Elite Pharmaceuticals, Inc. (OTC:ELTP) Q4 2025 Earnings Call Transcript

Elite Pharmaceuticals, Inc. (OTC:ELTP) Q4 2025 Earnings Call Transcript July 1, 2025

Operator: Good morning, ladies and gentlemen, and welcome to the Elite Pharmaceuticals Conference Call. [Operator Instructions] Before management begins speaking, the conference has the following statement. Elite would like to remind the 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 the reports 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. Nasrat Hakim, President and Chief Executive Officer of Elite Pharmaceuticals. Sir, the floor is yours.

Nasrat Hakim: Thank you, Jenny, 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 Dianne. Mr. Ward, you have the floor.

Carter J. Ward: Thank you, Nasrat, and thanks to everybody calling in. We had to wait a few extra minutes, have such a big crowd calling in. So really appreciate your interest. Thank you again for calling in. Yesterday, we filed our 10-K, that’s the annual report. We’re on a fiscal year March fiscal year. So for the fiscal year ending March 31, 2025, that’s our 2025 fiscal year. The reports available at our website, elitepharma.com under the Investor Relations section. You haven’t seen it yet, please get a copy and take a look. As always, I’m going to provide some context and a little color to the financial statements and also answer finance questions that we received overnight as well. I’ll answer that throughout my presentation.

Let’s start with the P&L. Total revenues for the 2025 fiscal year were $84 million. We compare that to $56.6 million for the prior year March 2024 fiscal year. That is a $27.9 million increase or 52%. There’s 2 main factors that contributed to the increase. First, the Elite label has become well established in our niche markets. The 2024 fiscal year is when we launched our Elite label. That was the first year. We were an unknown then. We did well in 2024 and throughout 2025, we’ve now solidified our place in the market. We’ve expanded our market share, and we’re no longer unknown. We are a known entity in the market. We’ve — and we have distinguished ourselves as a reliable supplier of quality product, and that equals increased revenues. The second main factor is the launch of our Lisdexamfetamine product line during the last quarter of this fiscal year, so January to March quarter.

Q&A Session

Lisdexamfetamine is the generic for Vyvanse. It’s a very large market with high demand. On the flip side, there’s also quite a bit of competition in that market, more than 10 suppliers currently in the market. Now we’ve done a really good job. We’ve grabbed a decent share of the market as reflected in the P&L statement. One thing to keep in mind though, the Lisdex market remains highly competitive. Our good name in the industry goes far, but it only goes so far. So we’re doing very well with this product, but this is generic pharmaceuticals. It’s an industry which is defined by tough competition, and Lisdex is a typical generic product when it comes to those characteristics. More than 10 suppliers in the market that equals price pressure, there’s quota pressure because this is a Class II products, all of the factors that are typical to the generic market.

Kirko is doing — he’s our Chief Commercial Officer. Kirko is doing a great job, but this is generics, and that’s saying about past performance, not guaranteeing future results is a part of the fabric of this industry. That being said, we are doing excellent with Lisdexamfetamine. Moving down the P&L. Our operating income was $19.6 million. That’s our income. Our profit, compare that to $10.8 million for the 2024 fiscal year that’s an $8.8 million increase or 82%, almost doubling on profits. Now I got a question that I received pretty much every quarter, and that’s regarding — there’s an item on our P&L below the line. It’s called change in fair value of derivatives. Now this is related to the valuation of warrants that were issued in 2017.

It’s a noncash technical entry required by GAAP, it has to do with the valuation of the warrants. If the valuation of the warrant goes up, we record an expense and we increased liability. On the flip side, if the valuation goes down, we record income, and we decreased the liability. How do we value it? We value it using Black Scholes model, which essentially means that if our stock price increases, the valuation will also increase and therefore, we book an expense. If the stock price goes down, the opposite happens, we book income. During the fiscal 2025 year, this year, our stock price almost tripled. We went from $0.15 to $0.44 and we’re very grateful for that. It’s a good thing. But when you run that through the Black Scholes model, the result is an increase in valuation of approximately $18.9 million and that’s the expense we show on the P&L.

