Operator Good morning, ladies and gentlemen, and welcome to the Elite Pharmaceuticals Third Quarter of Fiscal Year 2026 Conference Call. Before management begins the conference, Elite has the following statement.

Elite would like to remind the listeners that remarks made during this call may contain forward-looking statements that involve risks and uncertainties that are subject to change at any time, including, but not limited to, statements about Elite's expectations regarding forward operating results. Forward-looking statements are made pursuant to the safe harbor provisions of the federal securities laws and represent management's current expectations.

Actual results may differ materially. Elite disclaims any obligation to update or revise its forward-looking statements, except as required by law.

More complete information regarding forward-looking statements, risks, and uncertainties can be found in the reports Elite files with the SEC, which is available on Elite's website at elitepharma.com, under the Investor Relations section. Elite encourages you to review these documents carefully.

With that covered, it is now my pleasure to turn the floor over to your host, Mr. Nasrat Hakim, President and Chief Executive Officer of Elite Pharmaceuticals.

Sir, the floor is yours. Nasrat Hakim Thank you, 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 that you've submitted to Dianne.

Mr. Ward, you have the floor.

Carter Ward Thank you, Nasrat. Welcome, everybody.

Thank you for calling in. Yesterday, we filed our 10-Q.

That's the quarterly report for the quarter ended December 31, 2025. That's the third quarter of our fiscal year on a March 31 fiscal year.

So it's fiscal year 2026 ending March 31, 2026. The 10-Q is available at elitepharma.com under our Investor Relations section.

If you haven't read a copy yet, I encourage you to do so. I'm going to provide some context and color to the financial statements and answer as many questions as I can as I go through.

I got a bunch of finance questions last night, and I'll do my best to answer everybody's questions. So let's start with the P&L.

Total revenues for the quarter were $31.6 million. That's compared to $14.4 million for the December 2024 quarter, representing a $17.2 million or 120% year-on-year increase.

Let's take a look at the year-on-year increases in the first 3 quarters of our fiscal year. In the first quarter, we had a 114% increase year-on-year.

Second quarter saw a 92% increase; and this quarter achieved a 120% increase. Through the 9 months now, total revenues for the 9 months ended December 31, 2025, were $108 million as compared to $52 million for the 9 months ended December 2024.

That's a $56 million or 104% year-on-year increase. We doubled over last year, which is another milestone, and we crossed $100 million in revenues with still 1 quarter to go.

Safe to say we're having a great year. Those are MVP numbers for sure.

Also note that revenues for all of last year were $84 million, and that was our best year ever. We blew past that in 3 quarters.

So while fiscal 2025 was our best year ever, fiscal 2026 now has the tightest performance. We received a lot of questions on whether we are going to double revenues again for the next few years and if we are going to maintain the growth trend.

Doubling revenues every year is a bit much to ask. If you do the math, it gets more difficult as you get bigger.

But with regards to the growth trends, the thing that everybody needs to keep in mind is that this Elite today is not the same Elite as it was a year ago or 2 years ago. In the past 12 to 18 months, we've created quite a critical mass—critical mass in the form of the goodwill of the Elite name and the Elite label in the products, plus we have expanded our product line and possess a strong pipeline.

First, let's start with the Elite name and the Elite label. In April 2023, we launched the Elite label.

Less than 3 years ago, we were unknown. Today, we are the reliable, go-to supplier.

We deliver quality products on time and as promised, and that's worth a lot to our customers. Back in April 2023, we started with a few customers, and now we supply the whole market to all the household names out there.

Our customer list would be recognizable to anybody. Second is our product line development and our pipeline development.

We started less than 3 years ago, and at that time we had generic Adderall, Isradipine, Phendimetrazine, and a few other products. In the last 18 months, we've launched generics to Vyvanse, Tylenol with Codeine, Norco, Percocet, Otrexup, and Revia.

So those point to critical mass, an expanding product line, and being the market's go-to supplier. That's how you double your sales.

