Elite Pharmaceuticals, Inc. (ELTP) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, and welcome to 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 encourage 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.

Thank you, Matthew, and good morning, ladies and gentlemen. 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, the Boomerang Ward will give you a summary of the company financials, after which, I'll give you an update and answer some of the questions that you've submitted to Dianne. Carter, welcome back, and you have the floor.

Thank you, Nasrat. Good morning, everybody. Let me just start by, I guess, reintroducing myself. My name is Carter Ward, this is my second sort of duty here at Elite. Some of you, longer-term investors may remember me. But I was the CFO here from 2009 to 2021. For 12-years, and I rejoined Elite about 2 months ago and very, very happy to be back home with [ Miante ] here at Elite and hoping that I can do my best to contribute to future success at Elite. So yesterday, we filed our 10-Q. It's the second quarter of our 2020 fiscal year. Our fiscal year, as always, the end March 31. So March 31, 2024, is our 2024 fiscal year and September 30, this quarter is the second quarter of that year. As I've done -- before I'm going to provide some context, some color to the financial statements. And as I go through my comments here, I'll be -- I received a bunch of questions overnight and I'll do my best to answer those as well. Let's start with the P&L. And total revenues for the quarter were $14.2 million, and you can compare that to $8.6 million for September '22 quarter -- 2022 quarter and also $9 million for the June 2023 quarter. So that's a year-on-year increase of 65% and a 58% increase since our last quarter, the June '23 quarter. Our operating income was $1.9 million profit. You compare that to a profit of $1.1 million last year and $1.6 million for the last quarter. That's a 73% year-on-year increase and a 19% increase since the last quarter. It's pretty clear that the increases are the result of one very big event that happened actually in April of this year, the beginning of our fiscal year, and that's the launch of the Elite label. Nasrat is going to talk a lot about the products, the pipeline and all of those things. I'm not going to go into that type of detail here. But from the finance side, it's pretty clear that this launch, the Elite label being in the market has made a significant positive contribution to our financial condition. There's no doubt about that. Going back, pulled up the history books and I looked at the last 5 years of revenue, 2019 -- fiscal 2019, for the entire year, we didn't even have $8 million in revenue, $7.6 million for that year. And then it went $18 million, $25 million, $32 million last year, March 2023, we were at $34 million, and that's for the entire year, for the full 12 months. We are already halfway -- only halfway through the year, 6 months, we're already at $23 million. So that run rate should continue, but we will far exceed last year's revenues by the time see. So going down the peak there's a large number. And I did get a question on that, so I might as well answer that question. And I got a question says, what is the income tax benefit income? And why was it recorded in this quarter? So if you look down the P&L, the [ $13.7 million ] income tax benefit. So that means there's an income item. It's a noncash revenue item and this relates to net operating losses, NOLs that we've been accumulating for the past 20 or so years. There are tax reductions on future tax returns. When we file it, we can deduct prior year losses and offset against any income taxes that we would owe currently. This is what's known as the deferred tax asset on the balance sheet. It's always been there, except up and until now, we had them to reserve against it. So we had to bring that asset down to 0. The definition on asset [indiscernible] , but accounting rules required that since we were in a loss position since the metrics were not showing enough profits to be able to use this benefit going forward, we had to make a reserve against that bringing it down to 0. Things are different now, however, we're now profitable. We have metrics that are showing profits going forward. And now those same accounting rules require that we remove that reserve. We released the reserve is what it's called. And we recorded [indiscernible], meaning we're going to get a future benefit from these prior year losses. Within the terms of the internal revenue code. So now this is a technical onetime entry and results in a large noncash below line income item on our P&L. So that's exactly what it is. It's not going to repeat. It's a onetime thing, technical accounting stuff. But the take away hear really is that our metrics have changed. They changed from in the past, ongoing losses to now profits. And now a tax deduction does have value to Elite going forward. So it's showing up as a balance item. [indiscernible] the P&L statement, and it was -- increased revenues were fantastic. However, I see gross profit margins experienced a small dip compared to previous quarters. And then mentioning the fiscal 2023, we had a 49% gross profit margin. And this quarter, we have -- for the 6 months, we had 48%. So we really didn't have much of a drop in profit margin. And -- but the only thing is we have much higher volumes. We're selling our label now to a lot of wholesalers who are giving these volumes to a significant margins, and there's discounts and chargebacks and things like that, which have a negative effect on our margins. But really, we're holding on to the