My Take on Stock Sale

So as you all know I am a chemist by trade but I've been doing some research on warrants as that is new to me and I love to learn. This is my opinion based on the research I have done.

First Doug needs the cash to exercise the warrants, so lets assume this coming January he wants to exercise the warrants totaling 5M, he would need $150k to purchase. This is the first part of what I have found.
Second Doug has to pay taxes on the difference of current market value of the strike price vs the current price. So lets assume the stock is 50c vs the 3c strike price that's a difference of 47c or a taxable value of $2,350,000, lets assume he is in the 25% tax bracket that's $587,000 he would have to pay in tax. So brings him to out of pocket to exercise the two sets of warrants to potentially $737,500. Now that's a lot of money to just have laying around. My opinion and take it for what's is worth is that is why the sale occurred now to cover this exercising of the warrants. Cheers

Taxes on stock warrants
Warrants usually result in taxable income at the time you exercise them. The taxable portion of the warrant is the difference between the exercise price and the stock’s current market price. For example, if a stock is trading at $25 per share and you have a warrant that allows you to buy the shares at $20 per share, the $5 difference would be taxable.

Because you didn’t own the stock before you exercised the warrant, the profit is taxed as income rather than a capital gain. As a result, you’ll pay your ordinary income tax rate.

There will also be a tax consequence if and when you decide to sell the stock. If you hold the stock for less than one year before you sell, you could be subject to short-term capital gains taxes, which mean you’re taxed at your ordinary income tax rate. But if you hold the stock for more than one year before you sell, you’ll be eligible for the more favorable long-term capital gains tax rates.

Yes that is correct, go check IMS as its official as of the end of June and by the way the Prasco rep I talk to weekly. Good luck playing both sides of this stock. This be the last time I respond to you as I am trying to help the others get information. Cheers

My interpretation is that Doug is getting ready to have cash on hand so that he can exercise his options as he has to pay cash for those. I may be wrong but in my mind this is an extremely positive sign as he plans to buy the full 7.5M shares he has under warrants. I would not be surprised if we see this for more of teh executives covering their bases for the big pop. I am not a financial guy but this is my interpretation and could be wrong.

Its the ER 😉

I think there is news brewing, and by the volume I feel it's something big, 3 days in a row we have seen unusual volume, and it has been mostly to the buy side. But not the facility FDA approval, remember Nasrat stated the batch to qualify the facility was being put on stability a week after the financial call we had in August, they need at least 3 months of accelerated data to file with the FDA for the site approval. This will be done in November and then I would expect the FDA approval to come Q1 2025, just wanted to clarify this so everyone knows the exact timeline. This is definitely exciting!! Oh and our Adderall ER market share is north of 20% ;) Cheers everyone!!

I see them listed, my guess is if they are involved in this at all, they could be involved in secondary packaging, such as putting the tablets in blister packs. That would be my guess but can't really tell. Might be a good question for the Earnings call to better understand the product flow. Either way its nice seeing Elite officially listed and to be 1 of 3 I liked even better!!

Israeli Version of the Orange Book

Look what I found and from what I can tell we are 1 of only 3 suppliers for this drug in the country, not much competition at the moment, props to Nasrat for this one:

https://israeldrugs.health.gov.il/#!/medDetails/177%2092%2038035%2099

DEXTAMINE 10 MG
Preparation Details
Active ingredientAMPHETAMINE ASPARTATE MONOHYDRATE 2.5 MG , AMPHETAMINE SULFATE 2.5 MG , DEXTROAMPHETAMINE SACCHARATE 2.5 MG , DEXTROAMPHETAMINE SULFATE 2.5 MG
Form of administrationPommy
Method of administrationPER OS
Dosage formTABLET,TABLETS
To prevent overdose or poisoning, the drug should be taken according to the recommended dose as indicated in the consumer leaflet
Full registration number177 92 38035 99
Registry holderDEXCEL LTD, ISRAEL
ManufacturerELITE LABORATORIES, INC., USA
Registration validity9/2029
Date of submission2/2024
Submission Track

