Elite Pharmaceuticals Q3 2025 Earnings Report

Elite Pharmaceuticals EPS Results

• Actual EPS: -$0.01
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Elite Pharmaceuticals Revenue Results

• Actual Revenue: N/A
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Elite Pharmaceuticals Announcement Details

• Quarter: Q3 2025
• Date: 2/13/2025
• Time: After Market Closes
• Conference Call Date: Friday, February 14, 2025
• Conference Call Time: 11:30AM ET

Elite Pharmaceuticals (OTCMKTS:ELTP), a specialty pharmaceutical company, engages in the development, manufacture, and sale of oral, controlled-release products, and generic pharmaceuticals. The company operates in two segments, Abbreviated New Drug Applications for Generic Pharmaceuticals and New Drug Applications for Branded Pharmaceuticals. It owns, licenses, manufactures, and sells various generic and oral dose pharmaceuticals products, such as Phentermine HCl 37.5mg tablets, and 15mg and 30mg capsules for the treatment of bariatrics under Adipex-P brand; Phendimetrazine Tartrate 35mg tablets for bariatrics under the Bontril brand; Naltrexone HCl 50mg tablets for the treatment of pains under the Revia brand; and Isradipine 2.5mg and 5mg capsules for cardiovascular diseases. The company also provides Trimipramine Maleate Immediate Release antidepressant capsules under the Surmontil brand; Dextroamphetamine Saccharate, Amphetamine Aspartate, Dextroamphetamine Sulfate, and Amphetamine Sulfate Immediate Release tablets under the Adderall brand, as well as Dextroamphetamine Saccharate, Amphetamine Aspartate, Dextroamphetamine Sulfate, Amphetamine Sulfate Extended Release capsules under the Adderall XR brand for central nervous system diseases; Dantrolene Sodium capsules for muscle relaxant under the Dantrium brand; SequestOX, an immediate release Oxycodone with Naltrexone; Loxapine Succinate capsules for treating antipsychotic under the Loxapine brand; Acetaminophen and Codeine Phosphate for the management of mild to moderate pain; and antibiotic products. In addition, it manufactures controlled-release products on a contract basis for third parties in the areas of pain, allergy, bariatric, attention deficit, and infection. Further, the company is developing a range of abuse deterrent opioid products. Elite Pharmaceuticals, Inc. was incorporated in 1997 and is headquartered in Northvale, New Jersey.

Elite Pharmaceuticals Q3 2025 Earnings Call Transcript

Presentation

[Operator]

Good 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 statements. ALLETE would like to remind listeners that remarks made during this call may contain forward looking statements that involve risks and uncertainties that are subject to change at any time, including but not limited to statements about ALLETE's expectations regarding forward operating results. Forward looking statements are made pursuant to the 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 the report's Elite files with the SEC, which is 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.

[Nasrat Hakim, Chairman, CEO & President at Elite Pharmaceuticals Inc]

Thank you, Matthew, and happy Valentine's Day, everybody, and good morning, ladies and gentlemen, and thank you for joining us today. My name is Nasrat Hakim. I am Elite's Chairman and CEO. This is our earnings call. Our CFO, Carter Ward, will give us a summary of the company's financials, after which I'll give you an update and answer some of the questions that you've submitted to Diane.

[Nasrat Hakim, Chairman, CEO & President at Elite Pharmaceuticals Inc]

Mr. Ward, you have the floor.

[Carter Ward, Chief Financial Officer at Elite Pharmaceuticals Inc]

Thank you, Nasrat. Yesterday, we filed our 10 Q. It's for the third quarter of our fiscal year ending 03/31/2025. So our third quarter ends 12/31/2024. It's available on our website, elitepharma.com, under the Investor Relations sections.

[Carter Ward, Chief Financial Officer at Elite Pharmaceuticals Inc]

If you haven't seen it yet, please get a copy. As I always do, I'm going to provide some context, give you some color to the financial statements. And throughout my presentation, I received a lot of questions overnight, and I'll weave in answers to those questions as best I can into my presentation as well. Let's start with the P and L. Total revenues for the quarter were $14,400,000 that compares to $15,500,000 for the December 2023 quarter.

[Carter Ward, Chief Financial Officer at Elite Pharmaceuticals Inc]

It's a $1,100,000 decrease or 8% decrease. There was a delay in shipments, among other factors, at the December due to the Christmas, New Year's holidays, if you guys remember, happened on a Wednesday in the middle of the week, and that impacted revenues for the quarter. Many customers, they delayed shipments into January since a lot of people took most of those two weeks off. Our customers, they didn't want shipments sitting in trucks waiting to be received and processed, so instead, we just had to hold on to them till everyone was back at full strength a few days later in January. Now when I say shipments were delayed until early January, I'm not just talking about the product lines, which we have been selling the past two years, which were substantial, especially the generic Adderalls.

[Carter Ward, Chief Financial Officer at Elite Pharmaceuticals Inc]

Those had delays. But also included in this delay is the full commercial launch of the Libexamphetamine, which is our generic to Vyvanse. These volumes were well in excess of all of our other products combined. And they were delayed as well, same reason. It would have been nice to have some of that shipped before December 31 instead of a few days later.