The most important thing to take away here is that we will never pay cash for any expense shown and the flip side is we also will never receive cash if the stock price goes down and we report income. So it’s a noncash expense and a noncash income item. There’s no cash ever associated with this. This is a technical gap book entry. Please also note that our stock price today is much higher than it was even 3 months ago. On March 31, it was $0.44, so the next 10-Q, the one for the quarter just ended June 2025 we’re going to show another expense for a change in fair value of derivatives as a result of the further increase in the stock price. Another thing to note that with the $18.9 million change in derivative value, it resulted in Elite having a pretax loss of $52,000.

Despite showing a pretax loss, we still booked income tax expense of $4.3 million. And I got a question on that. How do we have an income tax expense if we show a pretax loss? Well, the answer is that the $18.9 million expense is not deductible for tax purposes. The IRS and the state tax authorities, they don’t recognize this as an expense when it comes to taxes. So I’ll also add that this item is also not considered in any enterprise valuation models either. It’s something we have to do for GAAP. Got a question on earnings per share. wanting to know what is our earnings per share. Well, that’s listed right on our P&L statement towards the bottom. The EPS for this year, 2025 was 0. And last year, it was $0.02. Now the EPS includes all of those below-the-line items.

So this year, we had that $18.9 million change in valuation, which is a negative as far as EPS. That’s why the EPS went down to 0. Last year, we had the release of a deferred valuation allowance, the asset valuation allowance, that was approximately $19 million in income. Again, a noncash item, but that increases EPS. That’s a positive to EPS. So that’s — keep those things in mind when you’re looking at the EPS, take a look at the below-the-line items and know that they are [indiscernible]. So now to the cash flow statement. Our operating cash flow this year was positive $7.5 million. That’s compared to a cash burn last year of $3.2 million. So that’s a $10.7 million swing to the positive. Now in 2024, last year, we just launched the Elite label and that means we have investments in inventory, receivables or increases in inventory, increases in receivables, and those are drags on cash flow.

And those in last year, those totaled $20 million. So that’s the reason for the burn in 2024. This year, we continue to expand the market share. We launched the Lisdex and the inventory and receivables continue to rise, which is a good thing because that portends to future revenues, but it is a drag on cash flow. Those increases were $13.2 million. So that’s $6.8 million less than the $20 million in the prior year, but it’s also less than the $10.7 million positive trend in cash flow, meaning that this doesn’t fully explain how we went from $3 million burn to $7 million positive. The factor that bridges these 2 is the profits. Remember, operating profits were up $8.8 million. Profits are a major driver of cash flows and profits are the reason that we are in business.

So we buy inventory, we sell, we increase our receivables, we collect every time I call that a rotation, everything is to the positive. And eventually, it’s going to result in cash flow, and it has. So now to the balance sheet. This is a good segue because the balance sheet continues to strengthen. And I looked over some of my prior presentations, and I’ve been saying that for quite a while now. So our balance sheet continues to strengthen, which is a great thing. Our working capital as of March 31, 2025, was $45.9 million. Now you can compare that to $27 million as of March 2024. That’s a $19 million increase or 41%. Drill down further into working capital. Remember, working capital is current assets minus current liabilities. Our current assets increased from $40 million in 2024 to $58 million this year.

And then — but the current liabilities, they decreased from $13 million in ’24 to $12 million this year. So you don’t see that too often. Current assets increasing by $18 million with current liabilities actually decreasing. you can expand that analysis even further and you look at the noncurrent liabilities, you’re going to see a similar trend. Our noncurrent liabilities, excluding the derivatives, the noncash were $5.8 million this year compared to $6.7 million in 2024. So that’s a decrease of $900,000. The takeaway here is that Elite has low debt, and it continues to decrease. Our debt continues to decrease. We have low debt, decreasing debt combined with increasing working capital, both things you want to see and both are hallmarks of a strong balance sheet.