margin pretty well and increasing our volumes significantly. So it's a good thing. It's a good thing. So now moving away from the P&L, we go to cash flow. We had an operating burn for the 6 months ended September 30 of this year of $2.9 million. And I did get a question on that and they were talking about we have strong revenues, we have profits. Why the cash burn? And [indiscernible] a growing company and cash burn is quite normal when you're in rapid growth phases. If you look at the cash flow statement, the answer jumps right off the page and you look at our increase in accounts receivable and our increase in inventory, together, that was around $13.1 million increases. And this is causing a cash burn. This is a classic example of growth requiring increased working [indiscernible] launches require upfront working capital, we're no exception. We have to buy inventory in advance, a lot of time months in advance to be able to manufacture on time. We're giving terms -- payment terms, so we're collecting over 60 days or so. So it takes a while for the money to start coming back in, very standard stuff here. We've primed our operations with increased inventory, receivables went up, but the cash flow will catch up as those assets turn over. And that's what's happening. So all of this is nothing to -- it's very much expected. Then let's move on to the balance sheet. I got a few questions there. And first, I just wanted to say on the balance sheet, our working capital has increased by almost $2 million in the past 6 months. So working capital is current assets minus current liabilities. It's a major metric as far as liquidity is concerned. That's a more than 14% increase just in these 6 months. The profits drive working capital, our financials clearly demonstrate this. Got a couple of questions. It says all those sales were very strong accounts receivable quite high at almost 70%. Please comment. And again, this kind of goes hand-in-hand with what I just said about the cash burn, the cash flow statement. Generally, we're seeing wholesalers generally terms are roughly 60 days, 45 to 60 days or so. So whereas in the past, we were selling -- we were licensing out and the terms were 30 days. So that's going to lead an increase in your receivables. Again, the number to look at is really the turn of the receivables, and that's happening. Got another question here on the balance sheet. Is there a plan to pay down debt? And what is the plan or expectation for paying down debt. And -- well, we don't really have that as much debt as it may seem. If you go into the balance sheet and you look, first of all, we have accounts payable, which is just trade payables and return that over every 30 to 45 days. So that's normal operations. But then you look at the accrued expenses, which are $11.1 million, and I think it's note for in the financial statements. Half of that $6.4 million noncash and really the amount that's showing on the balance sheet is based on the stock price. So this stock price has gone up a lot for this quarter and thankfully, it's still going up. So that makes that liability [indiscernible] the stock salaries and stock for the directors -- for the director fees, which have ended by the way, we still have that to be accrued until we issue those shares, which we expect to do this year. So there's a lot of noncash there. There's a profit split, which is due to Mikah, which I got another question that I'll talk to you about in a second. That's $3.4 million and it's for accruals. Then the other part of our debt is a loan from Nasrat and David, one of our directors of $4 million, which helped us provide the working capital for the launch. So that's going to be paid within terms. And then the other 2 items on debt is we have a bank. A term loan with a bank, East West Bank we're going to pay that within terms. I think that expires in 2027. And then we have our bonds way back from 20 -- 2005. That we're paying within terms. And I think the last payment is 2030. So when you look at it, we originally don't have much debt at all. We are very strong. Our balance sheet is very strong. We are very unusual in this segment just because how low the debt is. So then another question, it's kind of related to the balance sheet. We'll get to that as is talking about what makes up the $3.4 million accrued expense to Mikah. That has to do with the agreement originally with SunGen back in, I believe, 2017, 2018 code development, essentially of our mixed Amphetamine products. Half of the profits earned are shared with, at that time, SunGen. In the last few years, Mikah had bought out some of the [indiscernible]. This is we would either have to pay it to SunGen or we would have to pay it to Mikah. Mikah gives us a little better payment terms. So we haven't paid as of the balance sheet date, we haven't paid yet that amount, but it's accrued. It would have to be paid anyway and the plans are to. Yes, current, with Mikah and on these profit splits by the end of this fiscal year. I think I'm guiding to all the questions that I was asked. Let me [indiscernible] things up. Elite is a much different company than it was when I left and it's much different when even from a year ago. And this is thanks to the successful launch of Elite label last April. Our revenues are up 65%. Our operating profits are up 73%. Our 6 months revenue are more than triple where we were five years ago for a full year. Our working capital is increasing. Our debt is low. Our balance sheet is strong and strengthening. Much has changed for the better -- for the much better over the past year. So now our CEO, Mr. Nasrat Hakim, will provide his comments.

