What changed in this filing

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Item 1. Business

2023-03-29 compared with 2022-03-30 · 676 added, 717 removed, 79 unchanged (95% of the section changed)

ITEM 1 – BUSINESS

Cautionary Note Regarding Forward-Looking Statements (Safe Harbor

Annual Report on Form 10-K contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of

1933 and Section 21E of the Securities Exchange Act of 1934.

Such statements include, but are not limited to, any statements relating

our plans and strategies for our business;

Note Regarding Forward-Looking Statements (Safe Harbor Statement):

Annual Report on Form 10-K contains “forward-looking statements” within the meaning of the Private Securities Litigation

Reform Act of 1995, as amended.

Forward-looking statements can be identified by the fact that they do not relate strictly to historical

or current facts, and will often include words such as “expects”, “may”, “anticipates”, “aims”,

“intends”, “would”, “could”, “should”, “will”, “plans”, “believes”,

“estimates”, “targets”, “projects”, “forecasts”, “seeks” and similar words

and expressions.

Such statements include, but are not limited to, any forward-looking statements relating to:

our plans and strategies

for our business;

projections of future financial or operational performance;

the timing and outcome of pending

or anticipated applications for regulatory approvals;

factors that may affect the dairy and beef industries and future demand for our

the extent, nature and duration of the COVID-19 pandemic and its consequences, and their direct and indirect impacts on our

production activities, operating results and financial condition and on the customers and markets that we serve;

the impact of Russia’s

military invasion of Ukraine and attack on its people on the world economy including inflation and the price and availability of grain

the impact of the global supply-chain disruptions on our ability to obtain, in a timely and cost-effective fashion, all the supplies

and components we need to produce our products;

the impact of inflation and rising interest rates on our operating expenses and financial

the scope and timing of ongoing and future product development work and commercialization of our products;

future costs of product

development efforts;

the estimated prevalence rate of subclinical mastitis and producers’ level of interest in treating subclinical

mastitis given the current economic and market conditions;

the expected efficacy of new products;

estimates about the market size for

our products;

future market share of and revenue generated by current products and products still in development;

our ability to increase

production output and reduce costs of goods sold per unit;

the future adequacy of our own manufacturing facilities or those of third parties

with which we have contractual relationships to meet demand for our products on a timely basis;

the timing and outcome of pending or anticipated applications

for regulatory approvals;

future demand for our products;

the extent, nature and duration of the COVID-19 pandemic and its consequences,

and their direct and indirect impacts on our production activities, operating results and financial condition and on the customers and

markets that we serve;

the impact of Russia’s military invasion of Ukraine and attack on its people on the world economy including

inflation and the price and availability of grain and oil;

the impact of the global supply-chain disruptions on our ability to obtain,

in a timely and cost-effective fashion, all the supplies and components we need to produce our products;

the impact of inflation and

rising interest rates on our operating expenses and financial results;

the scope and timing of ongoing and future product development

work and commercialization of our products;

future costs of product development efforts;

the estimated prevalence rate of subclinical

mastitis and producers’ level of interest in treating subclinical mastitis given the current economic and market conditions;

expected efficacy of new products;

estimates about the market size for our products;

future market share of and revenue generated by

current products and products still in development;

our ability to increase production output and reduce costs of goods sold per unit;

the adequacy of our own manufacturing facilities or those of third parties with which we have contractual relationships to meet demand

for our products on a timely basis;

the impacts of backlogs on customer relationships;

the anticipated costs of (or time to complete) planned expansions of our manufacturing facilities and the adequacy of our funds available

for these projects;

the continuing availability to us on reasonable terms of third-party providers of critical products or services;

robustness of our manufacturing processes and related technical issues;

the efficacy or timeline to complete our contamination

remediation efforts;

the likelihood, severity or impact of future contamination events;

the anticipated costs of (or time to complete)

planned expansions of our manufacturing facilities and the adequacy of our funds available for these projects;

the robustness of our

manufacturing processes and related technical issues;

estimates about our production capacity, efficiency and yield;

which are highly subject to biological variability and the product format mix of our sales;

the future adequacy of our working capital

and the availability and cost of third-party financing;

future regulatory requirements relating to our products;

future expense ratios

future compliance with bank debt covenants;

costs associated with sustaining compliance with current Good Manufacturing Practice

(cGMP) regulations in our current operations and attaining such compliance for our facilities to produce the Nisin Drug Substance and

Drug Product;

our effectiveness in competing against competitors within both our existing and our anticipated product markets;

the cost-effectiveness

of additional sales and marketing expenditures and resources;

future regulatory

requirements relating to our products;

future expense ratios and margins;

the efficacy of our investments in our business;

future compliance

with bank debt covenants;

anticipated changes in our manufacturing capabilities and efficiencies;

the value of our net deferred tax assets;

projections about depreciation expense and its impact on income for book and tax return purposes;

our effectiveness in competing against

competitors within both our existing and our anticipated product markets;

projections about depreciation expense and its impact on income

for book and tax return purposes;

and any other statements that are not historical facts.

Forward-looking statements can be identified by the use of words such as “expects”,

“may”, “anticipates”, “aims”, “intends”, “would”, “could”, “should”,

“will”, “plans”, “believes”, “estimates”, “targets”, “projects”,

“forecasts”, “seeks” and similar words and expressions.

In addition, there can be no assurance that future developments

affecting us will be those that we anticipate.

Such statements involve risks and uncertainties, including, but not limited to, those risks

These statements are intended to provide management’s

current expectation of future events as of the date of this earnings release, are based on management’s estimates, projections,

beliefs and assumptions as of the date hereof;

and are not guarantees of future performance.

Such statements involve known and unknown

risks and uncertainties that may cause the Company’s actual results, financial or operational performance or achievements to be

materially different from those expressed or implied by these forward-looking statements, including, but not limited to, those risks

and uncertainties relating to:

2 unchanged sentences

product markets, customer acceptance of our new and existing products, product performance, alignment between our manufacturing resources

and product demand (including the consequences of backlogs or excess inventory buildup), uncertainty associated with the timing and volume

of customer orders as we come out of a prolonged backlog, adverse impacts of supply chain disruptions on our operations and customer relationships,

our reliance upon third parties for financial support, products and services, our small size and dependence on key personnel, changes

in laws and regulations, decision making and delays by regulatory authorities, a recurrence of inflation and its impact on our customers’

order patterns, currency values and fluctuations and other risks detailed from time to time in filings we make with the Securities and

Exchange Commission (SEC), including our Quarterly Reports on Form 10-Q, our Annual Reports on Form 10-K and our Current Reports on Form

Such statements involve risks and uncertainties and are based on our current expectations, but actual results may differ materially

due to various factors, including the risk factors summarized under PART I:

ITEM 1A – RISK FACTORS of this Annual Report

on Form 10-K and uncertainties otherwise referred to in this Annual Report.

