Elite Pharmaceuticals Q2 2027 Earnings Call Transcript

Quartr
Provided by Quartr
November 13, 2026

Key Takeaways

  • Positive Sentiment: Second-quarter revenue rose 10% to $40.1 million, while gross profit increased 14% to $16 million and gross margin edged up to 40%. Growth in mixed amphetamine and opioid-addiction products, alongside higher lisdexamfetamine volumes and a stabilizing market, made revenue less concentrated; management also noted lisdexamfetamine growth is constrained by quota availability.
  • Neutral Sentiment: Cash increased to $35 million, working capital exceeded $100 million, and liabilities excluding non-cash derivative liabilities fell 34% to $14.5 million. Operating cash flow for the first six months was $7 million versus $19.9 million a year earlier, which management attributed to lower lisdexamfetamine margins and timing-related increases in receivables and inventory.
  • Positive Sentiment: Management outlined a broad pipeline, including an anticoagulant under FDA review with a March 2027 target date, an anticipated anticonvulsant filing in Q1 2027, and plans for diabetes-product bioequivalence studies in 2027. Potential launches and approvals are forward-looking and remain subject to regulatory and development risks.
  • Positive Sentiment: Elite is targeting a NASDAQ listing around March 2027, after a shareholder meeting and director elections; management said the company meets the other listing criteria. The application has not yet been submitted, so the timing and listing remain uncertain.
  • Negative Sentiment: The board declined a verbal acquisition offer and shelved negotiations, asking its banker to revisit the interested party in 2027 after further business and pipeline progress. Management said it believes the company deserves a better valuation, but the offer’s terms were not disclosed.
AI Generated. May Contain Errors.
Earnings Conference Call
Elite Pharmaceuticals Q2 2027
00:00 / 00:00

There are 3 speakers on the call.

Operator

Good morning, ladies and gentlemen, and welcome to the Elite Pharmaceuticals conference call. At this time, all lines have been placed on a listen-only mode. Before management begins speaking, the conference has the following 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.

Operator

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.

Speaker 1

Thank you, Joanna. 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. Elite CFO, Carter Ward, will update us on the status of the company's financials for this quarter, after which I'll come back with an update and answer some of the questions that you submitted to Dianne. Mr. Ward, you have the floor.

Speaker 2

Thank you. Thank you, Nasrat. Good morning, everybody. Yesterday, we filed our 10-Q, the quarterly report for the quarter ended September 30, 2026. That's the second quarter of our fiscal year, which ends in March 31, 2027. If you haven't seen the 10-Q yet, it's available at our website, elitepharma.com, under the Investor Relations section. Please feel free to go and get a copy. As always, I'm going to provide some context, some color to the financial statements. Despite the email outage, we did get a lot of questions overnight, finance questions as well, so I'm going to answer those as I go through my presentation. Let's start with the area on the P&L statement, revenues and operating profit. Revenues for the quarter were $40.1 million. That's compared to $36.3 million for last year, September 2025 quarter, so $3.8 million increase, or 10%.

Speaker 2

The increase in revenues was mostly driven by strong growth in our amphetamine and opioid addiction treatment product lines. At our last call, I spoke a lot about Lisdex and the generic market dynamics. We launched Lisdex in early 2025 at higher prices back then, a year ago. Since then, more competitors entered the market and prices dropped, the typical generic market model, which was especially evident in 2025. The June quarter in 2025 had higher prices, and we had a $40 million revenue quarter that quarter as well, and that was driven by Lisdex. As the Lisdex market started correcting, our revenues in subsequent quarters decreased. Now, this quarter, our top line is back to the $40 million level, but it's a different $40 million.