Thank you, Carter. Carter covered the financials very thoroughly. So I'll only say a couple of high-level words about financials before I talk about the sales and distribution, the commercial product facility, R&D and then we'll go to Q&A. Our revenues are growing. Our investment in R&D and the R&D pipeline is growing. Our fundamentals are strong and more stable than ever, we are getting closer to the NASDAQ merger or acquisition. Last year was our best year in revenues ever. We generated $34 million. That was when multiple companies were selling Elite's products, including Lannett. The sales and distribution agreement between Elite and Lannett was terminated 2 quarters ago. In the last 2 quarters, we've generated $23 million in revenues. This is at the time where most experts thought we were going to have a major dip by switching between companies because the DEA did not give us enough [ product ] launch both. We had to finish one to start the other and still we came up with $23 million in revenues. We are on target to another record-breaking year in revenues, definitely north of $40 million. And today, we recommend a larger market share of the Amphetamine IR and ER market than Lannett. That is a serious noteworthy achievement. With the implementation of Prasco agreement as of January 1, 2024, and the R&D needle move products approved in 2024. It is my expectation that this trend will continue in calendar year 2024 and 2025 and beyond. Our business model is looking great for 2024 and 2025. If you look at just 2023, January through December, that alone will be way north of $45 million. The next 2 years are gonna be a lot than that. The products that are currently bringing in the revenues, Amphetamine IR and ER, these were Elite's largest products last year and acting to continue to be our largest product this year under Elite label. We have contracts in place, and we expect to maintain our double-digit market share. Managing the DEA quarter has been a challenge. However, Elite has been able to manage through this challenge very well to date. Amphetamine IR remains on the FDA shortage list and both products are in demand. The rest of our commercial portfolio contains the bariatric products, Phentermine and Phendimetrazine weight loss products, Isradipine, a hypertension product, Trimipramine, antidepressant and Loxapine product. Loxapine is for schizophrenia and agitation and Dantrolene as a muscle relaxant, are being sold under Elite's label as of April 1, 2023. And frankly, Perrigo is doing a better job at selling our product than any of our partners has ever done. We have also 2 products that are not being sold at this time, an antibiotic, Doxycycline and a pain management, [indiscernible]. We do not have any plans to sell these products in the near future. One, because we have a partnership with Praxgen and OxyContin, and we haven't resolved the issues with OxyContin and two, [indiscernible] is an opioid and there are a lot of problems associated with that at this time. With opioid, it's not the product. As far as the manufacturing, packaging, holding and testing facility is concerned, and increase in sales and distribution requires more testing, more employees and more storage space and more equipment. So we have upgraded and purchased several pieces of equipment to keep up with the sales to have backup units. As I have discussed with you before, the capacity and size of our facility have been on my mind for a while now. Even though we can supply our customers' demands today by running the facility every day on shift and a half for the week. We don't have the space to store. It's probably is a controlled substance. So let me explain that. When you buy the API and IPI, the active pharmaceutical ingredients and the inactive pharmaceutical ingredients, they come in buckets, and you mix them and blend them, and you make your tablets and capsules. And then you put them in bottles, and you package them. The bottling impact takes massive amount space compared to the raw materials and the tablets and capsules within that bottle. Now because these are controlled substances, you have to put them in vaults. So the more you make, the more vault space you need, and that is becoming an issue. Before we were making them and shipping them to Lannett's and others. Now it's our distribution, it's our facility, and we need to resolve that problem very soon. So we have been exploring options for manufacturing and storage capacity as I've updated you on before. One option is to rent or buy a warehouse that we can better fit into a manufacturing facility. There'll be a duplicate of the current facility where you have equipment and personnel and packaging lines and blending and leverages and what have you. And that has tremendous advantage in that if there is a catastrophe on one side, you have business continuity where you have another site to continue your business. But it has the disadvantage of being very expensive to duplicate the equipment. And it also is very expensive to run clinical trials to transfer the extended-release products. So another option would be to do something similar, get another facility, retrofitted, but only transfer the IR products, instant release because the instant release products do not require clinical trials, they just require that you manufacture the lot, place it on stability, so that it's equivalent to where you manufacture somewhere else, file a CBE30 and transfer it. The process takes a few months, and it doesn't cost much. It's all internal. But it still costs a lot of money to buy a plan, duplicate equipment and all of that. So for option 1 and option 