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spk03: 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 statement. Elite would like to remind their 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 Elite'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. 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. Nasrat Hakim, President and Chief Executive Officer of Elite Pharmaceuticals. Sir, the floor is yours.
spk00: Thank you, Matthew. And good morning, ladies and gentlemen. Thank you for joining us today. My name is Nasrat Hakim.
spk01: I am Elite's Chairman and CEO. This is our earnings call. Our CFO, Carter, the Boomerang Ward, will give you 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. Carter, welcome back, and you have the floor.
spk04: Thank you, Nasrat. Good morning, everybody. Let me just start by, I guess, reintroducing myself. My name's Carter Ward, and this is my second tour of duty here at Elite. Some of you longer-term investors may remember me, but I was the CFO here from 2009 to 2021 for 12 years, and I rejoined Elite about two months ago. Very, very happy to be back home with Mijente here at Elite and hoping that I can do my best to contribute to future success at Elite. So yesterday we filed our 10Q. It's the second quarter of our 2020 fiscal year. Our fiscal years, as always, they end March 31st. So March 31st, 2024 is our 2024 fiscal year. And September 30th, this quarter, is the second quarter of that year. As I've done before, I'm going to provide some context, some color to the financial statements, and as I go through my comments here, I received a bunch of questions overnight, and I'll do my best to answer those as well. Let's start with the P&L, and total revenues for the quarter were $14.2 million, and you can compare that to $8.6 million for September 2020. quarter, 2022 quarter, and also $9 million 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. Our operating income was $1.9 million profit. Compare that to a profit of $1.1 million last year and $1.6 million 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. Nazrat's 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. 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, pulled up the history books, and I looked at the last five years of revenue. 2019, fiscal 2019, for the entire year, we didn't even have $8 million in revenues, $7.6 million for that year. And then it went $18 million, $25 million, $32 million, and last year, March 2023, we were at $34 million. And that's for the entire year, for the full 12 months. We are already halfway, only halfway through the year, six months, we're already at $23 million. So, that run rate should continue, but we will far exceed last year's revenues by the time this year ends. Let me see. So, going down to P&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 that says, what is the income tax benefit? income and why was it recorded in this quarter? So if you look down the P&L, there is a $17.7 million income tax benefit. So that means there's an income item. It's a non-cash revenue item, and this relates to net operating losses, NOLs, that we've been accumulating for the past 20 or so years. There are tax deductions 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 a deferred tax asset on the balance sheet. It's always been there, except up until now, we had to make a reserve against it. So we had to bring that asset down to zero. The definition of an asset is a 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, bring it down to zero. Things are different now, however. We're now profitable. We have metrics that are showing profits going forward. And now those same accounting rules require that we remove that reserve, we release the reserve is what it's called, and we record this deferred tax asset 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&L. So that's exactly what it is. It's not going to repeat. It's a one-time thing, technical accounting stuff. But the takeaway here really is that our metrics have changed. They've changed from in the past ongoing losses to now profits. And now that tax deduction does have value to elite going forward, so it's showing up as a balance sheet item. And I did get one more question before I move away from the P&L statement. And it was increased revenues were fantastic. However, I see gross profit margins experienced a small dip compared to previous quarters. and they're mentioning the fiscal 2023, we had a 49% gross profit margin, and this quarter we had 46%, and actually for the six months we had 48%. So we 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 wholesalers who are, you know, 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. It's a good thing. So now, moving away from the The P&L, we go to the cash flow. We had an operating burn for the six months, ended September 30th of this year, of $2.9 million. And I did get a question on that, and they were talking about, we have strong revenues, we have profits. Why the cash burn? And, you know, strong revenues, profits, a 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 at you. You look at our increase in accounts receivable and our increase in inventory. Together, that was around $13.1 million increases, and this is causing a cash burn. This is a classic example of growth requiring increased working capital. All successful 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. So, you know, 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. The receivables went up. But the cash flow will catch up as those assets turn over. 