[Carter Ward, Chief Financial Officer at Elite Pharmaceuticals Inc]

But the most important thing is that they were shipped. They were on the market. We're gaining share. I did get a question on was the Vyvanse launch, were the revenues included in this quarter, December quarter. Just so you know, when we shipped in December, we shipped to our distribution center in Ohio, and that was that's not revenue to the company.

[Carter Ward, Chief Financial Officer at Elite Pharmaceuticals Inc]

Our revenue is recorded when it's earned, and when it's earned is with regards to most of our products is when we deliver to the customer. So I had some other questions on revenue recognitions. So those volumes were not included in the December financials, but they were delivered in January. So if you look at our balance sheet, you'll see that our inventory increased more than $6,000,000 during this quarter, so from $14,000,000 in September to $20,000,000 in December 31. That should give you a good visual of the shipments that went a few days after the quarter end.

[Carter Ward, Chief Financial Officer at Elite Pharmaceuticals Inc]

They were there, they were sitting in our warehouse, orders received, pallet stage, ready to ship, and they were. In fact, January 2025 was our best ever with regards to shipments, revenues, contribution margin and February's tracking in a similar fashion. The month of January was almost as much as the entire quarter that we just reported. And as I said, January is also tracking in a similar fashion. So I did get some questions asking about what would the revenue be like without a delay.

[Carter Ward, Chief Financial Officer at Elite Pharmaceuticals Inc]

Well, this will give you some idea of what it would have been like. On a year to date basis, the nine month revenues are $52,000,000 that's compared to $38,700,000 last year. So that's a 35% increase, $13,400,000 on year to date this year as compared to last year. Last year, for the whole year, all twelve months, we did $56,000,000 This year, we're already above $52,000,000 dollars still have a quarter to go. So note that another thing, the nine month numbers this year, they do not include a contribution from LizDex, which has taken our January and February revenues to the highest levels so far.

[Carter Ward, Chief Financial Officer at Elite Pharmaceuticals Inc]

So it's safe to say that last year's record revenue number has already been eclipsed. Moving down the P and L statement, there's R and D expense of $1,800,000 and G and A expense of $2,700,000 for the December. Both of them are up compared to the December. R and D is up 28% and G and A is up 59%. I'll address each one as far as R and D is concerned.

[Carter Ward, Chief Financial Officer at Elite Pharmaceuticals Inc]

As I said, probably every presentation I've ever made, R and D is the lifeblood of any generic pharmaceutical company. We just had a successful Lindexx launch, which was two years in the making. We don't just launch the product overnight, it doesn't just happen overnight. It's two years of developing, formulating, testing, submitting, getting approval takes quite a while. That's what we're doing now for future products.

[Carter Ward, Chief Financial Officer at Elite Pharmaceuticals Inc]

So we're spending money now to ensure that in the future there's a continuous flow of follow on products in the next one to two years, just as we did with the LizDex, which we began several years ago. So, Nazra will discuss product developments in more detail. But just from a finance perspective, accounting rules, GAAP, requires we expense these costs when we incur them, but the expectations are obviously that what we're doing now will be successful in the future, result in more products, future products, future revenues and future profits. So with regards to the increase in G and A costs, there's a couple of factors at play. First, regulatory costs have been increasing.

[Carter Ward, Chief Financial Officer at Elite Pharmaceuticals Inc]

The fees are up, cost more to comply. Compliance is more expensive. The consultants and everything we need to do for compliance with FDA, DEA, SEC, all of the alphabet agencies, everything costs more. And we also have a few more headcounts that we had to hire for compliance. The second factor in the G and A increase, and that's a temporary the second one is a temporary one, and that factor has just ended.

[Carter Ward, Chief Financial Officer at Elite Pharmaceuticals Inc]

And that's the facility at 144 Ludlow that was constructed and validated in 2024, but it was only approved last week, a couple of days ago actually. Now that the packaging facility in 144 is approved, it becomes part of our manufacturing assets and it's not an overhead asset, thanks to this approval. This is a big deal from both operational as well as a financial perspective. I got some questions on clarifying what is this new facility, what is it going to do. It's going to more than double our packaging capacity, which was our bottleneck up until now, plus we're adding a lot of new warehouse space that we can now use.

[Carter Ward, Chief Financial Officer at Elite Pharmaceuticals Inc]

We were running out of space before The business is increasing so fast. We need this extra space, and we especially needed this tremendous increase in packaging facility and capacity. So operational, that's a big deal. From a finance standpoint, these costs, I can now match them with our revenues. It's part of our product costs.

[Carter Ward, Chief Financial Officer at Elite Pharmaceuticals Inc]

It's part of our COGS. And it's no longer part of our G and A overheads. So the increase in G and A overheads, at least that portion of it, was temporary and that will go away as of a few days ago when we got the approval. Looking at the balance sheet, we're continuing to strengthen. The two week delay in shipment doesn't affect the balance sheet as much as it does the P and L since the inventories are there, they're ready to go, they're sitting in working capital.

[Carter Ward, Chief Financial Officer at Elite Pharmaceuticals Inc]

Our working capital, which is current assets minus current liabilities, our working capital continues to increase. It was $27,000,000 at the beginning of the year, the fiscal year, and it's now $33,000,000 as of 12/31/2024. So that's a $6,400,000 or 24% increase over the nine month period. It's also up almost $1,000,000 since September as well. Now, in addition to strong and growing working capital, our long term debt is low and it continues to decrease.

