IMMUCELL CORP /DE/ 10-K

ITEM 9A — CONTROLS AND PROCEDURES Disclosure Controls and Procedures: Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our management, including our principal executive and principal financial officer, as appropriate to allow timely decisions regarding required disclosures. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Our management, with the participation of the individual who serves as our principal executive and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the Exchange Act)) as of December 31, 2024. Based on this evaluation, that officer concluded that our disclosure controls and procedures were effective as of that date. Management’s Annual Report on Internal Control over Financial Reporting: The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. We conducted an evaluation of the effectiveness of the internal controls over financial reporting based on the framework in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. This evaluation included a review of the documentation of controls, evaluation of the design effectiveness of controls, testing the operating effectiveness of the controls and a conclusion on this evaluation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. This Annual Report does not include an attestation report from our independent registered public accounting firm regarding internal control over financial reporting. Management’s internal control report was not subject to annual or quarterly attestation by our independent registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit the Company to provide only management’s report. Changes in Internal Controls over Financial Reporting: Our principal executive and principal financial officer and our Director of Finance and Administration periodically evaluate any change in internal control over financial reporting which has occurred during the prior fiscal quarter. We have concluded that there was no change in our internal control over financial reporting that occurred during the quarter ended December 31, 2024 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. ITEM 9B — OTHER INFORMATION None ITEM 9C — DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS Not Applicable 39 ImmuCell Corporation PART III ITEM 10 — DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE Executive Officers of the Company Our executive officers as of March 21, 2025 were as follows: MICHAEL F. BRIGHAM (Age: 64, Officer since 1991, Director since 1999) was appointed to serve as President and Chief Executive Officer in February 2000, while maintaining the titles of Treasurer and Secretary, and was appointed to serve as a Director of the Company in March 1999. He previously had been elected Vice President of the Company in December 1998 and had served as Chief Financial Officer since October 1991. He has served as Secretary since December 1995 and as Treasurer since October 1991. Prior to that, he served as Director of Finance and Administration since originally joining the Company in September 1989. Mr. Brigham served as a member of the Board of Directors of the United Way of York County from 2012 to 2019, serving as its Treasurer until June 2016 and as Chair of the Board of Directors for one year and as a member of its Executive Committee. Mr. Brigham served as the Treasurer of the Board of Trustees of the Kennebunk Free Library from 2005 to 2011. He re-joined the Finance Committee of the library in 2012. Prior to joining the Company, he was employed as an audit manager for the public accounting firm of Ernst & Young. Mr. Brigham earned his Masters in Business Administration from New York University in 1989 and a Bachelor of Arts degree (with a double major in Economics and Spanish) from Trinity College in Hartford, Connecticut in 1983. BOBBI JO BROCKMANN (Age: 48, Officer since February 2015, Director since January 2018) served as a Director of the Company from March 2017 to September 2017 and from January 2018 to the present. She was promoted to Vice President of Sales and Marketing in February 2015. She joined the Company as Director of Sales and Marketing in January 2010. Prior to that, she had been employed as Director of Sales since May 2008 and Sales Manager from February 2004 to April 2008 at APC, Inc. of Ankeny, Iowa, a developer and marketer of functional protein products for animal health and nutrition. Prior to that, she held other sales and marketing positions at APC, W & G Marketing Company, Inc. of Ames, Iowa, The Council for Agricultural Science and Technology of Ames, Iowa and Meyocks Group Advertising of West Des Moines, Iowa after graduating from Iowa State University. Information with respect to our directors is incorporated herein by reference to the section of our 2025 Proxy Statement titled “Election of the Board of Directors”, which we intend to file with the Securities and Exchange Commission within 120 days after December 31, 2024. There is no family relationship between any director, executive officer, or person nominated or chosen by the Company to become a director or executive officer. ITEM 11 — EXECUTIVE COMPENSATION Information regarding compensation paid to our executive officers is incorporated herein by reference to the section of our 2025 Proxy Statement titled “Executive Officer Compensation”, which we intend to file with the Securities and Exchange Commission within 120 days after December 31, 2024. ITEM 12 — SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS Information regarding ownership of our common stock by certain owners and management is incorporated herein by reference to the section of our 2025 Proxy Statement titled “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters”, which we intend to file with the Securities and Exchange Commission within 120 days after December 31, 2024. ITEM 13 — CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE Information regarding certain relationships and related transactions and director independence is incorporated herein by reference to the section of our 2025 Proxy Statement titled “Certain Relationships and Related Transactions and Director Independence”, which we intend to file with the Securities and Exchange Commission within 120 days after December 31, 2024. ITEM 14 — PRINCIPAL ACCOUNTANT FEES AND SERVICES Information regarding our principal accounting fees and services is incorporated by reference to the section of our 2025 Proxy Statement titled “Principal Accounting Fees and Services”, which we intend to file with the Securities and Exchange Commission within 120 days after December 31, 2024. 40 ImmuCell Corporation PART IV ITEM 15 — EXHIBITS AND FINANCIAL STATEMENT SCHEDULES 1.1 At the Market Agreement between the Company and Craig-Hallum Capital Group LLC dated as of April 8, 2024 (incorporated by reference to Exhibit 1.1 of the Company’s Current Report on Form 8-K Filed on April 9, 2024). 3.1 Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 of the Company’s 1987 Registration Statement No. 33-12722 on Form S-1 as filed with the Commission). 3.2 Certificate of Amendment to the Company’s Certificate of Incorporation effective July 23, 1990 (incorporated by reference to Exhibit 3.2 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2008). 3.3 Certificate of Amendment to the Company’s Certificate of Incorporation effective August 24, 1992 (incorporated by reference to Exhibit 3.3 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2008). 3.4 Certificate of Amendment to the Company’s Certificate of Incorporation effective June 16, 2016 (incorporated by reference to Exhibit 3.1 of the Company’s Amended Current Report on Form 8-K/A filed on June 16, 2016). 3.5 Certificate of Amendment to the Company’s Certificate of Incorporation effective June 18, 2018 (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed on June 18, 2018). 3.6 Certificate of Amendment to the Company’s Certificate of Incorporation effective June 11, 2020 (incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed on June 11, 2020). 3.7 Bylaws of the Company as amended and restated September 20, 2024 (incorporated by reference to Exhibit 3.2 of the Company’s Current Report on Form 8-K filed on September 24, 2024). 4.1 Description of Securities Registered Under Section 12 of the Securities Exchange Act of 1934, as amended (incorporated by reference to Exhibit 4.2 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2020). 10.1+ Form of Indemnification Agreement (updated) entered into with each of the Company’s Directors and Officers (incorporated by reference to Exhibit 10.3A of the Company’s Annual Report on Form 10-KSB for the year ended December 31, 2006). 10.2+ 2010 Stock Option and Incentive Plan of the Company (incorporated by reference to Exhibit 10.6 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2010). 10.3+ Form of Incentive Stock Option Agreement (incorporated by reference to Exhibit 10.7 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2010). 10.4+ 2017 Stock Option and Incentive Plan of the Company (incorporated by reference to Exhibit 10.1 of the Company’s Quarterly Report on Form 10-Q for the three-month period ended June 30, 2017). 10.5+ Form of Incentive Stock Option Agreement (incorporated by reference to Exhibit 10.9 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019). 10.6+ Amendment to the 2017 Stock Option and Incentive Plan of the Company (incorporated by reference to Exhibit 10.7 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2022). 41 ImmuCell Corporation 10.7+ Amended and Restated Separation and Deferred Compensation Agreement between the Company and Michael F. Brigham dated as of March 28, 2022 (incorporated by reference to Exhibit 10.9 of the Company’s Annual Report on Form 10-K filed on March 30, 2022). 10.8+ Fourth Amended and Restated Incentive Compensation Agreement between the Company and Bobbi Jo Brockmann dated as of March 27, 2024 (incorporated by reference to Exhibit 10.11 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2023). 10.9+ Employment and Separation Agreement between the Company and Elizabeth L. Williams dated as of December 6, 2024 (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed December 9, 2024). 10.10+* Incentive Compensation Agreement between the Company and Michael F. Brigham dated as of March 27, 2025. 10.11+* Amended and Restated Incentive Compensation and Severance Agreement between the Company and Bobbi Jo Brockmann dated as of March 27, 2025. 10.12 Development Services and Commercial Supply Agreement between the Company and Norbrook Laboratories Limited dated as of September 5, 2019 (incorporated by reference to Exhibit 99.2 of the Company’s Current Report on Form 8-K filed on September 11, 2019). 10.13 Amending Agreement between the Company and Norbrook Laboratories dated as of March 4, 2024 (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed March 6, 2024). 10.14 Amending Agreement between the Company and Norbrook Laboratories dated as of November 29, 2024 (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed December 2, 2024). 10.15 Indenture of Lease for Premises Located in Portland, Maine between the Company and TVP, LLC (incorporated by reference to Exhibit 99.2 of the Company’s Current Report on Form 8-K filed on September 17, 2019). 10.16 Second Amendment of Indenture of Lease for Premises Located in Portland, Maine between the Company and TVP, LLC dated as of August 15, 2022 (incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K filed on August 17, 2022). 10.17 Third Amendment of Indenture of Lease for Premises Located in Portland, Maine between the Company and TVP, LLC dated as of November 14, 2023 (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed on November 16, 2023). 10.18 Term Note for $5,100,000 between the Company and Gorham Savings Bank dated March 11, 2020 (incorporated by reference to Exhibit 99.2 of the Company’s Current Report on Form 8-K filed on March 12, 2020). 