All credit to our sales department, operations, and product development teams—great job to everybody—and our P&L shows it. Moving down the P&L, we had a gross profit of $13 million for the 3 months ended December 2025, and $54 million for the 9 months ended December 2025.

That compares to $6 million and $23 million for the 3 and 9 months last year. This reflects year-on-year increases in gross profits of 112% and 138%, respectively.

Once again, we're not the Elite of last year. I received a few questions on our overall gross profit margin, so I might as well answer that since I'm on the subject.

Margins increased from our September quarter to our December quarter. I also received questions on indirect versus direct marketing channels, and they are kind of interrelated, so I'll address both at the same time.

With regards to direct versus indirect sales, I spoke about this at length on the last call, but I'll just summarize. Direct sales have lower costs and higher margins, but they require our customers to make an investment and possess complex supply chain abilities to manage that business.

Some of our customers do it and we sell direct to them, but many don't have the resources for direct sales.

Cardinal, McKesson, Cencora. Those wholesalers provide that supply chain expertise and complex network, but at a cost that seeps into our margins.

More customers use indirect channels because they don't have the resources to manage their direct sales business. So if we want maximum market reach and long-term stability, indirect channels are a must.

Also, when you introduce a new product into an indirect channel, there are onetime charges from the wholesalers, and that's what happened in the September quarter. That's why the margins were lower in the September quarter.

These are onetime stocking fees and various other onetime charges that do not repeat. They hit us in September and no more.

The takeaway here is that the December quarter that just happened is a better indicator of profit margins than September was, because September had the onetime costs that lowered the margins. Moving down the P&L, we had income from operations of $9 million for the 3 months and $39 million for the 9 months of this year.

You compare that to $1 million and $8 million for the 3 and 9 months last year. Those are increases of 721% for the 3 months and 361% for the 9 months.

Once again, we are a supplier of choice with attractive products and a strong pipeline. We're not the Elite of last year.

On the cash flow statement, operating cash flow was a positive $14.6 million for the 9 months ended December 2025, compared to $3.5 million last year. That's an $11 million increase, or 313%.

We are not the Elite of last year. Onto the balance sheet, which continues to strengthen.

our working capital in December 2025 is $84 million. Let me give you a little history on working capital, which is one of my favorite metrics.

At the beginning of this fiscal year, we started with $46 million in working capital. At the end of the first quarter, it went up to $67 million.

By the end of the second quarter, it was $75 million. Now at the end of the third quarter, it is $84 million.

We are up in working capital by $38 million this year, representing an 83% increase on a very strong balance sheet with low debt. I have a few more questions to answer before I finish up.

Somebody wants to know if we have any more NOLs left to use at this point. If you look at our balance sheet, there is a line item in the assets section—the other assets section—called deferred tax asset, and that stands at $10.3 million.

That is the tax value of the remaining NOLs. So yes, we do have more.

It's valued at $10.3 million. At the beginning of the year, it was valued at $18.4 million.

We're eating into the NOLs, but we still have more than $10 million available for us. I got a lot of questions on the increase in legal and professional costs—must be at least 5 of those questions.

Since we're not the Elite of last year, there's a cost to that expansion as well. Compliance costs in general are increasing, plus we have an expanded nationwide footprint.

That's how we generate all of this business and revenue, and that brings additional costs. We're bigger now, so audit fees are higher.

There are more legal fees and more consultants. We have HR services, cybersecurity, and Sarbanes compliance requirements.

We file tax returns in at least 30 states now, plus a bunch of other localities. We have CMS reporting for Medicare and Medicaid, which is quite complex, so consultants help us with that.

We also have improved and expanded our IT infrastructure. These are just a few areas that have expanded.

I joined Elite in 2009, which I can't believe was such a long time ago. This current situation is way better than what I found when I first walked in the door all those years ago.

I have a couple more questions. Somebody wants to know if there is any way we can get better terms, noting that our accounts receivable has increased a lot.

