Good morning, ladies and gentlemen, and welcome to the Elite Pharmaceuticals conference call. [Operator Instructions]. Before management begins speaking, the company has the following statements. This conference call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including those related to the effects, if any, of the results, performances or other expectations that may have some correlation to the subject matter of this conference call. Listeners are cautioned that such forward-looking statements involve risks and uncertainties, including, without limitation, Elite's ability to obtain FDA approval of the transfers of the ANDAs or the timing of such approval processes, delays, uncertainties and ability to obtain necessary ingredients and other factors not under the control of Elite, which may cause actual results, performance or achievements of Elite to be materially different from the results, performances or other expectations that may be implied by these forward-looking statements. These forward-looking statements may include statements regarding the expected timing of the approval, if at all, of SequestOx by the FDA, the steps we may take as a result of the CRL and the actions of the FDA required of Elite in order to obtain the approval of the NDA. These forward-looking statements may include statements regarding the expected timing of approval, if at all, of SequestOx by the FDA and the actions of the FDA required of Elite in order to obtain approval of the NDA. These forward-looking statements are not guarantees of future action or performances. These risks and other factors, including, without limitation, Elite's ability to obtain sufficient funding under the LPC agreement or from other sources the timing or results of pending and future clinical trials, regulatory reviews and approvals by the Food and Drug Administration and other regulatory authorities and intellectual property protections and defenses are discussed in let's filings with the Securities and Exchange Commission, including its reports in forms 10-K, 10-Q and 8-K. Elite is under no obligation to update or alter its forward-looking statements, whether as a result of new information, future events or otherwise. 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, Catherine. Good morning, ladies and gentlemen, and thank you for joining us today. My name is Nasrat Hakim. I am Elite's President and CEO. This is our earnings call, and our CFO, Mr. Carter Ward, will give us a summary of the company's financials. After which, I'll come back with a corporate update and answer a few of the questions that you've submitted to Dianne. Mr. Ward, you have the floor.