ImmuCell Corporation

ImmuCell Corporation was founded in 1982 and completed

an initial public offering of common stock in 1987.

After achieving approval from the Center for Veterinary Biologics, U.S.

of Agriculture (USDA) to sell First Defense ® in 1991, we focused most of our efforts during the 1990’s attempting

to develop human product applications of the underlying milk protein purification technology.

Beginning in 1999, we re-focused our business

strategy on the First Defense ® product line and other products that improve the health and productivity of dairy

and beef cattle.

We support the dairy and beef industries’ purpose to produce nutritious proteins efficiently while ensuring food

quality and safety.

Our products help address the growing human health concern about using less antibiotics in food-producing animals.

We aim to capitalize on the growth in sales of the First Defense ® product line (a product that provides significant

Immediate Immunity ™ to newborn dairy and beef livestock)

and to revolutionize the mastitis treatment paradigm with Re-Tain ® ,

a product we are developing to treat this most significant cause of economic loss to the dairy industry.

During 2000, we began the development of Re-Tain ® ,

our purified Nisin treatment for subclinical mastitis in lactating dairy cows.

No sales of this product can be made without prior approval

of our New Animal Drug Application (NADA) by the Center for Veterinary Medicine, U.S.

and product demand (including the consequences of backlogs), uncertainty associated with the timing and volume of customer orders as

we come out of a prolonged backlog, adverse impacts of supply chain disruptions on our operations and customer and supplier relationships,

commercial and operational risks relating to our current and planned expansion of production capacity, and other risks and uncertainties

detailed from time to time in filings we make with the Securities and Exchange Commission (SEC), including our Quarterly Reports on Form

10-Q, our Annual Reports on Form 10-K and our Current Reports on Form 8-K.

Such statements involve risks and uncertainties and are based

on our current expectations, but actual results may differ materially due to various factors, including the risk factors summarized under

ITEM 1A – RISK FACTORS of this Annual Report on Form 10-K and uncertainties otherwise referred to in this Annual

In addition, there can be no assurance that future risks, uncertainties or developments affecting us will be those that we anticipate.

We undertake no obligation to update any forward-looking statement, whether written or oral, that may be made from time to time, whether

as a result of new information, future developments or otherwise.

Corporation was founded in 1982 and completed an initial public offering of common stock in 1987.

After achieving approval from the Center

for Veterinary Biologics, U.S.

Department of Agriculture (USDA) to sell First Defense ® in 1991, we focused most

of our efforts during the 1990’s attempting to develop human product applications of the underlying milk protein purification technology.

Beginning in 1999, we re-focused our business strategy on the First Defense ® product line and other products that

improve the health and productivity of dairy and beef cattle.

We support the dairy and beef industries’ purpose to produce nutritious

proteins efficiently while ensuring food quality and safety.

Our products help address the growing human health concern about using less

antibiotics in food-producing animals.

We aim to capitalize on the growth in sales of the First Defense ® product

line (a product that provides significant Immediate Immunity™ to newborn dairy and beef livestock) and to revolutionize

the mastitis treatment paradigm with Re-Tain ® , a novel product we are developing to treat this most significant

cause of economic loss to the dairy industry.

2000, we began the development of Re-Tain ® , our purified Nisin treatment for subclinical mastitis in lactating

No sales of this product can be made without prior approval of our New Animal Drug Application (NADA) by the Center for Veterinary

Medicine, U.S.

Food and Drug Administration (FDA).

We have achieved

FDA approval for four out of five of the significant Technical Sections required for product approval, and we made a second submission

of the fifth and final Technical Section during the first quarter of 2022.

Regulatory achievements to date have significantly reduced

the product development risks in the areas of safety and effectiveness.

Our primary product development focus has now turned to completion

of the manufacturing objectives required for FDA approval.

Since 2006, we have made ongoing efforts to maintain

compliance with current Good Manufacturing Practice (cGMP) regulations in all of our manufacturing operations, which requires a sustained

investment that further enhances the quality of all of our products and our operating efficiency.

As we make process improvements, we

continue to invest in personnel, equipment and facility modifications to increase the efficiency and quality of our operations.

From the first quarter of 2016 through the second

quarter of 2021, we issued an aggregate of 4,553,017 shares of common stock, raising gross proceeds of approximately $26.7 million in

six separate transactions.

In order to minimize the dilutive effects of these transactions on our existing stockholders, we chose not

to issue any form of convertible or preferred securities and issued these common shares without any warrants.

After refinancing our bank

debt twice during 2020, we had approximately $9.2 million in outstanding debt under five different credit facilities as of December 31,

2021 compared to $9.5 million as of December 31, 2020.

This new equity and debt capital has been, and is being, used to increase the production

capacity for the First Defense ® product line and

complete the development of Re-Tain ® without relying on funding from a partner or licensee, thereby keeping control

over all product rights and future revenues.

During the past six years, we have funded our

operations, constructed an FDA regulated Drug Substance manufacturing facility for Re-Tain ® and invested capital

to increase our production capacity for the First Defense ® product line.

We have also initiated another capital

investment to bring the formulation and aseptic filling capabilities for Re-Tain ® in house in order to end our present

reliance on an outside contractor.

The following table displays the changes in the balances of certain accounts over this period (in thousands,

except for percentages):

We have achieved FDA approval for four out of five of the significant Technical Sections

required for product approval, and we are preparing to make a third submission of the fifth Technical Section.

Regulatory achievements

to date have significantly reduced the product development risks in the areas of safety and effectiveness.

Our primary product development

focus has now turned to completion of the manufacturing objectives required for FDA approval.

2006, we have made ongoing efforts to maintain compliance with current Good Manufacturing Practice (cGMP) regulations in all of our manufacturing

operations, which requires a sustained investment that further enhances the quality of all of our products and our operating efficiency.

