Elite Pharmaceuticals, Inc. (PNK:ELTP) Q2 2025 Earnings Call Transcript

Elite Pharmaceuticals, Inc. (PNK:ELTP) Q2 2025 Earnings Call Transcript November 16, 2024

Operator: Good morning, ladies and gentlemen, and welcome to the Elite Pharmaceuticals Second Quarter of Fiscal Year 2025 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 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 report 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, Matthew 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 you a summary of the company’s financials, after which I’ll give you an update and answer some of the questions you’ve submitted to Dianne. Mr. Ward, the floor is yours.

Carter Ward: Thank you, Nasrat. Good morning, everybody, and thanks, everyone, for calling in today. We filed our 10-Q yesterday. It was for the second quarter of our fiscal year ending March 31, 2025. It’s for the three and the six months ended September 30, 2025 [ph]. The 10-Q is available at elitepharma.com under our Investor Relations section. So please take a look if you haven’t already. Before moving on, I think we had a question on if we were going to change our fiscal year — the March fiscal year to a calendar year and just wanted to let you know that, that is not a priority right now. So fiscal 2025 remains in effect. And so this is the second quarter of our fiscal year ending March 31, 2025. I’m going to discuss the financials, as always, provide some context, a little color to the financial statements and answer any finance questions that I received overnight.

And I did get some good questions this time. Thank you very much. I appreciate everybody’s interest, and I appreciate taking the time to ask those questions. So I’m going to start with the P&L. Total revenues for the quarter were $18.9 million, and that compares to $14.2 million for the September 2023 quarter. That is a $4.7 million or 33% increase. On the year-to-date for the six months ended September 30, the revenues were $37.7 million and that compares to $23.1 million for last year, a $14.5 million increase or 63%. Operating income was $3.5 million for the quarter, and $7.3 million for the six months this year, September 2024. You compare that to $1.9 million and $3.5 million for the last year’s quarter and six months. So $3.5 million this quarter, $1.9 million last quarter.

Q&A Session

Operating profits, $7.3 million six months this year versus $3.5 million last year. So we have an increase of around 81% on a quarter-to-quarter basis, almost double. And in six months, we were up 108%. So on a year-to-date basis, we more than doubled our profits from last year. I mentioned this last few quarters, but our revenue trend continues to trend upward. Let me just recap. June of 2023, the first quarter that we launched the Elite label, we had $9.8 million in revenue; September 2023, $14.1 million; December 2023, $15.5 million; March 2024, $17.9 million; June of 2024, $18.8 million; and this quarter, September 2024, $18.9 million. So still up. The products, I call it the Phase 1 of the Elite label. Those products have been launched.

They’ve been in the market for around 18 months now. They’re reaching a steady state, and we have quite a defined market share, secure market share. So now we’re into the next phase of the Elite products, and they’re starting to be launched or they’re close to commercialization. We launched methotrexate in August. We launched Codeine APAP in October, just after the close of this quarter. Both of those, it’s too short to have a commercial window, too short to have an effect on these financials, but they will start contributing in future periods. We also have the recently approved ANDAs. They are nearing commercial launch. Those we purchased in June of this year, and that’s hydrocodone and APAP, which is generic for NORCO; the oxycodone and APAP, which is generic for Percocet; and methadone, which is generic for Dolophine.

So those are all nearing commercial launch. And there’s more in the pipeline, even more that is nearing commercialization. And Nasrat is going to discuss that in more detail with his comments. But the takeaway here is that as everyone in our business says, pipeline is the lifeblood of generic pharma, and that is so true. Our pipeline is very robust. We have current levels of sales that is steady. There’s a critical mass there of sales and our pipeline showing factors indicating that we have the ability to continue the upward revenue trends even above our current levels. Now before moving on from the P&L, I got a good question. Do you expect gross profit margin to go up after the new drugs are launched due to sharing the cost of the new facilities and equipment across more drugs?

And that is quite a big question. So there’s a lot of factors at play when you’re talking about gross profit and margins. First, gross profit consists of sales, which is units sold times the price and minus the cost of sales. And cost of sales is materials, labor overhead. And labor and overhead, they have fixed and variable costs. So there’s a lot of moving parts here. So with regards to the sales part of the margins, we’re in the competitive market. Generic pharmaceuticals in the United States are very competitive, so units and price can always be variable. But the variability in our Phase 1 products, it’s been flattening. The products have reached an establishment in the market. But regardless, there’s always going to be variability there.