[Carter Ward, Chief Financial Officer at Elite Pharmaceuticals Inc]

Our non derivative long term cash liabilities were $6,700,000 at the beginning of the year, the fiscal year, and at December 31, they were less than $6,100,000 The takeaway here is that our increase in working capital is resulting from profits and efficient operations and not from long term debt. I did get a question asking did we have to borrow money to fund the new launches, the LibDEX launch? And the answer is no. The investment in working capital for Lydex alone is in excess of $6,000,000 It's actually a little over $7,000,000 We funded that from our own cash flow, our own working capital. So some companies do get working capital from long term debt.

[Carter Ward, Chief Financial Officer at Elite Pharmaceuticals Inc]

We do not. At Elite, we fund our own working capital. We're paying down long term debt and we're increasing working capital at the same time. So those are two things you want to see. Had a couple of other questions that I'll answer.

[Carter Ward, Chief Financial Officer at Elite Pharmaceuticals Inc]

What are our plans to clean up our capital structure? Our capital structure is actually very solid and very clean. We have almost everything in common stock. We have no preferreds. We do have some warrants.

[Carter Ward, Chief Financial Officer at Elite Pharmaceuticals Inc]

We have no onerous covenants. So this capital structure is almost as clean as anything can possibly be. So we're really looking good as far as that's concerned. Got a question on will the Hakim and Caskey promissory notes be paid at the end of the fiscal year? Remember, the fiscal year ends March 31, those are due on March 31.

[Carter Ward, Chief Financial Officer at Elite Pharmaceuticals Inc]

They're actually due in the first quarter of the next fiscal year, and our plans are that we will pay those amounts, which total $4,000,000 when they come due, which will be in the Q1 of the twenty twenty six fiscal year. So to sum things up, one other question. Is the new lease in Florida signed? Will this benefit Elite in future from a tax perspective? Not really.

[Carter Ward, Chief Financial Officer at Elite Pharmaceuticals Inc]

First of all, Florida has a corporate income tax, but our income taxes are based really upon our operations and where we ship the state income taxes. We have multiple states that we have to file in, so it's quite complex. But having an office in Florida doesn't really have much of an impact on our taxable situation. It really is depending upon where we ship and there's all of these concepts of state nexus that apply based upon our shipments. So to sum things up, our financials have never been stronger and that they are one of the reasons that ALLETE is positioned extremely well for the next phase of our strategic plan, which I'm sure Nasrat will go into a little more in detail.

[Carter Ward, Chief Financial Officer at Elite Pharmaceuticals Inc]

So now I'd like to introduce him, our CEO and President, Mr. Nasrat Hakim.

[Nasrat Hakim, Chairman, CEO & President at Elite Pharmaceuticals Inc]

Thank you, Carter. In January, Elite's unaudited revenues, as Carter stated, were about $12,500,000 That's almost as much as the entire third quarter. The profits made in the month of January were more than the profits made in the entire third quarter. Why is this important? It's important because the revenues were lower in a single quarter.

[Nasrat Hakim, Chairman, CEO & President at Elite Pharmaceuticals Inc]

It does not mean that that is a trend or that's going to continue. And the reverse is true. Just because the revenues in January are very high, that doesn't mean that trend will continue. I'm not saying it will not. I'm just saying one point in space and time does not set a trend and everybody was jumping on one event in a quarter out of context that the sales are going down.

[Nasrat Hakim, Chairman, CEO & President at Elite Pharmaceuticals Inc]

Our sales are not going down. Elite is still leader in the industry in ethically in IR and ER and we will be as well in this tax. The second thing I want to caution is that, don't pull out your calculators and take what we just said about the third quarter the fourth quarter about January and multiply it by three and then say, oh, Nasdaq says we're going to make $37,500,000 I'm not saying that. We're giving you a flavor of January to put your hearts at ease that what is happening or what has happened in Q3 is not a trend. It's a point in space and time that is still, when you look at the totality of the three quarters, advantageous to Elite.

[Nasrat Hakim, Chairman, CEO & President at Elite Pharmaceuticals Inc]

Elite continues to grow and Elite is in its best financial position ever. Let's look at the last three quarters of our fiscal year. The quarter over quarter comparison includes certain time effects and uncertainties. It is better to compare fiscal year to date and the revenues rising from that. Revenues for the last three quarters grew to $52,400,000 which is a 35% growth over the same period last year.

[Nasrat Hakim, Chairman, CEO & President at Elite Pharmaceuticals Inc]

Operating income for the last three quarters was $8,500,000 which is 19% growth over the same period last year. Elite is on target for another record year when our fiscal year ends in March. Period. As a reminder, our annual revenue trend started in fiscal 'twenty one starting in fiscal 'twenty one, I don't want to go past that, for $25,000,000 in 'twenty one. There were even $7,500,000 couple of years before.

[Nasrat Hakim, Chairman, CEO & President at Elite Pharmaceuticals Inc]

Went up to 32, went up to 34 and 57 last year. Now for fiscal year twenty twenty five, we are already at $52,000,000 over three quarters and we still have a quarter of sales remaining to be booked. Elite is heading for another record year. I am certain that we will skip the 60s and comfortably hit the 70s range in revenues. I'm not going to be too bold and say we're going to hit 80.