They want to know if there's a way we can decrease the receivables to improve cash flows. Unfortunately, our terms are pretty standard in the industry, running anywhere from 60 to even 90 days.

That's what the competition offers, and we follow the same. We've had almost no problems collecting, so it's just part of doing business.

Another person is asking about the increase in finished goods inventory at the end of the year and whether they were impacted by the timing of the holidays. Bingo, absolutely.

We made a lot of shipments at the end of December, almost none of which were delivered until January. Our revenue is recognized when it's delivered, not when it ships, so that's the reason for that.

Plus, we also received quite a bit of raw material shipments right at the end of December. All of that added to an increase in inventory.

To sum up these financials, our strong revenues continue at almost $32 million for this quarter. Our revenues have more than doubled since last year.

We broke through the $100 million revenue mark in just 3 quarters. The Elite label continues to perform well.

Our margins are back up from the September quarter. Our balance sheet is strengthening, and working capital continues its upward trend.

Cash flow is solid. Fiscal 2026 is our best year ever, and it is clear that Elite is not the same Elite that it was last year.

We have become a new and larger company. Our next scheduled report is the 10-K report, which is our annual report due at the end of June.

So I look forward to speaking to everyone then. Now I'd like to introduce our Chairman and CEO, Mr.

Nasrat Hakim. Nasrat Hakim Thank you, Carter.

I will not summarize everything Carter covered, but a couple of numbers caught my attention. We've had solid results this quarter and this year, and it is destined to be our best year ever.

Some people are getting sick and tired of us saying that every single year for the past half a decade plus, but that's reality. Year-to-date across 3 quarters, we have achieved $108 million in revenues.

That's a substantial increase over last year, and that's the best ever. Operating income stands at $39 million in the last 3 quarters, reflecting a remarkable increase over the last period and the highest ever.

What led us to this great state of financials and fundamentals? For years, I've been talking about fundamentals when we were only an R&D company and had no money, and my vision was for us to someday have fundamentals.

They have arrived. First, what got us here is a lot of hard work from all departments.

Our exceptional sales and marketing is matched by our outstanding operations, supported by the groups in quality, regulatory affairs, pharmacovigilance, and finance. Every single one of these teams is lean and strong, and they deliver with minimal help.

We do not have hardly any risk at this company. With 65 employees, we're destined to hit about $130 million plus, maybe $140 million by the end of the year.

That equates to about a couple of million dollars in revenue per employee, which is an outstanding statistic. Second, it's the excellent product selection we have that allows sales, marketing, and production to support our generic Vyvanse, Adderall IR, Adderall ER, and new products in addition to our legacy offerings.

They all contributed to Elite's growth compared to previous years. Our largest product, the one leading the financial chart, is Lisdex, followed by Amphetamine IR and ER.

These three have very strong market shares and profitability. That's what Carter is talking about when he says we are a supplier of choice, because our sales and marketing department established their credibility with vendors and suppliers.

These three products are sold as fast as we can make them and get a quota for them. If we had a larger quota and a better supply of quota—meaning the DEA needs to give us more quota and the API supplier needs to be able to deliver—Kirko could sell twice as much.

Generic Lisdex was launched a year ago, and today we command about 70% of the market share. In terms of pricing, competition has brought prices down since earlier this year, as is typical with all generics.

Generic pricing starts off very high because the brand price was high, and you know whoever gets exclusivity sells at 80% of the brand price. Brand prices are insane because they have to compensate for all of the patents and work put in for the past 20-plus years.

If they sell at $2,000 per bottle, when it becomes generic, it becomes a couple hundred dollars per bottle. That has started to happen, and prices have begun to reach an equilibrium.

They went from very high levels at the beginning of the year to about half right now. It does impact your profit per bottle, but something else happens at the same time.

First, more scripts are written for the generic instead of the brand. You're taking away from the brand, and that expands the market.

