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Greetings. Welcome to the Medexus Pharmaceuticals Inc. First Fiscal Quarter 2024 Earnings Call. At this time, all participants are in listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note this conference is being recorded.
I will now turn the conference over to your host, Magda Gardner, Investor Relations. Magda, you may begin.
Thank you and good morning, everyone. Welcome to the Medexus Pharmaceuticals first fiscal quarter of 2024 earnings call. On the call this morning are Ken d'Entremont, Chief Executive Officer; and Marcel Konrad, Chief Financial Officer. If you have any questions after the conference call, I would like further information about the company, please contact Adelaide Capital at 416-206-8869.
I would like to remind everyone that this discussion will include forward-looking information as defined in securities laws. Actual results may differ materially from historical results or results anticipated by the forward-looking information.
In addition, this discussion will also include non-GAAP measures, such as adjusted net income and loss and adjusted EBITDA, which do not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other companies.
For more information about forward-looking information and non-GAAP measures, including reconciliation to net income and loss, please refer to the company’s MD&A, which along with the financial statements is available on the company’s website at www.medexus.com 1.46 and on SEDAR+ at www.sedar+.ca. As a reminder, Medexus reports on March 31 fiscal year basis. Medexus reports financial results in U.S. dollars.
I would now like to turn the call over to Ken d'Entremont.
Thank you, Magda. And thank you everyone for joining us on this call today.
We're very pleased to report another great quarter with continued strength and stability across the companies based business and notably strong power performance driving the quarter's record revenues. These results demonstrate the robustness of our product portfolio and our ability to generate revenue growth and positive operating profit net income and adjusted EBITDA.
Our fiscal Q1, '24 revenue of $31.6 million compares favorably to $23 million for the same period last year, or 37% growth year-on-year. The $8.5 million increases mainly due to continued strong sales of IXINITY. Strong Rupall demand growth that also benefited from timing of orders, solid receivable Metoject performance and the inclusion of U.S. Gleolan net sales and total revenue.
Adjusted EBITDA, increase to $6.6 million for the quarter compared to $1.9 million for the same period last year. The $4.7 million year-on-year increase is mainly due to increases in revenue that I mentioned and a small reduction in operating expenses. We produce net income of $0.7 million for the quarter compared to a net loss of $1.4 million for the same period last year. Overall, we are thrilled to be reporting this strong quarter of financial results. I will let Marcel comment further on our financial results later in the call.
Now turning to our specific product lines, our core business remains strong and stable, and we continue to work on potential additions to our product portfolio, to generate additional growth momentum. IXINITY unit demand in the United States remain strong during the quarter experienced, a slight decrease over the trailing 12 months period ended June 30.
This reflects the effects of lower observed average quantities of product consumed by newer patients following the particularly strong quarter for new patient conversions in fiscal Q4, '23. We have also continued to invest moderately in our manufacturing process improvement initiative, which has had a positive impact on batch yield and manufacturing costs.
We will continue to monitor, these benefits against expected increases in direct costs of our third-party contract manufacturing agreements. On Rasuvo, we maintain a market leading position during the quarter as unit demand for Rasuvo remain strong in the moderately growing us branded methotrexate market.
We continue to deploy a highly efficient allocation of sales force resources and our position remains strong despite to stay in competition in U.S. branded methotrexate market. Rupall unit demand in Canada remain strong during the quarter, which is reflected in the unit demand growth of 26% over the trailing 12 months period ended June 30.
This performance reflects successful execution of our sales and marketing initiatives, as well as the timing of certain orders during the quarter. You see tropical terbinafine, which we licensed in March, as a strategic fit with Rupall and we expect that, if and when approved by Health Canada, that new product will both contribute to our Canadian revenues and engage are in place commercial infrastructure, currently supporting Rupall.
On Gleolan, we continue to execute our post transition commercial plan in the U.S., including new sales and marketing initiatives. As well in May, we present the data at ISPOR 2023, demonstrating a 33% cost savings with Gleolan, compared to conventional white light surgery in U.S. patients with high-grade glioma.