10.19 Loan Agreement for $5,100,000 between the Company and Gorham Savings Bank dated March 11, 2020 (incorporated by reference to Exhibit 99.4 of the Company’s Current Report on Form 8-K filed on March 12, 2020). 10.20 Allonge to and Amendment of Term Note, dated March 23, 2022, between the Company and Gorham Savings Bank (incorporated by reference to Exhibit 99.1 of the Company’s Current Report on Form 8-K filed on March 24, 2022). 10.21 Mortgage Modification Agreement, dated March 23, 2022, between the Company and Gorham Savings Bank (incorporated by reference to Exhibit 99.2 of the Company’s Current Report on Form 8-K filed on March 24, 2022). 10.22 Term Note for $3,500,000 between the Company and Gorham Savings Bank dated March 11, 2020 (incorporated by reference to Exhibit 99.3 of the Company’s Current Report on Form 8-K filed on March 12, 2020). 10.23 Loan Agreement for $3,500,000 between the Company and Gorham Savings Bank dated March 11, 2020 (incorporated by reference to Exhibit 99.5 of the Company’s Current Report on Form 8-K filed on March 12, 2020). 10.24 Line of Credit Agreement for up to $1,000,000 executed by ImmuCell Corporation in favor of Gorham Savings Bank dated March 11, 2020 ( incorporated by reference to Exhibit 99.2 of the Company’s Current Report on Form 8-K filed on March 12, 2020 ). 10.25 Allonge to and Amendment of Line of Credit Loan for up to $1,000,000 between the Company and Gorham Savings Bank dated March 23, 2022 (incorporated by reference to Exhibit 10.23 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2022). 10.26 Allonge to and Amendment of Line of Credit between the Company and Gorham Savings Bank, dated February 22, 2024 (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed on February 27, 2024). 10.27 Note Purchase Agreement executed by the Company in favor of the Maine Technology Institute dated June 12, 2020 (incorporated by reference to Exhibit 99.2 of the Company’s Current Report on Form 8-K filed on June 16, 2020). 10.28 Subordinated Promissory Note for $500,000 executed by the Company in favor of the Maine Technology Institute dated June 12, 2020 (incorporated by reference to Exhibit 99.3 of the Company’s Current Report on Form 8-K filed on June 16, 2020). 42 ImmuCell Corporation 10.29 Note Purchase Agreement executed by the Company in favor of the Maine Technology Institute dated June 30, 2021 (incorporated by reference to Exhibit 99.1 of the Company’s Current Report on Form 8-K filed on July 6, 2021). 10.30 Subordinated Promissory Note for $400,000 executed by the Company in favor of the Maine Technology Institute dated June 30, 2022 (incorporated by reference to Exhibit 99.2 of the Company’s Current Report on Form 8-K filed on July 6, 2021). 10.31 Term Note for $1,500,000 executed by the Company in favor of Gorham Savings Bank dated December 15, 2020 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on December 17, 2020). 10.32 Loan Agreement for $1,500,000 executed by the Company in favor of Gorham Savings Bank dated December 15, 2020 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on December 17, 2020). 10.33 Term Note for $2,000,000 executed by ImmuCell Corporation in favor of Gorham Savings Bank dated July 17, 2023 (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed on July 21, 2023). 10.34 Loan Agreement, by and between ImmuCell Corporation and Gorham Savings Bank dated July 17, 2023 (incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K filed on July 21, 2023). 10.35 Economic Recovery/SSBCI Program Loan Promissory Note for $1,000,000 executed by ImmuCell Corporation in favor of the Finance Authority of Maine dated July 17, 2023 (incorporated by reference to Exhibit 10.3 of the Company’s Current Report on Form 8-K filed on July 21, 2023). 10.36 Economic Recovery Loan Program Loan Agreement, by and between ImmuCell Corporation and the Finance Authority of Maine dated July 17, 2023 (incorporated by reference to Exhibit 10.4 of the Company’s Current Report on Form 8-K filed on July 21, 2023). 10.37 Consent and First Amendment to Economic Recovery Loan Program Loan Agreement, by and between ImmuCell Corporation and the Finance Authority of Maine dated as of April 8, 2024 (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed on April 9, 2024). 10.38 Fourth Amendment of Indenture of Lease for Premises Located in Portland, Maine between the Company and TVP, LLC dated as of June 11, 2024 (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed on June 14, 2024). 10.39 Fifth Amendment of Indenture of Lease for Premises Located in Portland, Maine between the Company and TVP, LLC dated as of September 20, 2024 (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed on September 24, 2024). 14 Code of Business Conduct and Ethics (incorporated by reference to Exhibit 14 of the Company’s Current Report on Form 8-K filed on March 20, 2014). 19* Insider Trading Policy of the Company adopted as of December 11, 2024. 23.1* Consent of Independent Registered Public Accounting Firm. 24.1 Power of Attorney (incorporated by reference to the signature page of this Form 10-K). 31* Certification Pursuant to Rule 13a-14(a). 32* Certification Pursuant to Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 97.1 ImmuCell Corporation Clawback Policy (incorporated by reference to Exhibit 97.1 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023). 101.INS XBRL Instance Document-the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. 101.SCH Inline XBRL Taxonomy Extension Schema Document. 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document. 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document. 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document. 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document. 104 Cover Page Interactive Data File-the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. + Management contract or compensatory plan or arrangement. * Filed herewith. ITEM 16 – FORM 10-K SUMMARY None 43 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and the Board of Directors of ImmuCell Corporation Opinion on the Financial Statements We have audited the accompanying balance sheets of ImmuCell Corporation (the “Company”) as of December 31, 2024 and 2023, and the related statements of operations, stockholders’ equity, and cash flows for each of the two years in the period ended December 31, 2024, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. F- 1 Valuation of Inventory Description of the Matter At December 31, 2024, the Company’s inventory was $7,112,623. As discussed in Note 2 of the financial statements, inventory is recorded at the lower of cost or net realizable value. Auditing management’s valuation of inventory is complex and highly judgmental because of the estimates and assumptions used by management to determine the cost accounting and because of the variability of the cost per dose due to fluctuations in the biological yield achieved. How We Addressed the Matter In Our Audit The primary procedures we performed to address this critical audit matter included the following: We obtained an understanding of the cost accounting developed by management and the related assumptions and estimates used. We tested the cost accounting by examining the underlying data used by the Company to prepare the cost accounting. We evaluated the effect of the variability of the cost per dose on the inventory value by comparing the biological yield to historical results and by performing a sensitivity analysis of the potential range in inventory value within a corridor of historical results based on minimum and maximum outcomes for the biological yield. /s/ WIPFLI LLP We have served as the Company’s auditor since 2019. Radnor, Pennsylvania March 28, 2025 F- 2 ImmuCell Corporation BALANCE SHEETS As of December 31, 2024 2023 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 3,758,232 $ 978,741 Trade accounts receivable 3,771,133 2,185,383 Inventory 7,112,623 7,811,841 Prepaid expenses and other current assets 400,762 493,885 Total current assets 15,042,750 11,469,850 Property, plant and equipment, net 25,349,019 27,575,683 Operating lease right-of-use asset 4,560,679 4,571,149 Goodwill 95,557 95,557 Intangible assets, net 19,104 38,208 Other assets 33,368 57,655 TOTAL ASSETS $ 45,100,477 $ 43,808,102 LIABILITIES AND STOCKHOLDERS’ EQUITY CURRENT LIABILITIES: Current portion of debt obligations $ 1,497,619 $ 1,428,807 Current portion of operating lease liability 432,072 644,276 Accounts payable and accrued expenses 2,482,522 2,124,337 Total current liabilities 4,412,213 4,197,420 LONG-TERM LIABILITIES: Debt obligations, net of current portion 9,040,975 10,540,496 Operating lease liability, net of current portion 4,129,102 4,077,109 Total long-term liabilities 13,170,077 14,617,605 TOTAL LIABILITIES 17,582,290 18,815,025 CONTINGENT LIABILITIES AND COMMITMENTS (See Note 10) STOCKHOLDERS’ EQUITY: Common stock, $ 0.10 par value per share, with 15,000,000 shares authorized and 9,042,392 and 7,814,165 shares issued and 8,979,091 and 7,750,864 shares outstanding as of December 31, 2024 and 2023, respectively 904,240 781,417 Additional paid-in capital 40,916,155 36,357,239 Accumulated deficit ( 14,163,726 ) ( 12,007,097 ) Treasury stock, at cost, 63,301 shares as of both December 31, 2024 and 2023 ( 138,482 ) ( 138,482 ) Total stockholders’ equity 27,518,187 24,993,077 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 45,100,477 $ 43,808,102 The accompanying notes are an integral part of these financial statements. F- 3 ImmuCell Corporation STATEMENTS OF OPERATIONS During the Years Ended December 31, 2024 2023 Product sales $ 26,493,169 $ 17,471,669 Costs of goods sold 18,552,125 13,602,385 Gross margin 7,941,044 3,869,284 Product development expenses 3,898,582 4,394,852 Sales and marketing expenses 3,466,072 3,088,215 Administrative expenses 2,216,549 2,134,295 Operating expenses 9,581,203 9,617,362 NET OPERATING LOSS ( 1,640,159 ) ( 5,748,078 ) Other expenses, net 506,414 21,893 LOSS BEFORE INCOME TAXES ( 2,146,573 ) ( 5,769,971 ) Income tax expense 10,056 4,627 NET LOSS $ ( 2,156,629 ) $ ( 5,774,598 ) Basic weighted average common shares outstanding 8,167,244 7,747,686 Basic net loss per share $ ( 0.26 ) $ ( 0.75 ) Diluted weighted average common shares outstanding 8,167,244 7,747,686 Diluted net loss per share $ ( 0.26 ) $ ( 0.75 ) The accompanying notes are an integral part of these financial statements. F- 4 ImmuCell Corporation STATEMENTS OF STOCKHOLDERS’ EQUITY Common Stock Treasury Stock Shares Amount Additional paid-in capital Accumulated Deficit Shares Amount Total Stockholders’ Equity BALANCE, December 31, 2022 7,814,165 $ 781,417 $ 35,978,364 $ ( 6,232,499 ) 67,301 $ ( 147,233 ) $ 30,380,049 Net loss — — — ( 5,774,598 ) — — ( 5,774,598 ) Exercise of stock options — — 10,009 — ( 4,000 ) 8,751 18,760 Stock-based compensation — — 368,866 — — — 368,866 BALANCE, December 31, 2023 7,814,165 $ 781,417 $ 36,357,239 $ ( 12,007,097 ) 63,301 $ ( 138,482 ) $ 24,993,077 Net loss — — — ( 2,156,629 ) — — ( 2,156,629 ) At-the-Market Offering of common stock, net of $ 291,834 of offering costs 1,228,227 122,823 4,233,365 — — — 4,356,188 Stock-based compensation — — 325,551 — — — 325,551 BALANCE, December 31, 2024 9,042,392 $ 904,240 $ 40,916,155 $ ( 14,163,726 ) 63,301 $ ( 138,482 ) $ 27,518,187 The accompanying notes are an integral part of these financial statements. F- 5 ImmuCell Corporation STATEMENTS OF CASH FLOWS During the Years Ended December 31, 2024 2023 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ ( 2,156,629 ) $ ( 5,774,598 ) Adjustments to reconcile net loss to net cash provided by (used for) operating activities: Depreciation 2,668,077 2,697,897 Amortization of intangible assets 19,104 19,104 Amortization of debt issuance costs and debt discounts 42,666 22,619 Stock-based compensation 325,551 368,866 Loss on disposal of property, plant and equipment 15,391 8,099 Non-cash rent (benefit) expense ( 149,741 ) 95,724 Changes in: Trade