Speaker 2

Our mixed amphetamines and opioid addiction product lines have seen strong growth, combined with increased Lisdex volumes and a stabilizing Lisdex market. Lisdex is still a significant contributor, with increasing volumes and a market that has gone through a correction, but is now stabilizing. The takeaway here is that our revenue profile is more diverse than it was last year. No longer just Lisdex driving the top line growth. Moving down the P&L, our gross profit was up both in overall dollars as well as percentage-wise. Gross profit is revenues minus cost of manufacturing. Our gross profit this year was $16 million, or 40% of revenues, and that compares to $14 million and 39% of revenues last year. It's a $2 million increase, which is 14%, and the margin went up from 39% to 40%.

Speaker 2

I did get a revenue-related question, first time I got this question. What is the status of the ANDAs bought from Mikah? Are we making any money from them? This is a first-time question. The short answer is, most of these products that we bought, they're still being sold by Elite. Since 2013, they have generated $80 million in revenues, and currently they account for around 15% of our revenues. I know we have many long-term shareholders who have been calling in for a lot of years, but maybe they haven't been calling in for that long, that long term, so need to give some history behind this question. Elite purchased 15 approved ANDAs from Mikah between 2010 and 2017. Many familiar names, you'll all recognize them. Naltrexone, Phentermine, Phendimetrazine, Dantrolene, Isradipine, Loxapine, Hydromorphone, Hydroxyzine. You would have heard these all before many, many times.

Speaker 2

Back then, 2010 to 2017, Elite was not profitable, and we had no available cash. We turned our first annual profit only in 2021. Cash was always extremely tight. We paid for Naltrexone in 2010, first one we acquired by performing development services. No cash. The other ANDAs were paid for with notes payable, which were mostly converted to stock. Again, no cash, because we didn't have it. The last note payable was actually paid, cash paid in 2021, which was our first profitable year. Overall, total cash paid for all of these ANDAs that we acquired over this seven-year period was approximately $1.2 million in cash paid. But it's more than we just paid a million dollars, and then we generated $80 million so far, and 15% of our revenue today are from these products.

Speaker 2

We acquired these products when we had no cash and were not profitable. These products became our portfolio, generating at times up to 83% of our revenue, providing a bridge, keeping us in business, enabling us to develop our other products, especially the amphetamine lines. We all see how that turned out. Were it not for the contribution made by these products during those days, Elite would probably not be here today. To answer your question, yes, we are making money from these products. We made money in the past, we are making money today, and we expect to continue making money going forward. Just as important, these products are a big reason why we are here today, why we reached the levels we have, and they are continuing to fuel growth into the future. Thank you for that question. Moving down the P&L, we have R&D expense.

Speaker 2

Our R&D expense was $1.9 million this year, compared to $1.4 million for the September 2025 quarter. That is a half million dollar increase, or 35%. I always say R&D is an area where it is the lifeblood of any generic company, the pipeline, and it is an area where things take time. There are not announcements every week or every month or even every quarter. We do not always have announcements. Nasrat Hakim will talk more about the pipeline, but from a finance perspective, we are funding increased product development activity. Pipeline is our lifeblood, that has not changed, and our P&L shows this. Let us move on to the cash flow statement. Cash provided by operations for the six months ended September 2026 this year was $7 million, compared to $19.9 million for September 2025, six months.

Speaker 2

The decrease is due to last year having those very strong Lisdex margins prior to the generic market correction and stabilization that we spoke about. But I got a question on the cash flow statement, which is really more relevant to this year's cash flow statement. Let us see. Operating cash flows were $10 million for three months in June 2026, but only $7 million for six months in September 2026. Why have they decreased? First thing that you have to keep in mind is that cash flow is not the same as revenues and profits. Increases in receivables and inventories, they are actually negatives for cash flow, but they usually result from increased revenues or they signal increased revenues in the future, and that is what is happening here.

Speaker 2

In the June 2026 quarter, where our revenues were down, receivables and inventory decreased by a net $6.5 million, so that is an increase in cash. That is a positive cash flow. Compare that to the September quarter, with revenues that were $8 million higher than the June quarter, and our receivables and inventory increased by 4.8. From negative 6.5 to positive 4.8, that is an $11.3 million swing to the negative as far as operating cash flow. Cash flow has a timing aspect to it, and the normal business cycle rotations, they drive this timing. Increased inventory leads to future sales, future sales leads to future receivables, future receivables leads to future cash collections. That is the rotation, and that is the timing, and that is what is happening here. Let us move on to the balance sheet, I call the ever-strengthening balance sheet.