As we make process improvements, we continue to invest in personnel, equipment and facility modifications to increase the efficiency

and quality of our operations.

the first quarter of 2016 through the second quarter of 2021, we issued an aggregate of 4,553,017 shares of common stock, raising gross

proceeds of approximately $26.7 million in six separate transactions.

In order to minimize the dilutive effects of these transactions

on our existing stockholders, we chose not to issue any form of convertible or preferred securities and issued these common shares without

any warrants.

Net of debt issuance costs, we had approximately $10.2 million in outstanding debt under five different credit facilities

as of December 31, 2022 compared to approximately $9.1 million as of December 31, 2021.

This new equity and debt capital has been, and

is being, used to increase the production capacity for the First Defense ® product line and complete the development

of Re-Tain ® without relying on funding from a partner or licensee, thereby keeping control over all product rights

and future revenues.

the past seven years, we have funded our operations, constructed an FDA regulated Drug Substance manufacturing facility for Re-Tain ®

and invested capital to increase our production capacity for the First Defense ® product line.

initiated another capital investment to bring the formulation and aseptic filling capabilities for Re-Tain ® in

house in order to end our present reliance on an outside contractor.

The following table displays the changes in the balances of certain

accounts over this period (in thousands, except for percentages):

As of December 31,

$ (Decrease) Increase Over

% (Decrease) Increase Over

Cash, cash equivalents, short-term investments and long-term investments

3 unchanged sentences

Common shares outstanding (1)

(1) There were approximately 443,000 and 238,000 shares of common

stock reserved for issuance under stock options that were outstanding as of December 31, 2021 and 2015, respectively.

(1) Additionally,

there were approximately 605,000 and 238,000 shares of common stock reserved for issuance under stock options that were outstanding as

of December 31, 2022 and 2015, respectively.

Capacity Increase and Product Contamination

2018, it became clear that demand for Tri-Shield First Defense ® was outpacing production.

In response to this increasing

demand, we began a series of investments during 2019 to increase our production capacity for the First Defense ®

product line to approximately $30 million per year.

The necessary facility expansions and new equipment needed to increase production

capacity were in place by the end of 2022.

ITEM 7 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS , “Liquidity and Capital Resources”, for more detail about our production capacity.

ImmuCell Corporation

Animal Health Products

The First Defense ® product

line is manufactured from hyperimmunized cows’ colostrum (the antibody rich milk that a cow produces immediately after giving birth)

utilizing our proprietary vaccine and milk protein purification technologies.

The First Defense ® product line provides

bovine antibodies that newborn calves need but are unable to produce on their own immediately after birth.

The target disease, calf scours

(bovine enteritis), causes diarrhea and dehydration in newborn calves and often leads to serious sickness and even death.

Defense ® product line is the only USDA-licensed, orally delivered scours preventive product on the market for

calves with claims against E.

coli , coronavirus and rotavirus (three leading causes of scours).

A single dose of our product provides

a measured level of protection proven to reduce mortality and morbidity.

Our pre-formed antibody products provide Immediate Immunity™

during the first few critical weeks of life when calves need this protection most.

Studies have shown calves that scour are more susceptible

to other diseases later in life and under-perform calves that do not contract scours.

The direct, two-part mode-of-action of the First

Defense ® product line delivers specific immunoglobulins at the gut level to immediately protect against disease, while

also providing additional antibodies that are absorbed into the bloodstream.

These circulating antibodies function like a natural timed-release

mechanism, as they are re-secreted into the gut later to provide extended protection.

The First Defense ® product

line is convenient to use.

A calf needs to receive only one dose of First Defense ® within the first twelve hours

Our capsule format of this product, which requires no mixing, is stored at room temperature.

The gel tube formats of this

product require refrigeration in accordance with product label indications.

We are the market leader (in terms of both unit volume and

dollar sales) when compared to other calf-level scours preventatives and have greater market potential as we gain market share from the

dam-level (pre-calving scour vaccines) competitors.

The third quarter of 2021 marked the 30 th anniversary of the original USDA

approval of this product in 1991.

During the third quarter of 2021, our cumulative sales of First Defense ® since

inception exceeded 28,000,000 doses.

The First Defense ® product

line continues to benefit from wide acceptance by dairy and beef producers as an effective tool to prevent scours (diarrhea) in newborn

calves, which is the leading cause of death in preweaned calves.

Our Beyond Vaccination ® marketing campaign focuses

on providing antibodies without vaccination.

Unfortunately,

as this increased production capacity was coming online, a product contamination event was detected by standard in-process quality control

testing around the end of the third quarter of 2022.

Contamination events during 2022 (largely this one around the end of the third quarter)

resulted in a total charge to costs of goods sold of approximately $588,000.

We took immediate steps to address the contamination, and

production ran without issue during the balance of the fourth quarter of 2022.

Then during the first quarter of 2023 our standard in-process

quality control testing detected a second contamination event.

The related charge to costs of goods sold during the first quarter of

2023 is expected to be up to approximately $200,000, of which approximately $114,000 worth of product remains under evaluation.

we have slowed down our production output as we take the necessary steps to assess and remediate the issues and perform a deep sanitization

of our facilities and process equipment to ensure that any product that is put to market meets all quality standards.

We believe that

the ongoing implementation of our capacity expansion plans and the corrective actions being taken in response to these contamination

events should allow us to operate at the higher level of production output going forward without further significant contaminations.

We are working diligently to address the situation and believe we are taking the appropriate steps to emerge from this problem stronger

with the production capacity in place to produce approximately $30 million of product per year going forward.

production slowdown during the first quarter of 2023, has, in part, caused an increase in the amount of our order backlog from approximately

$2.5 million as of December 31, 2022 to approximately $8 million as of March 10, 2023.

However, we do not believe this backlog number

is highly relevant anymore as it includes very old orders, redundancy in demand and orders that may be cancelled.

We expect to report

reduced sales during the first quarter of 2023 and a large backlog as of March 31, 2023.

We are on track to produce approximately $3.2

million to $3.4 million of product during the first quarter of 2023, which is approximately 56% less than our $7.5 million quarterly

production target.

While this is less than we need, our remediation efforts are beginning to work as we cautiously come back into production.

Due to the loss in earned gross margin that is being incurred during the first quarter of 2023, we have made the decision to defer, for

the time being, completion of the incremental planned investment to increase our production capacity further to approximately $40 million

increase in sales demand for First Defense ® is both exciting and challenging for us.