And then when we bring the new products on, there will be increased variability as they get launched, accepted, and hopefully established in the market. Then looking at the cost side, the labor and overhead costs there also can be very variable, and they’re especially driven by volumes and factory utilization rates. So we’re expanding to increase our manufacturing footprint. We’re expecting more volumes, and we need to have more facility available. But we’re still quite lean, especially compared to the much larger players in the generic market. So we are a lean company, and we very closely manage our labor and overhead utilization rates. They are always an area of focus. They’re always a priority, and we need to — we’re always looking to keep those within a range that gives us the most efficient use of resources that we can while still assuring that we’re able to manufacture to meet demand.

And we’ve done that. We’ve done it well, meeting demand, supplying our customers. Our customers, they give us service level scorecards, and we’ve done very, very well with those. So we get a good report card from our customers. As far as with the new facility, we’re scaling up for increased production to meet the increased demand that we anticipate. And the endeavor is to achieve increasing costs that increase in a lower rate than the increased production. So we want to get more for less money. That brings the unit cost down. That’s more efficient operations, and this will drive our gross profit margin rates up. So there’s a lot of moving parts to this question. Gross profit margin is quite a large subject. It’s always an area of priority. We look at all the factors as we manage this company through the growth in our operations going forward.

Now moving down to the cash flow statement. This is also interesting. Operating cash flow for the six months ended September 2024 this year was a positive $4.6 million. Now you can compare that to last year when it was negative, it was a cash burn of $2.9 million. That is a $7.5 million turnaround and a turnaround in the right direction, positive direction. When you launch a new label like we did last year with the Elite label, there’s an upfront working capital requirement, and it’s generally in the form of investments in inventory and receivables. We have to buy inventory well in advance to make it to sell it, and then we have to wait to collect on the receivables. So inventory goes up, receivable goes up. This is a strain on cash flow. And that’s why last year, we had that cash burn, $2.9 million cash burn.

But now we’re 18 months into the Elite label. We’re beyond the launch phase and all of those associated upfront factors. Inventory receivables, they’re rotating as they should. Every time they rotate every time we make and sell and collect, we’re generating positive cash flows, and that’s why we’ve swung into the positive cash flow territory in such a major way. But what’s really interesting here is that while our cash flow is positive, our receivables and inventories continue to grow. So we’re buying more, we’re selling more, we’re collecting more, our receivables are growing, meaning we will be collecting more in the future. Those inventory receivables combined increased by $3.2 million this year. So the increase in inventories, that points to increased sales.

We’re buying more to make more to sell more. And that results in increased receivables, which points to increased cash receipts. So we like to see both of these. They are pointers to continued growth, very positive metrics that we’re happy to see. Now let’s stay on the cash flow statement. Looking down, we’ll go to the cash flow from investing section. There’s a couple of items there. We purchased ANDAs for $900,000. Those are the ones that I just spoke about. That was in June of this year. Plus we added almost $900,000 more in property and equipment purchases that we paid cash for, and that would be related to the facility expansion. Both of these are investments for the future growth, and as they’re part of the pipeline. The pipeline is the lifeblood of this company.

And the property and equipment are part of the new facility, which are being constructed in order to manufacture these products as they come online, as they’re launched. So when you put it all together, you take into consideration we had almost $5 million investment in increased inventory and receivables in the pipeline products in the new facility. With all of that, we still had an overall positive cash flow of $2.5 million. Our cash increased by $2.5 million so far this year. So the takeaway here is that the current operations by themselves are generating cash and profits that more than cover the investments needed to support even more continued growth in our business. So now on to the balance sheet. Cash as of September 30 was $9.6 million, and that’s up.

As I just said, it’s $2.5 million more than it was on March 31. Working capital on September 30 was $32.4 million. Working capital is current assets minus current liabilities. We had a surplus of $32.4 million, and that’s an increase of $5.5 million since March 31. I think I’ve said this before, I think I probably say this every call, but profits drive working capital. And then again, our financials are demonstrating this. Our balance sheet continues to strengthen by this equation. So I got a question on the balance sheet to — might as well answer now. Explain the variance in liability since the June quarter. So total liabilities in June were $29.6 million and the total liabilities in September were $40.9 million. So that’s $11 million increase.