accounts receivable ( 1,585,750 ) ( 426,783 ) Inventory 699,218 ( 1,773,302 ) Prepaid expenses and other current assets 93,123 ( 87,830 ) Other assets 24,287 18,973 Accounts payable and accrued expenses 362,606 156,995 Net cash provided by (used for) operating activities 357,903 ( 4,674,236 ) CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property, plant and equipment ( 465,725 ) ( 1,892,513 ) Proceeds from sale of property, plant and equipment 4,500 2,474 Net cash used for investing activities ( 461,225 ) ( 1,890,039 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from debt issuance — 3,000,000 Proceeds from line of credit — 2,000,000 Proceeds from At-The-Market Offering 4,648,022 — Debt principal repayments ( 1,468,338 ) ( 1,185,774 ) Line of credit repayments — ( 2,000,000 ) Payments of debt issuance costs ( 5,037 ) ( 35,425 ) Payments of debt discounts — ( 46,107 ) Payments of equity issuance fees ( 291,834 ) — Proceeds from exercise of stock options — 18,760 Net cash provided by financing activities 2,882,813 1,751,454 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 2,779,491 ( 4,812,821 ) BEGINNING CASH AND CASH EQUIVALENTS 978,741 5,791,562 ENDING CASH AND CASH EQUIVALENTS $ 3,758,232 $ 978,741 The accompanying notes are an integral part of these financial statements. F- 6 ImmuCell Corporation STATEMENT OF CASH FLOWS SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION During the Years Ended December 31, 2024 2023 CASH PAID FOR: Income taxes $ 7,293 $ 6,466 Interest $ 528,907 $ 444,954 NON-CASH ACTIVITIES: Change in capital expenditures included in accounts payable and accrued expenses $ 4,421 $ 50,086 Change in payments of debt discounts included in accounts payable and accrued expenses $ — $ 16,566 Operating lease right-of-use asset and operating lease liability $ 103,115 $ 2,472,203 The accompanying notes are an integral part of these financial statements. F- 7 ImmuCell Corporation Notes to Audited Financial Statements 1. BUSINESS OPERATIONS ImmuCell Corporation (the “Company”, “we”, “us”, “our”) was originally incorporated in Maine in 1982 and reincorporated in Delaware in 1987, in conjunction with an initial public offering of common stock. We are an animal health company whose purpose is to create scientifically proven and practical products that improve the health and productivity of dairy and beef cattle. We focus on the two most critical stages of dairy productivity, those being the first 30 days of life and the first 30 days of lactation. Our concentrated colostrum and purified Nisin technologies offer unique animal health solutions during these periods when immunity is at its most vulnerable. As disclosed in Note 16, “Segment Information”, one of our business segments is dedicated to Scours and the other is focused on Mastitis. We manufacture and market the First Defense ® product line, providing Immediate Immunity™ to prevent scours in newborn dairy and beef calves. We have expanded this line into four different products with formulations targeting E. coli , coronavirus and rotavirus pathogens. We are also developing Re-Tain ® , a treatment for lactating dairy cows with subclinical mastitis. Mastitis is the most significant cause of economic loss to the dairy industry. These products help reduce the need to use traditional antibiotics in food producing animals. We are subject to certain risks including dependence on key individuals and third-party providers of critical goods and services, competition from other larger companies, the successful sale of existing products and the development of new viable products with appropriate regulatory approvals, where applicable. A combination of the conditions, trends and concerns related to or arising from inflation, rising interest rates and potential recessionary conditions in the United States and/or internationally, could have a corresponding negative effect on our business and operations. We are experiencing price increases in key components, supportive services, transportation and other supplies that are causing our costs of goods sold to increase. We have experienced contamination events from time to time in our production process, beginning in the third quarter of 2022, as disclosed previously. We implemented a production slowdown during 2023 to remediate this problem, which led to the recognition of lower sales and gross margin. The last identified contamination event occurred during the first half of April of 2024, and we have been operating without further contamination events since then and through the time of this filing on March 28, 2025. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) Basis of Presentation We have prepared the accompanying audited financial statements reflecting all adjustments (which are of a normal recurring nature) that are, in our opinion, necessary in order to ensure that the financial statements are not misleading. We follow accounting standards set by the Financial Accounting Standards Board (FASB). The FASB sets Generally Accepted Accounting Principles (GAAP) that we follow to ensure we accurately report our financial condition, results of operations, earnings per share and cash flows. References to GAAP in these footnotes are to the FASB Accounting Standards Codification ™ (Codification). We believe that the disclosures are adequate to ensure that the information presented is not misleading. (b) Cash and Cash Equivalents We consider all highly liquid investment instruments that mature within three months of their purchase dates to be cash equivalents. Cash equivalents are principally invested in securities backed by the U.S. government. We hold no cash or cash equivalents in excess of Federal Deposit Insurance Corporation (FDIC) limits of $ 250,000 per financial institution per depositor. (c) Trade Accounts Receivable Accounts receivable are carried at the original invoice amount less an estimate made for credit losses, when applicable. Management determines the allowance for credit losses on a monthly basis by identifying troubled accounts and by using historical experience applied to an aging of accounts and other relevant factors. Accounts receivable are considered to be past due if a portion of the receivable balance is outstanding for more than 30 days. Past due accounts receivable are subject to an interest charge. It was not necessary to charge interest on past due accounts during the years ended December 31, 2024 or 2023 because the time past due was not significant, and there was no accrual for such interest charges as of December 31, 2024 or 2023. As of December 31, 2024 and 2023, we determined that no allowance for credit losses was necessary. Accounts receivable are written off when deemed uncollectible. No accounts receivable were written off during the years ended December 31, 2024 or 2023. Recoveries of accounts receivable previously written off are recorded as income when received. No such recoveries were recorded during the years ended December 31, 2024 or 2023. See Note 3. F- 8 ImmuCell Corporation Notes to Audited Financial Statements (continued) (d) Inventory Inventory includes raw materials, work-in-process and finished goods and is recorded at the lower of cost, on the first-in, first-out method, or net realizable value (determined as the estimated selling price in the normal course of business, less reasonably predictable costs of completion, disposal and transportation). Work-in-process and finished goods inventories include materials, labor and manufacturing overhead. At each balance sheet date, we evaluate our ending inventories for excess quantities and obsolescence. Inventories that we consider excess or obsolete are written down to estimated net realizable value. Once inventory is written down and a new cost basis is established, it is not written back up. We believe that supplies and raw materials for the production of our products are available from more than one vendor or farm. Our policy is to maintain more than one source of supply for the components used in our products when feasible. See Note 4. (e) Property, Plant and Equipment, net We depreciate property, plant and equipment on the straight-line method by charges to operations and costs of goods sold in amounts estimated to expense the cost of the assets from the date they are first put into service to the end of the estimated useful lives of the assets. The facility we have constructed at 33 Caddie Lane to produce the Nisin Drug Substance (DS) for Re-Tain ® ( Building 33 ) is being depreciated over 39 years from when a Certificate of Occupancy was issued during the fourth quarter of 2017. We began depreciating the equipment for our Nisin DS facility when it was placed in service during the third quarter of 2018. Approximately 86 % of these assets are being depreciated over 10 years. We began depreciating the leasehold improvements to our new First Defense ® production facility at 175 Industrial Way ( Building 175A ) over the remainder of the 10 -year lease term beginning when a Certificate of Occupancy was issued during the second quarter of 2020. During August of 2022, this lease term was extended to January of 2043 in connection with a new lease covering additional space at 175 Industrial Way ( Building 175B ). As a result, the net book value of these leasehold improvements as of August 31, 2022 is now being depreciated over the remainder of the extended lease term. Significant repairs to property, plant and equipment that benefit more than a current period are capitalized and depreciated over their useful lives. Insignificant repairs are expensed when incurred. See Notes 2(h) and 6 for additional disclosures. (f) Operating Leases We account for our real estate leases using a right-of-use model, which recognizes that at the date of commencement, a lessee has a financial obligation to make lease payments to the lessor for the right to use the underlying asset during the lease term and recognizes a corresponding right-of-use (ROU) asset related to this right. ROU assets and lease liabilities are recognized at the lease commencement date based on the present value of the future lease payments over the expected lease term. The ROU asset is also adjusted for any lease prepayments made, lease incentives received and initial direct costs incurred. For operating leases with lease payments that fluctuate over the lease term, the total lease costs are recognized on a straight-line basis over the lease term. Our leases, at times, may include options to extend the term of the lease. When it is reasonably certain that we will exercise the option, we include the impact of the option in the lease term for purposes of determining future lease payments. For all underlying classes of assets, we made an accounting policy election to not recognize assets or liabilities for leases with a term of twelve months or less and to account for all components in a lease arrangement as a single combined lease component. Short-term lease payments are recognized on a straight-line basis. Certain of our lease agreements include variable rent payments, consisting primarily of amounts paid to the lessor based on cost or consumption, such as maintenance and real estate taxes. These costs are recognized in the period in which the obligation is incurred. Because our leases do not specify an implicit rate, we use an incremental borrowing rate based on information available at the lease commencement date to determine the present value of the lease payments. We evaluate our ROU asset for impairment when events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. See Notes 2(h) and 11 for additional disclosures. (g) Intangible Assets and Goodwill We amortize intangible assets on the straight-line method by charges to costs of goods sold in amounts estimated to expense the cost of the assets from the date they are first put into service to the end of the estimated useful lives of the assets. We have recorded intangible assets related