[Nasrat Hakim, Chairman, CEO & President at Elite Pharmaceuticals Inc]

We're going to stop over here and we'll see what happens. But there is no way our projection from last year is not going to come through. I do expect this trend to continue throughout this year with the launch of Liz Dexamphetamine and other new products. Enough about financials, we are believing what Carter said and making sure that our faithful and true stockholders understand the big picture. You can buy stocks, you can sell stocks, you can do whatever you want.

[Nasrat Hakim, Chairman, CEO & President at Elite Pharmaceuticals Inc]

My job is just to outline for you where we stand and the rest of it is up to you. In sales and distribution, Elite's most recent launches included generic Lydox and amphetamine. The brand name as you know is Vyvanse. It's a central nervous system stimulus using used to treat attention deficit disorder. The IQVIA report annual sales of over $4,000,000,000 for this product.

[Nasrat Hakim, Chairman, CEO & President at Elite Pharmaceuticals Inc]

The product was launched in December 26. That's when we moved everything to the distribution center. The actual revenue started being booked in January because that's when the movement of goods went to the customers. We have seen a higher level of interest from consumers in Vyvanse. Now it's a matter of code and other complicated things, but we're in a very good shape in there.

[Nasrat Hakim, Chairman, CEO & President at Elite Pharmaceuticals Inc]

And launching this product is now the primary focus of our sales. We expect List DAGs to do well and be a key contributor to Elite's growth going forward. Next, we launched generic hydrocodone with aPAP. The brand name is Norco. We launched it in December.

[Nasrat Hakim, Chairman, CEO & President at Elite Pharmaceuticals Inc]

IQVIA delta for that product is $300,000,000 And I will say a few more words during the Q and A about opioids and the sale of opioids and the status of opioids. Generic codeine with aPAP launched in October. The brand name is Tylenol with codeine and the IQVIA report annual sales of over $40,000,000 Generic methotrexate launched in August. This product used to be on shortage. It's no longer it's readily available now.

[Nasrat Hakim, Chairman, CEO & President at Elite Pharmaceuticals Inc]

The IQVIA report is about $60,000,000 of annual sales. Additional products that will be coming in the next few months, oxyapab, the generic for Percocet and methadone. For everyone to understand, we had a schedule of getting a product to the market every six to eight weeks till we got to the price, which is Vyvanse, and that's when that is consuming all of our time. So now we focused on what is important, amphetamine IR, amphetamine ER and Vyvanse. And the launches for the other two products took a back seat.

[Nasrat Hakim, Chairman, CEO & President at Elite Pharmaceuticals Inc]

These two products will be rescheduled and are being worked on. They just are not top priority. And I will address the dates at least for Oxy in my comments later. The most important product up to date for Elite has been Adderall IR, which has IQVIA annual sales of $400,000,000 and the generic Adderall XR, which has IQVIA reported annual sales of over $800,000,000 We continue to see strong market demand for these products and we are in a very good shape for these products. IQVIA lists elite market share for the past year for the IR, amphetamine IR at 17%.

[Nasrat Hakim, Chairman, CEO & President at Elite Pharmaceuticals Inc]

You understand how many players are out there and how big they are, some of them are 100 times bigger than Elite, yet Elite is one of the top leaders in sales of the IR. And for ER, we command 13% through our sales and 3% through PRASCO sixteen percent of the market for the amphetamine ER. For a small little company, that is an unbelievable achievement and it is not a single event in space and time. We have proven it time and time again for the past two years. Isradipine, TREMETRA ME and Sondimetrazine are smaller products, but Elite also has a strong market share that we maintain in all three of them.

[Nasrat Hakim, Chairman, CEO & President at Elite Pharmaceuticals Inc]

We also have our partner Dexcel that we contracted with to sell amphetamine IR in Israel. They got approval last October from the Israeli Minister of Health. They will launch the product as soon as they finish going through the technicalities. They will provide the sales, marketing and distribution for this product and we will manufacture them, package it. They are they'll pay us transfer price and we'll have profit sharing.

[Nasrat Hakim, Chairman, CEO & President at Elite Pharmaceuticals Inc]

They have not launched the product yet because they are still going through labeling. In Israel, they have to go through complicated labeling in Hebrew, English and Arabic, okay? And we're working with them on that. My guess is that we'll probably launch it over the end of Q2. Elite will be selling all of our products exclusively on our own label by later this year, except overseas.

[Nasrat Hakim, Chairman, CEO & President at Elite Pharmaceuticals Inc]

Dexal will continue to sell under their name. Currently, though, we do have two licensees, okay? A PRASCO, who has a non exclusive license for amphetamine ER and that ends in 03/31/2025. PRASCO has been selling amphetamine ER under their PRASCO and Burel pharmaceutical label after March 31. However, Elite will sell Amphetamine ER exclusively under our name and our label.

[Nasrat Hakim, Chairman, CEO & President at Elite Pharmaceuticals Inc]

A precision dose who has a license for generic naltrexone and phentermine, They sell under their TEGI and precision dose labels. Their license will expire in September and Elite will sell these products exclusively under our label as well. Under development, we have two ANDAs right now. Generic Oxycodone ER, whose brand name of course is OxyContin, this is a paragraph for filing. And so we need both product approval and the settlement of the remaining Urdu product patents prior to commercialization.