Yes I saw and thanks for you finding that for us. I will be excited to see that one move, but as we all know Purdue has deep pockets. I think we are in the clear, but until we get final approval from the FDA and we see generics getting launched, I wanted to keep this one as a wildcard. One thing I told my dad is that if we are ahead of everyone else and we do get the first generic launched, just the publicity for little Elite will be huge and to be honest this could put us in uncharted territory for evaluations. But I am tempering my excitement until it all comes to fruition. As Jour stated the other drugs are the icing on the cake, this one is the huge sparkler that ignites everything such as the bottle girls in Vegas bring out on the bottle service ;)

Thanks HGils and yes from my perspective it seems like they have a lot going on with the R&D front. There are a lot of moving pieces that we do not even see yet. The new facility is a big step in the right direction. Just a reminder on the new facility, Nasrat stated that we were waiting on final DEA signoff which should have been received by now or very shortly, I doubt he will announce. Then he stated that the batch of product was packaged at the new facility and going on stability. This data will be filed in November he stated and that will trigger the FDA to perform an on-site audit of the new facility. I am guessing this will get done in the first few months of 2025, depending on the FDA's workload but usually this type of review takes priority for the agency. Just wanted to clarify to everyone the process, the new building is not getting approved in November, but it is very close. Exciting times ahead, the biggest thing is now that we have all of this new exposure and popping up on more radars, we will finally have consistent product launches, approvals and filings that will keep fueling the fire moving forward!!

Hi Meshcan, yes my 75M/year was for the 5 new drugs that we are launching and the 250M was just for Vyvanse. As far as the Oxycontin that is tough as if we are first generic we could get upwards of 40% of the market right off the launch, that is pure speculation at this point. The key first is getting tentative approval from the agency and then see where the patent issues finish. This is primarily why I am not including this one in my calculations and just consider it a wildcard at this point. Concerta has not even been filed so no point in getting ahead of ourselves. But just what I calculated I feel we should be doing just fine. As some of the others have pointed out, the significant increase in R&D spending is also a big tell and hopefully we get some new product updates before the end of the year. My guess and this is just a guess I feel we get two announcements of successful BE trials and potentially one of them getting filed before the close of calendar 2024, this is just a guess. Either way the company is headed in the right direction, still have 4 drug launches to go, two products that should be close to approval and then filing more products, this all points to a healthy company with a robust commercial product line and robust R&D pipeline. Cheers everyone!!!

Good afternoon Meshcan and all, thanks for the warm wishes and questions. As Cake stated, that is a tough question to answer. I can however tell you that the Elite label is being received very well on the current drugs that are on the market by several sales reps I have spoken too. I can also state that the market share we have for the Adderall ER is a lot higher than I had expected as I spoke with my rep from Prasco, way north of what everyone here has been guessing. When I am calculating my numbers, now keep in mind this is just my opinion, but I am guessing 75M/year with the current drug lineup, 75M/year with the expected launch of the new 5 drugs (anticipating a conservative 7.5% market share) now the wild cards are the Oxycontin and expected ADHD drug. Oxycontin not really in my calculation but assuming the generic market of the ADHD dropped to 2.5B, I am guessing this will get launched under the Prasco label as well, I am conservatively guessing 10% market share or 250M/year, by the way this is a lot lower than the market share of the ER currently ;) totaling 400M/year in the next 1-2 years assuming a 35% return for base earnings, once again assumptions, not an expert is 140M divided by OS is about 0.132/share times PE of 25 yields $3.30/share. These are the numbers I am using to say that a $5-7/share buyout is feasible based on just what we know about, but I could be way off and on the low side, I am just a chemist, hahaha.

Your welcome and yes it will be a fun trip. I guarantee my dad will tell everyone how the last time he was in Vegas he saw Elvis live right after his stint in Hawaii for Blue Hawaii and I think one of his final concerts. But I will him tell the specifics of the story, I'm sure my dad is reading this ha ;)

Yep you are correct by referencing his statement but like I said I like to read between the lines and also use my experiences based on my past communications with the FDA. His actions by having everything ready don't jive with a delay, breadcrumb. But either way its a good thing and exciting times ahead. To be honest I did not expect this one until next year so this was a pleasant surprise based on his comments. Cheers!!