One view is that we are operating

with short supply caused largely by contamination events on the First Defense ® side, while not yet achieving FDA

approval of Re-Tain ® .

However, the other view is that we are approaching both approximately $30 million in annual

production capacity for First Defense ® (with a flex option to get to approximately $40 million per year in the

future) while also advancing to the final stages of a very significant FDA product development initiative.

Health Products

First Defense ® product line is manufactured from hyperimmunized cows’ colostrum (the antibody rich milk that

a cow produces immediately after giving birth) utilizing our proprietary vaccine and milk protein purification technologies.

Defense ® product line provides bovine antibodies that newborn calves need but are unable to produce on their own immediately

The target disease, calf scours (bovine enteritis), causes diarrhea and dehydration in newborn calves and often leads to

serious sickness and even death.

The First Defense ® product line is the only USDA-licensed, orally delivered

scours preventive product on the market for calves with claims against E.

coli , coronavirus and rotavirus (three leading causes

A single dose of our product provides a measured level of protection proven to reduce mortality and morbidity.

Our pre-formed

antibody products provide Immediate Immunity™ during the first few critical weeks of life when calves need this protection

Studies have shown calves that scour are more susceptible to other diseases later in life and under-perform calves that do not

contract scours.

The direct, two-part mode-of-action of the First Defense ® product line delivers specific immunoglobulins

at the gut level to immediately protect against disease, while also providing additional antibodies that are absorbed into the bloodstream.

These circulating antibodies function like a natural timed-release mechanism, as they are re-secreted into the gut later to provide extended

The First Defense ® product line is convenient to use.

A calf needs to receive only one dose of First

Defense ® within the first twelve hours after birth.

Our capsule format of this product, which requires no mixing,

is stored at room temperature.

The gel tube formats of this product require refrigeration in accordance with product label indications.

We are the market leader (in terms of both unit volume and dollar sales) when compared to other calf-level scours preventatives and have

greater market potential as we gain market share from the dam-level (pre-calving scour vaccines) competitors.

The third quarter of 2021

marked the 30 th anniversary of the original USDA approval of this product in 1991.

During the third quarter of 2022, our cumulative

sales of First Defense ® since inception exceeded 30 million doses.

First Defense ® product line continues to benefit from wide acceptance by dairy and beef producers as an effective

tool to prevent scours (diarrhea) in newborn calves, which is the leading cause of death in preweaned calves.

Our Beyond Vaccination ®

marketing campaign focuses on providing antibodies without vaccination.

A 100% vaccine protection rate is biologically impossible.

The First Defense ®

product line removes the variability associated with a scour vaccine response and instead provides a measured level of pre-formed antibodies,

protecting each calf with an equal level of scours protection.

There is a strong link between how we sell our product and the challenges

we face in producing it.

We know better than most how variable a cow’s response is to any vaccine.

We see this in every batch of

First Defense ® that we produce.

The value in First

Defense ® is that we adjust for this variability by

standardizing the antibody content, as needed, so the newborn is given a steady, equal level of protection with each dose.

This technology

removes a producer’s reliance on variable vaccine responses to generate passive antibody protection and instead protects every calf

equally with a measured dose of Immediate Immunity ™ against

The First Defense ® product line removes the variability associated with a scour vaccine response and instead provides

a measured level of pre-formed antibodies, protecting each calf with an equal level of scours protection.

There is a strong link between

how we sell our product and the challenges we face in producing it.

We know better than most how variable a cow’s response is to

We see this in every batch of First Defense ® that we produce.

The value in First Defense ®

is that we adjust for this variability by standardizing the antibody content, as needed, so the newborn is given a steady,

equal level of protection with each dose.

This technology removes a producer’s reliance on variable vaccine responses to generate

passive antibody protection and instead protects every calf equally with a measured dose of Immediate Immunity™ against

the most common scour pathogens.

Plus, an effectively treated calf is much less likely to require expensive antibiotic treatments

and build antibiotic resistance.

Plus, an effectively treated calf is much less likely to require expensive antibiotic treatments and

build antibiotic resistance.

We are the only manufacturer within the scour prevention space offering polyclonal multi-pathogen antibodies.

The market is learning that the best preventative for scours may not be a vaccine, and we are continuing to educate the market about the

health benefits of a measured dose of pre-formed antibodies.

The product line extension, Tri-Shield First

is the first calf-level, passive antibody product on the market with USDA-approved disease claims providing Immediate Immunity™

against each of the three leading causes of calf scours ( E.

The market is learning that the best preventative for scours may not be a vaccine, and we are continuing to educate the market about

the health benefits of a measured dose of pre-formed antibodies.

product line extension, Tri-Shield First Defense ® , is the first calf-level, passive antibody product on the

market with USDA-approved disease claims providing Immediate Immunity™ against each of the three leading causes of calf

coli , coronavirus and rotavirus).

This product achieved USDA approval

during the fourth quarter of 2017 and was listed with the Organic Materials Research Institute (OMRI) during the first quarter of 2019,

which means it can be used on organic farms.

This product achieved USDA approval during the fourth quarter of 2017 and was

listed with the Organic Materials Research Institute (OMRI) during the first quarter of 2019, which means it can be used on organic

Tri-Shield ® combines the E.

coli and coronavirus antibodies

contained in our bivalent product with rotavirus antibodies in a single-dose gel tube delivery format.

This unique breadth of claims

further differentiates our product from calf-level competitive products on the market that contain only one or two of these label claims.

The unique virus-like particle (VLP) technology that is used in our production process increases rotavirus titers in colostrum to a level

much greater than traditional vaccine technology can.

coli and coronavirus antibodies contained in our bivalent product

with rotavirus antibodies in a single-dose gel tube delivery format.

This unique breadth of claims further differentiates our

product from calf-level competitive products on the market that contain only one or two of these label claims.

The unique virus-like

particle (VLP) technology that is used in our production process increases rotavirus titers in colostrum to a level much greater

than traditional vaccine technology can.

Because it is possible that some farms may not have (or perceive to have) a rotavirus

problem, we are continuing to sell the bivalent formats of the First Defense ® product

line as options for customers.

ImmuCell Corporation

problem, we are continuing to sell the bivalent formats of the First Defense ® product line as options for

Historically,

the most common tool to help combat scours has been to vaccinate the mother cow (dam) with a scours vaccine and deliver the antibodies

that she produces to the newborn.

It is generally believed that only 80% of animals respond to a vaccine, which could leave about 20%

of calves unprotected.