Thank you, Nasrat, and thanks to everyone calling in today. Yesterday, we filed our 10-Q for the quarter and the 9 months ended December 31, 2019. So we're on a March 31st fiscal year, and that means the December quarter is the third quarter of the fiscal year ended March 31, 2020. That's our 2020 fiscal year. The Q is available on the Investors section of our website, which is elitepharma.com, as well as sec.gov and many other websites that provide links to our filings. So if you haven't gone through the Q yet, please get a copy from elitepharma.com or any of the other usual sites. There's a lot in these financials, there's a milestone, I'd like to talk about. I'll talk about those and take you through some of the key parts of the financials, providing some analysis context and insight into the numbers. As always, we've received questions and comments from shareholders and Elite followers, and I'll do my best to address those that are financials related as well. So let's start with the P&L, where we reached that milestone I just mentioned, and it's a milestone we've been working hard to achieve. Revenues for the December quarter were $5.1 million as compared to $2.7 million for the December 2018 quarter. So that's an 88% increase as compared to last year, and it's also the first time that we've crossed the $5 million mark per quarter from ongoing operations. I checked and there was a quarter, it was around 5 years ago, where we had a one-time milestone that pushed revenues just above $5 million. But that quarter -- that was due to a onetime item. This one, this quarter is different. As the $5 million in revenues was earned not from a onetime event, but rather from manufacturing revenues and licensing fees. So all credit goes to a great effort by both our team at Elite in making and shipping products as well as our marketing partners for their performance. We still face the usual competitive and regulatory challenges faced by everyone in our industry. So a couple of good quarters is nice, but we still have our work cut out for us to achieve at an even higher level. December 2019's revenues were also approximately 11%, above the $4.6 million in revenues that were earned during the September 2019 quarter. So we went up 11% during December as compared to September. So I'm going to drill down a little on what's causing these growing revenues. But before I do that, I just want to summarize how far we've come in just a few quarters, starting with the March 2019 quarter, we were at total revenues of $1.3 million. We grew from there to $3.6 million in the June quarter. Then in September, we hit $4.6 million and now, in this December quarter, we achieved $5.1 million in revenues. And if you go down into the numbers and to the revenues, the reasons are clear. The biggest factor as you might expect, is the launch of new products during this fiscal year. Namely, we launched immediate release Generic Adderall and generic Dantrolene. We always talk about R&D and new products being the lifeblood of a pharmaceutical company that is so true, and the results of these past few quarters demonstrate that. When we launched the products, especially generic Adderall, we've got an immediate bump in manufacturing revenues. But as I always mentioned, that's just one part of the revenue stream. The other part in addition to manufacturing revenues is the profit split. Now the profit split is earned as and when the product is sold in the market by our market partners. I talked about this during our last call, but the takeaway on this subject is that there's a natural lag between when manufacturing and profit split revenues are earned. It takes between two to as many as six quarters for product to be fully sold into the end user market. Since it's this in-market sales that drive profit splits, there will be a lag between the period in which manufacturing revenues are earned, which is marked by product shipment and the period when profit splits are earned, which is marked by in-market product sales. So that's exactly what's happening. We launched generic Adderall and Dantrolene, and we recorded manufacturing revenues when we shipped. And now the profits are starting to come online after a quarter or 2 as they're sold in the market. So in addition to these new products, the existing products, the old products that we've had phentermine, naltrexone, they remain steady and Isradipine has done very well and grown significantly. So you put all that together and you get revenues, which are almost tripling in just 3 quarters and our first $5 million quarter. Before moving on from revenues, I want to note 2 other factors. First, is that the immediate release Adderall -- generic Adderall is still relatively new in the market, was launched barely more than 6 months ago through our marketing partner, Lannett, and they've done a great job with it so far. But there's still a lot of market share and growth still available. So it's not yet clear as to whether we've seen the full potential of this product. Time will tell. The second factor is that of the recently approved extended-release generic Adderall, that got approved in December. And that has not yet impacted our revenue. So these December financials don't include any contribution from that product, extended-release generic Adderall. Now we've seen the impact that immediate release generic Adderall has had on our financials, and the