[Nasrat Hakim, Chairman, CEO & President at Elite Pharmaceuticals Inc]

The Paragraph IV patent lawsuits remain as we discussed in the last phone call or in the last conference call. And is on and it depends on the stay and Purdue's next move and the court's decision. So Purdue most likely will appear to the Supreme Court by the March. They will ask for something called the writ of certiorari. It is highly likely the Supreme Court will reject it.

[Nasrat Hakim, Chairman, CEO & President at Elite Pharmaceuticals Inc]

If they do, they'll take about six weeks to do that. But regardless, we don't know if Purdue is going to come up with another patent that they claim everybody is infringing on and start the cycle over again. We wait to see and we're trying to minimize the cost and not to be too involved in the lawsuit, let somebody else handle their work and all the money. And hopefully, we will all share in the results later on. We have a generic dopamine agonist, ANDA, for treatment of Parkinson's under review by FDA.

[Nasrat Hakim, Chairman, CEO & President at Elite Pharmaceuticals Inc]

It is still under active review by FDA. FDA keeps asking questions and we keep answering. So we will let you know and update you once we get approval for either of these two products. Elite continue to make R and D a priority. We're spending a lot of money on R and D.

[Nasrat Hakim, Chairman, CEO & President at Elite Pharmaceuticals Inc]

But also reality is we're a small company that has a lot going on. Between the sales of Antethemian IR and ER and all of the other products that we have and bariatrics and isradipine and now the launching of the Golden Goose, which is Vyvanse, the pressure on the lab and other departments to make small lots of R and D and stop the equipment, flip over, make something there, clean the equipment, the process delays us by weeks. So R and D has not been moving as fast as I would like to. It's moving at lightning speed, but at least lightning speed is not fast enough for us. So I have been looking and contracting with companies to see if we can do some of the R and D work outside.

[Nasrat Hakim, Chairman, CEO & President at Elite Pharmaceuticals Inc]

In fact, I just returned from India where I explored several companies that could help us in a financially meaningful fashion of doing some of the work that we could do at Elite, but we don't have the time to because commercialization is very important to us and see how we balance that out. If this materialized and we get something going in there, we will update you hopefully by the next conference call. But it is really one of our best options to accelerate our R and D program. Regarding the infrastructure, our 34,000 square foot state of the art inventory and packaging expansion is nearly ready, and I'm saying nearly for a reason. Our filing strategy was well received by FDA.

[Nasrat Hakim, Chairman, CEO & President at Elite Pharmaceuticals Inc]

We filed a CBE theory for a tablet and a capsule to show them that we can make both of this new facility after we obtained the approval for everything possible, DEA, OSHA, municipality. And the FDA looked at the application and looked at all of our work and it was undeniable. They performed on other that's virtual and gave us approval between them and the center to proceed with the facility. And the reason I said nearly is because once they approve a tablet and a capsule, that means you can make either and there and all we have at the least, we're going to have injectables on what have you on liquids. We have tablets and capsules.

[Nasrat Hakim, Chairman, CEO & President at Elite Pharmaceuticals Inc]

Now, we file a blanket CVE0 or a go to office amendment or just annual reportable and start doing everything. Over the next two, three weeks, we will set the strategy, file it with FDA and proceed forward. But the approval is done, it's valid, it's just a matter of what now how to dot your eyes and cross your teeth and make sure you're ready if the FDA comes in for a full inspection. Beautiful facility, one of these days, we'll have a meeting there and show it off to our stockholders. This expansion not only took care of all the products we have now and we will have in the future for the next at least five years from standpoint of packaging, but the fact that we moved packaging from the manufacturing facility will allow us to put manufacturing suites instead of the packaging lines, which are usually long and help also our capacity in manufacturing as well.

[Nasrat Hakim, Chairman, CEO & President at Elite Pharmaceuticals Inc]

Okay, to wrap up before we go to Q and A, growth is expected to continue in the future for recently launched products, including these tests and upcoming product launches, including OxyAPAP and Methadone. Elite is positioned as an attractive generic pharmaceutical company with consistent profits, steady stream and low debt. Our fundamentals are strong. We are in the best financial position that we have ever been. We have always targeted merger and acquisition and or NASDAQ as our endpoint.

[Nasrat Hakim, Chairman, CEO & President at Elite Pharmaceuticals Inc]

And you all know, I've been talking about this for years and I refuse to reverse split this stock and go to NASDAQ before we had fundamentals because we did not have the fundamentals, meaning that I am certain if we did that prematurely, we will end up gravitating back to the OTC or worse, we'll go bankrupt. We will lose tremendous value. I have resisted that for years even though it was a such a thing to do. Everybody has advised me to do it. We were not going to do it now that we have strong fundamentals.

[Nasrat Hakim, Chairman, CEO & President at Elite Pharmaceuticals Inc]

It is time. We believe now is the right time for merger acquisition or uplisting finance back. We have been quietly working very hard on this issue. And you should expect to be out about that sometime soon. Let me go to Q and A.

