Greetings, and welcome to the Medexus Pharmaceuticals Inc first fiscal quarter 2024 earnings call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. 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 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 or 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 as 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 reconciliations 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 and on SEDAR+ at www.sedarplus.ca. As a reminder, Medexus reports on a March 31st fiscal year basis. Medexus reports financial results in US 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 are very pleased to report another great quarter, with continued strength and stability across the company's base business and notably strong Rupall 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 2024 revenue of $ 31.6 million compares favorably to $23 million for the same period last year or 37% growth year-over-year. The $ 8.5 million increase is mainly due to continued strong sales of IXINITY, strong Rupall demand growth that also benefited from timing of orders, solid Rasuvo Metoject performance, and the inclusion of U.S. Gleolan net sales and total revenue.
Adjusted EBITDA increased to $6.6 million for the quarter, compared to $1.9 million for the same period last year. The $4.7 million year-over-year increase is mainly due to increases in revenue that I mentioned and a small reduction in operating expenses. We produced 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. 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 remained strong during the quarter, experienced a slight de-decrease over the trailing 12-month period ended June 30th. 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 2023. 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 maintained a market-leading position during the quarter, as unit demand for Rasuvo remained strong in the moderately growing U.S. branded methotrexate market.
We continue to deploy a highly efficient allocation of sales force resources, and our position remains strong despite sustained competition in the U.S. branded methotrexate market. Rupall unit demand in Canada remained strong during the quarter, which is reflected in the unit demand growth of 26% over the trailing 12 month period ended June 30th. This performance reflects successful execution of our sales and marketing initiatives, as well as the timing of certain orders during the quarter. We see topical 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 our in-place commercial infrastructure currently supporting Rupall. On Gleolan, we continued to execute our post-transition commercial plan in the U.S., including new sales and marketing initiatives.
In May, we presented 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 30th, in spite of direct generic competition. In the quarter, Metoject unit demand benefited from an unanticipated shortages of product inventory of the competing product.
We continue to seek to defend and grow product the product's 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 use in conditioning regimens as part of allogeneic hematopoietic stem cell transplantation protocols, or allo-HSCT. In May 2023, we learned 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 US, 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's request regarding the treosulfan NDA. We still expect it will take medac until the first half 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 to explore 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 our 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, I'm also very pleased with what I see as our overall strongest quarter for Medexus to date. 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 quarterly revenue number compares favorably to revenue of $23 million for the three-month period ended June 30, 2022. As Ken mentioned, the $8.6 million increase in the first fiscal quarter, 2024, versus the prior year first quarter, is primarily due to continuing strong sales of IXINITY, continuing strong Rupall and demand growth, including in part due to timing of orders and Rasuvo performance, and to the recognition of 100% of Gleolan net sales in, in total revenue.
Gross profit was $17.2 million for the three-month 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-month period ended June 30, 2023, compared to 56.1% for the three-month period ended June 30, 2022. As we mentioned on last quarter's call, we continue monitoring this metric and the factors that contribute to gross margin. The year-over-year decrease in gross margin primarily reflects changes in product mix, including changes in how we account for Gleolan sales in the United States on the IFRS over the course of the fiscal year 2023.
Specifically, in accordance with IFRS, we recognize 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 the three month period ended June 30, 2023, compared to $12.1 million for the three month period ended June 30, 2022. Research and development was $0.4 million for the three month period ended June 30, 2023. This compares to $0.7 million for the three month period ended June 30, 2022. Adjusted EBITDA for the three month period ended June 30, 2023, was positive $6.6 million, compared to $1.9 million for the three month period ended June 30, 2022.
Again, as Ken mentioned, the $ 4.7 million year-over-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 month 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 other 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 period 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 fist 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 used some of this cash to repurchase and cancel, cancel $ 1.7 million of principal amount of convertible debentures under our NCIB.
Adjusting for that transaction, we continue to expect to have approximately $20 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 $38 million, depending on prevailing Canadian US dollar exchange rates.
Because of that NCIB repurchase, we expect to save approximately $ 321,000, or about $240,000, depending on prevailing Canadian US dollar exchange rates. Consisting of the avoided premium amount that would have been due at maturity and interest on principal that would have been accrued between July 18th and the maturity date. We may elect to satisfy any remaining amounts payable in respect of the convertible debentures as matured 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 improved 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. At this time, we are opening the floor for questions. If you have any questions, please press star one on your phone keypad now. A confirmation tone will indicate that your line is in the question queue. You may press star two if you would like to remove your question from the queue. For any participants using speaker equipment, it might be necessary to pick up your handset before you press the keys. Please pause a moment whilst we poll for questions. Thank you. Your first question is coming from Andre Uddin of Research Capital. Andre, your line is live.
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?