extended-release product is expected to provide its own positive contribution to future revenues and profits. So again, remember how the profits fits lagged behind the manufacturing revenues. And that business model also applies to revenue earned from this product, the extended-release generic Adderall. So I expect, in our future calls next year, I expect this is something I'll be talking about. One more thing on revenue and something I don't usually mention, and that's the year-to-date revenues. Everybody likes to focus on the quarterly revenues. But on the year-to-date revenues, we're just over $13 million for the 9 months ended December 31, 2019. It's more than double, the $6.2 million in revenues for the same 9-month period in 2018, and the $13 million in revenue is also more than we have achieved in any single year. So after just 9 months, we've already eclipsed a full year record, and we still have 3 more months to go. So moving down the P&L. We come to research and development, which was just under $1 million for this year's December quarter, December 2019 as compared to $2.5 million for the December 2018 quarter. Now in 2018, we invested heavily in the development of the immediate release and the extended-release generic Adderall products, and we see how that investment has been turning out. The December 2019 quarter was much less than actual dollars spent but that's more due to timing of bio studies and activities and it's not indicative of a correlating decrease in R&D activities. Nasrat will talk in more detail on R&D. But from a financial point of view, the takeaway here is that these decreased costs should not be viewed as a new benchmark or a trend, and we expect future quarters to reflect higher R&D costs as the cost of bio studies and trials are incurred. So moving down the P&L. We come to something that I haven't talked about for a long time, and that would be an operating profit, which was $700,000 as compared to an operating loss of $2.6 million for the December 2018 quarter. It's the word profit I haven't said in a long time. So that's a turnaround of around $3.3 million in profitability. And please keep in mind that these revenues and profits do not include any contribution from extended-release generic Adderall, which we expect to launch shortly. Also, going the other way, there's also some R&D costs on the horizon, which are not insignificant as we develop even more significant products that are in our pipeline. So there's going to be costs incurred for those developments. There's also the usual competitive and regulatory challenges, which we face, that will also have their effects on future results and profits. So there are many factors to consider for the future, as there always are. In summary, the December 2019 quarter was a record quarter for Elite. It's one in which we broke through the $5 million revenue mark. The nine months results also have exceeded any single fiscal year-to-date. So fiscal 2020 is already a record breaking year, and we still have 3 more months to go. And we showed a quarterly operating profit, which was the first in many years. And before I turn it over to Nasrat, I just wanted to talk about one thing. We've got some comments. I just wanted to address them now before getting into the Q&A. And that had to do with the change in derivative values, which is on our P&L statement. It's something I mentioned in the past, and -- but I haven't really talked about it for several calls now, so I thought today would be a good day to revisit that. If you look at our P&L statement, we have another in the other expense and other income section, below the line. We have a change in fair value of derivative instrument, we have an expense of just over $3 million -- almost $3.1 million. So that has to do with the warrants which are on our balance sheet. And every quarter, we value our warrants. This quarter, we valued using the Black-Scholes valuation model. Essentially, this is dependent upon the underlying stock price. So the way Black-Scholes works is if the stock price goes up, then the warrants have -- are worth more, and we have to book an expense. If the stock price goes down, the warrants will work less and we book revenue. This is what's known as a negative correlation between revenues and stock price. So in all cases, if we record an expense, there will never, never be any cash payments. And the flip side is, if we record revenue, there will never be any cash received. So eventually, these warrants -- the liability will be retired, either through the expiration of the warrants, or the exercise of the warrants, in both cases, any valuations will end up in equity. There will never be any cash coming in, nor will there ever be cash going out. This is an item where if our stock price goes up, we record an expense. So most of us like to see a stock price go up. If the stock price goes down, unfortunately, that we don't like to see, but then we get to book revenues. And we will never get paid for the revenue, nor will we ever have to pay for these expenses. So when you're looking at our financial statements, please keep that in mind, I know I get a lot of questions on that from time to time, so I hope that will satisfy everybody, for the time being, and I'll bring it up again, I'm sure, in a couple of quarters as well. So that's it for me. Now I'd like to introduce our Chairman and President and CEO, Mr. Nasrat Hakim.