[Nasrat Hakim, Chairman, CEO & President at Elite Pharmaceuticals Inc]

We had a ton of questions. A lot of them were not germane to what's going on. So I took them out. Maybe we'll address them in the next quarter or not. I love people's curiosity and asking things about generality, but some of them are way of pace.

[Nasrat Hakim, Chairman, CEO & President at Elite Pharmaceuticals Inc]

And I took balance portions and consolidated them, but reduced them also as well. I'm still addressing quite a bit that is okay and no problem, we'll have a conversation about that. That's not going to impact us, okay? The first question, the person asks about a new product that is non opioid pain medication. It's called Jornavax.

[Nasrat Hakim, Chairman, CEO & President at Elite Pharmaceuticals Inc]

And the question is, what effect will recent approval of the non opioid pain medication, Zornevex, have on Elite plans to launch their Oxypain medication? And there was three, four other questions about the same thing, including are you working on non opioid pain medication? Who or not? The effect of this new product, okay, remains to be seen. But I don't think it will have an effect on us and I'll explain why that's my opinion.

[Nasrat Hakim, Chairman, CEO & President at Elite Pharmaceuticals Inc]

Jorna Press, by the way, is a sodium V channel inhibitor that selectively blocks peripheral pain sensing neurons. So it doesn't work on the brain pain receptors. It's new. And because it's new, it will take some time for it to become mainstream. It has to be tested and we got to look at the side effects once you test it among large population, which is going to take years.

[Nasrat Hakim, Chairman, CEO & President at Elite Pharmaceuticals Inc]

Second, it's a brand and it's extremely expensive. So you think if you go to a doctor and take out your wisdom teeth, the insurance companies allow you to take this for versus a Norco, a Percocet or a paraglodine. I do not see that happening anytime soon. Again, that's my personal opinion. Drugs like that, the insurance companies will approve them very easily and it's going to take a very long time for them to be tested.

[Nasrat Hakim, Chairman, CEO & President at Elite Pharmaceuticals Inc]

So for the for seeable future, my opinion is refined. Next question at the last conference call, Nasrat was speaking about one of the medications, I don't remember which, but he mentioned that they sold the total amount of their quota or of their allotment that they were allowed to sell in general. Can you provide some additional color to the concept at this next meeting? My general question is who is setting quota on how much we can sell and what? Do we not allow to sell as much as we want to sell for any given drug?

[Nasrat Hakim, Chairman, CEO & President at Elite Pharmaceuticals Inc]

The question is yes and no. It's yes for non opioids. For non opioids, you can as long as you're approved by FDA, you can sell whatever you want as much as you want to anybody that will buy it. But the answer is absolutely no for opioids. The DEA determines how much quota you get and therefore how much we can sell.

[Nasrat Hakim, Chairman, CEO & President at Elite Pharmaceuticals Inc]

And we are going suffering through that right now, frankly. We have a lot more orders on sale than we have quota. And it takes a while to get through the DEA and go through the process to try and get them to opt to quota if they choose to. That's their answer. Sometimes there's no, you're getting nothing, okay?

[Nasrat Hakim, Chairman, CEO & President at Elite Pharmaceuticals Inc]

Bunch of questions about approved procedures, not sure what that is. Update on the pending launch of Aetna products, I believe. Update on the pending launches of approved generic Percocet, Oxy with acetaminophen. It's safe to say that we would launch it before April, by or before April, okay? Can you please provide more color as to the opioid regulations and how it affects the whole supply chain?

[Nasrat Hakim, Chairman, CEO & President at Elite Pharmaceuticals Inc]

The opioid regulations are insane. Starting with the quota and the process you get quota and filing it with the UN and going through the DEA and the things you have to prove before you get it. And after you do all of that, you have the states to deal with. It is said that we are one nation under guard. It is true, but we're not a nation among ourselves.

[Nasrat Hakim, Chairman, CEO & President at Elite Pharmaceuticals Inc]

Each state acts and treats us differently. One state lets us sell Oxoate app or Hydroate app or Het app with chlorine a certain number of tablets or capsule, then they penalize you $250,000 So you're going to work out the details of all of that before you launch because you could end up launching at a loss from all of the fees that some of the states charge you. It is really insane. Turco is very careful with that. We're all very careful with that.

[Nasrat Hakim, Chairman, CEO & President at Elite Pharmaceuticals Inc]

We're trying to manage it the best we can and make sure that we end up at the end day in the green. I have not had the chance, such as the boss has been very busy of figuring out from a legal standpoint if I can sell in some states and others. I think I probably could come up with something, but it will take a lot of thinking and a lot of court proceedings to get there. As of now, we're managing. Everything is good, but it definitely is arduous and it's very, very hard task to achieve.

[Nasrat Hakim, Chairman, CEO & President at Elite Pharmaceuticals Inc]

A question about Vyvanse, a whole bunch of questions about Vyvanse. Can you please provide more color around the Vyvanse launch? The DEA gave 24% more quota to Takeda in September 2021, shortage of buybacks. Did they move some of this quota to Elite upon approval or are we satisfied with the DEA quota for buybacks? Doc Elite has another VEIANCE quota and access to reliable API?