2, the cost estimate is between $25 million to $35 million. Option 3 was what we decided to do. So let me walk you through that since it is going to be a part of the company. Our current facility is about the manufacturing facility is 36,000 square feet. But you are facing the facility on one side, you enter the APIs and IPIG, enter all the components from there, the trucks come in and that's where you put them. The middle of the facility is where you do all of your manufacturing. And the right side of the facility is where you package and get the product out. So what I thought will be inexpensive for us to do and help release the company is if we take the final part out where all the finished product, which has to be in the vaults and the package and take that out and move it to a packaging facility and a storage facility that will give us enough space for expanding manufacturing for the future. And now we have a new facility where we have 2 packaging lines instead of 1, so we have unlimited capacity. We have a much larger vault. And we have stories for the noncontrol substances. So that was the option we decided to go with, and we were lucky enough to find the facility within a mile from North Whale which means our staff can actually -- they don't have to quit and will have somebody else to work in Philadelphia and Long Island, they are next door, so we can retain the current staff. They just move next door and continue working on Elite. Managements gets to keep an eye on the staff. And the cost is only about 10th of starting a manufacturing facility, about $2.5 million. I am happy to report that I got the approval of the Board of Directors and signed the letter of intent on Monday. We are in the middle of negotiating the details, and I expect that by mid next year, we will move into the new facility. So we have our products. We have our sales and marketing that's selling the products and generating today's revenues. We have set up the facility to be good to go for the next 5 years, at least. Now we need the pipeline in order to keep the business growing and in case anything happened where somebody enters the market and our share gets reduced, that does not affect the company. In fact, we want to increase our share in sales and marketing by introducing other products, and that's where R&D comes in. We will definitely continue to invest in product development. Our goal is to commercialize a new competitive products and diversify our portfolio. Commercial product line is nothing but an R&D line that made it to the market. So I'm always thinking R&D is an extension to the market because that's all it is. They are the commercial product today, they are the ones who are bringing the revenues and the R&D is the one that's going to bring the revenues in the future. So investing all the profits we have into R&D is the right thing to do. So let me walk you through what happens when we file an ANDA so I can update you on the ANDA as that are in the queue. After everything is done and we compile an ANDA, and you do the clinical trials and the recession, get to the point where you have filed with the FDA, you have to send it through FDA's gateway. It's an electronic means for them to receive it from you. Once we do that, the FDA will look at all the sequences and say, okay, you got all the parts in here. So we acknowledge that we received it. Then they give themselves 45 days in order to look at the components of the ANDA and make sure that you covered everything that it's linked properly that all the parts of it that are critical are there. And ANDA have 5 quarts, module 1 through 5, okay. Module 2 is for the clinical trials. Module 5 is also for the clinical trials. Module 3 is for the chemistry manufacturing and controls, where you have the drug substance and drug product. So they look at all these components and they say, fine, now it's accepted for review. That's when we will make an announcement that this ANDA has been accepted by FDA, and this will be the PDUFA date or at least the filing days, okay? So last time we waited and did announce the opioid till about 30 days, 45 days after we filed it because we did not receive the approval from FDA till then. The same thing is going to happen with the second needle mover. As soon as we hear from the FDA in December that it has been accepted for review. We will issue an announcement, right? So what the FDA does when they receive it and accept it for review, then they start the examination and evaluation process of the end prosecution [Audio Gap] say, fix this, do more testing here, sent me all documents, this is not eligible. You do that throughout the entire 10 months. So when we file, we don't go into banking for 10 months and then tell you guys, hey, we received a response from FDA or not. We are actually communicating with them on a regular basis, right? So today, we have 3 ANDAs that have been accepted for review and under prosecution by the FDA. And the fourth one that I will let you know next month that it has been accepted for review so that will make for this year. One of the ANDAs is dopamine agonist. And that ANDA that we submitted, the FDA has been corresponding back and forth with us. During the evaluation of the ANDA, they found that the microbiological lab that did micro testing on the ANDA was not adequate. So they sent us a note. Now while the ANDA has been cross-cuted, you cannot go ahead and change things in it. That's it. You have to wait till the end of the coming month. So they had to wait until October, which was our GDUFA date, tell us, go ahead and change the lab, where it passes doing that, and we will refile probably