So this is what I mean when I say our balance sheet continues to strengthen. That’s what I look at. also received a question on when we are paying the loans, which are owed to Nasrat and one of our directors, Davis Caskey. If you look on our financial statements, there’s a subsequent event section, I think it’s Note 17, and it says that we have paid those loans to Nasrat and to Davis Caskey. They’ve been repaid after March 31. So as of March 31, we still owe the money. It’s on our financial statements, but it’s no longer owed. And going forward, you’ll no longer see those liabilities on our balance sheet. That loan gave us working capital. That was about 2 years ago when we were just starting with the process of launching the Elite label. So that loan gave us the working capital that kickstarted the Elite label.

And you see how well that’s worked out. And that working capital was crucial in this success. So Nasrat and Davis provided that money just when we needed at the perfect time, and it worked out extremely well. And that’s one of the good things about working here, one of the things I enjoy working with Nasrat and having such support from him and our entire Board of Directors. Really great working with them. I have a few more questions that I received before I wrap it up here. Will Elite be an accelerated filer in fiscal 2026, the year — fiscal year that we’re currently in. To be an accelerated filer, the main criteria that we would have to meet is that we haven’t already met is we need more than $100 million in annual revenue to be an accelerated file.

So let’s see how that plays out, just something that we’re monitoring. Does Elite plan to change to calendar year reporting? We get that question a lot, and the answer to that is no. We are focusing on other areas that provide greater shareholder value than changing the reporting period. We’re not going to spend the resources and the time and the focus on that. We’re doing that elsewhere. So to sum up these financials, our record — we had record revenues this year, above the record revenues from last year. This year, we crossed $80 million for the first time. We had record profits, just under $20 million in profits. It’s clear that the Elite label is establishing itself in the market. The Lisdex launch was extremely successful and continues.

Our balance sheet is strengthening. Our cash flow is solid. Working capital is increasing. Debt is decreasing. So put that all together, I’d say it was a good year. It was a really good year. Our next quarterly report is due in August, and we’ll have more to say then. Now I’d like to introduce our Chairman and CEO, Mr. Nasrat Hakim.

Nasrat Hakim: Thank you, Carter, for this wonderful news. Just to recap a couple of things that Carter said and take it up a notch. Elite continues on a strong growth trajectory. Our revenues for fiscal year 2025 were $84 million, like you heard, 52% growth over the year before. Operating income from 2025 was $19.6 million, and that’s an increase of 82% over the year before. Another record year for Elite. I’ve been saying that for 5 years now. Operating profits grew from $2.1 million in 2021 to $10.8 million last year and $19.6 million this year, $2.1 million in ’21 to $19.6 million this year. Revenues grew from $25 million in ’21 to $57 million last year and $84 million this year. Not too long ago, Elite’s revenues were $7.5 million for the entire year, not the quarter for the entire year, and the stock was lingering between $0.03 to $0.05, about $0.04 on the average.

A $100,000 investment in Elite back then would have generated $1.5 million today. That’s nice. $100,000, you would have bought a nice car, $1.5 million, you’ll buy a house and a couple of nice cars. Now just to reiterate what I’ve said before in previous calls, I’m not saying this, and I’m not asking anybody to buy or sell Elite stock. That decision to invest or not to invest is between you and your financial adviser. I’m not crazy about people that invest in the stock and when it goes down, they come coming to me and when it goes up, they think they’re brilliant. This is between you and your financial adviser, whether you invest to release or not, it’s your decision. Our job is to report the numbers that we’ve generated by our team’s hard work.

Any way you look at it, it’s an outstanding growth, and our stock price reflects it. The recent growth comes from our launch of Lisdexamfetamine and strong results from our existing commercial products, including the mixed Amphetamine IR and ER. Don’t want to lose sight of that. Lisdex is the new kid on the block, but our foundation has been the legacy products plus Amphetamine IR and ER up till now. Think of Elite as revenues as coming from 3 sources: the old legacy products, Amphetamine IR, ER and Lisdex. Lisdex was launched in January as a central nervous system stimulus used for attention deficit disorder. The brand is Vyvanse and the IQVIA reported annual sales of over $3.5 billion based on NSP for this product. The market volume for Lisdex is growing still due to continuing brand to generic conversion, and I’ll explain that in a second.