Thank you, Carter. In the future, when most companies release their earnings calls, so only the Chief Financial Officer, will give an update. I always take the opportunity to update you guys on other things that are happening in the company. And once we get to a major stock exchange that will probably stop. I'm going to cover a few points. I'm not going to talk about a lot of issues in here a bit on the facility, a couple of comments about the revenues Carter just spoke about. A couple of comments about Amphetamine IR and ER. Other products that we are working on potential launches, a word on opioids, development and the shareholder's meeting. Okay. Since Carter talked about revenues, I'll capitalize on that for a minute before I move on to the facility. The revenues grew to $5.1 million this quarter, and that is definitely an impressive number for a small little company like us. The total of the last 3 quarters is $13 million, that's also another record for us. The revenues continue to grow. And if you do the math in the last 9 months, that is definitely larger than the double, double and triple that I promised you last June. We have exceeded that by several million dollars. It also exceeds last year's revenues and the year before of $7.5 million and $7.6 million for the entire year of 2018 and 2019, respectively. Okay. Actually, only in 3 quarters, we exceed that. With the fourth quarter, we are on target to double the revenues from the -- compared to the 2 previous years before. There's always fluctuations in the market. So I cannot promise you that's going to go up or down because we are having -- the whole industry is having issues with quota. Since our president, I believe, asked to challenge the DEA to cut the controlled substances by 35%, that affected the quota for everybody, including something like Amphetamine sold, which is really not a narcotic, but it does get abused. And a side statement, but for that, and if we got enough quota, our $5.1 million for last quarter, would have been a heck of a lot more than that. We've had orders that exceed $6 million. But you have to work within the regulations and the laws that are set before you, and that's what we were dealt, and we came up with a number that's still higher than what we expected, okay? We will continue to monitor that situation and see what the DEA is going to do, and I'll address that a little more further in my presentation. But the first thing that's outside the financials, I wanted to update you on, is that while we are preparing for the launch, and working with the DEA on getting quota and working with the API supplier on supplying us with product, we got a visit from FDA. FDA showed up in January to conduct an unannounced inspection. This was a Biannual General GMP inspection. FDA conducted the inspection, which was NAI, No Action Indicated. Obviously, no 483s. This was the fourth inspection that Elite has had with zero 483, including two preapproval inspections and 2 general GMP inspections. I cannot emphasize enough the importance of this event and what it means to anyone in the pharmaceutical industry. Any company would love to have one for a row with zero 483s from the FDA. So congratulations to the team on hard work this was a great achievement because, as you all know, this will help us in the future in getting approvals with minimal or no delays. Second Amphetamine IR and ER. I will not speak about IR, Carter covered that. That has been a very good product for us. The volumes have been nice again. But for the quota issues, we would have even delivered more because we have orders for that. But the DEA have a job and they need to monitor the market and have set certain standards, and we're happy to comply. ER -- Amphetamine ER was developed with our partner, SunGen, whom we also developed the IR with, they're a very good partner in that. In December, we received the approval for this product. We expect to begin and complete launch quantities of this product to our distributing partner before the end of this quarter. In spite of the quota issues, API, delayed issues and FDA showing up issues, we still are going to deliver and planning on delivering all the launch quantities needed by this quarter. Lannett, our sales and marketing partner has done a very good job at Adderall IR and penetrated the market to a level where we believe and hope that now they have a better chance of selling DR to the same customers that are buying the IR. Okay. We look forward to their predictions on the numbers. Right now, we're not going to do any of that. It's a $1.5 billion product, and it has 8 manufacturers in it that are approved now. And the $1.5 billion is according to the old IMS, which is IQVIA number by September 2019. Other products, Loxapine. The site transfer to a lease facility for Loxapine capsules was approved this quarter. We are finalizing arrangements with the marketing partner at this time. We had three marketing partner potentials, now it down to one, and we are very close at concluding an agreement with the marketing partner. We expect the product launch next quarter. This product has an IMS or IQVIA data of $6 million and currently there are four approvals. Loxapine has been on product shortage list for the FDA. It's a small product that has been on the product shortage list. And we're hoping to get to the market before that is remedied to capitalize on some of that. But even if it doesn't, it's still a very good product for us. Antibiotics tablets ANDA, this product was developed and filed with our partner SunGen and is currently under the view by the FDA, and I'll take a couple of more words about that in the Q&A. Opioids, as discussed previously, because of the current negative environment for opioids, Elite has deemphasized these products. We have stopped selling certain products and delayed the launch further. We are also not pursuing licensing deals for any opioid at this time until the market changes. Further, we have sold three of the opioid products. Part of the reasoning for selling these products was keeping a lid under 19 ANDAs because once you exceed that, the GDUFA fees goes by about $1 million. We would like to avoid paying that do we have viable products that we bring in a lot more money than $8 million. The other reason for divesting this product is that we do not see opportunity for this product until the market stabilizes and -- but now, that does not seem to be any time soon. Development, that we continue to work on other differentiating generics, including an extended-release product with about $1.5 billion in sales, which we are developing with our partner, SunGen. We will update you on those development projects upon achievements of key milestones. Shareholders' meeting. Our shareholder meeting was held in December, all proposals passed, the election results of the shareholder meeting are provided in our December filing, thanks to all of the voters and -- for those who voted and those who ended in person, a special thanks for those who attended in person. Next time, I will plan it too for you guys during our next meeting. You guys have submitted quite a few questions to Diane, which we have grouped them as always because many of them were pretty much redundant or addressing the same issue. So the categories we've received were some are futuristic, which I'm like an address, I just wanted to acknowledge we received them. Some had to do with the product launch, and I'll talk about that in detail. The ADT technologies, financing, the Series J, preferred shares and uplifts. Regarding the futuristic questions, again, as I said, I'm not going to answer these questions, I just want to acknowledge that you guys have sent them. A - Nasrat Hakim: When you ask a small company like Elite to provide goals and guidance for the next 12 months, I have worked at big companies that don't do that, including privately held companies like Activis. We're a small company. There are a lot of challenges in delivering on certain things, there are DEA requirements, there are competitors out there, there are API issues. It is not feasible for us to do this. We will be add lipping. I'm not giving you an accurate picture. If we had an accurate projections from our sales and marketing partners to share with you that I would consider that maybe for the quarter but for the whole year, it's wishful thinking. Several questions along these lines, profit splits, and what are you doing with this and that. We'll stable this for some other time. When do you expect the FDA filing for the third SunGen CNS stimulus mentioned in the losses you see for the $1.5 million? Again, whenever there is a material event, we will update you if there is no material event, we cannot discuss it. Adderall revenues, now that we have sales of Adderall going through Lannett, we will see both manufacturing and licensing fees for the product. At what point and how will it be noted in the financials, divided during the IR and ER? Okay. Sure. Go ahead.