to customer relationships, non-compete agreements and developed technology, each with defined useful lives. Amounts paid in excess of the fair value of the net assets (including tax attributes) are recorded as goodwill under the acquisition method of accounting. We assess the impairment of intangible assets that have indefinite lives (when applicable) and goodwill (at the reporting unit level) on an annual basis (as of December 31 st ) and whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. We would record an impairment charge if such an assessment were to indicate that the fair value of such assets was less than the carrying value. Judgment is required in determining whether an event has occurred that may impair the value of goodwill or identifiable intangible assets. Factors that could indicate that an impairment may exist include significant under-performance relative to plan or long-term projections, significant changes in business strategy and significant negative industry or economic trends. Although we believe intangible assets and goodwill are properly stated in the accompanying financial statements, changes in strategy or market conditions could significantly impact these judgments and require an adjustment to the recorded balance in the future. No goodwill impairments were recorded during the years ended December 31, 2024 or 2023. See Notes 2(h) and 7 for additional disclosures. F- 9 ImmuCell Corporation Notes to Audited Financial Statements (continued) (h) Valuation of Long-Lived Assets We periodically evaluate our long-lived assets, consisting principally of property, plant and equipment, operating lease right-of-use asset and amortizable intangible assets, for potential impairment. In accordance with the applicable accounting guidance for the treatment of long-lived assets, we review the carrying value of our long-lived assets or asset group that is held and used, including intangible assets subject to amortization, for impairment whenever events and circumstances indicate that the carrying value of the assets may not be recoverable. Under the held for use approach, the asset or asset group to be tested for impairment should represent the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities. No impairment was recognized during the years ended December 31, 2024 or 2023. (i) Fair Value Measurements In determining fair value measurements, we follow the provisions of Codification Topic 820, Fair Value Measurements and Disclosures . Codification Topic 820 defines fair value, establishes a framework for measuring fair value under GAAP and enhances disclosures about fair value measurements. The topic provides a consistent definition of fair value which focuses on an exit price, which is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The topic also prioritizes, within the measurement of fair value, the use of market-based information over entity-specific information and establishes a three-level hierarchy for fair value measurements based on the nature of inputs used in the valuation of an asset or liability as of the measurement date. As of December 31, 2024 and 2023, the carrying amounts of cash and cash equivalents, accounts receivable, inventory, prepaid expenses and other current assets, other assets, accounts payable and accrued expenses approximate fair value because of their short-term nature. The amount outstanding under our bank debt facilities is measured at carrying value in our accompanying balance sheets. Our bank debt facilities are valued using Level 2 inputs. The three-level hierarchy is as follows: Level 1 — Pricing inputs are quoted prices available in active markets for identical assets or liabilities as of the measurement date. Level 2 — Pricing inputs are quoted prices for similar assets or liabilities, or inputs that are observable, either directly or indirectly, for substantially the full term through corroboration with observable market data. Level 3 — Pricing inputs are unobservable for the assets or liabilities, that is, inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level of an asset or liability within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the investment. We also hold money market accounts in our bank account, which are classified as cash equivalents and measured at fair value. The fair value of these investments is based on their closing published net asset value. F- 10 ImmuCell Corporation Notes to Audited Financial Statements (continued) We assess the levels of the investments at each measurement date, and transfers between levels are recognized on the actual date of the event or change in circumstances that caused the transfer in accordance with our accounting policy regarding the recognition of transfers between levels of the fair value hierarchy. During the years ended December 31, 2024 and 2023, there were no transfers between levels. As of December 31, 2024 and 2023, our Level 1 assets measured at fair value by quoted prices in active markets consisted of cash and money market accounts. There were no assets or liabilities measured at fair value on a nonrecurring basis as of December 31, 2024 or 2023. The carrying values of our cash and money market accounts as of December 31, 2024 and 2023 approximated their fair market values. Due to inflation and the changing interest rate environment, the carrying values of our fixed rate bank debt as of December 31, 2024 and 2023 differed from their fair market values. These values are reflected in the following tables : As of December 31, 2024 Level 1 Level 2 Level 3 Total Assets: Cash and money market accounts $ 3,758,232 $ — $ — $ 3,758,232 Liabilities: Bank debt $ — $ 9,465,500 $ — $ 9,465,500 As of December 31, 2023 Level 1 Level 2 Level 3 Total Assets: Cash and money market accounts $ 978,741 $ — $ — $ 978,741 Liabilities: Bank debt $ — $ 10,431,817 $ — $ 10,431,817 (j) Concentration of Risk Concentration of credit risk with respect to accounts receivable is principally limited to certain customers to whom we make substantial sales. To reduce risk, we routinely assess the financial strength of our customers and, as a consequence, believe that our accounts receivable credit risk exposure is limited. We maintain an allowance for potential credit losses when deemed necessary, but historically we have not experienced significant credit losses related to an individual customer or groups of customers in any particular industry or geographic area. Sales to significant customers that amounted to 10% or more of total product sales are detailed in the following table: During the Years Ended December 31, 2024 2023 Company A 47 % 47 % Company B 30 % 32 %   Total 77 % 79 % Trade accounts receivable due from significant customers that amounted to 10% or more of our total trade accounts receivable are detailed in the following table: As of December 31, 2024 As of December 31, 2023 Company A 57 % 43 % Company B 21 % 36 % Total 78 % 79 % F- 11 ImmuCell Corporation Notes to Audited Financial Statements (continued) (k) Revenue Recognition We recognize revenue in accordance with Codification Topic 606, Revenue from Contracts with Customers (ASC 606) . ASC 606 is a single comprehensive model for companies to use in accounting for revenue arising from contracts with customers. The core principle is that we recognize the amount of revenue to which we expect to be entitled for the transfer of promised goods or services to customers when a customer obtains control of promised goods or services in an amount that reflects the consideration we expect to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. We conduct our business with customers through valid purchase orders or sales orders which are considered contracts and are not interdependent on one another. A performance obligation is a promise in a contract to transfer a distinct product to the customer. The transaction price is the amount of consideration we expect to receive under the arrangement. Revenue is measured based on consideration specified in a contract with a customer. The transaction price of a contract is allocated to each distinct performance obligation and recognized when or as the customer receives the benefit of the performance obligation. Product transaction prices on a purchase or sales order are discrete and stand-alone. We recognize revenue when we satisfy a performance obligation in a contract by transferring control over a product to a customer when product ships to a customer. Amounts due are typically paid approximately 30 days from the time control is transferred. Shipping and handling costs associated with outbound freight are accounted for as a fulfillment cost in costs of goods sold. We do not bill for or collect sales tax because our sales are generally made to distributors and thus our sales to them are not subject to sales tax. We generally have experienced an immaterial amount of product returns. See Note 13 for additional disclosures. (l) Expense Recognition We do not incur costs in connection with product sales to customers that are eligible for capitalization. Advertising costs are expensed when incurred, which is generally during the month in which the advertisement is published. All product development expenses are expensed as incurred, as are all related patent costs. We capitalize costs to produce inventory during the production cycle, and these costs are charged to costs of goods sold when the inventory is sold to a customer or is deemed to be in excess or obsolete. (m) Income Taxes We account for income taxes in accordance with Codification Topic 740, Income Taxes , which requires that we recognize a current tax liability or asset for current taxes payable or refundable and a deferred tax liability or asset for the estimated future tax effects of temporary differences and carryforwards to the extent they are realizable. We consider future taxable income and feasible tax planning strategies in assessing the need for a valuation allowance against our deferred tax assets at the end of each quarter. If we determine that it is more likely than not that we will realize our deferred tax assets in the future in excess of the net recorded amount over a reasonably short period of time, a reduction of the valuation allowance would increase income in the period such determination was made. Likewise, if we determine that it is more likely than not that we will not realize all or part of our net deferred tax asset in the future, an increase to the valuation allowance would be charged to income in the period such determination was made. Codification Topic 740-10 clarifies the accounting for income taxes by prescribing a minimum recognition threshold that a tax position must meet before being recognized in the financial statements. In the ordinary course of business, there are transactions and calculations where the ultimate tax outcome is uncertain. In addition, we are subject to periodic audits and examinations by the Internal Revenue Service and other taxing authorities. With few exceptions, we are no longer subject to income tax examinations by tax authorities for years before 2021. We have evaluated the positions taken on our filed tax returns and have concluded that no uncertain tax positions existed as of December 31, 2024 or 2023. Although we believe that our estimates are reasonable, actual results could differ from these estimates. See Note 15. (n) Stock-Based Compensation We account for stock-based compensation in accordance with Codification Topic 718, Compensation-Stock Compensation , which generally requires us to recognize non-cash compensation expense for stock-based payments using the fair-value-based method. The fair value of each stock option grant has been estimated on the date of grant using the Black-Scholes option pricing model. Accordingly, we recorded compensation expense pertaining to stock-based compensation of $ 325,551 and $ 368,866 during the years ended December 31, 2024 and 2023, respectively. See