Yeah, thanks, Andre. Good question. The Metoject competitive environment is experiencing some shortages of methotrexate, and Metoject has not been exposed to that. We've been able to keep it in supply, so we're certainly benefiting from that. We, you know, as a result, we're, we're growing unit share and I think dollar 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. We're, we're waiting on that. We hope it comes soon.
That's great. 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 that over to Marcel.
Yeah, thanks for that, that question, Andre. We've we've said that we're growing our cash mainly because we've seen historically our sales growing. We've you've also noticed our, our receivables, for example, going up. We're, we're obviously, you know, doing everything we can to to put aside as much cash as, as much cash as, as we can towards the convertible debentures. It is really just about now very, very mindfully, obviously, watching every single spend towards that critical date of October and manage the cash towards the balance we have projected it to be.
Yeah, that's great. 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'd be great as well.
Yeah, good, good opportunities. We're seeing many opportunities. Prices appear to be fair. As you well know, many companies have difficulty getting funded, there are some assets coming available. You know, I think the terbinafine transaction that we did was at 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, you know, broaden beyond the three products that we have now. That's where our focus is. You know, we think that there will be opportunities that come to the table.
Okay, thanks. That's, 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, you know, I know you had a lot of prepared remarks, but I, but I was wondering if you'd just tell us in, you know, in big terms, you know, what do you attribute all of this strength to? My, my history has been when a company turns, turns the gas on this heavy, it's usually driven by one product, but sometimes it's more than 1. You know, could you just talk a little bit about, you know, why, why things are as good as they are now, relative to the past? Thanks.
Yeah. Thanks, Scott. You know, it's more broadly based for us. We clearly have momentum on, 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. There's tremendous momentum behind Rupall in Canada. There's excellent momentum behind IXINITY, Rasuvo and Gleolan in the U.S. We just feel like we've, we've got momentum. You know, 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 know, you, you relaunch a product, takes time, there's always issues, and then it starts to get momentum. I think really that's it.
Tremendous momentum from, from both both teams.
Okay, great. Thank you, for that color. You did mention in the beginning, some benefit from timing of orders. You know, I assume that means 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, or might it pare back a little bit, given just timing of orders? How should we think about 2Q?
Yeah, Rupall, you know, obviously there's some seasonality with Rupall, you know, tied to the allergy season in Canada. Also there were these, you know, additional orders on top of strong demand, so it wasn't like the demand wasn't there. It clearly was there, it came in way stronger than we had expected. Wouldn't expect that to continue. Typically, this quarter we just reported, you know, is one of our stronger quarters. Sequential growth is gonna be challenging. You know, 31.6, I think, is a really good number, coming off, you know, what we were 28 and change last quarter. That's really strong sequential growth, so that it's gonna be tough to duplicate that.
Sequential growth is gonna be challenging, but certainly growth year-over-year, I think we'll continue to demonstrate that.
Okay, great. Yeah, it wasn't long ago you were in the 20s, and then even underneath the 20 mark. So, so great work there. Then topical terbinafine, yeah, how, how should we think about timing of that in, in US and in Canada?
Only licensed in Canada, only think of the Canadian market. I, I think we, we have said that we do expect to put that application into Health Canada in the fall of this year. Likely take a 12 months to a decision, and then we would launch shortly thereafter. The market for topical terbinafine in Canada is $80 million-$90 million. There's only one player at this stage, so we'll be second entrant, with a convenience advantage.
Okay, great. Thank you, Ken. Just to get Marcel involved, Marcel, I know you, you spent a lot of time in the prepared remarks talking about debt. I'm just wondering if you could just walk it, walk it through in, in simple terms, you know, what, what the inflection point is, how much you expect to have to pay back in, is it September or October? The game plan to achieve that, just, just to make sure it's, it's, it's very clear, as it's such a, a key factor.
Yeah, I know. absolutely. thanks for that question, Scott. You know, as a, as a reminder, we had we had refinanced our MidCap facility with, with BMO. so, so back then, we got a $38.5 million facility in place at, at, absolutely fantastic conditions at, at a, at a, at a really, really good rate.
a, we have a partner now, uh, with, with, with BMO. Uh, the total facility we announced back then was $ 58.5 million, so meaning that we have this $20 million of, uh, uncommitted, uh, facility, sort of term loan, uh, out there, uh, which, which we're, which we're waiting, uh, for, for BMO, basically to, to get, get back to us. So, I mentioned in my prepared remarks that, in simple terms, what is coming due now in, in October is about CAD 38 million, of, of, of, sort of, of a payment. We have a choice, as we mentioned a few times, to, to sell that in, in cash, in shares, or a combination
We'll see how much we accumulate towards that $38 million. You have the $20 million of the uncommitted accordion facility. We, we said we're gonna generate cash in the tune now of around $18 million. Obviously, that includes already the payout for the convertible debentures. As you can see, getting close. We're, we're obviously monitoring that cash situation very, very closely over the next few weeks and months. We're very pleased with the strong performance, which absolutely helps us now to tackle this sort of liability as much as we can. As you can see, it's getting very close. Yeah.