Based on the publication, we found that although Gleolan is additive to the cost of surgery, its use results in lower cost per imaging complete resection and therefore is a more efficient use of resources in the surgical resection of high-grade glioma.
Metoject unit demand in Canada increased by 12% in the trailing 12-month period ended June 30, in spite of direct generic competition. In the quarter, Metoject unit demand benefited from unanticipated shortages of product inventory of the competing product. We continue to seek to defend and grow product, the product strong market position as we await a court decision following the January 2023 trial for patent litigation we initiated against Metoject's generic competitor in 2020.
We remain optimistic about Treosulfan an agent for used in conditioning regimens as part of allogeneic hematopoietic stem cell transplantation protocols, or allo-HSCT. In May 2023, we learn that researchers at Toronto's Princess Margaret Hospital presented positive new data on Treosulfan at MDS 2023. The retrospective analysis of patient outcomes found improved one year overall survival for certain patients treated with Treosulfan among other positive findings.
The study further supports our optimism regarding Treosulfan's potential positive impact in both Canada, where we have commercially launched Treosulfan under the brand name Trecondyv, and in the United States. In the U.S. Treosulfan remains under an ongoing regulatory review process with the FDA. Medac as the party responsible for regulatory matters under our license agreement for Treosulfan continues to work on responding to the FDA requests regarding the Treosulfan NDA.
We still expect it will medac until the first half of calendar year 2024 to collect and submit the information requested by the FDA. As set out in our license agreement, we are discussing with medac what if any adjustments to our license agreement may be needed to reflect this extended FDA process, which has now continued beyond the agreed outside date for FDA approval in our license agreement.
A key component of our growth strategy will continue to be to leverage our infrastructure through new product acquisitions and partnerships. We therefore continue for our new product opportunities in both current and planned therapeutic areas in both the United States and Canada. In the meantime, we continue working to increase revenue, develop and leverage or commercial infrastructure across existing products and maintain strict financial discipline.
I will now turn the call over to Marcel who will discuss our financial results in more detail. Marcel?
All right, thank you. Thank you, Ken.
I'm also very pleased with what I see as our overall strongest quarter from Medexus today's total revenue for the fiscal first quarter was $31.6 million, which is slightly better than what we had anticipated when we previewed our expected revenue in July. This quarter's revenue number compares favorably to revenue of $23 million for the three months period ended June 30, 2022.
As Ken mentioned, the $8.6 million increase in the first fiscal quarter of 2024 versus the prior year first quarter is primarily due to continuing strong sales of IXINITY continuing strong Rupall of demand growth including in part due to timing of orders and Rasuvo performance and for the recognition of 100% of Gleolan net sales in total revenue.
Gross profit was $17.2 million for the three months period ended June 30, 2023, compared to gross profit of $12.9 million for the same period last year. The gross margin was 54.4% for the three months period ended June 30, 2023, compared to 56.1% for the three months period ended June 30, 2022. As you mentioned on last quarter's call, we continue monitoring this metric and the factors that contribute to gross margin.
The year-on-year decrease in gross margin primarily reflects changes in product mix, including changes in how we account for Gleolan sales in the United States under IFRS over the course of the fiscal year 2023. Specifically, in accordance with IFRS, we recognized Gleolan revenue as a royalty during the transition period, before recognizing net sales together with corresponding cost of goods sold starting in August 2022.
On the other hand, we have seen positive impact of the IXINITY gross margin due to the manufacturing improvement initiatives. Selling and administrative expenses were $11.9 million for three months period ended June 30, 2023, compared to $12.1 million for the three months period ended June 30, 2022.
Research and development was $0.4 million for the three months period ended June 30, 2023. This compares to $0.7 million for the three months period ended June 30, 2022. Adjusted EBITDA for the three months period ended June 30, 2023 was positive $6.6 million, compared to $1.9 million for the three months ended June 30, 2022. Again as Ken mentioned, the $4.7 million year-on-year increase was primarily due to increases in revenue that I mentioned and the small reduction in operating expenses.