Note 12. (o) Net Loss Per Common Share Net loss per common share has been computed in accordance with Codification Topic 260-10, Earnings Per Share . The net loss per share has been computed by dividing the net loss by the weighted average number of common shares outstanding during the period. All stock options have been excluded from the denominator in the calculation of dilutive earnings per share when we are in a loss position because their inclusion would be anti-dilutive. Outstanding stock options that were not included in this calculation because the effect would be anti-dilutive amounted to 664,000 and 618,500 during the years ended December 31, 2024 and 2023, respectively. F- 12 ImmuCell Corporation Notes to Audited Financial Statements (continued) During the Years Ended December 31, 2024 2023 Net loss attributable to stockholders $ ( 2,156,629 ) $ ( 5,774,598 ) Weighted average common shares outstanding - Basic 8,167,244 7,747,686 Dilutive impact of share-based compensation awards — — Weighted average common shares outstanding - Diluted 8,167,244 7,747,686 Net loss per share: Basic $ ( 0.26 ) $ ( 0.75 ) Diluted $ ( 0.26 ) $ ( 0.75 ) (p) Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Although we regularly assess these estimates, actual amounts could differ from those estimates and are subject to change in the near term. Changes in estimates are recorded during the period in which they become known. Significant estimates include our valuation of inventory, deferred tax assets and costs of goods sold. (q) New Accounting Pronouncement Adopted In November of 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant expenses. The amendments require disclosure of significant segment expenses that are regularly provided to our chief operating decision-maker and included within segment profit and loss. The adoption of ASU 2023-07 did not have a material impact on our financial statements. (r) New Accounting Pronouncements Not Yet Adopted In November of 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses , to provide disaggregated disclosures of specific expense categories underlying all relevant income statement expense line items on an annual and interim basis. The disclosure requirements will be applied on a prospective basis, with the option to apply it retrospectively. The effective date for the standard is for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. We are evaluating ASU 2024-03 to determine its impact on our financial statements. In December of 2023, the FASB issued ASU 2023-09 , Income Taxes (Topic 740): Improvements to Income Tax Disclosures , which includes amendments that enhance income tax disclosures, primarily through standardization and disaggregation of income tax rate reconciliation categories and income taxes paid by jurisdiction. The amendments are effective for annual periods beginning after December 15, 2024, with early adoption permitted, and may be applied either prospectively or retrospectively. We are currently evaluating ASU 2023-09 to assess the impact on our financial statement disclosures and to determine the transition method in which the new guidance will be adopted. 3. TRADE ACCOUNTS RECEIVABLE Trade accounts receivable amounted to $ 3,771,133 and $ 2,185,383 as of December 31, 2024 and 2023, respectively. No allowance for credit losses or product returns was recorded as of December 31, 2024 or 2023. We consider a broad range of information to estimate credit losses. Historically, we have experienced a very low level of credit loss expense, and most of our trade receivables are collected by the due date or within a few days of the due date. We anticipate no future events or conditions that would impact our ability to collect our accounts receivable. Because of the generally short duration from the balance sheet date to the date of collection, our collection rate is not expected to be significantly impacted by events occurring after the balance sheet date. The trade accounts receivable balances included $ 52,097 and $ 42,507 due from a related party as of December 31, 2024 and 2023, respectively. See Note 17. F- 13 ImmuCell Corporation Notes to Audited Financial Statements (continued) 4. INVENTORY Inventory consisted of the following: As of December 31, 2024 As of December 31, 2023 Raw materials $ 1,356,228 $ 1,594,028 Work-in-process 5,746,865 5,815,194 Finished goods 9,530 402,619 Total $ 7,112,623 $ 7,811,841 These inventory figures are net of write-offs of scrapped inventory in the amounts of $ 406,565 and $ 527,133 during the years ended December 31, 2024 and 2023, respectively, that resulted principally from contamination events and other production process losses. 5. PREPAID EXPENSES AND OTHER CURRENT ASSETS Prepaid expenses and other current assets consisted of the following: As of December 31, 2024 As of December 31, 2023 Prepaid expenses $ 360,207 $ 454,152 Other receivables 40,555 39,733 Total $ 400,762 $ 493,885 6. PROPERTY, PLANT AND EQUIPMENT, net Property, plant and equipment consisted of the following: Estimated Useful Lives (in years) As of December 31, 2024 As of December 31, 2023 Laboratory and manufacturing equipment 3 - 10 $ 21,234,259 $ 20,953,601 Buildings and improvements 10 - 39 20,889,395 20,784,565 Office furniture and equipment 3 - 10 1,056,145 1,036,374 Construction in progress n/a 2,693,904 2,768,224 Land n/a 516,867 516,867 Property, plant and equipment, gross 46,390,570 46,059,631 Accumulated depreciation ( 21,041,551 ) ( 18,483,948 ) Property, plant and equipment, net $ 25,349,019 $ 27,575,683 As of December 31, 2024 and 2023, construction in progress consisted principally of payments toward the First Defense ® production capacity expansion project and equipment needed to bring the formulation and aseptic filling for Re-Tain ® in-house. The costs associated with property, plant and equipment disposals were $ 130,365 and $ 100,142 during the years ended December 31, 2024 and 2023, respectively. Depreciation expense was $ 2,668,077 and $ 2,697,897 during the years ended December 31, 2024 and 2023, respectively. F- 14 ImmuCell Corporation Notes to Audited Financial Statements (continued) 7. INTANGIBLE ASSETS Intangible assets of $ 191,040 were valued using the relief from royalty method and are being amortized to costs of goods sold over their useful lives, which are estimated to be 10 years. Intangible amortization expense was $ 19,104 during both of the years ended December 31, 2024 and 2023. The net value of these intangibles was $ 19,104 and $ 38,208 as of December 31, 2024 and 2023, respectively. Intangible asset amortization expense is estimated to be $ 19,104 during the year ending December 31, 2025. Intangible assets as of December 31, 2024 consisted of the following: Gross Carrying Value Accumulated Amortization Net Book Value Developed technology $ 184,100 $ ( 165,690 ) $ 18,410 Customer relationships 1,300 ( 1,170 ) 130 Non-compete agreements 5,640 ( 5,076 ) 564 Total $ 191,040 $ ( 171,936 ) $ 19,104 Intangible assets as of December 31, 2023 consisted of the following: Gross Carrying Value Accumulated Amortization Net Book Value Developed technology $ 184,100 $ ( 147,280 ) $ 36,820 Customer relationships 1,300 ( 1,040 ) 260 Non-compete agreements 5,640 ( 4,512 ) 1,128 Total $ 191,040 $ ( 152,832 ) $ 38,208 8. ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses consisted of the following: As of December 31, 2024 As of December 31, 2023 Accounts payable – trade $ 934,883 $ 874,558 Accounts payable – capital 8,754 13,175 Accrued payroll 1,195,703 942,999 Accrued professional fees 102,815 97,800 Accrued other 234,552 192,754 Income tax payable 5,815 3,051 Total $ 2,482,522 $ 2,124,337 9. BANK DEBT Loans #1 and #2 : During the first quarter of 2020, we closed on a debt financing with Maine Community Bank (formerly known as Gorham Savings Bank) (MCB) aggregating $ 8,600,000 , which was comprised of a $ 5,100,000 mortgage note (Loan #1) that bears interest at a fixed rate of 3.50 % per annum (with a 10 -year term and 25 -year amortization schedule and a balloon principal payment of $ 3,145,888 due during the first quarter of 2030) and a $ 3,500,000 note (Loan #2) that bears interest at a fixed rate of 3.50 % per annum (with a 7 -year term and amortization schedule). The proceeds from the 2020 debt refinancing were used to repay all bank debt outstanding at the time of closing and to provide some additional working capital. During the first quarter of 2022, we closed on an additional $ 2,000,000 in mortgage debt, which bears interest at the fixed rate of 3.58 % per annum. This was accomplished through an amendment of the original mortgage note (Loan #1) that increased the then outstanding principal balance from $ 4,233,957 to $ 6,233,957 bearing interest at the blended fixed rate of 3.53 % per annum. This increased the balloon payment from $ 3,145,888 to $ 3,687,608 and extended the due date of the balloon payment from the first quarter of 2030 to the first quarter of 2032. F- 15 ImmuCell Corporation Notes to Audited Financial Statements (continued) Line of Credit (LOC) : Also during the first quarter of 2020, MCB extended a $ 1,000,000 LOC to us that is available, as needed, through September 11, 2025. Interest on borrowings against the LOC is variable at the National Prime Rate per annum. There was no outstanding balance under this LOC as of December 31, 2024 or 2023. Loan #3 : During the second quarter of 2020, we received a loan from the Maine Technology Institute (MTI) in the aggregate principal amount of $ 500,000 . The first 2.25 years of this loan were interest-free with no interest accrual or required principal payments. Beginning during the fourth quarter of 2022, Loan #3 became subject to quarterly principal and interest payments at a fixed rate of 5 % per annum over the final five years of the loan, through the third quarter of 2027 if not repaid before then. Loan #4 : During the fourth quarter of 2020, we closed on a $ 1,500,000 note with MCB that bears interest at a fixed rate of 3.50 % per annum (with a 7 -year term and amortization schedule). Proceeds of $ 624,167 were used to prepay a portion of the outstanding principal on our mortgage note (Loan #1), which reduced the outstanding balance to 80 % of the most recent appraised value of the property securing the debt, which allowed MCB to release the $ 1,400,000 that had been held in escrow. The remaining proceeds were available for general working capital purposes. Loan #5 : On June 30, 2021, we executed definitive agreements covering a second loan from the MTI in the aggregate principal amount of $ 400,000 , proceeds from which were received in July of 2021. The first two years of this loan were interest-free with no interest accrual or required principal payments. Principal and interest payments at a fixed rate of 5 % per annum are due quarterly over the final 5.5 years of the loan, beginning during the third quarter of 2023 and continuing through the fourth quarter of 2028 if not repaid before then. Loan #6: During the third quarter of 2023, we closed on a $ 2,000,000 term loan bearing interest at a fixed rate of 7 % per annum from MCB. The Finance Authority of Maine (FAME) provided $ 1,000,000 of loan insurance to MCB. This loan is repayable under a 7 -year amortization schedule with a balloon payment of $ 1,285,047 due during the third quarter of 2026. Loan #7: Also during the third quarter of 2023, we closed on a $ 1,000,000 term loan bearing interest at a fixed rate of 8 % per annum from FAME. The loan is repayable under a 7 -year amortization schedule with a balloon payment of $ 649,259 due during the third quarter of 2026. Loans #1, #2, #4, #6 and #7 are secured by liens on substantially all of our assets and are subject to certain restrictions and financial covenants. Loan #7 is subordinated to Loans #1, #2, #4 and #6. Reflecting our poor financial performance during 2023 and into the first nine months of 2024, the debt service covenant (DSC) requirements for the twelve-month periods ended December 31, 2023, June 30, 2024, September 30, 2024 and December 31, 2024 were waived pre-emptively by our lenders. We are required to meet a minimum DSC ratio of 1.35 for the year ending December 31, 2025 and annually thereafter. In connection with these credit facilities, we incurred aggregate debt issuance and debt discount costs of $ 173,305 . The amortization of these debt issuance and debt discount costs is being recorded as a component of interest expense, included in other expenses, net, and is being amortized on a straight-line basis over the underlying terms of the notes. Loans #3 and #5 are unsecured and subordinated to our indebtedness to MCB and FAME. Failure to make timely payments of principal and interest, or otherwise to comply with the terms of the agreements of Loans #3 and #5, would entitle the MTI to accelerate the maturity of such debt and demand repayment in full. These loans may be prepaid without penalty at any time. Debt proceeds received and principal repayments made (excluding our $ 1,000,000 line of credit) are reflected by loan during the periods as described in the tables below: During the Year Ended December 31, 2024 During the Year Ended December 31, 2023 Proceeds from Debt Issuance Debt Principal Repayments Proceeds from Debt Issuance Debt Principal Repayments Loan #1 $ — $ 230,763 $ — $ 223,222 Loan #2 — 512,139 — 494,455 Loan #3 — 96,104 — 91,446 Loan #4 — 213,227 — 205,884 Loan #5 — 66,470 — 32,017 Loan #6 — 235,393 2,000,000 93,054 Loan #7 — 114,242 1,000,000 45,696 Total $ — $ 1,468,338 $ 3,000,000 $ 1,185,774 F- 16 ImmuCell Corporation Notes to Audited Financial Statements (continued) Principal payments (net of debt issuance and debt discount costs) due under bank loans outstanding as of December 31, 2024 (excluding our $ 1,000,000 line of credit) are reflected in the following table by the year that payments are due: During the Years Ending December 31, 2025 2026 2027 2028 2029 Thereafter Total Loan #1 $ 239,864 $ 248,604 $ 257,649 $ 266,537 $ 276,720 $ 4,321,768 $ 5,611,142 Loan #2 530,738 549,881 140,423 — — — 1,221,042 Loan #3 101,001 106,146 83,143 — — — 290,290 Loan #4 220,998 228,965 240,438 — — — 690,401 Loan #5 69,856 73,415 77,156 81,086 — — 301,513 Loan #6 253,003 1,418,550 — — — — 1,671,553 Loan #7 124,364 715,698 — — — — 840,062 Subtotal 1,539,824 3,341,259 798,809 347,623 276,720 4,321,768 10,626,003 Debt issuance cost ( 21,314 ) ( 13,580 ) ( 5,420 ) ( 3,513 ) ( 3,513 ) ( 7,834 ) ( 55,174 ) Debt discount cost ( 20,891 ) ( 11,344 ) — — — — ( 32,235 ) Total $ 1,497,619 $ 3,316,335 $ 793,389 $ 344,110 $ 273,207 $ 4,313,934 $ 10,538,594 10. CONTINGENT LIABILITIES AND COMMITMENTS Our bylaws, as amended, in effect provide that the Company will indemnify its officers and directors against any liability arising from their responsibilities as officers and directors to the maximum extent permitted by Delaware law. In addition, we make similar indemnity undertakings with each director through a separate indemnification agreement with that director. The maximum payment that we may be required to make under such provisions is theoretically unlimited and is impossible to determine. We maintain directors’ and officers’ liability insurance, which may provide reimbursement to the Company for payments made to, or on behalf of, officers and directors pursuant to the indemnification provisions. Our indemnification obligations were grandfathered under the provisions of Codification Topic 460 , Guarantees . Accordingly, we have recorded no liability for such obligations as of December 31, 2024 or 2023. Since our incorporation, we have had no occasion to make any indemnification payment to any of our officers or directors for any reason. The development, manufacturing and marketing of animal health care products entails an inherent risk that liability claims will be asserted against us during the normal course of business. We are aware of no such claims against us as of the time of this filing on March 28, 2025. We believe that we have reasonable levels of liability insurance to support our operations. We enter into agreements with third parties in the ordinary course of business under which we are obligated to indemnify such third parties from and against various risks and losses. The precise terms of such indemnities vary with the nature of the agreement. In many cases, we limit the maximum amount of our indemnification obligations, but in some cases those obligations may be theoretically unlimited. We have not incurred material expenses in discharging any of these indemnification obligations and based on our analysis of the nature of the risks involved, we believe that the fair value of the liabilities potentially arising under these agreements is minimal. Accordingly, we recorded no liabilities for such obligations as of December 31, 2024 or 2023. We plan to purchase certain key parts (syringes) and services (formulation, aseptic filling and final packaging) pertaining to Re-Tain ® Drug Product (DP), our Nisin-based intramammary treatment of subclinical mastitis in lactating dairy cows, exclusively from contractors. The contract for formulation, aseptic filling and final packaging of DP terminated on November 30, 2024. This contract was extended through March of 2026 for the purpose of final packaging of existing DP inventory, but this contract extension does not anticipate the production of new DP inventory. During 2019, we initiated an investment in the necessary equipment to perform the DP formulation and aseptic filling services in-house, but this investment has been paused at the present time. F- 17 ImmuCell Corporation Notes to Audited Financial Statements (continued) Effective March 28, 2022, we entered into an Amended and Restated Separation and Deferred Compensation Agreement (the “Deferred Compensation Agreement”) with Mr. Brigham (our President and CEO) that superseded and replaced in its entirety a March 2020 severance agreement between the Company and Mr. Brigham. Upon separation from the Company for any reason, Mr. Brigham’s Deferred Compensation Agreement allows Mr. Brigham to be paid, among other amounts, all earned and unused paid time off. Accordingly, an expense of $ 222,379 for earned and unpaid sick time was accrued during the first quarter of 2022 and a related accrual of $ 230,162 was included in accounts payable and accrued expenses as of December 31, 2024 and 2023. Additionally, Mr. Brigham was paid $ 300,000 in deferred compensation during the first quarter of 2025 (which was accrued over the three-year period ending in December 2024). This deferred compensation payment vested as to $ 300,000 , $ 200,000 and $ 100,000 on January 1, 2025, 2024 and 2023, respectively. Deferred compensation of $ 300,000 and $ 200,000 was included in accounts payable and accrued expenses on the accompanying balance sheets as of December 31, 2024 and 2023, respectively. In addition, upon termination of Mr. Brigham’s employment (a) by the Company other than for cause, (b) due to death or disability or (c) by Mr. Brigham for good reason, in each case as described and defined in the Deferred Compensation Agreement, the Company agrees to pay Mr. Brigham 100 % of his then current annual base salary and a lump sum payment equal to the employer portion of the costs of continued health benefits for Mr. Brigham and his covered dependents for a twelve-month period following termination, and certain equity incentive awards granted to Mr. Brigham would continue to vest following such termination in accordance with the terms of the Deferred Compensation Agreement. Incentive compensation agreements may be entered into with Mr. Brigham, Ms. Brockmann (our Vice President of Sales and Marketing) and Ms. Williams (formerly our Vice President of Manufacturing Operations), which, at times, allow these executives to earn incentive compensation if certain regulatory and financial objectives are met during the year to which the agreement relates, as specified in their agreements. Amounts related to these incentive compensation agreements are accrued over the period they are earned (when it is probable that the amounts will be earned) based on our best estimate of the amounts expected to be earned. In addition to the commitments discussed above, we had committed $ 67,000 to increase our production capacity for the First Defense ® product line, $ 1,629,000 to the purchase of inventory and $ 686,000 to information technology services and other obligations as of December 31, 2024. F- 18 ImmuCell Corporation Notes to Audited Financial Statements (continued) 11. OPERATING LEASES On September 12, 2019, we entered into a lease covering approximately 14,300 square feet of office and warehouse space with a possession date of November 15, 2019 and a commencement date of February 13, 2020. The property is located at 175 Industrial Way in Portland ( Building 175A ), which is a short distance from our headquarters and manufacturing facility at 56 Evergreen Drive. We renovated this space to meet our needs in expanding our production capacity for the First Defense ® product line. The original lease term was ten years with a right to renew for a second 10 -year term and a right of first offer to purchase. At the time we entered into this lease, we were not reasonably assured that we would exercise this renewal option in place of other real estate options. For that reason, a 10-year period was reflected in the right-of-use (ROU) asset and lease liability on our balance sheet. During the third quarter of 2022, we committed to lease an additional 15,400 square feet of space at 175 Industrial Way ( Building 175B ), which is connected to the original space, over a 20 -year term. The ROU asset and lease liability for the committed space at Building 175B was recorded as of April 1, 2023 after construction of the building shell was completed in accordance with the lease agreement. Monthly lease payments commenced as of August 1, 2023. In connection with the lease commitment for space at Building 175B , the term of the original lease for Building 175A was extended by approximately 13 years. On November 14, 2023, June 11, 2024 and September 20, 2024, we amended this lease further to provide for certain tenant improvements on the leased premises to be paid for by our landlord. These improvements will provide heat to an unfinished space, provide additional warehouse space, and create a new primary shipping and receiving facility. As a result of these three amendments and in consideration for the landlord agreeing to pay for the cost of those certain tenant improvements, we agreed to make additional rent payments of $ 20,000 per month from November of 2023 through June of 2025 and a one-time additional rent payment of $ 248,743 in July of 2025. Because of these modifications to the lease payments, the ROU asset and lease liability associated with the space at Building 175B were remeasured as of the modification dates. Our leases include variable non-lease components. Such payments primarily include common area maintenance charges. As of December 31, 2024, the balance of the operating lease ROU asset was $ 4,560,679 and the operating lease liability was $ 4,561,174 . As of December 31, 2023, the balance of the operating lease ROU asset was $ 4,571,149 and the operating lease liability was $ 4,721,385 . The calculated amount of the ROU asset and lease liability is impacted by the length of the lease term and the discount rate used for the present value of the minimum lease payments. We elected not to separate lease and non-lease components for all classes of underlying assets, and instead to account for them as a single lease component. Variable lease cost primarily represents variable payments such as real estate taxes and common area maintenance. The following tables describe our lease costs and other lease information: During the Years Ended December 31, 2024 2023 