Speaker 2

Cash at September 30, 2026, this year, was $35 million, and that is up from $30 million at March 31. Working capital at September 30, 2026, was $103 million. That is up from $95 million at March 31. Also remember that the working capital of September 30 this year includes non-cash derivative liabilities of $7.6 million, which are now classified as a current liability. At March 31, they were long-term liabilities, and they were not included in working capital. This year, September 30, they were. Take that into account when comparing these metrics and when determining working capital based only on cash liabilities. Speaking of liabilities, total liabilities exclusive of the non-cash derivatives were $14.5 million compared to $22.1 million at March 31. That is a $7.6 million or 34% decrease. Liabilities, we like to see decrease. Revenue, we like to see increase.

Speaker 2

The core principle in Elite is that we want to decrease debt, and we are doing that. I did get a question. It is more of a comment on the balance sheet, which I think I am going to read here. It says, "Without the warrants and current liabilities, the current ratio would be 10 to 1, which is unbelievable strength on a balance sheet. Paired with long-term liabilities of less than $4 million is phenomenal. Have never seen such a strong balance sheet, and it is producing $40 million in quarterly revenues and $10 million in earnings, while R&D has increased. Just incredible." Couldn't have said it better, couldn't agree more, feel the same way. Thank you for that comment. Actually thinking for the next investor call we have, inviting this person to give the presentation. Let's see.

Speaker 2

Might as well just get into the questions. Let's see. First question I have here is, "What is the status of the NASDAQ uplisting and the next steps?" The next steps are we need to do a shareholder meeting, we need to have director elections, and we got two new directors, but we need to have a shareholder election of them. More recent election is one of the requirements we have for NASDAQ. We meet all of the other requirements, so we need to do that shareholder meeting, which will be in progress, probably January or February, that shareholder meeting will happen. We just have to file the application form. We meet all of the criteria for the NASDAQ listing, so we intend on applying, and timing is probably sometime in Q1 of calendar 2027.

Speaker 2

If all goes well and if they accept us, hopefully we will be on the NASDAQ. Got a bunch of questions, as always, on the warrants. "What is the status? Why the change in the amount of the liability?" Went through this pretty detailed in our last call three months ago, but the status is they expire in 2027, April of 2027, less than six months from now. There are three options, either a cash exercise where 79 million shares will be issued and roughly $12 million will be received by the company. There is a cashless exercise, and that depends on the VWAP at the time, where we will get no cash, but it will be less than 79 million, again, based upon whatever the VWAP is on that day. The third option is probably not going to happen, but expire. They will just expire without exercise.

Speaker 2

Why does the amount change every quarter?" The amount is determined by changes in the share price and the Black-Scholes pricing formula. If our stock price goes down, we record a revenue. We have a decrease in the value of the liability, which means a revenue. If the share price goes up, we have an increase in the liability and an expense. The thing to keep in mind is, if there's an expense recorded, there is never cash being paid, and if there's a revenue recorded, there is never cash being received. Cash is never involved in any way whatsoever. I got a question asking about, "Why don't we do an early redemption of the bond?" This is something that's really not possible, not permitted.

Speaker 2

The bonds have certain contracts, and there are payment dates that run through 2030, like four years from now, and it's not really material anyway. The total liability is $600,000, and we'll just follow along with what the contract says. I got questions on internal controls. People asking, "What is the remediation timeline? We have material weakness on our internal controls, and what is the remediation timeline?" With internal controls, keep in mind, most of the controls are already existing and already in place, a large majority of them. But the project, when we talk about internal controls from a Sarbanes standpoint, it's not just having them in place, it's documenting them and testing them over a period of time and documenting those tests, the testing of the controls. That's what we're working on. It's a high-priority project. I want to have this in place when we're on the NASDAQ.