We believe that the variability in a cow’s immune response to vaccines creates a sales opportunity for our

that she produces in her milk to the newborn.

It is generally believed that only 80% of animals respond to a vaccine, which could leave

about 20% of calves unprotected.

We believe that the variability in a cow’s immune response to vaccines creates a sales opportunity

for our product.

Additionally, our research suggests that treatment protocols for dam-level scours vaccine programs are not always followed,

2 unchanged sentences

Our marketing campaign,

Beyond Vaccination ® , emphasizes that by delivering Immediate Immunity™

directly to the calf via the First Defense ® product line, producers can reduce stress-causing injections to

Reliance on a dam-level scours vaccine requires that money be spent before it is known whether the cow is carrying a viable,

With the First Defense ® product line, that investment can be

targeted to the calves that are most critical to the operation.

This, in turn, can free up space in the cow’s vaccination schedule

to improve her immune response to vaccines that are critical to her health.

Preventing newborn calves from becoming sick

helps them to reach their genetic potential and reduces the need to use treatment antibiotics later in life.

We believe that the long-term

growth in sales of the First Defense ® product line may reflect, at least in part, the success of our strategic decision

to invest in additional sales and marketing efforts to help us introduce the expanding First Defense ® product line

to new customers.

Our communications campaign continues to emphasize how the unique ability of the First Defense ® product

line to provide Immediate Immunity™ generates a dependable and competitive return on investment for dairy and beef producers.

First Defense Technology ®

is a unique whey protein concentrate that is processed utilizing our proprietary colostrum (first milk) protein purification methods,

for the nutritional and feed supplement markets without the claims of our USDA-licensed product.

During 2012, we initiated a limited launch

of a gel tube delivery format of our First Defense Technology ® in a gel solution.

We achieved USDA claims for this

product format during the fourth quarter of 2018 and Canadian approval during the first quarter of 2019, and it is now being sold as Dual-Force

First Defense ® .

We are selling the same concentrated whey proteins in a bulk powder format (no capsule), which is delivered

with a scoop and mixed with colostrum for feeding to calves.

We are working to achieve USDA claims for this product format.

Milk Products, LLC of Chilton, Wisconsin launched commercial sales of their product, Ultra Start ® 150 Plus and certain

similar private label products, which are colostrum replacers with First Defense Technology ® Inside .

During 2001, we began to offer our own, internally

developed California Mastitis Test (CMT) .

CMT is most often used as a quick on-farm diagnostic to determine which quarter

of the udder is mastitic.

This test can be performed at cow-side for early detection of mastitis.

CMT products are also made by

other manufacturers and are readily available to the dairy producer.

In connection with our acquisition of certain gel formulation technologies

during the first quarter of 2016, we acquired private label manufacturing rights covering a feed supplement product sold by Genex Cooperative,

Beyond Vaccination ® , emphasizes that by delivering Immediate Immunity™ directly to the calf via the

First Defense ® product line, producers can reduce stress-causing injections to the cow.

Reliance on a dam-level

scours vaccine requires that money be spent before it is known whether the cow is carrying a viable, valued calf.

With the First Defense ®

product line, that investment can be targeted to the calves that are most critical to the operation.

This, in turn, can free

up space in the cow’s vaccination schedule to improve her immune response to vaccines that are critical to her health.

newborn calves from becoming sick helps them to reach their genetic potential and reduces the need to use treatment antibiotics later

We believe that the long-term growth in sales of the First Defense ® product line may reflect, at least

in part, the success of our strategic decision to invest in additional sales and marketing efforts to help us introduce the expanding

First Defense ® product line to new customers.

Our communications campaign continues to emphasize how the unique

ability of the First Defense ® product line to provide Immediate Immunity™ generates a dependable and

competitive return on investment for dairy and beef producers.

Defense Technology ® is a unique whey protein concentrate that is processed utilizing our proprietary colostrum (first

milk) protein purification methods, for the nutritional and feed supplement markets without the claims of our USDA-licensed product.

During 2012, we initiated a limited launch of a gel tube delivery format of our First Defense Technology ® in a

gel solution.

We achieved USDA claims for this product format during the fourth quarter of 2018 and Canadian approval during the first

quarter of 2019, and it is now being sold as Dual-Force First Defense ® .

We are selling the same concentrated whey

proteins in a bulk powder format (no capsule), which is delivered with a scoop and mixed with colostrum for feeding to calves.

working to achieve USDA claims for this product format.

During 2011, Milk Products, LLC of Chilton, Wisconsin launched commercial sales

of their product, Ultra Start ® 150 Plus and certain similar private label products, which are colostrum replacers with

First Defense Technology ® Inside .

2001, we began to offer our own, internally developed California Mastitis Test (CMT) .

CMT is most often used as a quick

on-farm diagnostic to determine which quarter of the udder is mastitic.

This test can be performed at cow-side for early detection of

CMT products are also made by other manufacturers and are readily available to the dairy producer.

In connection with

our acquisition of certain gel formulation technologies during the first quarter of 2016, we acquired private label manufacturing rights

covering a feed supplement product sold by Genex Cooperative, Inc.

of Shawano, Wisconsin.

This product was discontinued by mutual agreement during the first quarter of 2022.

Annual sales of this product

were less than $170,000 during the years ended December 31, 2021 and 2020.

Sales and Markets

This product was discontinued by mutual agreement

during the first quarter of 2022.

Annual sales of this private label product were less than $170,000 during each of the years ended December

31, 2021 and 2020.

Our sales and marketing team consists of one vice

president, one commercial research and technical services veterinarian, one director of marketing and customer service and eight regional

The First Defense ® product line and CMT are sold primarily through major animal health distributors

who, in turn, sell to veterinary clinics, fleet stores and direct to farms.

Sales of the First Defense ® product

line are normally seasonal, with higher sales expected during the first quarter, largely driven by the beef calving season, which runs

primarily from January to April, unlike the dairy industry in which operations generally calve year round.

Warm and dry weather reduces

the producer’s perception of the need for a disease preventative product like the First Defense ® p roduct line.

However, heat stress on calves caused by extremely hot summer weather can increase the incidence of scours, just as harsher winter weather

benefits our sales.

Other competition for resources that dairy producers allocate to their calf enterprises has been increased by the

many new products (principally feed supplements) that have been introduced to the calf market.

Despite the market volatility affecting

both milk prices and feed costs, we continue to increase our sales.