Lease Cost Operating lease cost $ 427,519 $ 348,929 Variable lease cost 66,523 36,774 Total lease cost $ 494,042 $ 385,703 Operating Lease Cash paid for operating lease liabilities $ 577,260 $ 248,595 Weighted average remaining lease term (in years) 18.1 19.1 Weighted average discount rate 6.6 % 7.11 % F- 19 ImmuCell Corporation Notes to Audited Financial Statements (continued) Future lease payments required under non-cancelable operating leases in effect as of December 31, 2024 were as follows: During the years ending December 31 Amount 2025 $ 711,623 2026 349,744 2027 356,732 2028 363,870 2029 371,144 Thereafter 5,578,344 Total lease payments (undiscounted cash flows) 7,731,457 Less: imputed interest (discount effect of cash flows) ( 3,170,283 ) Total operating liabilities $ 4,561,174 12. STOCKHOLDERS’ EQUITY Common Stock Issuances From February of 2016 to April of 2021, we sold the aggregate of 4,553,017 shares of common stock in six different transactions raising gross proceeds of $ 26,714,403 at the weighted average price of $ 5.87 per share. These funds have been essential to funding our business growth plans. On April 9, 2024, our shelf registration on Form S-3 relating to the offer, issuance and sale by the Company of up to $ 20,000,000 of securities was declared effective by the Securities and Exchange Commission. Also on April 9, 2024, we entered into an At-The-Market (ATM) Agreement with Craig-Hallum Capital Group LLC, pursuant to which we may offer and sell up to $ 11,000,000 of shares of our common stock. Legal, accounting and other fees in the amount of $ 152,272 associated with the completion of the shelf registration and the ATM Agreement were initially capitalized and then were offset against the initial proceeds received during the second quarter of 2024. As of December 31, 2024, we have sold 1,228,227 shares under the ATM Offering conducted pursuant to the ATM Agreement. Net proceeds through December 31, 2024 from shares sold pursuant to the ATM Agreement (net of the upfront legal, accounting and other fees), less sales commissions of $ 139,562 , were $ 4,356,188 . Stock Option Plans In June of 2010, our stockholders approved the 2010 Stock Option and Incentive Plan (the “2010 Plan”) pursuant to the provisions of the Internal Revenue Code of 1986, under which employees and certain service providers may be granted options to purchase shares of the Company’s common stock at no less than fair market value on the date of grant. At that time, 300,000 shares of common stock were reserved for issuance under the 2010 Plan and subsequently no additional shares have been reserved for the 2010 Plan. Vesting requirements are determined by the Compensation and Stock Option Committee of the Board of Directors on a case-by-case basis. All options granted under the 2010 Plan expire no later than 10 years from the date of grant. The 2010 Plan expired in June of 2020, after which date no further options can be granted under the 2010 Plan. However, options outstanding under the 2010 Plan at that time can be exercised in accordance with their terms. There were 183,500 and 188,500 options outstanding under the 2010 Plan as of December 31, 2024 and 2023, respectively. F- 20 ImmuCell Corporation Notes to Audited Financial Statements (continued) In June of 2017, our stockholders approved the 2017 Stock Option and Incentive Plan (the “2017 Plan”) pursuant to the provisions of the Internal Revenue Code of 1986, under which employees and certain service providers may be granted options to purchase shares of the Company’s common stock at no less than fair market value on the date of grant. At that time, 300,000 shares of common stock were reserved for issuance under the 2017 Plan. An amendment to the 2017 Plan increasing the number of shares reserved for issuance under the 2017 Plan from 300,000 shares to 650,000 shares was approved by a vote of stockholders at the Annual Meeting of Stockholders in June of 2022. Vesting requirements are determined by the Compensation and Stock Option Committee of the Board of Directors on a case-by-case basis. All options granted under the 2017 Plan expire no later than 10 years from the date of grant. The 2017 Plan expires in March of 2027, after which date no further options can be granted under the 2017 Plan. However, options outstanding under the 2017 Plan at that time can be exercised in accordance with their terms. As of December 31, 2024 and 2023, there were 480,500 and 430,000 options outstanding under the 2017 Plan, respectively. Activity under the stock option plans described above was as follows: 2010 Plan 2017 Plan Weighted Average Exercise Price Aggregate Intrinsic Value (1) Outstanding as of December 31, 2022 202,500 402,500 $ 7.19 $ ( 661,310 ) Grants — 122,000 $ 5.16 Terminations/forfeitures (2) ( 10,000 ) ( 94,500 ) $ 7.12 Exercises ( 4,000 ) — $ 4.69 Outstanding as of December 31, 2023 188,500 430,000 $ 6.82 $ ( 1,071,121 ) Grants — 86,000 $ 3.91 Terminations/forfeitures (2) ( 5,000 ) ( 35,500 ) $ 6.55 Exercises — — $ — Outstanding as of December 31, 2024 183,500 480,500 $ 6.46 $ ( 870,558 ) Vested as of December 31, 2024 183,500 136,500 $ 6.97 $ ( 582,340 ) Vested and expected to vest as of December 31, 2024 183,500 480,500 $ 6.46 $ ( 870,558 ) Reserved for future grants — 151,500 (1) Intrinsic value is the difference between the fair market value of the underlying common stock as of the date indicated and as of the date of the option grant (which is equal to the option exercise price). (2) Terminations and forfeitures are recognized when they occur. The following table displays additional information about the stock option plans described above: Number of Shares Weighted Average Fair Value at Grant Date Weighted Average Exercise Price Non-vested stock options as of December 31, 2023 337,500 $ 3.66 $ 7.14 Non-vested stock options as of December 31, 2024 344,000 $ 3.12 $ 6.25 Stock options granted during the year ended December 31, 2024 86,000 $ 1.84 $ 3.91 Stock options that vested during the year ended December 31, 2024 54,000 $ 4.31 $ 9.73 Stock options that were terminated or forfeited during the year ended December 31, 2024 40,500 $ 3.33 $ 6.55 F- 21 ImmuCell Corporation Notes to Audited Financial Statements (continued) No stock options were exercised during the year ended December 31, 2024. During the year ended December 31, 2023, 4,000 stock options were exercised by one employee with $ 18,760 in cash. The aggregate intrinsic value of options exercised during the year ended December 31, 2023 was $ 1,040 . The weighted average remaining life of the options outstanding under the 2010 Plan and the 2017 Plan as of December 31, 2024 was approximately 4 years and 10 months. The weighted average remaining life of the options exercisable under these plans as of December 31, 2024 was approximately 2 years and 8 months. The exercise price of the options outstanding under these plans as of December 31, 2024, ranged from $ 3.60 to $ 10.04 per share. The 86,000 stock options granted during the year ended December 31, 2024 had an average exercise price of $ 3.91 per share. The 122,000 stock options granted during the year ended December 31, 2023 had an average exercise price of $ 5.16 per share. The weighted-average grant date fair values of options granted during the years ended December 31, 2024 and 2023 were $ 1.84 and $ 2.80 per share, respectively. As of December 31, 2024, total unrecognized stock-based compensation related to non-vested stock options aggregated $ 365,124 which will be recognized over a weighted average remaining period of approximately 1 year and 3 months. The fair value of each stock option grant has been estimated on the date of grant using the Black-Scholes option pricing model, for the purpose discussed in Note 2(n), with the following weighted-average assumptions: During the Years Ended December 31, 2024 2023 Risk-free interest rate (1) 3.77 % 3.59 % Dividend yield (2) 0 % 0 % Expected volatility (2) 52 % 54 % Expected life (3) 4.6 years 6.2 years (1) The risk-free interest rate is based on U.S. Treasury yields for a maturity approximating the expected option term. (2) The dividend yield and expected volatility are derived from averages of our historical data. (3) The expected life is calculated utilizing the simplified method, which uses the mid-point between the vesting period and the contractual term as the expected life. Common Stock Rights Plan In September of 1995, our Board of Directors adopted a Common Stock Rights Plan (the “Rights Plan”) and declared a dividend of one common share purchase right (a “Right”) for each of the then outstanding shares of the common stock of the Company. Each Right entitled the registered holder to purchase from the Company one share of common stock at an initial purchase price of $ 70.00 per share, subject to adjustment. The description and terms of the Rights were set forth in a Rights Agreement between the Company and Equiniti Trust Company, LLC, as Rights Agent. At various times over the years, our Board of Directors, which has the authority to amend the Rights Plan, voted to authorize amendments to the Rights Plan to extend the expiration date of the Rights Plan. During 2024, our Board of Directors determined not to further extend the Rights Plan because these plans are generally considered not to be stockholder friendly. With no further extension, the Rights Plan expired as of September 19, 2024. No shares were issued under Rights Plan while it was in effect. 13. REVENUE We primarily offer the First Defense Ò product line to dairy and beef producers to prevent scours in newborn calves. Generally, our products are promoted to veterinarians as well as dairy and beef producers by our sales team and then sold through distributors. Our primary market is North America. We do sell into select international regions and may expand this international reach in the future. There were no material changes between the allocation and timing of revenue recognition during the years ended December 31, 2024 or 2023. We do not have any contract assets for which we have satisfied the performance obligations, but do not yet have the right to bill for, or contract liabilities such as customer advances. All trade receivables on our balance sheets are from contracts with customers. We incur no material costs to obtain contracts. The following table presents our product sales disaggregated by geographic area: During the Years Ended December 31, 2024 % 2023 % United States $ 22,893,721 86 % $ 15,949,382 91 % Other 3,599,448 14 % 1,522,287 9 % Total Product Sales $ 26,493,169 100 % $ 17,471,669 100 % The following table presents our product sales disaggregated by major product category: During the Years Ended December 31, 2024 % 2023 % First Defense ® product line $ 26,314,250 99 % $ 17,293,933 99 % Other animal health 178,919 1 % 177,736 1 % Total Product Sales $ 26,493,169 100 % $ 17,471,669 100 % F- 22 ImmuCell Corporation Notes to Audited Financial Statements (continued) 14. OTHER EXPENSES, NET Other expenses net, consisted of the following: During the Years Ended December 31, 2024 2023 Interest expense (1) $ 568,725 $ 475,598 Loss on disposal of property, plant and equipment 15,391 8,099 Interest income ( 77,702 ) ( 96,570 ) Insurance recoveries (2) — ( 365,127 ) Income - other — ( 107 ) Other expenses (income), net $ 506,414 $ 21,893 (1) Interest expense includes amortization of debt issuance and debt discount costs of $ 42,666 and $ 22,619 during the years ended December 31, 2024 and 2023, respectively. (2) The income from insurance recoveries resulted from claim benefits paid to us under our business interruption policy related to product contamination losses (in the amount of $ 250,000 ) and a recovery from a vendor’s policy related to an equipment malfunction (in the amount of $ 115,127 ). 