within 2 weeks. The second ANDA, the antimetabolite ANDA, the FDA is very interested in that because that product is on product shortage. So the FDA is working very closely with us to ensure that it does get approved by the GDUFA date, which is February or before. The third ANDA is the one we received the acceptance for its opioid. We haven't gotten much response from them yet. It's only been a couple of months. I expect next month or the month after they start asking questions. And while we're at the fourth ANDA, which is the largest of them, I am expecting that the GDUFA date will be September of 2024. And we will focus on that and the opioid ended the most because they are the ones that are going to be game changers. These 2 products are going to be bigger than Amphetamine IR and ER in my opinion, okay? Other than what we have in the market, which is 3 and 1, the total of 4 that are pending for FDA, we have 1 more product that we did a pilot study for, that's another needle mover. And the pilots so they give us guidance on what to do. And I expect that we're going to run the DV study in 2024 and hopefully file that product then. Next after that is the preliminary work, and I've made the decision for the company that going forward, we are no longer going to work on small products. And what I mean by that is like the product I was alluding to earlier, the dopamine agonist is a very small product. It takes a lot of effort to work on small products. It takes a lot more effort to work on larger products, but larger products really pay. In way of an example on that actives, we had about 250 products at the Elizabeth facility. Out of the 250, 12 of them were bringing in 80% of the money and the rest were fillers. Well, we are a small company. So going forward, every single product you are going to select is going to be a large billion-dollar product. That we have selected that fits within our technology, either tablets, capsules, extended release, instant release. And they need to be either going to be off patent soon or have a very good market. And we have 3 of these products identified that we will be working on for the next generation. And I'll keep you updated on that. These 3 products that are -- we're starting on other than the 5 dated beyond are all products that are still on patent for a couple of more years, and each and every one of them is a $1 billion market or above. To wrap it up, this is extremely exciting. The company is turning around finally. We are becoming a fully functional pharmaceutical company with having our own sales and distribution. We are executing on our growth plans, filing new ANDAs, obtaining product approvals and expanding our sales and distribution organization and increasing our revenues. With that, I'll go to Q&A. As always, I know that you've submitted questions to Dianne, some of them she called out, other she grouped for me to look at and answer. And I did incorporate quite a bit of the answer to my presentation, but I'll address some of the questions that you sent me, read them out loud and answer when needed.

All right. So the first question, can you provide PDUFA date insights for opioid analgesic and other filings. It's GDUFA not PDUFA. And the general rule is that you'll get a response in 10 months. The response could be, hey, you need more work, which is called complete response letter, or hey, you're approved. But the FDA is obligated to give you a response in 10 month, okay? What that response is going to be? We don't know. We'll wait until the FDA says that, but the general rule for everybody in the industry, 10 months, and you will get an answer. Now after the 10 months, if the answer is that I still need you to do something doesn't mean it's rejected. All that means is go do that, and I'll approve you later, but now you're not under a [ PDUFA ] fee. The FDA doesn't have to take it up and give it priority over anybody else. Any update on the dopamine agonist? I just did. Any update on the central nervous system stimulus that recently had a positive bioequivalence study? Yes. As I stated, we will issue a PR once we have an acceptance for review by FDA. We haven't seen that a CNS product filed yet. This one seems to be taken longer to file as per positive DEA results that -- than usual. Are we still tracking to file soon? And if so, when? Let me take a minute to tell you that the assumption is not true. Pharma company is manufactured and exhibit batch, just a single batch out of the set of dosages that you have. So a product has 5 different strengths. They'll pick the one that's supposed to go into the clinical trial and make one batch and run the clinical trial. If they pass the clinical trial, then they go ahead and make the rest of the lots because it costs a lot of money. So if you have 5 dosages and you run a clinical trial with 1 NPAs, then you have to go back and make 3 batches of each strength. That's 15 lots. Plus, if you want a second, bunbury have to do 5 more. So 20 lots have to be made after you past the clinical trial and put on stability. Mandatory is 6-month stability for accelerated and control room temperature. So manufacturing the lots take a couple of months. The stability is 6 months. That's 8 units tested, that's 9 and regulatory [Audio Gap], okay, August 28, 2023, that we passed the BE. 10 months from them will be June 2024. And this is the filing, it's happening now. So I think that we're moving at lightning speed. And that's because we took chances and we made the lots at risk because this was an important product and our data was solid when we're going to pass. But under normal circumstances in the future, look