Speaker 2

Also, in fiscal 2028, so the year ended March 31st, 2028, we will be required to have an audit of our internal controls, an independent audit, and they have to issue an opinion on the effectiveness of our internal controls. So really, we have to have all of this in place, meaning not just the controls, but the documentation and the testing regimen in place, really by the beginning of fiscal 2028, or April 2027. So, that's the timeline. That's what we're working on, and we expect to meet that timeline. Okay, I got a question on, "Where's the ropinirole question?" I have a question on ropinirole, and has ropinirole contributed to our Q2 revenue, and, but more importantly, the non-controlled substance product revenue rose from $4.3 million in Q1 to $5.9 million.

Speaker 2

In Q2, ropinirole is part of that, but really it's growth throughout the non-controlled product lines, not just ropinirole. So we've seen ropinirole has contributed, but we've seen growth throughout all of the products in that segment and have contributed to that growth. Gross margin was about 40% in both Q1 and Q2, down from 54% a year earlier. Has price competition on lisdexamfetamine leveled off? Are you expecting more pressure? We kind of talked about that before, but the generic market, that's something that's characterized by competition and market pressure. That's just the way it is. But that being said, we have seen stabilization in the lisdexamfetamine market. Numbers are showing that, and it's just the market, so let's see what happens. Let's see. To sum up our financials, strong performance, increased revenues, increased profits, cash flow is strong.

Speaker 2

The $40 million in revenue for this quarter is not the same as the $40 million revenue quarter that we had last year in June 2025. This year's quarter, our revenue profile is more diverse, more diverse product revenue distribution with a lower product concentration risk profile. Now we are spreading out the revenue to more products, and that lowers the risk profile of our revenue base. The balance sheet continues to strengthen. Our working capital is above $100 million. Liabilities exclusive of the derivatives are below $15 million. As that other person wrote in, you will have a hard time finding another generic pharma company with our revenues and our low debt profile. Our next 10-Q will be for the quarter ended December 31st. That is due in February. Look forward to speaking to everyone then.

Speaker 2

I would like to introduce our Chairman and CEO, Mr. Nasrat Hakim.

Speaker 1

Thank you, Carter. I am not going to address the financials. Carter did an excellent job at going through all of that. What I am going to do is give you a mini presentation, watered down or written in layperson's form that I have given something similar to the board. I am going to cover the following subjects: Elite's current products, Elite's R&D pipeline, facility expansion, M&A, and NASDAQ. First, Elite's current products. This is where we stand right now. Our legacy products, the isradipine, trimipramine, phentermine, and naltrexone are steady, and they are doing okay. Our recently launched combo of APAP with codeine, oxy APAP, hydro APAP, and methotrexate, we started slow intentionally. We ramped up slow because of many factors, and they are expected to grow.

Speaker 1

We are going to even be making more money out of this in the future because there is a potential to do that. They are low margin but high volume products, oxy APAP and hydro APAP. Our best products that account for 80% of our revenues are lisdexamfetamine, generic Biphentin, the mixed amphetamine salts IR, generic Adderall, and ER, the generic Adderall XR. Amphetamine IR and ER have been around for a couple of decades, and there are a lot of companies out there selling them. The sales and prices are steady, the margins are attractive, and the market is stable and growing. As you can see from the four or five years we have been in this market, it actually is growing even though it has been genericized for nearly 20 years. Lisdexamfetamine is doing great, and it should follow the same path long term.

Speaker 1

Prices may adjust whenever a product is new, but in due time, it's in the same family, it's an attention deficit disorder medication, it's going to do the same thing as amphetamine IR and ER, and it's going to reach a point where it's very stable and it's going to be a wonderful product for us for years to come. In general, the ADHD product family are expanding, and we are in a very good position in this niche, and we expect it to last for the foreseeable future. However, this makes us limited to this specific niche. Therefore, Elite would be in a more secure place and a stronger, more stable company if we expand and diversify our commercial product line, and that starts with R&D.