[Nasrat Hakim, Chairman, CEO & President at Elite Pharmaceuticals Inc]

Or are we experiencing or expecting to run out similar to most of our generic companies? The DEA gave Decatur a massive amount of quota. And some of the responses to us is that, yes, we wanted to make sure that we deal with the shortage. That's fair call. I will make no comment about that.

[Nasrat Hakim, Chairman, CEO & President at Elite Pharmaceuticals Inc]

I sell Vyvanse at a heck of a lot lower price than they do, maybe 10% on the dollar. But nevertheless, the DEA is in charge and they decide how to allocate this. They gave us quota and the quota they gave us, we went out on solicit business, and I'm happy with that. Then we solicited enough business and we don't want to sign contracts with everybody and have failure of supply. So before we started the process, we asked for more quota to just get a sense of security that it's coming.

[Nasrat Hakim, Chairman, CEO & President at Elite Pharmaceuticals Inc]

Well, eventually, they gave us a little more quota, but they didn't give it to the API manufacturer. So even if I had quota, I couldn't buy it. So this is why we slowed things down a little to make sure that we distribute what we have over our vendors and clients and do not get into trouble with the failure to supply. It's a very tough thing to manage and that's one of the reasons we just didn't bump it in the market on December 26. We need to make sure when the DEA gives you 12 bottles, you plan to, of quota, you plan to sell one bottle per month and that's how you distribute.

[Nasrat Hakim, Chairman, CEO & President at Elite Pharmaceuticals Inc]

If you sell it all in three months and ask for quota again and they don't give you, you get hit with failure at supply and lose. So it has to be managed and that's what we're doing. And so far, with amphetamine IR, ER and Vyvanse, we have managed it extremely well. Will Percocet be launched within six to eight weeks? As I said, no.

[Nasrat Hakim, Chairman, CEO & President at Elite Pharmaceuticals Inc]

Vyvanse changed all of that. We will launch that probably by April, no later than April. Partnerships, a lot of questions about Dexal They are our partner, are they going to get Vyvanse? Are we going to go global? Are they going to have more sales in two years?

[Nasrat Hakim, Chairman, CEO & President at Elite Pharmaceuticals Inc]

So let me summarize all of that with this. Dexcel is our partner. We've been working with them for three years and accommodating them in any way we can, so they can get the approval in Israel, and they did. Now, they are working to get their labeling and marketing set, and we're working with them on that. Along the way, they've mentioned that they're interested in amphetamine ER and Bivance and other things.

[Nasrat Hakim, Chairman, CEO & President at Elite Pharmaceuticals Inc]

But one thing at a time, let's go through one process successfully, then step and repeat. We can repeat it again and again. But as of now, they haven't sold a single bottle and have invested three years in them. I want to make sure we get through this, we see some benefit and then we'll park. But the opportunity is there, the market is there, we're dealing with them the best we can and accommodating the right way we can.

[Nasrat Hakim, Chairman, CEO & President at Elite Pharmaceuticals Inc]

New facility, lots of questions about that. I already understood. Upon the final approval of the facility, it was already approved or expansion. When will that happen? Was the new facility approved?

[Nasrat Hakim, Chairman, CEO & President at Elite Pharmaceuticals Inc]

Yes, it was. Is it functional? Yes, it is. Is the new equipment producing 120 bottles and made operational, totally operational? Could you also follow-up on what capacity and manufacturing we should expect from this facility?

[Nasrat Hakim, Chairman, CEO & President at Elite Pharmaceuticals Inc]

I will give you the generality of this for packaging. We do not have to think about it for years to come because the packaging line that we have and the one we're moving from the current facility and we already plumbed it for a third one that we can install in a heartbeat, we are set for a very, very, very long time, okay? And it's good that it's released us in the other buildings, so we can change some of the packaging line space to suite. In addition, the new facility had a huge role. We're keeping the old vault, of course, in Building 135, and we have another vault in the old warehouse.

[Nasrat Hakim, Chairman, CEO & President at Elite Pharmaceuticals Inc]

So we're also covered very nicely for vault space for control substances. All right. What else? Trump administration. Oh, my God.

[Nasrat Hakim, Chairman, CEO & President at Elite Pharmaceuticals Inc]

Okay. What effect do you think our Afkei Junior coming on board will have on our overseas sales with his health farm, wellness farm for mental health approach? Less drugs? Is it a potential issue on volume? I don't think anything is going to come out of this.

[Nasrat Hakim, Chairman, CEO & President at Elite Pharmaceuticals Inc]

Honestly, there is a lot more than one thing to policy. I'm not sure why the person who's asking the question mentioned if it's going to be an issue of volume. I do not see him asking us to give him a bottle of opioids for every bottle we sell. If he does, we'll have to discuss the price. But I do not see any effect in that.

[Nasrat Hakim, Chairman, CEO & President at Elite Pharmaceuticals Inc]

We don't make injectables and he seems to be anti vaxxed. Everything else we make is generic that helps the public and he's in support of that. So I'm not concerned about that. The second seven, eight questions are all intelligent, important and talk about the same thing. How would the tariffs that Trump is setting hurt elite or would they hurt elite?

[Nasrat Hakim, Chairman, CEO & President at Elite Pharmaceuticals Inc]

Do they affect the API? Do they affect the supply chain? Are we going to pass on the cost to the consumers? Or are we going to eat it? So let me address that in a minute.