Yep that is why I do not think that people realize Nasrat gives us hints and people have to read between the lines ;) I have a feeling its coming and coming very soon!!

Great question, two different types of stability. What I was referring to was marketed stability and they can sell once the lots are released from QC this is the T=0 timepoint. The FDA requires you to monitor the first 3 batches of the product through its commercial life cycle. But these lots will sell within immediate release from the QC lab.
The second stability is registration batch stability. This stability is 6 Months in accelerated conditions and then 24-36 month shelf stability. This stability is used for the filing of the ANDA, a company can file the drug after the 6M accelerated test point is completed and as long as all of the specifications are met. Then during the review cycle the FDA will ask for the shelf data that is available at the time of the communication. Hope that clarifies.

Correction, Nasrat stated that the FDA appears to have finished the review of their application, and they stated that they needed 30 days additional, from whenever they communicated last with Elite to finish review of the DMF for the API holder. Based on my interpretation is that if there are no issues with the DMF then approval should proceed, once again from my perspective based on my experiences with how the FDA communicates. Either way its good news I feel as Nasrat already appears to have bought everything so I think he knows the outcome. Cheers

Yes I apologize meant October, one of my drugs I was just working on was November. Either way I think its imminent in my opinion. Cheers

No worries, here is what I posted awhile back as you can see what it takes to launch a drug and directly with regards to the methotrexate based on my experiences:

Good morning James, I had previously alluded to how long it takes for a launch in a previous email. Anticipate 2-4 weeks post approval for the API to come in and be released, then they need to schedule a total of 3 process validation commercial scale batches. There is a lot of paperwork associated with these. Anticipate another 4 weeks for this to be performed. Then all of the samples need to be tested and all of the validation reports signed off by QA so another 4 weeks. To be conservative once approval is given if they did not have everything in place, which most companies do not as you never know when FDA approval will come, I would anticipate about 3 months until official launch of a drug product. Based on my estimates I would anticipate launch of this one sometime middle to end of August. Once again this is conservative, and timelines can always shift or be sped up but this gives everyone an idea of time to launch. Cheers

Now Elite could actually launch these drugs faster but as Nasrat stated on the call, it would bog down the QC department. As I alluded to above you have to make 3 batches to launch a product and remember each strength of a product is a different batch and formulation. So this adds up quick, let's take APAP/Codeine coming next, 3 strengths would mean that they probably need to manufacture 9 batches. Thats a lot of samples to test and release as usually a finished product has at least 4-5 tests to perform to release the lot. Now also remember that the first 3 commercial batches have to go on long term shelf stability for 24-36 months with pull dates at 3,6,9,12,18, 24 and 36 months. So what Nasrat is doing is he is staggering the launches to be able to handle all of the testing in the lab. Nasrat and his team know what they are doing and so far they are doing an awesome job. And remember Nasrat stated that he had everything to launch the new CNS drug already. Now that little breadcrumb if it is accurate means approval is imminent and not November like everyone is thinking!!! Cheers everyone and this is getting fun to watch and playout like we had hoped. My dad and I will be joining for the Vegas trip as well.

Good morning Meshcan, what would you like to know. I already kind of touched on some of the breadcrumbs Nasrat mentioned. Anything you have a question about?

Good afternoon, Everyone, great day and also another update, they just moved the Oxy/APAP off the discontinued list, and it is active ready for marketing, according to the Orange Book. Cheers and this is definitely getting exciting!!!

Good morning, everyone, I just wanted to send a quick message to everyone that has complimented me on posting here in the forums, thank you very much. My father and I are here for the ride and so far, it has been an exciting one. I am always here to help answer any questions I can as we navigate this rocket launch. Good luck to everyone and looking forward to the continued product launches moving forward! Cheers

Assuming approval in November if what he is saying is accurate it could launch in November and his comment about reprioritizing makes sense as they could launch within 2-3 weeks of approval is my guess. I've noticed Nasrat gives us hints we just have to connect the dots. I am very happy with our investment at this point!! Good luck to all of the true longs on here it has been a long hard fought uphill battle, but the top is in sight!!!

Based on this statement by Nasrat and notice what I put in bold, he is expecting approval imminent as I interpret what he is saying is that he has already purchased the API and all ingredients for launch! This is beyond huge!!