Second, more doctors start to prescribe the medicine because now it is generic, and more insurance companies allow it. Even though the price goes down, it reaches a point where it is stable.

We are at a stable point right now, but there is still potential opportunity for expansion. The brand commanded about 30% of the market in the first quarter of this year, and they are down to 20%.

That 10% was converted to us, the generic companies—not just Elite, but all generic companies. Note for those of you who look at IQVIA and send us notes that you're not seeing the sales: IQVIA data does not accurately reflect our Lisdex market shares yet due to reporting delays and certain volumes that we sell to companies that don't report to IQVIA.

The numbers we're reporting to you are our true sales. IQVIA may be lagging behind or not reporting all of it.

For Amphetamine IR, the generic for Adderall, according to IQVIA data, we are averaging about 16% market share from the October through December quarter. Pricing has been steady for Elite, and we've maintained good profitability for this product compared to last year.

For Amphetamine ER, the generic for Adderall XR, our market share average is about 14% with good profit margins. Naltrexone was launched in September under the Elite label.

The Naltrexone market itself is controlled mostly by Sun Pharma and Mallinckrodt, who hold about 80% to 90% of the market. Our sales and marketing team penetrated that market to reach 9% share by the end of December, and we still have an opportunity to secure a larger margin.

I'll pause here for a second and give you an analogy for this product. This is one of the very first products brought to Elite, years before I even joined the company.

At that time, the management team and the Board signed a contract with TAGI that gave them 17 years of exclusivity for Naltrexone. Sales for us over those 17 years were limited to TAGI and Precision Dose.

Do not compare that to the profitability we're getting today in the last few months since we took it over. For all of that time, we were making more revenues but hardly any profit.

Now the profit margins are very healthy. That is a testament to what happens when you own your own products, put your own label on them, and have your own team that cares because they are a part of the business manufacturing, selling, and distributing it.

Isradipine and Trimipramine are smaller markets, but they each have only one competitor. Even though they are small, we hold a healthy part of the market—commanding 40% and 50% of sales—and enjoy very healthy margins on both.

They are small products, but they are very good products for us. For Phendimetrazine, our biggest competitor is KVK, but Elite holds 30% of the market share with good margins.

Phentermine is now being sold exclusively under our label; that was another product that TAGI had. The competition holds about 80% to 90% of the market, and we intend to penetrate and increase our sales because it features attractive margins.

In addition to everything bringing home the bacon, we started several soft launches this year: generic Oxy APAP, Hydro APAP, and APAP with Codeine. All 3 are good products, but our primary focus remains on the products that generate the most profit and hold the most potential, which are Lisdex, Amphetamine IR, and Amphetamine ER.

These products have good potential, and we are not even at their full potential right now. We are commanding about 2% to 4% of the market, and in due time, I expect us to get between 5% and maybe up to 15% of the market.

We received approval for Ropinirole, and that's another product that we will be launching in Q2 of 2026. We will also be launching Methadone in this quarter, Q1 of 2026.

Our partner, Dexcel, in Israel launched Amphetamine IR, as we have updated you on for the past few months. They are doing very well in sales and providing incremental revenue and profit for our Amphetamine IR product, and they are also interested in deals for other products with Elite.

That covers the group of products that brought and will continue to bring money and fundamentals for the foreseeable future. What will continue to expand our fundamentals in the pipeline?

First is expanding current sales, which Carter and the team are taking care of. Second is R&D.

We have an ANDA filed and under review with the FDA for generic OxyContin, which is OxyContin ER. This is a Paragraph IV filing, and the patent lawsuit is on a stay awaiting the next step by either Purdue—which is now called Knoa—or the courts.

From our standpoint, we have done everything that we need to do. We've responded to all inquiries from Purdue or the courts, and we await the decision.

We previously announced a successful BE study for an undisclosed anticoagulant generic. The brand has unexpired patents.

The ANDA will be ready to be filed with the FDA next month; however, we may choose to wait to explore the unexpired patents further. If we do so, we will delay the filing, and I will say more about that in our next conference call.