Okay, great. When will you get a decision on that $20 million uncommitted? Is there a specific deadline date for that?
There, there isn't really a specific deadline. Of course, you know, we, we, we would like to have clarity sooner, sooner than later. All we can do at this point is, is what we do now. As you can see, these strong results, you see we perform, we, we execute against our plan. We were even, even now, as you, as you've seen, a little bit better than what we pre-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 questions, 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.
Hey, good morning, Ken and Marcel. This is Mike on for Rahul. A couple questions on, on indication expansions and, and introducing products to the market. First, you, you, you I'm glad to hear that there's some optimism around about, around treosulfan resubmission. I wonder, I wonder and you mentioned that there's some re- renegotiation that's possible with, with medac in consideration for this, this submission process. I wonder if you could, you could describe, I guess, the durability of the, of the patents around treosulfan, how, if you could remind us how, how far those go out, and also, you know, what, what sort of terms would you might consider renegotiating with medac, given the circumstances here?
Hey, 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 any patent protection. We're gonna 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. That, that timeline doesn't start ticking until approval. We, we would have seven and a half years from approval in order to be exclusive in the U.S. Then your second part of your question related to the renegotiation with Medac.
You know, 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. We are in the process of doing that now. You know, clearly, you know, we believe that the, 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 of such.
All right.
We will put that information out as, as soon as we've got that complete.
All right. Fantastic. both, both really positive points. Thank you. and now, I wonder if, if you could, if there were any updates to report on the, you know, pediatric indication expansion for, for IXINITY?
Nothing to report. Submitted, accepted for review. We think that process will take some months, probably six to eight months, and then we, we should have a decision. Remember, this, this was a post-marketing commitment around the original approval. We believe that, you know, the data that we've generated, will be sufficient to support the registration, the label expansion. You know, clearly, 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, from Echelon Capital Markets. Stefan, your line is live.
Thank you very much, and congrats on the quarter, guys. I just have a, a quick question on the BMO accordion. Are there any sort of financial covenants or, or legal requirements on your end, in order to access the accordion? If so, what are they, and where do you stand on those, those measures? Thanks.
Thanks, Stefan. I'll, I'll give that to Marcel.
Yeah. Hi, Stefan. Good, good, good question in terms of the access. Yeah, of course, yeah, we, we do have, as, as part of the overall facility, we, we do have covenants in place that, that, that will apply to the, to the, to the facility. Right now, we have $38.5 million, as you know, if we get to the, to, to, to this uncommitted accordion, of course, there's, the covenants will be part of that additional $20 million. Yes.
But, but just to be clear, you're, you're on side for all the, the current covenants to access the, the additional $20 million or, or at least on track towards it. Is that correct?
Yes, that is, that is an important part, that we of course, you know, could not so to speak,
Yeah
go, go against any covenants, we, we, we have in order to access the facility. Absolutely, yes, and we're, we're, we're, we're, we're, we're absolutely in line with that at the moment, yeah.
Yeah, I think just one additional point. Important to point out that, you know, clearly the results that we produced this quarter were beyond what the street expected, and it's also beyond what we had provided to BMO in terms of expectations. I think this quarter bodes well for, for, you know, our discussions with BMO.
Okay, guys. Thanks again.
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 IXINITY dosing. You mentioned that patients prescribed more recently are using lower quantities. Maybe just if you could go into what's driving that?
Hi, Antonia. Thanks for that question. That's, that's, that's a good one, and it's complicated. You know, obviously, you know, growth for us is dependent on patient starts. Most patient starts are adults for us because we don't yet have the pediatric indication. You know, historically, starts for these patients, you know, were in patients that were just using more product. They, they may have been using it prophylactically, and now maybe we're getting more who are on demand. Just of late, there's, there's been a high volume of new patient starts, just that we're noticing that the average volume consumed by each of the new starts has been a bit, little bit lower than what we've seen historically. 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. You know, we, we think that will continue. Just we're, we're, we're reducing the average volume per new start patient in our forecast.
Okay. 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, more room for improvement. Being a biologic, it's kind of an ongoing process. We've made really good process, progress to this point. We do believe that there, there are additional efficiencies that we'll be able to generate as we go forward.
Okay. 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, it's really difficult to tell, but we do see this situation in other markets, also U.S. market. We think this is more of a global issue related to the availability of the API for methotrexate. We're certainly seeing it in the two markets that we serve, and we've heard similar issues in other markets. We think it's an ongoing problem, but it's very difficult to forecast what will happen with a specific competitor, you know, in a specific market.
No impacts on you?
