 10 months, if the answer is that I still need you to do something, doesn't mean it's rejected. All it means is go do that and I'll approve you later. But now you're not And if PDUFA see the FDA doesn't have to take it up and give us priority over anybody else. Any update on the dopamine agonist I just did?

Speaker 1

Any update on the central nervous System stimulus that recently had positive bioequivalency study. Yes. As I stated, We will issue a PR once we have an acceptance for review by FDA. We haven't seen data CMS product Filed yet. This one seems to be taking longer to file as per positive BE results that than usual.

Speaker 1

Are we still tracking to file soon? And if so, when? Let me take a minute to tell you that The assumption is not true. Pharma companies manufactured an exhibit batch, just a single batch out of the set Dosages that you have. So our product has 5 different strengths.

Speaker 1

They'll pick the one that's supposed to go into the clinical trial and make one batch and run the clinical trial. If they pass the clinical trial, then they go ahead and make the rest of the lots, because it costs a lot of money. So if you have 5 dosages And you run a clinical trial with 1 and you pass, then you have to go back and make 3 batches of each strength, that's 15 blocks. Plus,

Operator

if you

Speaker 1

want a second vendor, you have to do 5 more. So 20 lots have to be made after you pass the clinical trial and put on stability. Mandatory 6 months stability for accelerated and control room temperature. So manufacturing the lots Take a couple of months. The stability is 6 months, that's 8.

Speaker 1

Unit tested, that's 9. And regular Okay, August 28, 2023 that we passed the DE. 10 months from then will be June 2024. And this is the filing is happening now. So I think that we're moving at lightning speed.

Speaker 1

And that's because we took And we made the loss at risk, because this was an important product and our data was solid when we were going to pass. But under enormous circumstances in the future, Look at 10 months after the clinical trial passing for a filing. That would be reasonable anywhere in the industry. Kindly provide insight into pipeline progress. What are our filings expectations for 2024?

Speaker 1

I expect that we file at least 2 more in 2024 and hopefully get approval for 4. That includes the 2 knee removers. On that Elite plan to diversify away from CNS and opioids. I'm not sure why would we do that. We will add to it and I just went through the list.

Speaker 1

We have high blood pressure medications. We have Bariatrics, we have Muscle Relaxants. We have a lot of other products. And as long as the product is popular, serves a purpose And it creates revenues and profits. We'll stick with it.

Speaker 1

When do you anticipate filing the 3rd needle mover product assuming trials timeline goes according to plan. Next year, 2024 will be the time. Some questions about the PRASCO details you can share on PRASCO agreement. Well, Rasco is the authorized generic and They'll be buying the product now from Elite instead of the brand. It hasn't been easy because we had to obtain quota just And they expect to launch in January of 2024 and we're going to be there right with them.

Speaker 1

They will receive what we promised them in December. It's a win win for both companies. It's a very exciting opportunity And that's going to add quite a bit to our revenues and profits. Does Praesto get To keep their prior Adderall quota for us to manufacture. No, that's not the way it will start.

Speaker 1

As a matter of fact, According to Brasco, they never had to deal or think about CODA. It was the brand company. Brand companies get all the CODA they want. So they were selling the product to Prasco, putting it on their label and Prasco was selling it, but the quota does not come with it. Has Elite been able to increase their quota for API for Adderall generic?

Speaker 1

The DEA has been timed. They are giving us what we need to stay in business. Corporate operation, when will fiscal calendar year align fiscal and calendar year align? This is a Carter project. I definitely want us to go to a calendar year and he's resisting.

Speaker 1

So We'll figure out. He seems to think we'll go through NASDAQ faster, but I'm working on him. It's the first thing I asked Tata to do when he joined the company and He's pretty busy working on a lot of things that he hasn't done before, the chargebacks and dead net. There are a lot of things for him So I'm not pushing you on this, but I really would like to do that and we'll see what happens over time. Does Mr.

Speaker 1

Nosot have an idea of what price point would start looking at to do a reverse split? We are not going to have a reverse split unless we're going to NASDAQ. Otherwise, it will be meaningless to stay on the bulletin board and do any kind of aggressive split. If we stay on the bulletin board, Which we're not. Then we'll grow organically.

Speaker 1

But if we're going to go to NASDAQ, we have to comply with certain rules. And the only thing really that we don't comply with to the best of my knowledge now is the share price. It needs to be above $5 I think to enter. My primary focus right now is to continue to strengthen the fundamentals and everything else will take care of itself. A few questions on manufacturing and then one more on financials.

Speaker 1

Few questions on manufacturing. 1st, Please provide an update on additional manufacturing and or storage space utilization and anticipated needs. I already did that. So as I said, we're going to start a new facility and do the packaging there and a huge vault in it and the warehousing. With expanding in house sales and marketing, can investors get an update on manufacturing capacity?

Speaker 1

Yes, that's exactly what I gave you. Does Elite have a timeline for when will it max out on our current manufacturing facility? Really, the manufacturing It can manufacture a lot more than it is and we can package more. It's a matter of capacity for storage and that's why we came up with a solution of starting a new warehouse That we will house the finished product at. Will we be able to More manufacturing space before that happen, yes.

Speaker 1

How long will it take to expand our manufacturing capability? I would imagine when we finish negotiating the contract and we need them to build a few things for us And we will be moving in between April 1, we'll take charge and all in probably by June. Can you provide a Q4 and 2024 sales and profitability outlook? Okay. We usually don't do that and I thought I'd try to wait from Duda and I agree with this.

Speaker 1

But I'm going to be brief today and tell you this. Let's look at 2023. In the last three quarters from January till September, we've made more than 30,000,000 By the end of this quarter, by December, we would be north of 40. Next year, it's going to be a bigger year because we will have Trasco in the mix. And later on in the year, we will have some of the needle movers as well.

Speaker 1

So next year, calendar year 2024 We'll be even bigger than that. And for 2025, will it be even bigger than that too, because Most of the needle movers will get approval for will be toward the end of the year. So what I'm looking at is an extremely positive outlook for Elite. The increase we have seen from $7,500,000 to $23,000,000 is only the beginning. I think the next 3, 4 years Are going to be fantastic for us and for the spot holders.

Speaker 1

With that, thank you all for coming. I really appreciate it. And thank you, Matthew, and we will talk to you soon.

Operator

Thank you, everyone. This concludes today's event. You may disconnect at this time and have a wonderful day. Thank you for your participation.

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Earnings Conference Call
Elite Pharmaceuticals Q2 2024
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