All right. Well, the question is, with regards to the Adderall -- the generic Adderall. At what point and how will it be noted in the financials? Do we see the profit split to SunGen? The SunGen gets 50% of the profit split, they don't get any portion of the manufacturing revenues. So keep that in mind. And the way we report the profit split, we show revenues that are net of the amount that goes to SunGen. So what you're seeing on our financial statements is already net of the reduction of what we had to send to SunGen, which is only 50% of certain products that are defined in the agreement with SunGen, and currently, that means immediate release Adderall. And it will also mean extended-release Adderall when those profit splits come. So I hope that answers the questions.

Okay. Excellent. Thank you, Carter. Okay. Next, product launches -- anticipated product launches. Obviously, the biggest is Amphetamine ER. The first question is that in their Q2 conference call, Wednesday, February 5, Lannett mentioned, Adderall XR is a drug launch they expect within the next few months. This time line is much longer than what you are expecting based on the Q2 for CC Q2. Why the discrepancy in the launch projection? Do you foresee a shorter time line? If so, what might be the new projection? Okay. Lannett is a larger company, and they have a ton of products. So whenever they answer a question, they need to be careful and give a range instead of a date. A few months means like 2 to 7, and that's really pretty accurate, okay? We've said in our press release, I stated in December 2019 press release, that the launch of the Amphetamine ER -- launch of this product is our top priority. Okay. So now let me walk you through why I do believe what Lannett is saying is accurate, and it was in line with what we told you guys. First, because it will take us in order to get quota, get the API, tested, released and make the product when everything goes well, it takes about 3 months. 3 months is few months, that's the duration of few, it's 2 to 7, okay? So they are, what they're saying is in line with what we're saying, but they are giving themselves a little more room, and that's because of the following: they depend on the DEA to deliver the quota, okay? And the DEA nowadays, for you are familiar with that. If you ask for 400 kilos, in the old days, they'll give you a permission to buy 400 kilos whenever you need the time in order to -- whenever you have the time in order to make them. Now they'll give you 1/4 of that. And tell you, go ahead and refile and ask for more quota. And just for them to review, it takes 6 weeks. So there's a potential that things get delayed. So Lannett is concerned as everybody else in the industry, this is not unique to Lannett or Elite that quota may cause some delays. So they don't want to set the specific date. Second, once you get to quota, there is negotiations with the API supplier. Amphetamine has been no shortage and with the demand volume is very high, these guys have to make it and also for a small company like us, they demand upfront payments, and then they have to test it and ship it as a controlled substance with to -- somewhat have you, and that takes some time. Third, the unexpected happens. While we are trying to prepare this launch, the FDA showed up, conducted the full general GMP inspection. With all of this, we still intend to deliver to Lannett within this quarter, the launch quantities. Now please understand that Lannett's launch is the day they ship to their customers. So after we've delivered everything to them, whether we've delivered 50% today and 100% soon, that does not constitute launch to them. Their launch is the day they ship to the customers. And that date, I will notify you when they notify us. Right now, our day to deliver everything is Q1 of this year, and we're still on target. Okay. Second is the generic Tylenol with Codeine. What is the plan for the Codeine and the Acetaminophen combo, a product that has been approved since 2019. As I stated many times before, this is my priority. And if anybody has a buyer for it, please call Dianne. She still hasn't gotten any call, and I've said that for 3 quarters now. The antibiotic tablet plus CC stated -- expected GDUFA date late in November, has this changed? Yes. It has. We did receive actually GDUFA notification from FDA. They give us a complete response letter that's classified as minor. They wanted a resolution of an issue i.e., they want us to buy an impurity and test it and show exactly where it shows up and validate it. And that ability is really rare and very difficult to purchase we've been working on it. We finally found it, and we will be filing the response sometime soon. I expect approval by the end of next quarter. Loxapine. On the last conference call, it was mentioned that Elite was expecting approval by the FDA for the site transfer of Loxapine soon. And it's a well on question goes on, being on short -- on the shortage list and all of that good stuff. And can we capitalize on that? Yes. As of now, the site transfer has taken place successfully. We've received approval, our API supplier, their DMF and the site is approved. We're waiting for 2 things: one, the final signature with our sales and marketing partner, so they can start selling the material; and 2 for the API supplier. And I expect both of these probably to be concluded and probably will launch next quarter. Sale of generic Percocet and generic Norco, that stumps me a little because we have already announced that we sold these ANDAs. So we have no -- we cannot launch what we've already sold. So both of these have been gone for a while. Sales of other products. As we stated, Hydromorphone was another opioid that we divested as well. In addition to a couple of others that we may divest either duplicate and as or other opioids. ADT technology. Once Elite is moderately profitable, will you resume working on the ADT drugs? Or will you still continue waiting until the opioid loss landscape has quieted down? There are 2 critical issues in here: number one is the lawsuits and the landscape for opioids; and number two is the prohibitive cost. As we've stated many times before, these products cost millions and millions of dollars, of which we don't have. Okay. And without a partner, we can't proceed with this. And I'm not looking for a partner because we all know what happened with Pfizer. Pfizer got there Oxy ER anti-abuse through FDA after they spent tens of millions of dollars on it, they got it approved and they never launched it because of landscape. So little Elite is not going to take that project on. For now, this is not a priority for us. We will keep our ADT technology and patent and hoping we can utilize on someday. But for now, we're not taking any risks that will jeopardize the company. Financing. When might Elite turn from LPC and start using their own funds. LPC has been one of the best things that ever happened to Elite, okay? We're not getting in debt where we borrow money from somebody and later on, if we can't pay it, they'll come after us and take the company. We are bringing in partners and partners will be more tolerable. And if they don't like it, they can divest their shares and if they like it, they buy more, okay? So still, we have solid fundamentals. Even then, actually, I'm not sure if this is an opportunity to turn away because if we get the opportunity to acquire another company or acquire a product, why not go through somebody like LPC, which is the cheapest way to get money and go ahead and bring in value for our stockholders. So I don't have a such standards, in my mind, these are things I don't do, and these are things I do. I'm always open-minded to see, if Elite is making enough money for us to buy new products support R&D, support the ADT without needing [indiscernible] will do it. I don't see that anytime soon. Financing. A Series J. How soon after April 27, does not Nasrat plan to convert the Series J preferred stocks to common stock? Till I got the question as coming from Diane. I didn't know that April 27 was the date because I really do not care.