The net income for the three months period ended June 30, 2023 was $0.7 million compared to a net loss of $1.4 million in the same period last year. Also included in net income or loss is a non-cash unrealized gain or loss on fair value of our embedded derivatives in our outstanding convertible debentures, which are sensitive to amongst others fluctuations in our share price.
We believe that adjusted net income or loss provides a better representation of performance of our operations, because it excludes non-cash fair value adjustments on liabilities, which may be settled for shares.
Our adjusted net income for the three months ended June 30, 2023 was $0.6 million compared to an adjusted net loss of $3.6 million for the same period last year. Our cash position has continued to improve in the first quarter of fiscal year 2024, increasing from $13.1 million at March 31, 2023 to $15.8 million at June 30, 2023.
In July, we use some of this cash to repurchase and cancel CAD 1.7 million of principal amount of convertible debentures under our NCIB. Adjusting for that transaction, we continue to expect to have approximately USD20 million of total cash at September 30. Assuming successful execution of our - cash management plan, and not including any additional amounts that may become available under the $20 million uncommitted accordion facility with BMO.
The remaining convertible debentures will mature on October 16, 2023. At maturity, we will be obligated to repay 125% of the aggregate principal amount of the then issued and outstanding convertible debentures, plus accrued and unpaid interest.
Altogether, this represents a near-term liability of approximately USD38 million depending on prevailing Canadian U.S. dollar exchange rates. Because of that NCIB repurchase, we expect to save approximately CAD 321,000 or about USD240,000 depending on prevailing Canadian U.S. dollar exchange rates.
Consisting of the of the avoided premium amount that would have been due at maturity, and interest and principal that would have been accrued between July 18 at the maturity date. We may elect to satisfy any remaining amounts payable in respect of the convertible debentures at maturity in cash, common shares or a combination of cash and common shares.
The extent to which we will be able to choose to sell the convertible debentures in cash at maturity will depend on availability of funds from our operations through the maturity date, and from cash provided by financing activities, including any amounts that may become available under the BMO accordion facility.
We have been consistent in executing our plan quarter-after-quarter, which has put the company in a strong financial position with strong quarterly revenue and improve profitability. This is the second consecutive quarter with positive net income and the seventh consecutive quarter demonstrating positive adjusted EBITDA. As always, there can be variability in our quarter-to-quarter results, but we look forward to continuing to build our momentum over the coming fiscal year and beyond.
Thank you very much. [Operator Instructions] Thank you. Our first question is coming from Andre Uddin of Research Capital. Andre, your line is live.
Okay. Thank you. Nice quarter Ken and Marcel. Can you just elaborate a little bit more on the Metoject competitive environment and when you think that litigation should be resolved?
Yes, thanks, Andre. Good question. The Metoject kind of environment is experiencing some shortages of methotrexate and that is not - methotrexate is not been exposed to that. We've been able to keep it in supply. So certainly benefiting from that. And we - as a result, we're growing unit share and I think dollars share as well. The litigation, the trial was in January. There is no timeline on a decision. But we would expect it to come sometime in this calendar year. So, we're waiting on that. We hope it comes soon.
It's great. And just besides growing your sales, what is your cash management strategy right now to have about $20 million in the bank by the end of September? Could you just discuss that a little bit? Thanks.
Sure, I'll turn it over to Marcel.
Yes. Thanks for that question, Andre. So we've said that we're growing our cash, mainly because we've seen historically our sales growing. So we've also noticed our receivables, for example, going up, we're obviously doing everything we can to put aside as much cash - as we can towards the convertible debentures, but it is really just about now, very, very mindfully, obviously, watching every single spend towards that critical data for October and managed the cash to watch the balance sheet we have projected with you.