Speaker 1

Before I do that, just to be very clear, we are extremely happy with our ADHD product line, and we will grow it, and there may be a BE study in 2027 to try and grow it. ADHD products are our first pillar. Elite filed an ANDA for undisclosed anticoagulant product. It is a substantial product that is not yet off patent. IQVIA reports annual sales of $27 billion. We expect approvable status in 2027, and we expect to launch the product in 2028. Ladies and gentlemen, that is less than a year and a half ago. It's 17 and a half months, but who's counting? We are also in the advanced stage of development for another anticoagulant that we expect the BE study to begin during the first half of 2027. And barring then expected, an approval in 2028.

Speaker 1

Hopefully we can have both products to launch in 2028. Anticoagulants are in high demand. Heparin was discovered in 1916, 110 years ago, and it's still in demand today. We'll be manufacturing and selling a much more advanced version of heparin, and that will be our second pillar. Another group of products that are in high demand are diabetes products. We have more than 40 million Americans diagnosed with diabetes. 95% of them are type 2. We also have 110 million Americans who are pre-diabetic. That's 150 million Americans that are either diabetic or pre-diabetic out of a population of 350 million. That's a huge, nearly half. That is why we decided to invest in this segment.

Speaker 1

We are working on a set of products for type 2 diabetes, and barring then expected, we will conduct our first BE study on a diabetes product in the first half of 2027, and I'm being very generous in here. And that will be our third pillar. This is going to be a very big segment for us. My personal prediction is that in 2027, Elite will conduct two to three BE studies on type 2 diabetes, but I'm going to commit to one. Our fourth pillar will be pain management and opioid addiction treatment. We have our current products that fit into that category, all molecular entities, oxy APAP, hydro APAP with codeine, methadone, naltrexone. They all fit into this group.

Speaker 1

But adding a generic oxy IR, OxyER, which is the generic for OxyContin that we have reported on before, it is, in previous calls, it is under review by FDA. And adding another product that is in the R&D stage that is for opioid addiction would make this a more stable, robust product group. Our fifth pillar is the antipsychotic, antidepressant, anti-depression seizure medications. They are all medications that work on the central nervous system. We reported a successful BE study for an undisclosed anticonvulsant product that is not off patent yet. The brand product has an annual sale of $840 million, as reported by IQVIA. We are currently compiling the ANDA for FDA filing for this product. Again, barring the unexpected, the seizure medication will be filed in Q1 of 2027. We are waiting for the stability data, and we should be able to file right after that.

Speaker 1

We also have another newer antipsychotic product in the pipeline that I will discuss further at the appropriate time. I am not going to keep adding to all the pillars, so I will stop here for the sake of time and move on to the next subject. To make all of these products, we need to upgrade and expand our facility. It is a must in order to grow our current commercial product line and support R&D and our future products. We currently have more than 50,000 sq ft of GMP space in building 165 and 135 that we own. We have another 35,000 sq ft of GMP space in the building across the street. That is a total of 85,000 sq ft of GMP space. Our packaging has been moved to the building across the street, and that is where we have the 35,000 sq ft.

Speaker 1

We intend to lease the rest of the building, and once we do, and that will be executed in 2027, we will have 130,000 sq ft of GMP space. That is considerable. The packaging line does not need anything at this time. It can support our current products and future products with minimal tweaking. We have increased the lab footprint. The lab expansion will start now, and the upgrades of the lab equipment have already begun, and they are mostly completed. Manufacturing is constantly being upgraded, and we will undergo a serious expansion in 2027 when we get the rest of the facility. Merger and acquisition. A year ago, our stock price was much higher than it is today, and I feel the pain more than anybody at the sound of my voice since I own more shares than anybody at the sound of my voice.