Overall market growth due to increased scripts because any time a product becomes generic, more doctors write it up and because more insurance companies allow it. The generics have about 68% of the market year-to-date in 2025. That’s up from 53% in 2024. Both numbers are impressive that the brand is still holding on to that much, and that’s because of the quota and other issues. But what you can see is that further market penetration by the generics is expected. Usually, when a product becomes generic, it drops by 90% in sales from the brand and becomes all generic and then it expands more because more doctors write scripts. In this case, it has not happened because of quota and the fact that the brand received a huge quota last fall. As the market generalizes, the price competition is increasing so that the margins will go down.

But the margins continue to be very attractive. We have 13 companies that are active competitors in the market right now. Elite currently has about 8% to 10% of the market according to IQVIA. When you have 13 companies that are fighting for this huge product and little Elite gets 8% to 10%, that’s an excellent solid start. In addition to Lisdex, our existing products are doing very well, starting with generic Adderall IR. The IQVIA reported annual sales for Adderall IR of $400 million based on NSP, and they reported Elite’s market share year-to-date of the IR to be about 20%. Again, that’s an old molecular entity. This product has been around for a long time, and the market is stable, and we’re doing that well in it. This is a strong product for us.

Another of Elite’s important product is generic Adderall XR. The IQVIA report annual sales for this is $800 million based on NSP, and we command 16% of the market according to IQVIA, 11% on Elite’s label and 5% under the Burel Pharma label, which is Prasco. Now note that Prasco’s nonexclusive license for Amphetamine ER ended in March 31, but they are selling out their remaining inventory. It ended in March, but they still have a lot of material that they are still selling to today. Going forward, once they are depleted, Elite will sell this product exclusively under our label. The next set is the legacy products, Isradipine, Trimipramine, Phendimetrazine. They are small market size, but Elite has a strong market share with attractive margins for these small products.

Example, for Isradipine and Trimipramine, even though they are small, the margins are not bad, and we command about 50% of the market. Precision Dose license for generic naltrexone and phentermine tablets and capsules in September. At that time, Elite will begin selling these products exclusively under our label. But nevertheless, as of today, that is still a part of our legacy products, the bariatrics and naltrexone that Tagi and Precision Dose have been selling for a while. Other than these 3 categories, we also have what we’ve launched recently and they are still working on. We’ve launched generic methotrexate. It’s a small product for $1 million NSP according to IQVIA. We have a minor share of the market in that. Generic Oxy/APAP, that’s the brand for Percocet.

The IQVIA report annual sales of $300 million per year for this product. And for Hydro/APAP, the brand is NORCO, IQVIA reports $325 million in sales. Elite is beginning to build market shares in these products. These products are large lots, easily accessible, lots of players and small profit margins. And that’s why we have not been as aggressive with them, okay? They’re going to take up a lot of lab time, a lot of equipment, and we will get around to them, but we have bigger fish to fry. We have the list taxes of this world and the Amphetamine IR and ER. Amphetamine. Generic Codeine and Acetaminophen, generic Codine and APAP, which we launched in October, has a growing market share, which is currently — this is our share of 5%, okay? It’s a $50 million product according to NSP.

We’re at about 5%, and we will continue to grow that market. In the near future, sometime this year, we have methadone to get through validation and launch. And we have not given it a priority because, again, once Lisdex hit the market, that became the #1 priority, but that will be coming sometime this year. The IQVIA data for that is about $20 million of — according to NSP. Our partner, Dexcel which received last October for Amphetamine IR approval from the Israeli government. They have received, meaning they picked up their first order from Elite. We don’t know if they shipped it to Israel or when it’s going to get there, but when it gets there, the product will be launched. They have also put in for a second order for later this year. Dexcel provides the sales and marketing and distribution for Elite’s product, Amphetamine IR, which we will manufacture and package for them.