Yes. That's great. And just can we also get a bit of a business development update in terms of, are you seeing prices dropping in assets? And what type of opportunities are you are you seeing right now? That would be great as well?
Yes. Good opportunities, we're seeing many opportunities. Prices appear to be fair. As you all know, many companies have difficulty getting funded. So, there are some assets coming available. I think the terbinafine transaction that we did was an extremely fair price. We do believe, we'll get others like that. We're really seeking to build portfolio in the U.S. in order to broaden beyond the three products that we have now. So that's where our focus is, and we think that there will be opportunities that we'll come to the table.
Okay, thanks. That's it for me. Thank you.
Thank you very much. Your next question is coming from Scott Henry of ROTH Capital. Scott. Your line is live.
Thank you and good morning. Ken, Marcel really strong results. Really good momentum. Ken I know you had a lot of prepared remarks, but I was wondering if you just tell us in big terms, what do you attribute all this strength to - my history has been when a company turns the gas on this heavy, it's usually driven by one product. But sometimes it's more than one. But could you just talk a little bit about, why things are as good as they are now, relative to the past? Thanks.
Yes. Thanks Scott. It's more broadly based for us, we clearly have momentum on four products. And I think that therefore speaks to the success that the two commercial teams, both the U.S. and Canada are having, that there's tremendous momentum behind Rupall in Canada. There's excellent momentum behind IXINITY, and Gleolan in the U.S. And so, we just feel like we've got momentum, clearly, when you acquire a product, there's always issues.
We experienced that with IXINITY. We got through it, and now we're having successful execution that's making a very nice contribution to our business. Same thing, with Gleolan you relaunch a product takes time, there's always issues, and then it starts to get momentum. So I think really, that's it tremendous momentum from both teams.
Okay. Great. Thank you for that color. And you did mention in the beginning. Some benefit from timing of orders. It seems to me some orders got pulled through into Q1, when I think about 2Q your fiscal 2Q that is, should we think about sequential growth from Q1 to Q2? Or might it pair back a little bit given just timing of orders? How should we think about 2Q?
Yes, Rupall, obviously, there's some seasonality with Rupall, tied to the allergy season in Canada. But also, there were these additional orders on top of strong demand. So it wasn't like the demand wasn't there clearly was there, but it came in way stronger than we had expected. So wouldn't expect that to continue. And typically this quarter we just reported, is one of our stronger quarters.
So sequential growth is going to be challenging, 31.6 I think is a really good number coming off, what we were 28 in change last quarter. So that's really strong sequential growth, and so that - it's going to be tough to duplicate that. So sequential growth can be challenging, but certainly growth year-on-year, I think we'll continue to demonstrate that.
Okay. Great. Yes, it wasn't long ago, you were in the 20s. And then even underneath the 20, mark, so great work there. And then topical terbinafine? How should we think about timing of that in U.S. and in Canada?
Only licensed in Canada. So only think of the Canadian market. I think we have said that we do expect to put that application into Health Canada, in the fall of this year, likely it take 12 months to a decision. And then we would launch shortly thereafter, the market for topical terbinafine in Canada is $80 million to $90 million there is only one player at this stage. So will be second entrance with a convenience advantage.
Okay. Great. Thank you, Ken. And just to get Marcel involved. Marcel, I know you spent a lot of time in the prepared remarks talking about debt. I'm just wondering if you could just walk it, through in simple terms. What the inflection point is - how much you expect to have to pay back in is it September or October. And in the game plan to achieve that just to make sure it's very clear that's a key factor?
Yes, no, absolutely. Yes. Thanks for the question, Scott. So as a reminder, we had refinanced our mid-cap facility with BMO. So back then we got a $38.5 million facility in place absolutely fantastic conditions at a really, really good rate. So, we have yet a partner now with BMO the total facility we announced back then was $58.5 million.