The sixth product to be launched is the central nervous system attention deficit disorder product, pending FDA approval. This is the most important of all the products I spoke of. This product will have launch priority over all other products once approved. Now we can only plan for what’s in the queue and what we have. We have everything we need to launch the central nervous system attention deficit disorder medication. Once the FDA gives us approval, we reprioritize everybody else and this will go next.

You are correct on this one. From what I gleaned from his comments is that the ANDA review is complete with no additional comments. They have to review the active ingredient DMF, basically the paperwork for the ingredient filed with the FDA, if it's from a reputable source like what's on the market, which I am guessing is the case, we could receive approval in a few months. This is beyond huge news!

I would say yes. There are a lot of other details that I did not include in my previous response. One of the most expensive components of drugs is the active ingredient and there is no way Nasrat would just order material until he had a clear plan moving forward. You then have to have all of the inactive ingredients in house as well as order labelling, the labelling alone can take 4-6 weeks to arrive. A lot of moving parts for a drug launch. My guess is we get all of them launched before the end of the year, they will be staggered of course, but my guess is once the ink was dried on that transfer agreement the ball started rolling ordering everything for each product. Just my opinion but we shall see, either way this is a good problem to have, too many drugs to launch lol never a bad thing and he said at least 70M, I'm guessing this was with the current pipeline, each new drug adds to this, like some of said we could be north of 100M. We shall see how this story unfolds but so far, I am enjoying see it in what could potentially be lifechanging wealth for all of us. Good luck to everyone!!

Your welcome, I've launched about 20 drugs this way so I know exactly what is involved. Nasrat and team are all doing an excellent job and you can see where he is taking the company. Like I said the big tell is the new facility!!!!!

Good morning James, I had previously alluded to how long it takes for a launch in a previous email. Anticipate 2-4 weeks post approval for the API to come in and be released, then they need to schedule a total of 3 process validation commercial scale batches. There is a lot of paperwork associated with these. Anticipate another 4 weeks for this to be performed. Then all of the samples need to be tested and all of the validation reports signed off by QA so another 4 weeks. To be conservative once approval is given if they did not have everything in place, which most companies do not as you never know when FDA approval will come, I would anticipate about 3 months until official launch of a drug product. Based on my estimates I would anticipate launch of this one sometime middle to end of August. Once again this is conservative, and timelines can always shift or be sped up but this gives everyone an idea of time to launch. Cheers

Revenue Trends
First want to say congratulations to Nasrat and Team and he has definitely turned this company in the right direction. Also, congrats to all the investors as we have stuck through the tough times and all the ridicule that this board has to offer. So for the past 6-8 quarters I have been looking at trends to predict potential revenue, I love trends. While this is no way a perfect system, I have noticed that the quarterly revenue has typically landed between 59%-82% of the combined totals of the accounts receivable and inventory lines for the trailing quarter. If this trend holds true the 2025 Q1 numbers should be at a minimum of 19M based on what I am seeing in the current 10K for those two 2024 Q4 line items. Suffice to say that I would say north of 80M+ this upcoming year may just be a reality and as Nasrat likes to say we skip the 60s and the 70s and maybe even the 80s, lol. Good luck everyone and enjoy the call! Cheers!

Good question, the new facility is strictly for packaging as stated in the conference call. So the approved manufacturing facility under the filed ANDAs still stands. As I alluded to the first 3 commercial batches, which most likely would be packaged in the new facility would go up on long term stability. You are allowed to sell these immediately. Elite will have the FDA approve the new packaging facility prior to shipping any commercial lots. Hope this clarifies.

As these products were originally approved from this site, no additional stability work is performed. For filing and ANDA, you have 6 months in 40C/75%RH this allows you to file and then you have the long term stability 24-36 months 25C/60%RH. This is for the filing or a new site approval. Once you start commercializing you have to put your first 3 commercial batches on long term stability and then one batch annually. Hope this clarifies as these products should not have any stability requirements prior to launch.