ImmuCell Corporation

We estimate that the total U.S.

market for scours

preventative products (including sales of our product) that are given to newborn calves (the calf-level market) is approximately $24 million

With the additional claim for our new product ( Tri-Shield First Defense ® ) against rotavirus, we are now

also competing against the dam-level vaccine products that are given to the mother cow to increase the antibody level against specific

scours-causing pathogens in the colostrum that she produces for her newborn.

We estimate that the dam-level product category covers approximately

twice as many calves as the calf-level product segment reaches.

We estimate that the total domestic addressable market (both calf and

dam levels) is approximately $70 million per year.

president, one commercial research and technical services veterinarian, one commercial leader of stakeholder engagement, one director

of marketing and customer service and eight regional sales managers.

The First Defense ® product line and CMT

are sold primarily through major animal health distributors who, in turn, sell to veterinary clinics, fleet stores and direct to farms.

Sales of the First Defense ® product line are normally seasonal, with higher sales expected during the first quarter,

largely driven by the beef calving season, which runs primarily from January to April, unlike the dairy industry in which operations generally

calve year round.

Warm and dry weather reduces the producer’s perception of the need for a disease preventative product like the

First Defense ® product line.

However, heat stress on calves caused by extremely hot summer weather can increase

the incidence of scours, just as harsher winter weather benefits our sales.

Other competition for resources that dairy producers allocate

to their calf enterprises has been increased by the many new products (principally feed supplements) that have been introduced to the

Despite the market volatility affecting both milk prices and feed costs, we expect to continue to increase our sales over

the long term (despite a drop in 2022).

estimate that the total U.S.

market for scours preventative products (including sales of our product) that are given to newborn calves

(the calf-level market) is approximately $27.9 million per year.

With the additional claim for our new product ( Tri-Shield First Defense ® )

against rotavirus, we are now also competing against the dam-level vaccine products that are given to the mother cow to increase the

antibody level against specific scours-causing pathogens in the colostrum that she produces for her newborn.

We estimate that the dam-level

product category covers approximately twice as many calves as the calf-level product segment reaches.

We estimate that the total domestic

addressable market (both calf and dam levels) is approximately $74.5 million per year.

on market share information that we purchase from the leading source of this data for the animal health sector, we are gaining market

share in the United States year after year with our Beyond Vaccination ® strategy.

We aim to continue these

market share gains in both the dairy and beef segments.

Our share of the market (on a unit volume basis) of scour preventative products

administered at the calf-level was approximately:

Our share of the market of calves treated with

products administered to calves and those administered to the dam prior to calving (adjusting for two doses of dam-level scour vaccines

required for primary vaccination of first-calf heifers) was approximately:

We continue our efforts to grow sales of the First

Defense ® product line in North America, where there are approximately 40 million dairy and beef cows in the United

States and 4.5 million dairy and beef cows in Canada.

We believe that significant market opportunities exist in other international territories.

share in the United States year after year.

We aim to continue these market share gains in both the dairy and beef segments.

of the market (calculated on the basis of calves treated) of the scour preventative products administered at the calf-level was approximately:

share of the market (calculated on the basis of calves treated) of both products administered at the calf-level and vaccines administered

to the dam prior to calving (adjusting for two doses of dam-level scour vaccines required for primary vaccination of first-calf heifers)

was approximately:

continue our efforts to grow sales of the First Defense ® product line in North America, where there are approximately

40 million dairy and beef cows in the United States and approximately 4.5 million dairy and beef cows in Canada.

We believe that significant

market opportunities exist in other international territories.

The majority of our international sales are to Canada.

We price our products in U.S.

To the extent that the value of the dollar

declines with respect to any other currency, our competitive position may be enhanced.

Conversely, an increase in the value of the dollar

in any country in which we sell products may have the effect of increasing the local price of our products, thereby leading to a potential

reduction in demand.

Generally, our international sales have been generated through relationships with in-country distributors that have

knowledge of the local regulatory and marketing requirements.

We are initiating our plan to expand the number of countries to which our

First Defense ® product line is approved for export.

Generally, it is our intent to be the holder of these product

registrations for each country rather than rely on distribution partners to gain and hold these registrations.

This is a long regulatory

process but allows us to maximize the use of our product label claims.

The statistics above are provided by an industry compilation of

USDA data for 2022.

Industry practices, economic conditions, cause of disease, distribution channels and regulatory requirements may differ

in these international markets from what we experience in North America, potentially making it more difficult or costly for us to generate

and sustain sales volumes at profitable margins in these markets.

We price our products

To the extent that the value of the dollar declines with respect to any other currency, our competitive position may

Conversely, an increase in the value of the dollar in any country in which we sell products may have the effect of increasing

the local price of our products, thereby leading to a potential reduction in demand.

Generally, our international sales have been generated

through relationships with in-country distributors that have knowledge of the local regulatory and marketing requirements.

We are initiating

our plan to expand the number of countries to which our First Defense ® product line is approved for export.

it is our intent to be the holder of these product registrations for each country rather than rely on distribution partners to gain and

hold these registrations.

This is a long regulatory process but allows us to maximize the use of our product label claims.

Industry practices,

economic conditions, cause of disease, distribution channels and regulatory requirements may differ in these international markets from

what we experience in North America, potentially making it more difficult or costly for us to generate and sustain sales volumes at profitable

margins in these markets.

introduced First Defense ® into South Korea in 2005 through Medexx Co., Ltd of Gyeonggi-do, Korea and its equivalent

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the registration of Tri-Shield First Defense ® .

The business in Japan is currently

not active, but we are working to resume sales in this territory.

We entered into distribution contracts covering certain Middle Eastern

countries with Triplest for Drugs and Trade of Madaba, Jordan during the first quarter of 2017 (no sales have yet been achieved under

this contract) and covering Iran with Senikco, LLC of Laguna Niguel, California during the fourth quarter of 2016 (sales have been initiated

under this contract).

We are investigating the requirements to sell the First Defense ® product line in Mexico.

Re-Tain ® , we are working to expand our product offerings to include an intramammary treatment for subclinical mastitis

for the mother cow during lactation.

Nisin (the active ingredient in Re-Tain ® ) is a naturally-occurring polypeptide

antimicrobial that is not used in human medicines and could alleviate some of the social and public health concerns that the widespread

use of antibiotics encourages the growth of antibiotic-resistant bacteria (“superbugs”).