No decision we make is not in Elite's best interest or directed at getting a better outcome for Elite. This will be an active R&D year, and R&D continues to be a priority.

In addition to our in-house development, we continue to evaluate product opportunities from the outside. We will update everyone on the pipeline when material events occur.

There was a question about our relationships regarding doing R&D outside. Not everything works the way you plan it.

We had this great contract with a company in a lower-cost region in India where we can get R&D done at a very low cost. Unfortunately, with everything happening with immigration and visa holds, they have not been able to come to the U.S.

to help transfer the minimal work we did. But these are opportunities we're always exploring.

We are working in-house, we have our R&D group, we're working externally, and we look for in-licensing opportunities as well. Regarding mergers and acquisitions and uplisting, we received about 100 questions on the subject that I will address during the Q&A.

Our position is very simple: M&A remains our primary focus. Elite is evaluating potential M&A opportunities presented to us.

As previously stated, we will pursue opportunities that bring value to our shareholders. We will evaluate each opportunity, but if none are acceptable, we will pursue uplisting to NASDAQ or alternative actions.

We will update you when anything material occurs. So for now, let me wrap this up.

Elite is executing its strategy of developing and filing new ANDAs, growing sales, increasing working capital, growing cash on hand, expanding our pipeline, and creating very strong fundamentals. The results of every quarter for the past 5-plus years, one after the other, are self-evident of the statements I just made.

Elite maintains a strong reputation as a reliable and dependable supplier, and we will build on that strength to grow the business. Elite is positioned as an attractive, midsized generic pharmaceutical company with consistent profits, steady growth, and low debt.

We will continue to evaluate M&A options as a priority, uplisting potentials, and all alternatives if they bring value to our shareholders. Now let me go to the Q&A.

There were a lot of questions and many of them repetitive, so I will touch on as many as I can. When things share the same theme, if I don't read your exact question, know that the gist of it is answered.

Do you see any benefit to Elite from changes in policies, paperwork, timeframes, or inspections from the FDA under RFK? No, not in the short term.

There will be an impact on certain things longer term, but things don't trickle down to small companies like Elite this fast. The FDA launched the PreCheck Pilot Program to strengthen domestic pharma manufacturing, which can fast-track Elite's request to use its facility to produce additional medicine.

Is Elite planning to become a part of this program? This is a pilot program that focuses initially on larger companies, and I don't think we fit into it yet.

Someday, I hope so, and it would be a benefit to Elite once we get to that point. But right now, the answer is no.

Can you confirm whether Elite currently meets all prerequisites for participating in upcoming federal procurement opportunities, specifically the ability to obtain a 6-month inventory, and what the challenges are? Elite is represented in the VA federal supply schedule, and we sell through distributors.

Elite has opted not to sell Amphetamine IR and ER or Lisdex to the FSS, as we are already utilizing 100% of our quota through retail channels. That is more stable and better money.

We simply do not have additional products to sell through FSS and DAPA contracts at this time, as our priority remains focused on retail channels and customers. Beyond the mentioned products, what progress has been made on the broader R&D pipeline, including any new early-stage or market-ready developments?

How does this align with the decline in R&D expenses noted in Q2? R&D is our primary focus.

I cannot discuss what's in the pipeline until there is a material event because it would be meaningless to you. If I say I'm working on 50 formulations and none of them come to fruition because they fail at the R&D stage or the pilot clinical study does not work, it will be a letdown.

When a material event happens, we'll update you. Our R&D pipeline is very rich.

As for the decline in expenses, whenever we are working with a partner in India, the costs drop for that period. Similarly, whenever we go through a period where we don't have clinical trials, the costs are lower.

It's going to be very high this year; fiscal 2026 is going to see high R&D expenses because we have plans for quite a few things. How many ANDAs are at some stage in the pipeline?

Is it likely any will be submitted for approval by the end of June? What is the current status of the FDA submission of the anticoagulant?