So meaning that we have this $20 million of uncommitted facility, sort of term loan out there, which we're waiting for BMO basically together to get back to us. So I mentioned in my prepared remarks that in simple terms, what is coming due now in October is about $38 million of sort of a payment. We have a choice, as we mentioned a few times to sell that in cash and shares or a combination.
So, we'll see how much we accumulate towards that $38 million. So then you have the $20 million of the uncommitted accordion facility, we said we're going to generate cash in the tune now around $18 million. Obviously, that includes sorry, the payout for the convertible debentures. So as you can see, getting close.
So, we're obviously monitoring that cash situation very, very closely over the next few weeks and months, but we're very pleased with the strong performance, which absolutely helps us now to tackle this sort of liability as much as we can. So as you can see, it's getting very close.
Okay. Great. And when will you get a decision on that $20 million uncommitted - is there a specific deadline date for that?
There isn't really a specific deadline. Of course, we would like to have clarity sooner than later. All we can do at this point is, is what we do now, as you can see the strong results. You see, we perform, we execute against our plan. Even now as you've seen a little bit better than what we announced on the revenue side, for example. That's what we can do. We are in regular contact, obviously with the bank, and we'll see when we get an answer for that.
Okay, great. Thank you for taking the question. And congratulations again on the strong results.
Thank you.
Thank you very much. Your next question is coming from Rahul Sarugaser from Raymond James. Rahul, your line is live.
Good morning, Ken and Marcel. This is Mike on for Rahul? A couple of questions on indication extensions and introducing products to the market. But first, I'm glad to hear that there's some optimism around - about around Treosulfan and resubmission. I wonder and you mentioned that there's some renegotiation that's possible with medac in consideration for this submission process? I wonder if you could describe the durability of the patents around Treosulfan? And how - if you could remind us how far those go out? And also, you know, what sort of terms you might consider renegotiating with medac. Given the circumstances here?
Hi Mike, thanks for the question. So just remind you that the Treosulfan protection is related to orphan drug status in the U.S. So we're not relying on a patent protection, we're going to rely on orphan drug, which in the case of Treosulfan, we think will be seven and a half years, because it includes a pediatric indication. And that timeline doesn't start ticking until approval. So, we will have seven and a half years from approval in order to be exclusive in the U.S.
And then just the second part of your question related to the renegotiation with medac. As we mentioned, it's contractual, that if it takes beyond the original outside date that we sit down, and we try and figure out what the new terms are. So, we are in the process of doing that now. So, clearly, we believe that the market has had some changes. We still think it's a very good opportunity for Treosulfan, but we're working with our partners to reset the contractual obligations with respect to the milestone payments and timing as such. And we will put that information out as soon as we've get that complete.
Right. Fantastic. Both really positive points. Thank you. And now I wonder if you could, if there were any updates to reports on the pediatric indication expansion for IXINITY?
Nothing to report so submitted, accepted for review. We think that process will take some months, probably six to eight months, and then we should have a decision. Remember, this was a post marketing commitment around the original approval. So, we believe that the data that we've generated will be sufficient to support the registration label expansion. But clearly that it's up to the FDA to confirm that.
Okay. Thank you very much. Those are my questions and very glad to see the strong performance and the increase in the cash balance continue.
Thank you.
Thank you very much. Your next question is coming from Stefan Quenneville at Echelon Capital Markets. Stefan, your line is live.
Thank you very much, and congrats on the quarter guys. I just have a quick question of the BMO accordion. Are there any sort of financial covenants or legal requirements on your end in order to access the accordion? And if so, what are they and where do you stand amongst those measures?
Thanks.
Thanks, Stefan. I'll give that to Marcel.
Yes, that sounds good. Good question in terms of the access so. So of course, we do have as part of the overall facility, we do have covenants in place. That will apply to the facility. Right now we have $38.5 million, as you know, and then when we get to, if we get to this uncommitted accordion, then of course, there's the covenants will be part of that additional $20 million. Yes.
But just to be clear, you're on site draw to the current covenant to access the additional $20 million or at least on track towards it, is that correct?