Hi Imanjen13, yes what JamesF1 is stating with regards to the REMs is correct, all of the protocols are ready and the road map is clear and should be a pretty quick turnaround. With regards to the DEA they can submit quota request immediately as if they just got approval. I would anticipate the DEA would give them some quota to get launched. My best guess if they have everything in order is they would launch these products right after summer going into the fall season, best guess September/October in my opinion. Either way this is just more revenue streams coming into Elite and this was excellent news. As others have stated I am excited to see the roadmap Nasrat lays out next week during the conference call. There is definitely more behind the scenes than we know about. Two of the biggest tels to me were the new facility and then all of a sudden we really see that law firm Troutman/Pepper referenced a lot on out SEC filings. Connecting the dots in my mind is that we already have a potential suitor in the wings. Good luck to all and have a safe and Happy Fourth of July next week!!

You are correct, I am a winemaker as I make my own wine as a hobby and I run a pharmaceutical company

You are all welcome as I am always here to help in anyway I can as I have a lot of experience on the development and approval side, funny now with my own drug I am starting to learn the marketing side too, now I am getting really dangerous for the dark side posters on the board, lol.
Its more frustration as what a lot of you don't see is what I alluded to in my post every drug filed is assigned a new reviewer and sometimes as it takes so long to get approval you get a new reviewer halfway through the process. Best way I can explain getting a drug approved is like trying to kick a field goal, however the goal posts are always moving, you just have to get that one lucky alignment and boom its good(approved)!!!! Have a nice evening everyone and cheers!!

Sure, in my opinion there is nothing wrong and this is all part of the ANDA review and approval cycle. So let me summarize how the GUDUFA dates work. Nasrat has already explained all of this but sometimes not in a clear and concise way.

A company files an ANDA for a product with the FDA through the FDA portal (online application process), FDA confirms receipt of the filing with 24hrs. The FDA now has 30-45 days to accept the filing for official review. This is when Elite puts out a PR to let everyone know the ANDA has been filed. With the acceptance for review letter, there is an associated GUDUFA target date assigned, from my experience this is running 9-12 months out. Now to be clear this is not a date the approval will happen and I think that is what is getting everyone confused. This date is the loose date that the FDA will communicate a Complete Response Letter to the filer. 95% of drugs filed get a CRL and do not go right to approval. Now the CRL can be classified as minor or major. Minor keeps your place in the review Que, while Major you start from the beginning again. Typically for a minor the FDA requires you to respond with answers and clarifications within 3 Months, a Major since it is usually a lot more they give you 12 months. You can respond any time within this timeframe. Once you respond to the CRL, the FDA usually takes up to 30 days to accept the response, if accepted they issue a new GUDUFA date, 3 months for minors and 9-12 months for majors. The process starts all over again. Usually after a minor CRL, approval is received after the review, however the FDA allows themselves the ability to issue Information Request Letters, this kicks the GUDUFA date out by another 1-2 months depending on the information being requested. Hope this helps clarify a little. Its a long process, but one Nasrat and team have navigated for many drugs and we just need to give them some slack as to be honest just getting one drug approved is hard for any company, my team has 20+ under our belts and each one is a new challenge and new FDA reviewer and comes with new requests. Based on what I have seen so far Nasrat and his team are doing a fantastic job, the new packaging facility was the key for me to realize we are headed to the next level and I have been heavily accumulating as well as my dad!! Good luck to everyone and no matter what happens moving forward it has been great sharing and reading everything on this board. Quite a little Elite family we have grown into!

Good afternoon Everyone and thanks for your purchase Pentacle1, I was the late afternoon buyer yesterday, wanted to add around 65k to round off my holdings to a round number, scientist in me. Even with my small buying pressure the mms did not seem to have shares to keep my orders from driving the price upwards and then today with this 300k purchase, hopefully shows that the shares to sell on the ask side of things are starting to run thin. Good luck everyone heading into earnings!