But you look at what is in the total liabilities, and there’s one thing that jumps out at you and it’s the derivative liability for the warrants. That increased, that went from $9 million to $22 million. So that increased by almost $13 million. So while my total liabilities increased by $11 million, the derivative component of that increased by $13 million. So if you take that out, the overall liabilities actually went down. Let me just say one thing on the derivatives. I’ve mentioned this before, but the derivative liabilities are related to the warrants and they’re valued using the Black-Scholes method and they essentially — the level of liability varies directly with our stock price. If the price per share goes up, the liability goes up.

If the price per share goes down, the liability goes down. In June, our stock price was $19.9 million, in September, our stock price was $38.8 million. It almost doubled over this quarter. Now we’re — I don’t know where we are right now, but around $0.50. So thank you, everybody for bringing our stock price up. One of the effects is because of the calculation, the liability goes up. But always keep in mind when you see this liability, it is a noncash item. There will never ever, ever be cash involved with this liability. Just something that we record to comply with GAAP. So instead of looking at the total liabilities, I really focus more on the ratio between liabilities and assets, especially the working capital — the current liabilities.

Current liabilities as compared to current assets. That’s all working capital. That’s my main area of focus. We have large investments as you see in inventory and receivables. Generally, as those increase, you’re also going to see an increase in accounts payable and accrued liabilities. They kind of track with each other. The important thing is you always want to have more on the asset side than the liability side. That’s a surplus. That’s your working capital. The larger the surplus, the better it is, the more liquid we are, the stronger our balance sheet is, and we have a $32 million surplus as of September 30, and that surplus grew by more than $5 million this quarter alone. So that’s the metric I’m most focused on with regards to liabilities, and it does show our balance sheet is strengthening.

I think I had one other question on the warrant liability or the warrants in general and that was related to asking are we going to shift to an adjusted EBITDA disclosure of reporting with that, excluding the warrant impact on EBITDA? So first of all, it’s not possible to remove the warrants from the financials. GAAP requires that we account for them and we present them as we are presenting them. So the balance sheet, the cash flow, the P&L statement, they all have to take into consideration the warrants and they can’t be excluded. But what you’re referring to with an adjusted EBITDA is really what’s known as a non-GAAP financial measure, and that would have to be presented in a footnote manner and not part of the core four financial statements, something separate in a footnote.

And that’s not something we’re considering at this time. Everyone I speak to regarding Elite financials, they evaluate the warrants and their impacts separately, depending upon the nature of the analysis that they’re conducting. So we disclose as per GAAP, the warrants are easily identified and whosever’s evaluating our company can either include them or exclude them depending upon the nature of their evaluation. That’s really what happens. So to sum things up, our financials continue on the growth trajectory. Revenues are up, profits are up, working capital is increasing, debt is low. The balance sheet is strengthening. Cash flow that we’re generating internally is funding future growth. The pipeline is progressing and positioned to maintain an upward trajectory.

So all-in-all, it was quite a good quarter. Now our CEO, Mr. Nasrat Hakim, will provide his comments.

Nasrat Hakim: Thank you, Carter. Nice picture of our growth. Elite is in its best financial position ever and continues to grow. As Carter stated, our revenues grew to $18.9 million this quarter, which is more than 30% growth over the same quarter last year. And year-to-date revenues are $37.7 million, which is more than 60% growth over last year to date. Profits grew similarly. Year-to-date profits, as you heard, $7.3 million, which is more than 100% growth over year-to-date from a year ago. It is amazing that our profit in the first half of the year is $ 7.3 million. And in 2019, our entire revenues were $7.3 million. That’s in 5 years. In 2020, it was $17 million; ’21, about $25 million; ’22, $32 million; in ’23, $34 million.

In our Elite fiscal year, 2024, $56 million. Halfway through the year, we are at $37.7 million. We are on target to have another great year, we are on target to skip the 60s and go for the 70s. This is going to be another record-breaking year for us. Our growth cycle continues, and it will be even stronger starting in calendar year 2025 and beyond. Our stock price now reflects our current growth, growth that will continue beyond 2024, 2025 and 2026. Elite still has many new product launches to come, and I will talk about that shortly. The most important products for Elite continues to be the generic Adderall IR and ER. We continue to see strong market demand for those products, and we have a significant market share for each of them. Other products such as Isradipine and phentermine and Phendimetrazine, et cetera, are doing well.