The ANDA for the anticoagulant could be submitted next month. However, as I stated, we are looking at certain options, and if we decide on a different alternative, we may decide not to submit yet and submit later.

Can you provide an update on the planned launch of Methadone, including timelines? We will be launching Methadone before the end of this quarter, and it will be a soft launch.

Depending on the market response and the margins, we will decide how to fit it into our system. Are there any developments in expanding the Lisdex formulation product line, such as the potential addition of chewable tablets, given the feasibility of equipment modifications discussed?

Yes, we've discussed this before. It is of interest and is one of the things in the R&D stage.

When we reach a point where it is prioritized enough and we reach a clinical trial, we'll update you. Is Elite's generic OxyContin likely to receive a conditional approval before the patent issues are resolved?

What updates can you share on the ongoing litigation? Yes, it's a possibility.

We are not sure what's going to happen with the new company, Knoa, and how the courts are going to handle this case—whether they're going to let everybody launch or keep stopping them from launching so Knoa can make money. All we can do is respond to the courts and wait.

The FDA may give us an approvable status or may be watching what's happening with the courts and Purdue. We have no litigation regarding Sequestox; it's OxyContin we're talking about, and everything is on stay waiting for the courts and Purdue.

The last section of questions covers the potential sale of the company and our M&A focus. Are there any active discussions, targets, or timelines for acquisitions that could enhance Elite's portfolio or operations?

If we find the right fit for Elite, I would like to get a partner that has a complementary portfolio and possesses the financial strength to expand into another building we have here to supply more products. But nobody tells you during discussions what they're going to do; they just do their numbers and try to figure out how to get the cheapest price possible.

They come in, visit the company, look at the numbers, and ask for data, making their own assessments. Does your extended-release technology seem to be of significant interest to potential acquirers?

That is a very interesting question because every time we give a presentation, there is a section on our anti-abuse technology. It gets the most comments and the most attention, even though the patents expired and this is our old technology.

People get very excited about that. For a potential acquirer, do you have a personal preference for an all-cash deal, all stock, a combination of the 2, or no preference?

Cash is king, but more important than cash or a combination of stock is the price. You give me the right price and I'll work with you.

If not, nothing else matters. I cannot discuss site visits, letters of intent, banking engagements, or multiples, because every company does their own thing.

There are R&D companies that don't have a single product in the market, but because of their patents and potential, they are valued at $1 billion because people gamble on the promise of tomorrow. There are other companies that are purely commercial and bringing in a lot of money, but they are rated very low because they don't have an R&D pipeline and sales are expected to decline.

Acquirers have to look at the company as a whole, see how it fits, and come up with their own valuation. If an acceptable M&A offer does not materialize, would you expect to have completed the reverse split and uplisting to NASDAQ by the end of calendar year 2026?

Or do you expect that will take longer? We always try to think on multiple levels.

Even though M&A is our #1 priority, we have explored a lot of other avenues. NASDAQ has been one of the things we've talked about for a long time as an alternative, and there are certain actions you have to take to get there.

We are working on all of this at the same time. There is no way that I will consider a reverse split unless we are going onto NASDAQ.

Considering how our market is on the OTC and how easy it is for people to manipulate the stock because it doesn't have high volumes, if I were to authorize a reverse split without going to NASDAQ, the price would simply gravitate back down to where it is today through manipulation. This is not a smart thing, and it's not good for the stockholders or for me, as the #1 stockholder.

We are working on M&A. Concurrently, there are certain things we're doing for NASDAQ, and certain things we're doing aside from those two.

But a reverse split will not happen outside of that context. All right.

That concludes our talk today. We're looking forward to talking to you in June.

Congratulations to all of our stockholders and to Elite employees. This has been a sensational 9 months.

We already beat the record for last year, and we look forward to doing that again and again. Thank you, operator.

Thank you, Matthew. Enjoy the rest of your day.

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.