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. And first I just wanted to say on the balance sheet, our working capital has increased by almost $2 million in the past six 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 six months. The profits drive working capital. Our financials clearly demonstrate this. Got a couple of questions. It says, although sales were very strong, accounts receivable were quite high, almost 70%. Please comment. And again, this kind of goes hand in hand with what I just said about the cash burn, the cash flow statement. Generally, we're selling now to a lot of wholesalers. Generally, terms are roughly 60 days, 45 to 60 days or so. Whereas in the past, 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. Is there a plan to pay down debt, and what is the plan or expectation for paying down debt? Well, we don't really have 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 $11.1 million. I think it's Note 4 in the financial statements. More than half of that, $6.4 million, is 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 number higher because it will be – stock salaries and stock for the directors, for the director fees, which have ended, by the way. So as of April 1st, we're no longer doing that, but 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 MECA, which I got another question on that I'll talk to you about in a second. That's $3.4 million. That's about 90% of our accruals. Then The other part of our debt is a loan from Nasrad and David Caskey, one of our directors, of $4 million, which helped us provide the working capital for the launch. So that's going to be paid within terms. And then the other two 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. And then we have our bonds way back from 2010. 2005 that we're paying you know within terms and I think the last payment is 2030 so when you look at it we really don't have much debt at all we are very strong our balance sheet is is very strong we are very unusual in this segment just because how low the debt is um so then another question it's kind of related to the balance sheet so I might as well get on to that and it says uh talking about what makes up the $3.4 million accrued expense to MICA. That has to do with the agreement originally with SunGen back in, I believe, 2017, 2018. It was a co-development essentially of our mixed amphetamine products. Half of the profits earned are shared with, at that time, SunGen in the The last few years, MECA had bought out SunGen's rights to these profit splits, so we would either have to pay it to SunGen or we would have to pay it to MECA. MECA gives us a little better payment terms, 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 MECA and on these profit splits by the end of this fiscal year. Let me see. I think I got into all the questions that I was asked. Yes. So let me just sum things up. Elite is a much different company than it was when I left, and it's much different even from a year ago. This is thanks to the successful launch of Elite. the elite label last April. Our revenues are up 65%. Our operating profits are up 73%. Our six-month revenue are more than triple where we were five years ago for a full year. Our working capital is increasing. 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 CEO, Mr. Nazra Hakim, will provide his comments.
spk00: Thank you, Carter.
spk01: 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 product, facility, R&D, and then we'll go to Q&A. Our revenues are growing. Our investment in R&D and the R&D pipeline is growing. Our fundamentals are strong and more stable than ever. And we are getting closer to NASDAQ merger or acquisition. Last year was our best year in revenues ever. We generated $34 million. That was when multiple companies were selling Elite's products, including Lynette. The sales and distribution agreement between Elite and Lynette was terminated two quarters ago. In the last two quarters, we've generated $23 million in revenues. This is at a 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 quota to launch both. We had to finish one to start the other. And still, we came up with $23 million in revenues. We are on target to achieve another record-breaking year in revenues, definitely north of $40 million. And today, we command a larger market share of the amphetamine IR and ER market
spk02: than Lynette.
spk01: That is a serious noteworthy achievement. With the implementation of PRASCO agreement as of January 1st, 2024, and the R&D needle mover products expected to be approved in 2024, it is my expectation that this trend will continue in calendar year 2024 and 2025 and beyond, our business model is looking great for 2024 and 2025. If you look at just 2023, January through December, that alone we will be way north of 45 million. The next two years are going to be a lot better than that. The products that are currently bringing in revenues are the mixed amphetamine, IR, and ER. These were Elite's largest products last year, and we expect them to continue to be our largest products this year under Elite's label. We have contracts in place. and we expect to maintain our double-digit market share. Managing the DEA quota has been a challenge. 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, Phentermine and Phendiametrazine, weight loss products. Isradapine, a hypertension product. Trimipramine, antidepressant and nerve pain product. Loxapine is for schizophrenia and agitation. And Dentaline as a muscle relaxant. All are being sold under ELITE's label as of April 1st, 2023. And frankly, Kirko is doing a better job at selling our product than any of our partners has ever done.
spk02: We have also two products that are not being sold at this time.