We recently launched generic Methotrexate. It was launched late August. This product was on the FDA’s shortage list earlier in the year, but currently, it is no longer. We have picked up a modest market share for this product so far. Generic Codeine with APAP was launched in October. This is the brand for Tylenol with Codeine. This product was approved a few years ago, but we waited until the market needs were right before we launched it. Although we have just launched this product, we are expecting to achieve a reasonable market share by the end of this year. Elite has also two licensees, Prasco has a non-exclusive license for Amphetamine ER that ends in March 31 next year. Prasco has been selling Amphetamine ER under the Prasco and Burel Pharmaceutical label.

After March 31 however, Elite will sell Amphetamine ER exclusively under our label in the USA. Precision Dose is another partner that we have Naltrexone, phentermine tablets and phentermine tablets licensed to. They sell under both TAGI and Precision Dose label. Their license is up for renewal next September. Naltrexone API is in short supply currently and this is limiting supply for both us and the rest of the industry. In addition, our partner, Dexcel received approval in Israel in October for Amphetamine IR. A product launch is expected during the first half of 2025. We have a three year agreement with Dexcel that’s renewable two additional years. Elite has three additional product launches in the next few months. Hydrocodone with APAP, which is the generic for NORCO, which is expected to launch in the next few weeks, I would say around the first week of December.

Oxy/APAP, generic for Percocet is expected to launch after Hydro/APAP. Originally, we were planning on launching Oxy/APAP first, but due to issues with API supply particle size issues, we had to adjust our schedule and Oxy/APAP will be launched after Hydro/APAP. Methadone will be launched right after Oxy. We have three lined up, all material, all working, and we can maneuver things so we can fill in a gap in case of what happened just like it did with Oxy. And all of them will happen, as I said before, six to eight weeks apart. The most important launch is the one that is not approved yet. The central nervous system, ANDA, pending approval by FDA. We expect to hear from FDA on November 23. Yes, I know it’s a Saturday, but that’s what the FDA said.

We will give you an answer on November 23. When approved, this ANDA becomes our number one priority to launch. We will issue a press release upon approval. I’ll say a couple of thoughts about this because that’s a very important product. The API supplier had issues with the DMF. We are not allowed to see the DMF. We only get FDA authorization to look at the DMF and approve it after the vendor lets us do that. So once the FDA looked at it and noticed some problems, they updated us. And so did our supplier, they said FDA has some issues with us. Our application, to the best of my knowledge, and as per FDA, did not have any issues with it. So now all observations by the API supplier have been addressed. We have evaluated them and they look adequate, and we believe the FDA will find them adequate as well.

If the FDA does, then approval come in next week. If it doesn’t, there is nothing that I’ve seen that looks like it’s major. It will be a minor amendment that we will work with FDA to see how fast we can get into the market. As of now, Doug and Kirko are lining up for launch in end of December or early January. In our development pipeline, we have three ANDAs, one that I just mentioned, that hopefully will be approved next week, and we will launch it by the 1st of January. The second is the generic for OxyContin extended release. This is a Paragraph IV filing. So even upon approval, the product launch for this product will not take place until the patent issues are resolved, and you are all familiar with what’s happening in the courts of law and product petitions.

The settlement for the patents are going to take probably longer than the settlement of our approval from FDA. So we wait and watch to see what’s happening with that product. The third ANDA is a generic dopamine agonist ANDA for the treatment of Parkinson’s. The FDA made some comments about it. And due to the massive all other work that we have and the filings that we have and the launches that we have in new building, we haven’t had the chance to focus on this because it’s not as big of a product as what we’re dealing with. So we will get around to it. It’s one of the ANDAs that we have in the pipeline. Elite will update everyone on these products as we get approvals starting hopefully by next week. We are looking at, as I said, November 23 as a goal date.

Elite has other products in the formulation development stage that have not reached reportable milestones yet. We will continue to make R&D a priority. Again, historically, a few years ago, when we were only making $7.5 million a year it was because we had specific products. We set the pipeline and these R&D projects became finished products that today are bringing in our run rate is over $70 million. That is a formula that we are not forfeiting R&D pipeline is our top priority. Update on the new building, we have 35,000 square feet of packaging and warehouse facility. To put it in perspective for you, it’s as big as the entire existing manufacturing facility, including packaging, warehousing, QA office and manufacturing. The new building will have two packaging lines.