Yes, that is that is an important part that we - of course, could not so to speak, go against any covenants we have in order to access a facility. Absolutely. Yes and we're absolutely in line with that at the moment yes.
Yes, I think - just one additional point important point out that, clearly the results that we produced this quarter will be on what the street expected and it's also beyond what we had provided to BMO in terms of expectations. So, I think this quarter bodes well for our discussions with BMO.
Okay. Guys, thank you.
Thanks, Stefan.
Thank you very much. Your next question is coming from Antonia Borovina from Bloom Burton. Antonia, your line is live.
Hi, Ken and Marcel. Thanks for taking my question. Just wondering if you could discuss a bit more on what you're seeing with the extended dosing you mentioned that patients prescribed more recently are using lower quantities. So maybe just if you could go into what's driving that?
Hi, Antonio thanks for that question. It's a good one. And it's complicated. Obviously, you know, growth for us is dependent on patient starts. Most patient's starts are adults for us, because we don't yet have the pediatric indication. And historically starts for these patients. We're - in patients that we're - just using more product, they have been using it prophylactically. And now maybe we're getting more who are on demand.
And so it's just a blade, there's been a high volume of new patient's starts, just that we're noticing that the average volume consumed by each of the new starts, has been a bit a little bit lower than what we've seen historically. So just a trend that we're noticing. I think the good news, is that we do continue to generate these new starts, which is excellent. And we think that will continue. Just we're reducing the average volume for new start patient in our forecast.
Okay, and then regarding the manufacturing process for IXINITY and extracting some greater efficiencies, is there any additional room for improvement there? Or has that been fully implemented?
No, absolutely more room for improvement have been a biologic. It's kind of an ongoing process. And so, we've made really good - progress at this point. And we do believe that there are additional efficiencies that we'll be able to generate as we go forward.
And then just finally, just a clarification regarding some of your earlier comments on the competitive environment for Metoject. You mentioned that methotrexate was out of stock. Is this something that's an ongoing issue? Or has that been resolved with your competitors?
Appears to be an ongoing issue. It's really difficult to tell, but we do see this situation in other markets, also U.S. market. And so, we think this is more of a global issue related to the availability of the API for methotrexate. And so, we're certainly seeing that in the two markets that we serve, and we've heard similar issues in other markets. So, we think it's an ongoing problem. But it's very difficult to forecast what will happen with a specific competitor in a specific market.
And no impacts on you?
No. So, Medac being one of the largest manufacturers of injectable methotrexate in the pre-filled pen or auto injector format. It's got excellent control on the API. So far for us, it's been really good. We continue to hold on to significant inventories to avoid any short-term issues. And so, so far, so good for us.
Great. Thanks. That's all for me.
Thank you very much. Your next question is coming from Justin Keywood from Stiefel. Justin, your line of live.
Good morning, thanks for taking my call. On the Treosulfan timeline for resubmission, it got a bit more precise in the first half of calendar 2024. Just trying to understand the reasoning behind that. Just given there's still ongoing negotiations with Medac. And then also is there a consideration of new trials to be initiated for Treosulfan?
Yes. Thanks, Justin. Good question. So, we're getting a little more specific on the timeline to resubmission. As the work -- much of the work has been done. So, the process that Medac needs to follow in order to collect this data is ongoing, but so far, so good. And they are collecting information pretty much on the timeline that we had anticipated. So we're able to get a little more specific as to when we think the resubmission will happen. So we've got a fair degree of confidence in that timeline. And sorry, so what was the second part of the question?
If there's the potential to initiate new trials for Treosulfan given this as the third attempt, or do you feel that you have the enough of the data requested to ensure a successful outcome?
Yes, sorry about that. I forgot that piece of it. No, still no requirement for a new trial. I mean, but the trial that had been conducted by Medac was all very large trial. Its 570 patients in the trial. So it's a big trial. There are a lot of patients in there. So, at this stage, no, what the FDA is requesting is clarification on that pivotal study. So, no need for that.