spk01: An antibiotic, doxycycline, and a pain management, apiputcodine. We do not have any plans to sell these products in the near future. One, because we have a partnership with Praxogen and Doxycycline, and we haven't resolved the issues with Doxycycline. And two, Apep with Clodine 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 demands and also 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. Even though We can supply our customers' demands today by running the facility every day on a shift and a half for five days a week. We don't have the space to store the finished product because most of it 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 buckets. 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 packaging takes massive amounts of space compared to the raw materials and the tablets and capsules that are not bottled. Now, because these are controlled substances, you have to put them in vaults. So the more you make, the more vault space you need. And that is becoming an issue. Before we were making them and shipping them to Lynette and others, now it's our distribution, it's our facility, and we need to resolve that problem very soon. 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 will be a duplicate of the current facility where you have equipment and personnel and packaging lines and blending and laboratories and what have you. And that has tremendous advantage in that if there's a catastrophe on one site, you have business continuity where you have another site to continue your business. But it has the disadvantage of being very expensive to duplicate the equipment. And it also is very expensive to run clinical trials to transfer the extended release products. So another option would be to do something similar, get another facility, retrofit it, 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 CPE 30 and transfer it. The process takes a few months and it doesn't cost much. It's all internal. But it still costs a lot of money to buy a plan, duplicate equipment, and all of that. So for option one and option two, the cost estimate is between $25 to $35 million. Option three 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. If you're facing the facility on one side, you enter the APIs and IPIs. You enter all the components from there, the trucks come in, and that's where you put them. 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 would be inexpensive for us to do and help relieve the company is if we take the final part out where all the finished product, which has to be in vaults and the packaging, take that out and move it to a packaging facility and storage facility, that will give us enough space for expanding manufacturing for the future. And now we have a new facility where we have two packaging lines instead of one, so we have unlimited capacity. We have a much larger vault. and we have storage for the non-controlled substances. So that was the option we decided to go with, and we were lucky enough to find the facility within a mile from Northvale, which means our staff can actually, they don't have to quit and we'll hire somebody else to work in Philadelphia or 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 tenth of starting a manufacturing facility, about $2.5 million. I am happy to report that I got the approval of the board of directors and signed the letter of intent on Monday. We are in the middle of negotiating the details And I expect that by 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 five years at least. Now we need the pipeline. in order to keep the businesses growing, and in case anything happens where 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&D comes in. We will definitely continue to invest in product development. Our goal is to commercialize new competitive products and diversify our portfolio. Commercial product line is nothing but an R&D line that made it to the market. So I'm always thinking R&D is an extension of the market because that's all it is. The commercial products, they are the ones who are bringing the revenues, and the R&D is the one that's going to bring the revenues in the future. So investing all the profits we have into R&D is the right thing to do. 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 you have to file with the FDA, you have to send it through FDA's gateway. It's an electronic means for them to receive it from you. Once we do that, the FDA will look at all the sequences and say, okay, you got all the parts in here, 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. An ANDA has five parts, Module 1 through 5. Module 2 is for the clinical trials. Module 5 is also for the clinical trials. Module three 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, or at least the filing date. So last time we waited and did not announce the opioid until January, about 30 days, 45 days after we filed it because we did not receive the approval from FDA until then. The same thing is gonna happen with the second needle mover. As soon as we hear from the FDA in December that it has been accepted for review, we will issue an announcement. So what the FDA does when they receive it and accept it for review, Then they start the examination and evaluation process of the ANDA, prosecution of the ANDA. Every time they find something wrong, they send you a letter called disciplinary review letter. They say, fix this. Do more testing here. Send me more documents. This is 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 FDA or not. We are actually communicating with them on regular basis, right? So today, we have three ANDAS that have been accepted for review and under prosecution by the FDA. And the fourth one that I will let you know next month that it has been accepted for review, so that will make four this year. One of the ANDAS is dopamine agonist. And that ANDA that we submitted, the FDA has been corresponding back and forth with us. During their evaluation of the ANDA, they found that the microbiological lab that did microtesting on the ANDA was not adequate. So they sent us a note. Now, while the ANDA is being prosecuted, you cannot go ahead and change things in it. That's it. You have to wait until the end of the month. So they had to wait until October, which was our due date. Tell us, go ahead and change the lab. We're in the process of doing that, and we will refile probably within two weeks. The second ANDA, the anti-metabolite 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 third ANDA, is the one we received the acceptance for. It's the opioid. We haven't gotten much response from them yet. It's only been a couple of months. I expect next month or the month after they start asking questions. And while we're at it, the fourth 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 are going to be bigger than amphetamine IR and ER, in my opinion. Other than what we have in the market, which is three and one, the total of four that are pending for FDA, we have one more product. that we did a pilot study for. That's another needle remover. And the pilot study gave us guidance on what to do. And I expect that we're going to run the DE study in 2024 and hopefully find that product then. Next after that is the preliminary work. And I've made the decision for the company that going forward, we are no longer going to work on small products. 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 Activist, we had about 250 products at the Elizabeth facility. Out of the 250, 12 of them were bringing in 80% of the money, and the rest were fillers. Well, we're a small company, so going forward, every single product we are gonna select is gonna be a large billion dollar product. So the three products we have in development right now at the early stage, all of them are products 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 three 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 we're starting on other than the five I updated you on are all products that are still on patent for a couple of more years and each and every one of them is a billion dollar market or above. To wrap it up, this is extremely exciting. 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 ,, obtaining product approvals, and expanding our sales and distribution organization, and increasing our revenues. With that, I'll go to Q&A. As always, I know that you've submitted questions to Diane. 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 the 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. 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, you know, we don't know. We'll wait until the FDA says that. 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 under a PDUFA fee. The FDA doesn't have to take it up and give it priority over anybody else. Any update on the dopamine agonist? I just did. Any update on the central nervous system stimulus that recently had the positive bioequivalence study?