You didn't actually convert today. It's at your...

Two things: first, this has no consequence on the stockholders. Correct?

Correct.

Okay. It doesn't because the these stocks have been already reserved. So whether I convert them or not is irrelevant. And to me, I'm not in hurry because I have no intention of selling any of these stocks anytime soon. So it bears no sequence on the company. It's not something that I'm thinking about or care for. So it's not really a part of my head. And take an action or not isn't the consequence. Go ahead about that.

Just follow the thing on the Series J, let me just give you a little history of that. The Series J shares they're convertible into preferred shares, they were issued to Nasrat in exchange for shares that that he had -- that he held about 158 million shares and these shares are convertible into the same exact number of shares that Nasrat returned to the company some years ago. So they're convertible into those same numbers here. So whenever Nasrat decides to convert these shares, he's just going to get back exactly what he gave to us years ago, nothing more and nothing less.

Thank you, Carter. And the final question is on uplisting. Many stockholders have brought up the desire for Elite to get off the OTC and uplist to NASDAQ. How are your plans to doing that? Definitely, the first thing to me is to build strong fundamentals before we uplift because I do not want to uplist and I have resisted uplisting for years and have been under to uplist, and my answer is always no because if you do, and you don't have fundamentals. This park will gravitate back to the OTC board, okay? You need strong fundamentals to be able to want to -- once you get to NASDAQ to stay there. Second, there are a lot of other options in addition to uplisting. Purchasing another company that has R&D or -- and/or sales and marketing, that's complementary to Elite, either merging with somebody, purchasing somebody. There are a lot of other things that we can do before we get to NASDAQ or after we get to NASDAQ. That was the last question. So this concludes our conference call. Thank you all for joining us, and thank you, Catherine.

Thank you, ladies and gentlemen. 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.