[Nasrat Hakim, Chairman, CEO & President at Elite Pharmaceuticals Inc]

The API for opioids have to be made in The U. S. So there are no tariffs there. You cannot make opioids overseas and bring them here. Having said that, when I thought about this and I'm trying to protect us, there is a way it could affect us because the people who are making the opioids may have a raw material that makes opioids that could come from overseas, okay?

[Nasrat Hakim, Chairman, CEO & President at Elite Pharmaceuticals Inc]

So to date, all of my suppliers have said they don't see an impact yet because most of this material is coming from European countries that are not subject to tariffs, Italy, Spain and what have you, and not from India and China. We will see when the tariffs came, what's going to happen. Second, my gut feeling is, don't think that President Trump is going to put tariffs on medical products. That is not a popular thing to do and it doesn't serve any purpose. We're trying to lower the price of drugs in America, not increase it.

[Nasrat Hakim, Chairman, CEO & President at Elite Pharmaceuticals Inc]

So it's highly unlikely that that's going to happen. If for some reason certain products, the bariatrics or isradipine or atrimepromine, Ventraline, products that we buy from overseas got dissected, Of course, we're going to have to increase the price, so does everybody in the industry, okay? All of our competitors, everybody is going to be impacted, so we'll increase that. So I do not see an impact on Elite in the short term under all of the terms that have been discussed to date. If things change later and we start some kind of a turf war that has to do with medical equipment and medical products, then I will update you then.

[Nasrat Hakim, Chairman, CEO & President at Elite Pharmaceuticals Inc]

As of now, I think we're safe. The last set of questions, the general questions are about merger and acquisition and NASDAQ. Did we did you receive any M and A offers for Elite? Think of it this way. If you have your house up for sale, people make you an offer.

[Nasrat Hakim, Chairman, CEO & President at Elite Pharmaceuticals Inc]

If you don't have it up for sale, nobody is going to come make you an offer, okay? So we have not offered Elite for merger acquisition yet, and therefore, nobody has come and talked to us about it. Are there currently any companies interested in merging or acquiring Elite? Again, same answer. Is the plan to uplift to NASDAQ without any reverse stock split still intact?

[Nasrat Hakim, Chairman, CEO & President at Elite Pharmaceuticals Inc]

This is a tricky question and I'll address that in a minute. Is the timeline for uplisting to NASDAQ or acquisition mergers still on track to be around August 2026? No. All right. So let me take a minute on top about NASDAQ and merger and acquisition.

[Nasrat Hakim, Chairman, CEO & President at Elite Pharmaceuticals Inc]

We have been setting that as a goal for years now. And the first few months I joined the company, our previous Chairman, who is extremely knowledgeable and well connected in the industry, took me to a New York entity that wanted us to go to NASDAQ and have a reverse split and even have it from the Israeli exchange. And I said no because then I believe then as I believe till recently that rushing to do something like this is extremely detrimental to the stockholders. Now, things are different. We have turned Elite around.

[Nasrat Hakim, Chairman, CEO & President at Elite Pharmaceuticals Inc]

We went from a company that almost went bankrupt because the FDA and got turned down on the art technology, And we turned things around and now we're a viable company that has profits and revenues and we are a leader in the industry on some of these products. Our fundamentals are strong and this is the time for us to seek out mergers and acquisition or NASDAQ. So what would be the first step if we're going to do that? The first step would be, you will sign up with a world renowned company. The top companies in the country, Jefferies, JP Morgan, Wells Fargo, Bank of America, among others.

[Nasrat Hakim, Chairman, CEO & President at Elite Pharmaceuticals Inc]

And believe me, I'll talk to them all. Then if you sign up with one of them, they will bring your suitors. Then when the management, first line management, my senior staff and I listen to these people and see that the offer is viable, it goes to the or we have offers to entertain, it goes to the next level, which is the Board of Directors. Board of Directors approve it, it'll go to you, the stockholders. The stockholders approve the purchase, the sales acquisition, then it will go to the SEC and that will be it.

[Nasrat Hakim, Chairman, CEO & President at Elite Pharmaceuticals Inc]

If we go through this process and we either don't get the right offer or we reject the offer, then the next step is NASDAQ. We have the fundamentals, we have everything that we need to go to NASDAQ. We cannot go to NASDAQ without a reverse split, okay? Now, I am not as concerned because we do have fundamentals before any hit, any little blip and road of gravitated back to the bolt on board. But now, we are a strong company with current products that will last for a long time to come and future products that are in the pipeline.

[Nasrat Hakim, Chairman, CEO & President at Elite Pharmaceuticals Inc]

So we have a business continuity and I do think we can withstand NASDAQ right now. So whatever happens, it's going to go exactly in these two points that I outlined. And the reason I said no to the last question is the time line for uplisting to NASDAQ or acquisition merger in August 26. It's not. The time is very near.

[Nasrat Hakim, Chairman, CEO & President at Elite Pharmaceuticals Inc]

We need to work on it now. Thank you, Matthew. And thank you, ladies and gentlemen. We look forward to talking to you again next quarter.

[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.

Participants

Executives

• Nasrat Hakim, Chairman, CEO & President
• Carter Ward, Chief Financial Officer