They pay a transfer price for the product and Elite will share in the profit when the sales prices exceed certain amount. We have a 3-year agreement with Dexcel, and it is renewable for 2 additional years and everything after that is negotiable. In our development pipeline, we have 2 ANDAs filed and under review by FDA. Generic Oxy ER, whose brand is OxyContin. It’s a Paragraph IV filing and the patent lawsuits is underway by multiple companies against Purdue. We’re waiting to see what happens in courts. And from our side, we have been extremely smart. Dr. Kim Smith handled this brilliantly. We have tried to avoid being a part of the lawsuits and let everybody duke it out while we don’t spend any money on lawsuits. And so far, we’ve been successful.

But now it’s time to face the music. So last week, we filed a motion to dismiss against Purdue. Most likely, the judge were rejected and we’ll have to go through discovery sometime in 2, 3 months. But we are trying to delay the process from having to spend money on this and let other companies do it out for as far and as long as we can. The second is a dopamine agonist ANDA for the treatment of Parkinson’s. We are due to respond to FDA inquiries very soon by August, I believe. And then the FDA will make a decision whether they have more questions or we can move forward. We will update you and update everyone on these products as they receive approval. We recently announced the successful BE study for undisclosed anticoagulant, i.e., blood thinner — that is the brand has not gone generic yet.

The annual sales are $27 billion according to IQVIA, and the market has not been genericized yet. There is no generic in the market by anybody. The brand has unexpired patent listed in the Orange Book. And of course, everybody have to wait until these patents are overcome. They are unexpired or somebody have to challenge them and try to invalidate them. We expect to submit the ANDA probably in Q1 of 2026. We have stability work to do. We’re working hard on R&D. Elite has other generic products expected to enter BE studies, but we got to make sure we have finalized formulation for these other products. before we enter the BE study. We need to make sure that the testing is robust. The clinical batches withstand stability and no unexpected issues come up.

BE studies are not cheap, and we need to make sure before we start one — and we can start the pilot, but start the BEE study, we need to make sure that all of our docs are in the row. We continue to make R&D a priority, and we will update everyone on these products upon the successful completion of a BE study like we did with the blood tin. As far as our facilities are concerned, and there’ll be a Q&A about that, our 34,000 square foot state-of-the-art inventory and packaging expansion is operational. With this expansion, Elite has the capacity for all of our products coming to Elite to be able to be packaged here for the next 5 years. Right now, running only 1 shift, we have more capacity in that facility to be able to package everything that we have, just on one shift.

Just to summarize, Elite’s 5-year trend of growth continues. Elite is executing its strategy of developing and filing new ANDAs and growing sales while supporting our working capital growth and pipeline development. The increase in the ELTP stock price reflects this growth. Lisdex is expected to continue to be a key product for Elite with attractive margins over the next year as this market continues its conversion to generics. Amphetamine IR and ER is a mature market, and we expect to successfully defend our strong market shares and Amphetamine ER is expected to grow after Prasco is phased out. Elite is positioned as an attractive midsized generic pharmaceutical company with consistent profits, steady growth and low debt. Our stock price has been strong, and we continue to evaluate mergers and acquisition options and alternatives, including uplisting to NASDAQ, and we will report back when we have material events to report.

Let’s go to Q&A.

Nasrat Hakim: We have lots of questions and many of them was really good because they were redundant. So a lot of people are interested in the same thing. We have lots of questions, but they come in different categories. So we’ve divided them up for you for general. The — of course, a lot of questions about the anticoagulant partnership, which is Dexcel, potential sale of the company. So that’s how I’m going to go through them in the form that I just listed. We’ll start first with the general stuff and go down the list and we address finally the potential merger and acquisition. First question is from a gentleman who’s asking, when is Elite planning to apply with the FDA for a greater expansion of the manufacturing capacity of other drug states besides tablets and capsules.