Speaker 1

And back then, we informed the bankers that we expect any offer to be premium above the stock price. About three weeks ago, our bankers requested a meeting and conveyed a verbal offer from one of the companies that visited and evaluated Elite. The board discussed the proposal and voted to pass on that opportunity. The board decided to shelve the negotiations for now, focus our efforts on improving our current commercial business, expand the development pipeline, and the facility. We asked our banker to shelve the negotiations for now and asked that they inform the interested party that we will invite them back in 2027, after we have conducted a few BE studies and hopefully have an approvable status for the anticoagulant, and have some progress in the expansion of the facility.

Speaker 1

We wanted to leave the door open because today's price, even though they gave us what we wanted, the price changed so drastically that that's not really what we want anymore. Elite is a solid company with cash in the bank, low debt, great products, and an excellent R&D product line. We deserve better than today's stock price and a premium. What's next? What is next is that we go to NASDAQ and execute on all of the things that I just mentioned. For years, I have stated that we did not go to NASDAQ and we will not go to NASDAQ unless we have fundamentals. Ladies and gentlemen, we have fundamentals that are stable and strong. We are going down the list of everything that is needed to uplist to NASDAQ, and barring the unexpected, we will be listed on NASDAQ by March 2027.

Speaker 1

That means that the next earning call scheduled for mid-February 2027 will be our last conference call while we are on the OTC, period. All right. Let me go to some Q&A. Anticoagulant. Since the anticoagulant was filed under paragraph three, does a 2028 launch depend on reaching an agreement with the brand? Yes, it does. When do you expect these negotiations to conclude? They are already concluded and done. Would Elite launch alongside the generics that have already settled? Yes, 100%. There could be two exceptions. One, if somebody have a first to file, so they launch six months earlier. I'm not aware of anybody. Two, if they get delayed for any reason, Elite has the rights to launch on a specific date, the earliest of the following set of dates, and the earliest will be our date.

Speaker 1

I think that's where everybody else can join in or be a little later. Where does the review process stand for the undisclosed anticoagulant and what response timeline is management expecting from FDA? The GDUFA date is still set for March 2027. We've heard minor things from FDA, change the labeling, do this, do that, but so far nothing substantial. We are waiting for them to send us whatever questions they have so we can address them, and hopefully they don't have any. Up to date, we haven't had anything but soft hitters. Anticonvulsant. Is the anticonvulsant still on track for filing in Q1 2027? Yes, it is. In case if you guys missed it, the theme is 2027. The anticoagulant, we're going to get tentative approval in 2027. The anticonvulsant will be filed in 2027.

Speaker 1

The host of BE studies that I told you about will be conducted in 2027. 2027 is going to be the year of R&D, and 2028 is the year of the second growth. Diabetic products. Can you provide more details on the three diabetic products formulations announced at the last call? Exactly what I just told you guys. We are going to start one of them within the first half of the year, most likely earlier, and they grew from three to four. What are the next product opportunities closest to launch to aid in growth from here? It's the anticoagulant. We're hoping to get an approvable status in 2027 and launch in 15 and a half months, actually, not 17 and a half. It's 15 and a half months. Okay? OxyER is the next one.

Speaker 1

Purdue lawsuit over generic OxyER was dismissed on June 12 by agreement of both sides. Yes. Does that agreement include a licensed entry date or other launch conditions, or is the only remaining step FDA approval? There is the FDA approval, which is the biggest problem. Second, there is a specific entry date, but it does not bar them from suing us for something else. Purdue is notorious for always introducing something that is not in the contract or you are not fighting them with and doing that. We are hoping the old Purdue is done and they will not do that this time, and it will be limited to FDA approval. But I really do not know. We will have to wait and see. They have the right to do that if they chose to. Approved products. You said lisdexamfetamine ER sell as fast as you can make them. Okay, get to the question.