at 10 months after the clinical trial testing for filing. That would be reasonable anywhere in the industry. Can you provide insight into pipeline progress? What our filings expectations for 2024? I expect that we file at least 2 more in 2024 and hopefully get approval for 4. That includes the 2 needle movers. When does Elite to diversify away from CNS and opioids. I'm not sure why would we do that. We will add to it. And I just went through the list we have high blood pressure medications. We have bariatrics, we have massive relaxants. We have a lot of other products. And as long as the product is popular, serves a purpose and it creates revenues and profits, we'll stick with it. When do you anticipate filing the third needle mover product, assuming trials time line goes according to plan? Next year, 2024 will be the time. Some questions about Presco. Details you can share on Presco agreement. Well, Presco is the authorized generic and they'll be buying the product now from Elite instead of the brand. It hasn't been easy because we had to obtain quota just for them, supported by their data. But we are making lots, and they expect to launch in January of 2024, and we're going to be there right with them. They were received what we promised them in December. It's a win-win for both companies. It's a very exciting opportunity, and that's going to add quite a bit to our revenues and profits. Does Prasco get to keep their prior Adderall quota for us to manufacture? No, that's not the way it works out. As a matter of fact, according to Presco, they never had to deal or think about quota. It was the brand company. Brand companies get all the quota they want. So they were selling the product to Presco, putting it on the label and Prasco was selling it, but the quota does not come with it. Has Elite been able to increase their quota for API for Adderal generic? The DEA has been signed that are giving us what we need to stay in business. Corporate operation, when will fiscal calendar year -- fiscal and calendar year aligned? This is a Carter project I definitely want us to go to a calendar year and he is resisting. So we'll figure it out. He seems to think we'll go to NASDAQ faster, but I'm working on him. It's the first thing I asked Carter to do when he joined the company and he is previously working on a lot of things that he hasn't done before, the charge backs and debt net. And there are a lot of things for them to work on. So I'm not pushing on this, but I really would like to do that. And we'll see what happens over time. Does Mr. Nasrat have an idea of what price point would start looking at -- to do a reverse split? We are not going to have a reverse split unless we're going to NASDAQ. Otherwise, it would be meaningless to stay on the bulletin board and do any kind of reverse split. If we stay on the bulletin board, which we're not, then we'll grow organically. But if we're going to go to NASDAQ, we have to comply with certain rules. And the only thing really that we don't comply with to the best of my knowledge now is the share price. It needs to be above $5, I think, to enter. My primary focus right now is to continue to strengthen the fundamentals and everything else will take care of itself. A few questions on manufacturing. And then one more on financials. A few questions on manufacturing. First, please provide an update on additional manufacturing and/or store space utilization and anticipated needs. I already did that. So as I said, we're going to start a new facility and do the packaging there, and a huge vault in it and the warehousing. So with expanding on how sales and marketing, can investors get an update on manufacturing capacity? Yes, that's exactly what I gave you. Does Elite have a time line for when will it max out on our current manufacturing facility. Really, the manufacturing facility can manufacture a lot more than it is and we can package more. It's a matter of capacity for storage, and that's why we came up with a solution of starting a new warehouse that we will house the finished product at. Will we be able to get more manufacturing space before that happened? Yes. How long will it take to expand our manufacturing capability, I would imagine when we finish depreciating the contract and we need them to build a few things for us and we will be moving in -- between April 1, will take charge and all in probably by June. Okay. Can you provide a Q4 and 2024 sales and profitability outlook? Okay. We usually don't do that, and profits side we don't do that, and I agree with it. But I'm going to be brave today and tell you this. Let's look at 2023. In the last 3 quarters from January till September, we've made more than $30 million. By the end of this quarter, this -- by December, we would be north of $40 million. Next year, is going to be a bigger year because we will have Presco in the mix. And later on in the year, we will have some of the needle movers as well. So next year, calendar year 2024 will be even bigger than that. And for 2025, will it be even bigger than that, too, because most of the needle movers will get approval for will be toward the end of the year. So what I'm looking at is an extremely positive outlook for Elite. The increase we have seen from $7.5 million to $23 million is only the beginning. I think the next 3, 4 years are going to be fantastic for us and for the stockholders. With that, thank you all for coming. I really appreciate it. And thank you, Matthew, and we will talk to you soon.

Thank you, everyone. This concludes today's event. You may disconnect at this time, and have a wonderful day. Thank you for your participation.