spk02: Yes.
spk01: As I stated, we will issue a PR once we have an acceptance for review by FDA. We haven't seen data CNS products filed yet. This one seems to be taken longer to file after positive results than usual. 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 manufacture an exhibit batch, just a single batch out of the set of dosages that you have. So if a product has five different strengths, 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 five dosages and you run a clinical trial with one and you pass, then you have to go back and make three batches of each strength. That's 15 lots. Plus, if you want a second vendor, you have to do five more. So 20 lots have to be made after you pass the clinical trial and put on stability. mandatory six-month stability for accelerated and controlled room temperature. So manufacturing the lots take a couple of months. The stability is six months. That's eight. You need to test it. That's nine. And regulatory affairs needs to compile the end. That's at least another month or two. That's 10 or 11 months. So we made the announcement at the end of August, if I can remember correctly, August 28th of 2023, that we passed the BE. Ten months from then will be June 2024. And, you know, this is the filing is happening now. So I think that we're moving at lightning speed. And that's because we took chances and we made the lots at risk because this was an important product and our data was solid when we were going to pass. But under normal circumstances in the future, look at 10 months after the clinical trial passing for a filing. That would be reasonable anywhere in the industry. Can you provide insight into pipeline progress? What are filing expectations for 2024? I expect that we file at least two more in 2024 and hopefully get approval for four. That includes the two needle movers. When does 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. 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 creates revenues and profits, we'll stick with it. When do you anticipate filing the third needle mover product, assuming the trial timeline goes according to plan? Next year, 2024 will be the time. Some questions about PRASCO. Details you can share on PRASCO agreement. Well, PRASCO 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 for them, supported by their data. But we are making lots, and they expect to launch in January of 2024, and we're going to be there right with them. 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 Presco get to keep their prior Adderall quota for us to manufacture? No, that's not the way it works out. As a matter of fact, according to Presco, they never had to deal or think about quota. It was the brand company. Brand companies get all the quota they want. So they were selling the product to Presco, putting it on their label, and Presco was selling it, but the quota does not come with it. Has Elite been able to increase their quota for API, for Adderall generics? The DEA has been kind. They have given us what we need to stay in business. Corporate operation, when will fiscal calendar year, fiscal and calendar year align? This is a Carter project. I definitely want us to go to a calendar year, and he's resisting, so we'll figure it out. He seems to think we'll go to NASDAQ faster, but I'm working on him. It's the first thing I asked Carter to do when he joined the company, and he's pretty busy working on a lot of things that he hasn't done before, you know, the chargebacks and the dead net. There are a lot of things for him to work on, so I'm not pushing him on this, but I really would like to do that, and we'll see what happens over time. Does Mr. Nusrat 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 reverse split. If we stay on the bulletin board, which we're not, then we'll grow organically. 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. A few questions on manufacturing. First, please provide an update on additional manufacturing and all 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? Yep, that's exactly what I gave you. Does Elite have a timeline for when will it max out on our current manufacturing facilities? Really, the manufacturing facility 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 the solution of starting a new warehouse that we will house the finished product at. Will we be able to get more manufacturing space before that happens? Yes. 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 1st, we'll take charge and all end 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 shy away from doing that, and I agree with it, but I'm going to be brave today and tell you this. Let's look at 2023. In the last three quarters, from January until September, we've made more than $30 million. By the end of this quarter, by December, we would be north of $40 million. Next year is going to be a bigger year because we will have PRASCO in the mix. And later on in the year, we will have some of the needle movers as well. So next year, calendar year 2024, will be even bigger than that. And for 2025, it will be even bigger than that too because most of the needle movers we'll 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 $7.5 million to $23 million is only the beginning. I think the next three, four years are going to be fantastic for us and for the stockholders. With that, thank you all for coming. I really appreciate it. And thank you, Matthew, and we will talk to you soon.
spk03: 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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