Mastitis (inflammation of the mammary

gland) is estimated to cost the U.S.

dairy industry approximately $2 billion in economic harm per year, which makes it the most costly

The business in Japan is currently not active, but we are working

to resume sales in this territory.

We entered into distribution contracts covering certain Middle Eastern countries with Triplest for

Drugs and Trade of Madaba, Jordan during the first quarter of 2017 (no sales have yet been achieved under this contract) and covering

Iran with Senikco, LLC of Laguna Niguel, California during the fourth quarter of 2016 (sales have been initiated under this contract).

We are investigating the requirements to sell the First Defense ® product line in Mexico, Pakistan and Israel.

Re-Tain ® , we are working to expand our product portfolio to include an intramammary infusion for the treatment

of subclinical mastitis in lactating dairy cows.

Mastitis is inflammation of the mammary gland typically associated with a bacterial

It is estimated to cost the U.S.

dairy industry approximately $2 billion in economic harm per year.

It is the most costly

and common disease affecting the dairy industry.

The disease diminishes the saleable quantity and overall value of milk, in addition

to causing other herd health and productivity losses.

While the benefit of treating clinical mastitis is widely known, subclinical mastitis

(those cases where cows have infected udders, but still produce saleable milk) is associated with its own significant economic losses

and is recognized as a substantial contributor to clinical mastitis cases.

There is a growing awareness of the cascade of adverse events

and conditions associated with subclinical mastitis for both the dairy producer and the milk processor, including reduced or foregone

milk quality premiums, lower milk production (some have estimated approximately 1,500 pounds of lost milk, or about $270 at $18.00 per

hundredweight, per infected cow), shorter shelf life for fluid milk, lower yields and less flavor for cheese, higher rates of clinical

mastitis, lower conception rates, increased abortions and increased cull rates.

Some industry experts have estimated that subclinical

mastitis costs the U.S.

dairy industry approximately $1 billion per year.

Currently, treatment of subclinical mastitis is limited because

it cannot be visibly detected and treatment requires a milk discard, which is costly.

ImmuCell Corporation

The USDA’s National Animal Health Monitoring

System through its Dairy 2014 study suggests that 21% of all dairy cows are treated per year with a mastitis drug, of which approximately

51% are treated with third generation cephalosporins.

Many fear that the possible overuse of antibiotics in livestock undermines the effectiveness

of these drugs to combat human illnesses and contributes to a rising number of life-threatening human infections from antibiotic-resistant

bacteria, commonly known as “superbugs”.

The FDA is committed to addressing this public health risk.

Citing concerns about

untreatable, life-threatening infections in humans, new FDA and European regulations are aimed at restricting the use of antibiotics (including

cephalosporins) in food animals and at improving milk quality.

Regulators have recently increased their monitoring of antibiotic residues

in milk and meat.

During the first quarter of 2012, the USDA reduced the allowable level of somatic cell counts (SCC) in milk from 750,000

(cells per milliliter) to 400,000 at the individual farm level (not a blended calculation of comingled milk) in order to qualify for an

EU health certification for export.

The FDA’s Veterinary Feed Directive (VFD)

became effective January 1, 2017, restricting the use of medically important antibiotics for performance purposes and requiring more oversight

of antibiotic usage in food producing animals by a veterinarian.

More regulatory and private sector changes and restrictions relating

to antibiotic usage appear to be likely.

Several major food processors and retailers have implemented policies addressing this growing

public health concern.

This would not be a concern for Re-Tain ® because Nisin is not used for human health.

the risk of antibiotic residues and slowing the development of antibiotic-resistant organisms, we can improve food quality and preserve

medically important antibiotics for human disease treatment.

This current environment is favorable to the introduction of our new product

as an alternative to traditional antibiotics such as penicillin and cephalosporins.

We believe that this changing environment of new regulations

and public opinion supports the value of our ongoing development and commercialization efforts for Re-Tain ® .

Additionally,

we believe that the use of our First Defense ® product line is consistent with this trend of reducing the use of

antibiotics because the prevention of calf scours early in life with our purified colostrum antibodies can reduce the need for treatment

antibiotics later in a calf’s life.

We believe that Re-Tain ® could

revolutionize the way that mastitis is treated by making earlier treatment of subclinically infected cows (while these cows are still

producing saleable milk) economically feasible by not requiring a milk discard during, or for a period of time after, treatment, which

would be a significant competitive advantage for our product.

No other FDA-approved mastitis treatment product on the market can offer

this value proposition.

It is generally current practice to treat mastitis only when the disease has progressed to the clinical stage

where the milk from an infected cow cannot be sold.

Because the milk from cows treated with traditional antibiotics must be discarded,

most dairy producers simply do not treat subclinically infected cows.

The ability to treat such cases without a milk discard could revolutionize

the way mastitis is managed in a herd.

It is common practice to move sick cows from their regular herd group to a sick cow group for treatment

and the related milk discard.

This movement causes stress on the cow and a reduction in milk production.

While practices may vary farm-to-farm,

there would be no requirement to move cows treated with our product, allowing this costly drop in production to be avoided.

likely will be priced at a premium to the traditional antibiotic products currently on the market, which are all sold subject to a milk

discard requirement.

Common milk discard periods cover the duration of treatment and extend from 1.5 to 3 days after last treatment, depending

on the antibiotic.

On average, a cow produces approximately 60 to 80 pounds of milk per day.

While milk prices vary significantly, at

an average value of $18.00 per 100 pounds, a cow produces approximately $10.80 to $14.40 worth of milk per day.

These estimated figures

would result in milk discard costs ranging from approximately $37.80 (for 3.5 days of milk at 60 pounds per day) to $158.40 (for 11 days

of milk at 80 pounds per day) per treated animal.

This illness is categorized as either clinical mastitis or subclinical mastitis.

mastitis infections cause visibly abnormal milk which cannot be sold.

On the other hand, subclinical mastitis infections do not

cause any visible changes in milk or udder appearance, making it difficult to detect.

Most mastitis cases treated today are those that

reach the clinical stage even though it is understood that clinical cases are only the tip of the mastitis iceberg.

Milk from cows with

subclinical mastitis can still be sold if not treated with traditional antibiotics.

Milk from cows treated with traditional antibiotics

must be discarded for the duration of the treatment and for 1.5 to 4 days after the last treatment, depending on the antibiotic that

The cost of that milk discard along with the stress and risk in moving the cow to the hospital pen is thought to be the primary

reasons more subclinical mastitis cases are not treated today.