Speaker 1

What limits growth most today, quota, API, or plant capacity? Well, it depends on the issue. Quota is an issue for lisdexamfetamine. We are not getting it as fast as we would like to, and that is a little scary sometimes because you get the quota, then you have to order the API, you got to bring it in, you got to test it, you got to make the product. There is a lag time in there, and it is like almost hand-to-mouth. API for amphetamine IR and ER has been okay. Plant capacity could be an issue for one of the products. Distribution and sales and marketing. Are the soft launches, launch products being marketed more aggressively, and are they gaining market shares? They are not marketed a lot more aggressively because of other competing resources right now. They will be very soon.

Speaker 1

We are entering in a phase of approaching soft launch. We are increasing it a little, and we will go for broke maybe within a year. But right now, as you saw, the business is growing, but there is still potential for us to grow in there too. Operations. What is the status of the new building? Is the lease signed? No, it is not, but it will be very soon. It could be as early as today or this week. When would the first commercial batch come out? Can I at least sign the lease first? I would say maybe 2028. Does the project go ahead regardless of the M&A? Absolutely. Look, having a facility of this magnitude is an attraction, so it will lead to an M&A.

Speaker 1

So whether we did or did not, we are going to move forward with it, and whomever takes over will take it from there. Since Elite only runs one shift in the existing facility, why not contract with other pharmas to maximize facility output? That is a non-starter. We are not a contract manufacturer because of the capacity and the products we have, and we are developing into an R&D facility, so we really need every square inch of the building that we have. Contract manufacturing does not have that much money in it, and it has a lot of headache. Board members. Have the new directors been assigned to any committee or given particular mandates? They will be. They have not yet. We just started, and that is what we are working on.

Speaker 1

We are a small company, so what we do is we have a chairman for each committee, and we are all members of it. For example, Jeff Whitnell is the financial expert, former CFO, and he has been with Elite for a very long time. He is the chairman of the Audit Committee and the Finance Committee. The rest of us are members of that. So we have a person who has subject matter expertise, becomes the leader in certain area, and everybody else is a member of that committee. Has the expanded board changed the company's approach or urgency around strategic alternatives? Are there any near-term milestone shareholders should watch for? Yes. First, we should watch giving the guys a chance, couple of weeks in here before they get their hands around the company.

Speaker 1

What you need to watch for are all the things that I said earlier, the expansions of the R&D pipeline, the commercial line, the facility going to NASDAQ. These are the things you guys should be watching for. There were a lot of questions about M&A, but I am not going to answer them because I have already concluded that part of it. NASDAQ. In August, you said that NASDAQ listing would have just happened or be about to happen by February call. Has the listing application been submitted, and for what tier? The listing application, as Carter indicated, has not been submitted, and I was pretty close. We are going to be there in March, barring the unexpected. Regardless of what happened, February will be our last call on the OTC, and the next one, whenever it happens, it will be on NASDAQ.

Speaker 1

That will be the timeframe, around March, if it will take a little. What are the key milestones remaining for uplisting to NASDAQ? Carter addressed that. Last question, as Elite prepares for a NASDAQ listing and a much broader institutional investor audience, does management plan to expand its investor relations effort through investing conferences or international outreach? Do you expect Jefferies role to expand beyond the current M&A mandate to help with these efforts? Of course, we go to NASDAQ. We were going to conferences when we were on the OTC, but we had a brand product, okay? Elite was going to conferences when they were on the AMEX. Definitely, once we get to NASDAQ, we need to get out there and spread the company's name. We need to have a PR firm work with Dianne to help us with that.

Speaker 1

Dianne will be much more active in that part, going to conferences and spreading the company's name. Uplisting to NASDAQ will increase exposure. It will expand Elite's investor base and institutional ownerships, and that will help us decide if we want to pursue acquisition or not. This concludes this update. I will talk to you in February, and thank you, Joanne, and thank you, everybody, for joining us.

Operator

Thank you. This does conclude today's conference call. You may disconnect your phone lines at this time and have a wonderful day. Thank you for your participation.

Powered by Quartr