And the reason behind this and a few other people ask about the same subject is the gentleman is a vet who used ketamine in his practice and recommends that we explore it. Ketamine is an injectable product, and it’s also available as inhaler. It’s not a tablet of a capsule that’s approved by FDA, but I know that people compound it into a [indiscernible] or a solid dosage for animals or for humans. This will be an original NDA, new drug application or at the very least a 505(b)(2) NDA. So this is going to be a long-term project to explore. And thank you for that. Another gentleman sent us a list of the top 10 blockbuster drugs with the patents expiring in 2025. I do appreciate the positive ideas and interaction with our stockholders. Thank you both, and please keep them coming.

This is the kind of feedback that I really appreciate. People are thinking positively and giving us positive feedback. Can you provide an update on the old packaging line moving to the new facility? And any update regarding the new manufacturing suites that are to take their place at the old facility? Yes. So let’s break it into 2. The first one, we have moved the old packaging line into the new facility after we made sure that the new packaging line is working. So first, we set up the new packaging line, we transferred over there, but we left the old packaging line in its place just in case if something goes wrong. And sure enough, after 2, 3 months, because of serialization and other issues, we start noticing anomalies. We immediately stopped reverted back to the old line, got all the engineers that sold us all the equipment to come in, troubleshoot.

They fixed the whole thing, tested it again. It’s been running great. So we went ahead and transferred the old packaging line to the new facility. So now in the new facility, we have 2 packaging lines, which freed up the space where it used to be. We have not purchased any equipment or done anything in that space yet. We barely just stripped it. It takes a little bit of time, but that’s where we stand. What can you say about the API shortage reported to FDA and DEA? Well, we are required to report to the FDA on product shortage, whether it is controlled substance or not. For example, Naltrexone is not a controlled substance yet we were notified by our suppliers a few months ago that they’re not going to have anything like from January, February until June, July due to API shortage on their part, the API that goes into making our API.

So we have to report that to the FDA. Other shortages happen because of quota issues. When you sell all of your quota and then you can’t sell anymore, people will call in and they want to buy a product, and you’ll have to tell the FDA, I only have limited amount for people that I’ve committed to, and that’s about it. So that’s what I believe you’re referring to. We have to report that on a monthly basis, and we’re very honest and not front about it. latest pharma and China tariffs impact, do we have any impact from these turfs. As of today, the active pharmaceutical ingredients we have imported are exempt from the Trump turfs. Also, our imported APIs were and continue to be duty-free, okay? We have not felt it on the API. There were other little issues where some price increases are here and there, but overall, it has not been really that material.

Predictions for the 2026 and 2027 annual review, annual revenues of current and other approved generics, we’re not going to do projections down the line because we don’t know. Okay. The blood thinner and anticoagulant, lots of questions about this. I will read some of them just to show you the trend and so you can understand that we’ve read your question. And then I’ll answer all of them as a package. Lots of questions about that. Please tell us more about the $27 billion debt. Will this be the strategy moving forward? Elite is to go after unexpired patent blockbuster drugs ahead of our competitors to be first to file and get the 180-day exclusivity. How does Elite intend to address the unexpired patent? Does Elite anticipate any potential litigation?

Has Elite communicated with the patent holder and NDA holder? What are the patent challenges noted in the press release? — what percentage of the market for 2027 generic anticoagulant can Elite realistically capture? Realistically, I can’t answer that. We haven’t even filed the application. But let me go through the others. By and large, it’s an outstanding product. It’s the best anticoagulant out there, period. It does have a patent. We are not — I would love to become a Paragraph IV company, but we are not set and built for that. We can do onesies and twosies, but we’re not Teva or activist. The unexpired patents and the litigation and all of the stuff you’re asking about are patent issues that will be settled after we file. We have to notify the and the holder that we filed, and we are or are not infringing on your patents.