15. INCOME TAXES Our income tax expense aggregated $ 10,056 and $ 4,627 (amounting to less than 1 % of our loss before income taxes) during the years ended December 31, 2024 and 2023, respectively. As of December 31, 2024, we had federal net operating loss carryforwards of $ 17,647,250 of which $ 15,935,343 do not expire and of which $ 1,711,907 expire in 2034 through 2037 (if not utilized before then) and state net operating loss carryforwards of $ 5,194,515 that expire in 2037 through 2038 (if not utilized before then). Additionally, we had federal general business tax credit carryforwards of $ 842,565 that expire in 2027 through 2042 (if not utilized before then) and state tax credit carryforwards of $ 777,459 that expire in 2025 through 2042 (if not utilized before then). The provision for income taxes is determined using the asset and liability approach of accounting for income taxes. Under this approach, deferred taxes represent the estimated future tax effects of temporary differences between book and tax treatment of assets and liabilities and carryforwards to the extent they are realizable. During the second quarter of 2018, we assessed our historical and near-term future profitability and recorded $ 563,252 in non-cash income tax expense to create a full valuation allowance against our net deferred tax assets (which consist largely of net operating loss carryforwards and federal and state credits) based on applicable accounting standards and practices. At that time, we had incurred a net loss for six consecutive quarters, had not been profitable on a year-to-date basis since the nine-month period ended September 30, 2017 and projected additional net losses for some period going forward before returning to profitability. Should future profitability be realized at an adequate level, we would be able to release this valuation allowance (resulting in a non-cash income tax benefit) and realize these deferred tax assets before they expire. We will continue to assess the need for the valuation allowance at each quarter and, in the event that actual results differ from these estimates, or we adjust these estimates in future periods, we may need to adjust our valuation allowance. Currently, we adjust the valuation allowance at the end of each quarter to reduce the value of our deferred tax assets to zero . Net operating loss carryforwards, credits, and other tax attributes are subject to review and possible adjustment by the Internal Revenue Service. Section 382 of the Internal Revenue Code contains provisions that could place annual limitations on the future utilization of net operating loss carryforwards and credits in the event of a change in ownership of the Company, as defined. We file income tax returns in the U.S. federal jurisdiction and several state jurisdictions. We currently have no tax examinations in progress. We also have not paid additional taxes, interest or penalties as a result of tax examinations nor do we have any unrecognized tax benefits for any of the periods in the accompanying audited financial statements. F- 23 ImmuCell Corporation Notes to Audited Financial Statements (continued) The income tax provision consisted of the following: During the Years Ended December 31, 2024 2023 Current Federal $ — $ — State 10,056 4,627 Current subtotal 10,056 4,627 Deferred Federal ( 500,927 ) ( 1,179,474 ) State ( 59,032 ) ( 145,802 ) Deferred subtotal, gross ( 559,959 ) ( 1,325,276 ) Valuation allowance 559,959 1,325,276 Deferred subtotal, net — — Income tax expense $ 10,056 $ 4,627 The actual income tax expense differs from the expected tax computed by applying the U.S. federal corporate tax rate of 21 % to the loss before income taxes during the years ended December 31, 2024 and 2023 respectively, as follows: During the Years Ended December 31, 2024 2023 $ % $ % Computed expected income tax expense rate $ ( 450,780 ) ( 21.00 )% $ ( 1,211,694 ) ( 21.00 )% State income taxes, net of federal expense ( 36,681 ) ( 1.71 ) ( 117,149 ) ( 2.03 ) Share-based compensation 49,030 2.28 56,214 0.97 Tax credits ( 116,091 ) ( 5.41 ) ( 53,241 ) ( 0.92 ) Valuation allowance 559,959 26.09 1,325,276 0.09 Other 4,619 0.22 5,221 22.97 Income tax expense/rate $ 10,056 0.47 % $ 4,627 0.08 % The significant components of our deferred tax assets, net, consisted of the following: As of December 31, 2024 2023 Property, plant and equipment $ ( 1,833,727 ) $ ( 2,121,940 ) Federal general business tax credits 842,565 726,474 Federal net operating loss carryforwards 3,705,923 3,729,500 State tax credits and net operating loss carryforwards 900,569 886,428 §174 R & D expenditures 727,410 592,915 Deferred compensation 82,370 50,722 Prepaid expenses and other 24,718 37,124 UNICAP 22,443 32,607 Incentive compensation 121,718 100,200 Valuation allowance ( 4,593,989 ) ( 4,034,030 ) Deferred tax assets, net $ — $ — F- 24 ImmuCell Corporation Notes to Audited Financial Statements (continued) 16. SEGMENT INFORMATION Our business operations (being the development, manufacture and sale of products that improve the health and productivity of dairy and beef cattle) are described in Note 1. Pursuant to Codification Topic 280, Segment Reporting , we operate in the following two reportable business segments: i) Scours and ii) Mastitis. The Scours segment consists of the First Defense ® product line. The core technology underlying the Scours segment is focused on polyclonal antibodies. The Mastitis segment includes our products, CMT and Re-Tain ® . Re-Tain ® is projected to be the driver of this segment when approved for sale. The core technology underlying the Mastitis segment is focused on a bacteriocin called Nisin. The category we define as “Other” includes unallocated administrative and overhead expenses and other products. The significant accounting policies of these segments are described in Note 2. Product sales are the primary factor we use in determining our reportable segments. The governing regulatory authority (Center for Veterinary Biologics, U.S. Department of Agriculture for First Defense ® or Center for Veterinary Medicine, U.S. Food and Drug Administration for Re-Tain ® ) is also a factor in determining our reportable segments. Management monitors and evaluates segment performance from sales to net operating income (loss) closely. We are not organized by geographic region. No segments have been aggregated. The revenues and expenses allocated to each segment are in some cases direct and in other cases involve reasonable and consistent estimations by management. Each operating segment is defined as the component of our business for which financial information is available and evaluated regularly by our chief operating decision-maker in deciding how to allocate resources and in assessing performance. Our chief operating decision-maker is our President and CEO. During the Year Ended December 31, 2024 Scours Mastitis Other Total Product sales $ 26,314,251 $ 178,918 $ — $ 26,493,169 Costs of goods sold 18,382,949 169,176 — 18,552,125 Gross margin 7,931,302 9,742 — 7,941,044 Product development expenses 243,578 3,493,298 161,706 3,898,582 Sales and marketing expenses 2,909,799 556,273 — 3,466,072 Administrative expenses — — 2,216,549 2,216,549 Operating expenses 3,153,377 4,049,571 2,378,255 9,581,203 NET OPERATING INCOME (LOSS) $ 4,777,925 $ ( 4,039,829 ) $ ( 2,378,255 ) $ ( 1,640,159 ) During the Year Ended December 31, 2023 Scours Mastitis Other Total Product sales $ 17,293,933 $ 177,736 $ — $ 17,471,669 Costs of goods sold 13,453,514 148,871 — 13,602,385 Gross margin 3,840,419 28,865 — 3,869,284 Product development expenses 11,103 4,242,329 141,420 4,394,852 Sales and marketing expenses 2,447,137 641,078 — 3,088,215 Administrative expenses — — 2,134,295 2,134,295 Operating expenses 2,458,240 4,883,407 2,275,715 9,617,362 NET OPERATING INCOME (LOSS) $ 1,382,179 $ ( 4,854,542 ) $ ( 2,275,715 ) $ ( 5,748,078 ) Scours Mastitis Other Total Total Assets as of December 31, 2024 $ 24,644,294 $ 16,523,048 $ 3,933,135 $ 45,100,477 Total Assets as of December 31, 2023 $ 24,735,413 $ 17,827,839 $ 1,244,850 $ 43,808,102 Depreciation and amortization expense during the year ended December 31, 2024 $ 1,373,815 $ 1,277,218 $ 78,814 $ 2,729,847 Depreciation and amortization expense during the year ended December 31, 2023 $ 1,365,988 $ 1,287,600 $ 86,032 $ 2,739,620 Capital Expenditures during the year ended December 31, 2024 $ 409,696 $ 53,721 $ 2,308 $ 465,725 Capital Expenditures during the year ended December 31, 2023 $ 1,096,819 $ 795,694 $ — $ 1,892,513 F- 25 ImmuCell Corporation Notes to Audited Financial Statements (continued) 17. RELATED PARTY TRANSACTIONS David S. Tomsche (Chair of our Board of Directors) is a controlling owner of Leedstone Inc., a domestic distributor of our products (the First Defense Ò product line and CMT ). His affiliated company purchased $ 567,114 and $ 231,405 of products from us during the years ended December 31, 2024 and 2023, respectively, all on terms consistent with those offered to other distributors of similar status. Our accounts receivable (subject to standard and customary payment terms) due from this affiliated company aggregated $ 52,097 and $ 42,507 as of December 31, 2024 and 2023, respectively. 18. EMPLOYEE BENEFITS We have a 401(k) savings plan (the Plan) in which all employees completing one month of service with the Company are eligible to participate. Participants may contribute up to the maximum amount allowed by the Internal Revenue Service. We currently match 100 % of the first 3 % of each employee’s salary that is contributed to the Plan and 50 % of the next 2 % of each employee’s salary that is contributed to the Plan. Under this matching plan, we paid $ 203,756 and $ 178,150 into the Plan for the years ended December 31, 2024 and 2023, respectively. 19. SUBSEQUENT EVENTS We have evaluated subsequent events through the time of this filing on March 28, 2025. First, in January of 2025, we settled a long outstanding insurance claim related to previously disclosed contamination events in our production process incurred from late 2022 through April of 2024. As a result of the settlement, we received $ 426,587 during January of 2025, which is in addition to the $ 250,000 that was previously received on this claim and recognized for financial statement purposes during the third quarter of 2023. Second, net proceeds from January 1, 2025 through March 21, 2025 from 3,532 shares sold pursuant to our ATM Agreement (less sales commissions of $ 584 ) were $ 18,849 . As of the time of this filing on March 28, 2025, there were no additional material, reportable subsequent events. F- 26 Signatures Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ImmuCell Corporation Registrant Date: March 28, 2025 By: /s/ Michael F. Brigham Michael F. Brigham President, Chief Executive Officer and Principal Financial Officer POWER OF ATTORNEY We, the undersigned directors and employees of ImmuCell Corporation, hereby severally constitute and appoint Michael F. Brigham our true and lawful attorney-in-fact and agent with full power of substitution and re-substitution, for us and in our stead, in any and all capacities, to sign any and all amendments to this report and all documents relating thereto, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing necessary or advisable to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or to be done by virtue hereof. Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Title Date /s/ Gloria J. Basse Director March 28, 2025 Gloria J. Basse /s/ Michael F. Brigham President, Chief Executive Officer, March 28, 2025 Michael F. Brigham Principal Financial Officer and Director /s/ Bobbi Jo Brockmann Vice President of Sales and Marketing and Director March 28, 2025 Bobbi Jo Brockmann /s/ Bryan K. Gathagan Director March 28, 2025 Bryan K. Gathagan /s/ Steven T. Rosgen Director March 28, 2025 Steven T. Rosgen /s/ David S. Tomsche Director March 28, 2025 David S. Tomsche, DVM /s/ Elizabeth S. Toothaker Controller March 28, 2025 Elizabeth S. Toothaker /s/ Paul R. Wainman Director March 28, 2025 Paul R. Wainman