One of the lines we have is brand new. It’s a state-of-the-art utilizing the latest technology from Cremer for tablet and capsule counting and filling. The capacity of the line is 120 bottles per minute. It’s more than twice as fast as the current line. So when we move the current line from the manufacturing facility into the packaging facility, so we’ll have three times the capacity. If you run two shifts, that’s easy, six times that we have now. So honestly, we are covered for years to come from the packaging standpoint and also from warehouse space. The warehouse space triples our existing space. Our new vault for DEA control is four times larger than the existing space. The case we have is for controlled substances that are Class 3, 4 or 5, is twice as big as the current one.

We have 5 truck docks that we produce for distribution in case if in the future, we wanted to eliminate 3PL, we will ship directly from the new facility. The building, of course, as updated before, all the permits are approved. New Jersey Department of Health approved us, DEA approved us and about a week ago, okay, they came in for another inspection as if we’re functioning as a full-blown facility. And we told them that we’re waiting for the FDA. We have made the registration batches, and we will be filing them sometime this month or early December. The three months stability is up at the end of this month. So we’ll file early next month. And hopefully, 30 days later, if we don’t hear from FDA, we will go ahead and start utilizing the facility, I would say, in January.

Unless the FDA says don’t do it till we come and look at it. We intend to start utilizing it as of January. With this expansion, Elite has the capacity for all the new products coming in the next few years. To wrap things up, Elite’s five year trend of growth continues. Elite is executing its strategy of development and filing new ANDAs and growing direct sales while supporting working capital growth, the pipeline development costs and maintaining a strong cash position. The increase in Elite’s stock price reflects Elite’s growth. The growth is expected to continue in the foreseeable future with numerous upcoming product launches, such as I said, hydrocodone, APAP, Oxy APAP, methadone and the three ANDAs that are pending approval by FDA. We are in a position that is very attractive for a pharmaceutical company with consistent profits, steady growth and low debt, and we are in a great position, a strong position for merger and acquisition if the price is right, or to move up to next step.

All right. Let’s go to Q&A.

A – Nasrat Hakim: As I said, the FDA received the responses from the suppliers. They look like they are adequate. It’s just a matter of how fast the FDA can act. And my evaluation of everything I saw is there is no reason why they shouldn’t approve us next week. Again, I’m not saying they will. I’m saying, my evaluation is that there is no reason why they shouldn’t. Somebody can always ask questions it’s going to take us a few days to resolve and take them a few days to respond. But right now, my focus and the team’s focus is we’re going to get the approval. Based on the current trade — okay, so the next two, three questions are all about R&D. We spend twice as much money on R&D. What’s happening with R&D? When are you going to run some DE studies?

When are you going to let us know? In a nutshell, to address all the R&D questions, as I’ve stated before, our commercial products are at the last phase of R&D. And you can tell what we’ve done with R&D when we have gone from $7.5 million to $70 million in five years. And that is not it. We will continue to grow, and we’re going to way surpass these numbers, okay? So that’s one phase. The second phase will be the ANDAs that are pending with FDA that are also going to fit into the pipeline. And we have a few of them that we just talked about. And then the phase before that is what you have to populate in clinical trials and file with FDA, and we have several formulations there. And then the early stage where you are examining and evaluating whether this product should go into the pipeline, are they doable?

Is there money in them and all of that? And we have several of those. Our R&D pipeline is excellent, as evidenced by all the sales that we have and all the launches that we have planning and all the revenues we’ve generated over the few years. Second group is approved products. Why has Elite Adderall ER not had similar success as Adderall IR in terms of market shares? I thought that was an interesting question. First, it’s not accurate at all, but I’m not sure how the impression is there that it’s not doing as well. We sell the ER, Amphetamine ER through Prasco and Elite label. The combination of ER sales is better than the IR. For the IR and ER, we are selling 100% of our DEA quota. You can’t go beyond that. You can only sell what the DEA approved, they gave us X quota, we sold every single iota of it.

And frankly, in a field with 10 competitors in the ER, we have more than 10% of market share, and it’s a lot more. I don’t want to give you an exact number. What I will tell you is this, out of 10 competitors, Kirko rings supreme on this one. The sales that Kirko are bringing in are bigger and better than — we are the envy of the industry. So definitely, we’re doing very well on IR and ER. As I said, we can only sell what we got, and we’ve sold every single brand that the DEA has approved for us. A question that I wouldn’t usually answer about insider trading. A gentleman said I would like to ask you to Dianne, if you could bring up some understanding on why Mr. Plassche would sell his before all the positive moves — with all the positive moves in the horizon.