If we are not infringing, they’re going to come and look and see that we’re not. If we are infringing, I’m a nice guy. We’re not going to launch until the patent expires or the court rules otherwise. We’re not going to go fight in a battle we’re going to lose. So if they have a solid patent, you leave it alone. If it is obvious or something that can be challenged, you challenge it. We will deal with that, though, in a couple of years when we get the approval. Okay. For the $27 billion new anticoagulant just announced, is the branded drug — or does the brand drug have foreign patent expiring before U.S. patent? Would Elite pursue foreign partnership to sell our generic in foreign market prior to being able to enter the U.S. market? I left this question separately from the others because it was something I was exploring before we got this question.

And unfortunately, the answer is no. If it was approved in the U.S., if our application was already approved in the U.S., then I could do that. I will find somebody and we will file with the dossier in Europe and be a lot less paperwork to get an approval. But since we only passed the BE that has not been reviewed by the FDA, and they have not approved the application, I cannot do any of that. I’ll have to go to Europe, make everything from scratch, file with the authority there, BE study there and do the whole process, which will take a very long time. I don’t mind if we can partner with somebody to do that, but that’s not something I’m pursuing at this time. A very, very, very good question, though. Next question is I noticed that under the tab of pipeline and generic drugs, the list is empty.

Is this because — is this done on purpose to protect our secrecy from our competitors? Yes, we don’t list the name because people go shopping and to see what you’re doing and then they start making the same product. How many potential drugs are actually in our current pipeline? And approximately, what’s the IQVIA amount? We have several products in the pipeline, and we’ll issue the IQVIA amount once we pass the BE study or when we file the application. any good news with R&D in India or elsewhere to expand our pipeline. Another question, in the R&D, is it happening soon? The answer is yes, it is happening. But like a lot of things that happen in the industry with the turfs and people getting gunshy, people from India are not being able to get a visa to the U.S. as easily as they were in the old days.

And a part of our strategy with the Indians that they’ll develop everything there and then they’ll transfer it over here. And even though we’ve been successful at doing one where a guy came in, the top scientists came in and we worked on a product, the next set, the 2 scientists were not able to get a visa, so we’re working with them. So the answer is yes. It’s not going as fast as I would like it to, but it is happening. Any good news with Dexcel launch and time line? Yes. As I stated earlier, Dexcel said they are ready to receive the material, so they came and picked up the inventory. We don’t know if it’s on ship or when it’s going to get there as by plane. But when they launch it in Israel, they let us know, and they already put in an order for the next shipment in a few months.

Potential sale of the company. That’s the last group of questions, and we’ll start covering those again. I’m going to read some of them because they’re redundant, and then I’ll address all of them combined. Do we know what course we are taking buyout or NASDAQ? Our top priority is merger and acquisition, a buyout. If that does not work, then NASDAQ is an option. I am following up on message on the most recent quarterly call where he anticipated transforming — transferring to being listed on the NASDAQ sooner rather than later. Possibly during the current quarter, could you please provide me with an update on where we are in the process? I made the point during the last conference call of saying merger and acquisition first than NASDAQ for a reason.

And even if we wanted to, we couldn’t go to NASDAQ in a quarter. There’s a lot that goes into being uplisted on NASDAQ. It’s a lot of work. How does this feel about getting acquired with a premium added to the acquisition price per share with a potential 25% turf on European nations? I like it, sign me up. The fact is once we put Elite out for a bid and a serious offer is made, then at the end of the day, you, the stockholder, will decide whether we sell the company, me if I like it or not, really, at the end of the day, it’s your vote that will decide. Wouldn’t every big pharma company you want to acquire a company like Elite to avoid the turf if drugs are manufactured in the U.S. versus waiting 5 to 10 years for a newly built facility to be approved by the FDA to operate and manufacture drugs.