Good morning Sharkey, this is a powder for reconstitution. Elite manufactures the powder is a sachet and the pharmacist will reconstitute by mixing with an instructed amount of water when giving the prescription to the patient. Hope that clears up the confusion, either way this is another revenue stream for Elite so all good. Cheers

Good morning everyone and thank you for the compliments. Just to confirm I am a chemist by background and I run a Pharmaceutical Research and Development lab that has been filing ANDAs for oral solution and suspension products for the past 23 years. We have over 20 designated products and 20 ANDAs approved through my facility. I am also the DEA controlled substance manager so everything I share with you is from my direct experience in the industry. To put it in perspective, Jim Huang from Sungen was my old boss at Bausch and Lomb, my current CDMO sales rep spent Christmas at Nasrat's house. The pharmaceutical industry is small close knit family. My dad and I are very excited about the potential future of our investment and in my opinion the latest move with the SEC filings is in anticipation of something as it really appears as though they are getting their ducks in a row. Either way as Nasrat stated, they are at the growth phase in their revenue and to be honest this growth phase has occurred with current products and doesn't even include the new ones coming down the pike. Exciting times ahead. Cheers everyone!!

Good afternoon everyone, just want to clear up what an authorized generic is by definition. To be honest in our industry its frustrating as we wait 17 years for a drug to come off patent and then what happens is typically 6-9 months prior to the patent expiring, the branded drug contacts a company such as Prasco, who by the way do not manufacture any drugs themselves, and they sign them up to be an authorized generic. What this means is that the brand makes the drug and labels it under the Prasco/Burel name and they sell it as a generic, however it is the same drug as the brand. What this does is this allows them to lock up the generic contracts at the wholesalers prior to the true generics even hitting the market. Trying to get a drug out of a contract is very hard as you can bid a lower price but typically they just go back to the drug they have loaded and ask them to match, which they usually do. Hope that helps clear up what an authorized generic is in the industry. So no Elite is not an authorized generic, however Prasco being as big as they are has much more influence with getting drugs under contract and this is what will help Elite in a big way!! Have a great afternoon everyone. Cheers

Good morning Meschcan, I know as much about elite's filings and project sales numbers as all of you. I can only pass on the information given to me and yes I feel Elite can capture 8% of the ER market based on how they have done in the IR market. With regards to the Vyvanse filing I think launching in 2024 is way to aggressive. As I have mentioned before, an ANDA gets assigned a GUDUFA date when the FDA accepts the filing, on average this is 9 months from the date of acceptance. My experience is that 90% of these filings get a CRL, now a CRL can be a minor or major. A minor typically you have 2-3 months to respond and you keep you line in Que, once you respond you get a new GUDUFA date of about 6-9 months. A major you go back to the back of the line and usually have up to a year to respond and then your GUDUFA date is assigned at response and based on how many other ANDAs are ahead of yours. Now the FDA also has this little game, which they played on our ANDA filing and they like to give you an additional information request letter close to the GUDUFA date and then they extend the date out 3 months. Basically, what I am saying is trying to time the FDA approval is very hard. The key is that Elite now has 4 ANDAs filed and that is big as they are all moving towards approval and we have cash coming in to continue to grow our pipeline. A 2024 launch for the Vyvanse is I feel is possible but not a reality, I would say Q1/Q2 2025 calendar year. The generic Oxycontin is really what has me excited as if they beat the patent, they should get 6 months exclusivity. This is the product I am watching the most as I feel this is one that will put Elite on the map and on every traders radar. As Newman from Seinfeld always said "have a great no feel Tuesday" Russ

Good morning Meshcan et all, my dad and I are still here and very excited for the future of Elite. Small world, my company just got our first approval under our rebranded name a few weeks ago and of all companies to reach out to partner was Prasco. We discussed briefly the Adderall ER they just launched and he stated that they hope to eventually penetrate 8-12% of the market, this is a rough estimate and no way set in stone but bodes well for the future of our sales numbers. Little to say Elite is firing on all cylinders the pipeline is growing leaps and bounds. I have been with my company for 23 years and have successfully developed and launched 18 ANDAs under our previous name growing market share from 18M-180M. It takes time and the trajectory can quickly start to pickup especially at the phase Elite is currently at in their growth cycle. Another funny story is the contact manufacturing facility we are currently using, the sales rep is good friends with Nasrat and even went to his house two Christmas' ago. Like I said small world in the pharmaceutical world. If you guys/gals have any questions I will try my best to answer them as my team is currently getting ready to launch our product but I respect some of you on this board and want to help in anyway I can. Cheers to a great ride so far and an even better one to come. Winechemist