And then went on being very kind explaining that a lot of people are bashing us on some website and he is concerned and we should address this issue. First, as you said, why would he sell when there are a lot of good news coming? That would be the right time to sell because if you sell, when it’s bad news, people will complain more. First, it is normal to sell stocks of a company that you work for. Mr. Plassche bought those shares with his salary and paid taxes on them years ago, some date back to 10 years ago and he has been sitting on it until now. We have blackout periods where management cannot trade in the stock, and we have open periods where they can. The EVP of ours exercises legal right to do so. That is a normal event in the course of business.

The fact is it’s amazing how little we, the insiders, sell. Carter hasn’t sold anything to the best of my knowledge. The Board of Directors haven’t sold anything for years or ever and neither have I. So if a person needed to pay their mortgage or take care of their livelihood or decide, hey, I have a lot invested in this thing, I would like to spread the risk, congratulations to them. A last statement on that. I actually went online, and I looked at other companies. The Insider trading from Pfizer, from Teva, from every other company is regular. I mean the Vice President and the management and the CEO and the Board, they are always selling shares that they get awarded from the company, stock options, regular stocks or purchased stocks. This is normal event.

When I looked at Elite, there’s only one poor guy who is an outstanding employee, who has been with us for 13 years and then we get negative feedback. Anyway, enough of that. What he did is legal, excellent and congratulations to him. A question on the stock after that, is now a buying opportunity? I can’t address that. You need to talk to your financial analyst and adviser and ask what stock is a good opportunity. All you can do is listen to Carter’s analysis and read our filing and see if the fundamentals. And if you find them acceptable, then you invest in the company. If you don’t, you don’t. If it is, what will investors be looking for to help the stock rise? Again, you look at the fundamentals. Our fundamentals have more than justified the price of our stock historically.

I kept telling you guys when we were $0.03 and $0.05, every time I gave the stockholders good news, the stock went down. There was a point where it became undeniable and it had to move. So now we are at a place where we are doing very well. We have solid fundamentals, and we have future growth. So take all of that into account and make your own decision. Are there potential new drugs in development that may make the stock continue to grow with the results — with the results, the price rise passed $1. I’m not going to comment on the $1 part, but I will comment on do we have other drugs in development that are going to continue fitting the pipeline? And the answer is yes. The new facility with the new five pending FDA approval, are we able to use the new site in any capacity, such as storage?

Yes, absolutely. That’s what we’re using it for right now. There are a lot of packaging components and a lot of products that you can put in the new facility. The facility is a part of our PDUFA. When we filed for PDUFA, we are under the same number for all three facilities, and we paid PDUFA fees for all the three facilities. So the facility definitely can be used for packaging components, storage of materials and even for DEA stuff because the DEA approved it as well, okay? What is the expected date for the FDA walk through? The FDA is not likely to make a walk through. They may come in for a different inspection and do this on the side. They most likely will either approve the CDE30 in January or not or they will go silent. If they go silent on it, we’ll take that as approval.

If they approve it, it’s approved. Only if they deny it, then we’ll ask why, and then they may come back with we need to come over and do a walk through. Okay, last question. The Trump administration, what are the predictions of how Elite will do with the new administration? Second question, with the Trump 2.0 just around the corner, what impact, if any, will it have on Elite dealing with the FDA, DEA as with any potential M&A activities? Well, I did not think about it until I read the question. The fact is the Democrats got beaten badly. So they are going to need some painkillers. And the Republicans are psychotics so they need antipsychotics. So we’re going to do well with our sales of our painkillers and antipsychotics, which we have plenty of.

Frankly, we are the original MEGA, Make Elite Great Again. We had that slogan long before Trump entered politics or plagiarized from Ronald Reagan, who originally started Make America Great Again. So to that end, maybe to support the stockholders, our MEGA, we’re going to build a wall of needle mover ANDAs around Elite and stop other generic companies from penetrating the marketing borders, okay? And then maybe we’ll defeat all the fake users, the bashers, the shorters and the conspiracy theorists. Enough silliness for one day, it’s a Friday. On a serious note to our dedicated stockholders, Elite has done an excellent job for you, and that is not it. The best is yet to come. I am looking forward to updating you in February. With that, thank you, Matthew.

Thank you, everybody and Cheers. Have a great weekend.

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.