Absolutely, you would think so. And we are a very nice fit for many companies. The fact is most companies have their own problems and internal politics and policies and internal agendas. So not too many people will make the initiative, and this is why you need an intermediary, an M&A firm to go and reach out to these people. A lot of people know something is a good deal, but they don’t want to take a chance because they like their job and not of the fear, if it goes sour, then they’ll be blamed. But I agree with you, we are a good fit for a lot of companies, and we will see what happens next. Is Elite actively reaching out to all big pharma companies and informing them that we are for sale and ready to be acquired or merged to avoid the turfs if their drugs are manufactured outside the U.S. Have any potential suitors approached Elite to discuss a buyout?

Was there any activities around the buyout? Did we hire an M&A firm? Does Elite have a target sale price in mind? Have any suitors come close to this price? Okay. That’s not how it works. We don’t set the price in mind and we don’t tell people come on down and buy us. We have a firm identified that we are heavily engaged with and have been for a while, but we have not hired them officially yet for the purpose of M&A. Once we do, we are locked in with them for a certain period of time. So we want to make sure we are 100% sure before we move to Phase II. There are steps that must be taken before we get to that point, okay? This is where you start. You start with valuation. Elite does not do that. We don’t say how much will work. We provide paperwork and somebody else does that.

An independent firm performs the valuation, and they issue an opinion that costs a lot of money if you ask for it because that makes them liable that what they are telling is the truth and other companies would rely on that, including the stockholders that it has been done properly, okay? So to summarize everything that everybody is talking about or asking for these 15 questions or so that we got on this subject, our primary objective is M&A. To do so, we need to contract an independent firm, M&A firm to conduct valuation of the company. We’ve done that. This is not an easy task for a growing company like Elite. When you are set an income, it’s a lot easier to come up with a value of what you’re worth. But when we are growing, it requires different more complicated models.

We have our legacy products that are easy, Isradipine, Amphetamine and Naltrexone and the bariatrics. That’s an easy assessment. We have Amphetamine IR and ER. That’s not that difficult to evaluate either because we have a good history on them and they are mature market with solid history of sales, okay? But we have Lisdex, which we just started. And pending products are a lot harder to evaluate. At the end of the day, we’ll get a range representing best and worst-case scenario because when they draw models, they don’t come up with a single number. They have to say, well, under these conditions, this is what you’ll do, under these conditions, that’s what you’ll do, and it have to be a range, okay? The process is complicated and it involves a lot and it involves everybody.

So just let me walk you very quickly high level through this. Our departments in-house, they go through audit themselves, internal audits by implementing GMPs and checks and balances. The department heads have to monitor the employees and make sure that we’re doing everything perfectly. Carter and his team audit all departments internally to make sure he’s ready for the external auditors. Auditors like [ Mizzars ] will come in with their team on site and by requesting the electronic documents and audit Carter and his team. The auditors are responsible to their management and the SEC for the Qs and Ks that we filed. And they could be audited by the SEC or they could request out to be performed on us with lawyers from a separate firm overseeing the whole process.

Now on top of all of this, we need an independent M&A firm that we hired who will audit everybody and then come up with their own projections and models for the valuation. That becomes Phase 1. Next step is Phase 2. If the numbers they come up with are agreeable, then we’ll give the M&A firm a green light to move forward and find a suitor. Then the acquiring firm, the one super who’s interested in us will do their own valuation and make an offer. They’re not going to take anybody’s word for it. It doesn’t matter how many checks and balances you have. If the offer is reasonable, it will be presented to the Board of Directors for a vote. And then upon their approval, you guys are the final say in this process. You make the final decision, you, the stockholders, okay?

We will decide if we will enact Phase 2 within the coming 3 to 4 months. By then, we’ll have a couple of quarters of list sales under our belt and a better idea on the valuation. If these options do not look attractive, then and only then we’ll add NASDAQ uplisting to the mix. I hope that was a nice summary. And if anybody has any questions, we are meeting together in 6 weeks, and we’ll hope to talk to you then. Thank you, ladies and gentlemen, and we’ll talk to you in 6 weeks. Thank you, operator.

Operator: Thank you very much. This does conclude today’s conference call. You may disconnect your phone lines at this time, and have a wonderful rest of the day. We thank you for your participation.