Just one more question. What would be the next milestone to look out for as far as Treosulfan?
I guess the next news you'll hear from us will be the new negotiation in license agreement, which should come out to shortly. And then, I think it will be the acceptance of the resubmission. And that that will be the next piece of information we'll put out. And so, that'll be in some sometime in the first half of calendar 2024.
Thank you.
Thank you very much. [Operator Instructions] Our next question is coming from Alan Richardson from Echelon Capital Partners. Alan, your line of live.
Thank you very much. This is more addressed to Konrad than it is to you, Ken. With regards to the reimbursements of your -- I'm wondering, do you know the number that BMO is was looking for in order to fully activate that $20 million accordion level? And do you know, if you if you've surpassed that. Is this something where they just have to rubber stamp it or is there further negotiations required between now and maturity of the bond?
Yes. Thanks for that question. The negotiations per se as you as you can call it obviously happened during the time when we set up the facility. And as a reminder, we got this, this the $8.5 million facility with the $20 million of uncommitted accordion and the overall negotiation as part of that facility, including all the conditions have been essential negotiated that then including all the terms and conditions, yes, so there's nothing sort of sort of "new coming to the idea" and another process of accessing this accordion, obviously, at the discretion of the bank, ultimately, but As Ken mentioned before, I think a key component to that, and maybe a little bit as a side note, also, a question follow up from Stefan before this is about what we what we said we're going to do.
This is about delivering on the results. This is much about basically telling people what we're going to do. We deliver on what we're going to do. And this first quarter has been very encouraging already for us to see that what Ken mentioned before as well. He says even better than what we had anticipated. So as I mentioned earlier on this is -- at this point, you know, what we can do, focusing on the business and growing the business, delivering all the results, and everything will be up to the bank as part of the process to access to the accordion, ultimately, yes.
Okay. Now, if we just fast forward to 12 months from now, right, and I recognize that we're talking about the future and it's uncertain. I'm going to assume that you get, that the $20 million is activated. With the amount of money that you're generating in cash every quarter, what is your debt level look like? Because right now, I'm thinking that you're going to be somewhere around $55 million to $58 million in total debt by October, by the end of September, early October. If we're going to fast forward and look at either end of July or end of September of next year, where do you anticipate your debt level to be at that point in time?
Yes, of course, that is overall a bit hard to quantify. But what you can assume at this point is that, if you look historically, where we came from, and we've started to be profitable and increase revenue, we're generating cash, yes. So we're in a good place to basically continue to do that. And as we've said in the past, so look at this as the new normal now.
Now, yes, as you mentioned, assuming that access will happen as a $58.5 million sort of debt at this point. There is an amortization schedule, obviously kicking in. So that debt will decrease there. So we're definitely going to amortize that pay back debt loan and being in a position with less debt and a strong business. Ultimately, so it's really good prospects to have. As again, as an interest rate, as conditions that are very favorable relative to the markets we are right now. So really all good positive signs, I would say from now on, yes.
But that doesn't give me a number. So what number are we looking at? Should we be thinking about $40 million. I recognize that you might make acquisitions. So I'm talking about ceteris paribus. Everything else being equal and assuming no dilution, would you get to $40 million in debt year from now from now, from 58?
That is -- yes, that is a bit aggressive as an amortization schedule. It's probably going to be a little bit more than that. But it's probably in the range, but a little bit more than that I would think.
Okay. Thank you.
Thank you very much.
Thank you. Well, that appears to be the last question in the queue. I will now hand back over to Ken, for any closing comments.
Thank you very much. Just want to thank everybody for joining us on the call today. We're extremely proud of the financial results that we've had in this first quarter of the year. And we're seeking to continue to build a core portfolio. We look forward to delivering continued strong performance and speaking to investors next quarter. Thanks very much.
Thank you, everybody. This does conclude today's conference call. You may disconnect your phonelines at this time and have a wonderful day. Thank you for your participation.