No. So medac, you know, being one of the largest manufacturers of injectable methotrexate, you know, in the pre-filled pen or auto-injector format, you know, has got excellent control on the API. So, so far for us, it's been really good. We continue to hold on to significant inventories to avoid any short-term issues. 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 fr o m Stifel. Justin, your line is live.
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. Trying to understand the reasoning behind that.
Just given there's still ongoing negotiations with medac. Is there a consideration of new trials to be initiated for treosulfan?
Yeah, thanks, Justin. Good question. We're, we're getting a little more specific on the timeline to resubmission, as much of the work has been done. The process that medac GmbH needs to follow in order to collect this data is ongoing, but so far, so good. They are collecting information, you know, pretty much on the timeline that we had anticipated. We're able to get a little more specific as to, you know, when we think the resubmission will happen. We've, we've got a fair, fair degree of confidence in, in that, that timeline. Sorry, what was the second part of the question?
If, there's the potential to initiate new trials for, for treosulfan.
Okay, yeah.
Given this is the third attempt, or do you feel that you have enough of the data requested to ensure a successful outcome?
Yeah, sorry about that. I forgot that piece of it. No, still no requirement for a new trial. I mean, the, the trial that had been conducted by medac, was a very large trial. There was 570 patients in the trial, so it, it's a big trial. There are a lot of patients in there. You know, at this stage, no. What the FDA is requesting is clarification on that, pivotal study, so, no, 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 the license agreement, which should come out shortly. You know, I think it will be the acceptance of the resubmission. That will be the next piece of information we'll put out. That'll be sometime in the first half of calendar 2024.
Thank you.
Thank you very much. Just as a reminder, if anyone does still have any remaining questions, it's star one on your phone keypad. Our next question is coming from Alan Richardson from Echelon Capital Partners. Alan, your line is live.
Thank you very much. This is more addressed to Konrad than it is to you, Ken. With regards to the reimbursement of your... I'm wondering, do you know the number that BMO is looking for in order to fully activate that $20 million accordion level? Do you know if you've 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?
Yeah, thanks. Thanks for that, that question. The, the negotiations per se, as you, as you can call it, obviously happened during the time when we set up the facility. As a reminder, yeah, we got this $58.5 million facility with the $20 million of uncommitted accordion. The overall negotiation as part of that facility, including all the conditions, have been, have been essentially negotiated back then, including all the terms and conditions. Yeah, there's nothing so, so quote-unquote, "New, new coming to that." Yeah, now, now the process of accessing this, this accordion, obviously at the discretion of, of, of the bank ultimately.
As Ken mentioned before, I think the key component to that, and maybe a little bit as a side note, also as a question follow-up from Stefan before, this is about, this is about what we said we're gonna do. This is about delivering on the results. This is much about basically telling people what we're gonna do. We deliver on what we're gonna do, and this first quarter has been very encouraging already for us to see that what Ken mentioned before as well, is even better than what we had anticipated.
As I mentioned earlier on, this is, this is at this point, you know, what we can do, focusing on the business and growing the business, delivering on the results, and everything will be up to the bank as part of the process to access the, the, the accordion ultimately, yeah.
Okay. Now, if we just fast-forward to 12 months from now, all right? I recognize that we're talking about the future, and it's uncertain. I'm gonna assume that you get the, that the $20 million is activated. With the amount of money that you're generating in cash every quarter, what would your debt level look like? Because right now, I'm thinking that you're gonna be somewhere around $55 million-$58 million in total debt by, by October, by the end of September, early October. If we're gonna fast forward and look at, either end of July or end of September of next year, where do you anticipate your, your debt level to be at that point in time?
Yeah, of course, that is overall a bit hard to quantify. What you can assume at this point, is that if you, if you look historically where we've, we came from, and we've, we've, we've started to be profitable and increased revenue, we're generating cash, yeah. We've, we've, we've gone in a good, we're in a good place to, to, to basically continue to do that. As we've said in the past, to look at this as the new normal now. Yes, as you mentioned, assuming that access will happen as a CAD 68.5 million sort of debt at this point, you know, there is an amortization schedule obviously kicking in. Debt, debt will, will, will decrease.
Yeah, we're definitely going to amortize that payback some of that loan and being in a position with less debt and a strong business ultimately. It's a really good prospects to have. At again, you know, at an interest rate, at conditions that are very favorable relative to the markets we are right now. Really, all good, positive signs, I would say, from now on, yeah.
That doesn't give me a number. What, 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 a year from now, from $58 million?
Yeah, that is a bit aggressive as an amortization schedule. It's probably gonna be a little bit more than that, but it's, it's, it's probably in the, it's in the range, but a little bit more than that, I would think, yeah.
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 wanna 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. We're seeking to continue to build the 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 phone lines at this time, and have a wonderful day. Thank you for your participation.