However, the cascade of negative events triggered by subclinical mastitis

for both the dairy producer and the milk processor are significant.

These include lower milk production (some have estimated approximately

1,500 pounds of lost milk, or about $270 at $18.00 per hundredweight per infected cow per lactation), higher rates of clinical mastitis,

lower conception rates, increased abortions, increased cull rates, reduced or foregone milk quality premiums, shorter shelf life for

fluid milk, and both lower yields and less flavor for cheese.

Cows with subclinical mastitis maintain a reservoir of infection within

the herd and increase exposure of healthy cows to contagious pathogens.

Subclinical mastitis also increases the risk of various quality

defects on a variety of final dairy products.

active ingredient in Re-Tain ® is pharmaceutical-grade Nisin-A.

FDA approval for this drug would establish an entirely

new class of anti-infective that is different from those currently available to treat mastitis.

This new class, called bacteriocins,

are anti-microbial polypeptides with no resistance risk for human health.

Bacteriocins selectively target Gram+ bacteria, the same bacteria

that commonly cause mastitis.

We expect Re-Tain ® will be the first FDA-approved intramammary treatment for subclinical

mastitis without a milk discard or meat withhold.

This gives us the opportunity to revolutionize the way mastitis is treated, since Re-Tain ®

is specifically designed to treat ahead of clinical signs without a milk discard and, as a result, cows can reach their peak milk

production and not be sent to the hospital pen.

likely will be priced at a premium to the traditional antibiotic products currently on the market, which are all sold subject to

a milk discard requirement.

We estimate that the approximate cost to the U.S.

dairy industry of this discarded milk

may be around $300 million per year.

These high milk discard costs associated with traditional antibiotic treatments lead producers to

only treat mastitis after clinical signs develop.

The Re-Tain ® label

will be for subclinical mastitis (not clinical).

Without a milk discard cost, we expect producers to be more motivated to identify and

treat cows at the subclinical stage.

We believe that the product’s value proposition demonstrates a return on investment

to the dairy producer and the milk processor that will justify a premium over other mastitis treatments on the market today.

ImmuCell Corporation

It is difficult to accurately estimate the potential

size of the market for the treatment of subclinical mastitis because presently this disease is largely left untreated.

We believe that

approximately 20-40% of the U.S.

dairy industry of this discarded milk may be around $300

million per year.

These high milk discard costs associated with traditional antibiotic treatments lead producers to only treat mastitis

after clinical signs develop.

The Re-Tain ® label will be for subclinical mastitis (not clinical).

Without a milk

discard cost, we expect producers to be more motivated to identify and treat cows at the subclinical stage.

We believe that the product’s

value proposition demonstrates a return on investment to the dairy producer and the milk processor that will justify a premium over other

mastitis treatments on the market today.

is difficult to accurately estimate the potential size of the subclinical mastitis market because presently this disease is largely left

We believe that approximately 20% to 40% of the U.S.

dairy herd is infected with subclinical mastitis at any given time.

This compares to approximately 2%

herd that is thought to be infected with clinical mastitis, where approximately $60 million per year is spent on drug treatments.

Finding candidate cows will require farms to obtain monthly individual cow somatic cell count (SCC) data through participation in organizations

such as the National Dairy Herd Improvement Association (DHIA) or by installing monitors to indicate high SCC cows or a potential health

DHIA testing can provide this data monthly, and emerging technology can provide this data real-time.

Testing results at an elevated

level could indicate a good treatment candidate.

Likewise, testing results showing a reduced level after treatment could indicate a treatment

To reach the portion of the market that does not have access to this data presently, we would need to show new customers that

the benefit of using our product is worth the roughly $2.00 per cow per month test cost.

Similar market opportunities are likely to exist

outside the U.S.

We believe the use of Re-Tain ® could be expanded, with additional data and regulatory approval,

to support treatment late in lactation and possibly for clinical stage mastitis.

We also believe there may be a market for Re-Tain ®

in small ruminants, where the majority of mastitis cases are caused by strep-like organisms aligned with our effectiveness data.

Based on consultations with industry experts

and key opinion leaders, we have opted to carefully control the launch of this novel product over the first eighteen months or so after

FDA approval, as we seek to revolutionize the way that mastitis is treated in the dairy industry over the long term.

Through our direct

sales team, our goal is to create exceptional customer experiences with first adopters.

We believe that the resulting positive customer

testimonials should help create the momentum necessary to optimize product sales over the longer period.

Our goal is to help early adopters

select treatment candidates, develop easy to use protocols, optimize treatment results and realize a positive return on their investment.

We intend to limit initial distribution of Re-Tain ® to a level that enables our sales team to select the optimal

dairy farms at which to introduce Re-Tain ® and to limit the initial numbers of participating farms so that the desired

levels of support and guidance relating to effective usage of Re-Tain ® can be provided with our available resources.

believe that the operational adjustments and accommodations that dairy farmers will need to make to effectively use Re-Tain ®

will not be so burdensome as to deter its adoption and usage.

compares to approximately 2% of the U.S.

herd that is thought to be infected with clinical mastitis, where approximately $60 million

per year is spent on drug treatments.

Rarely is an industry revolutionized overnight.

Getting producers to change protocols to make subclinical

mastitis treatment a standard and routine procedure is going to take initiative, but we believe producers are eager for something new

and better since the FDA has not approved an intramammary treatment within the last 20 years.

Similar market opportunities are likely

to exist outside the United States.

We believe the use of Re-Tain ® could be expanded, with additional data and

regulatory approval, to support treatment late in lactation and possibly for clinical stage mastitis.

We also believe there may be a

market for Re-Tain ® in small ruminants, where the majority of mastitis cases are caused by strep-like organisms

aligned with our effectiveness data.

on consultations with industry experts and key opinion leaders, we have opted to carefully control the launch of this novel product over

the first 18 to 24 months after FDA approval, as we seek to transform the way that mastitis is treated in the dairy industry over the

Our goal is to help early adopters select treatment candidates, develop easy to use protocols, optimize treatment results

and realize a positive return on their investment.

We intend to limit initial distribution of Re-Tain ® to a level

that enables our sales team to select the optimal dairy farms at which to introduce Re-Tain ® and to limit the initial

numbers of participating farms so that the desired levels of support and guidance relating to effective usage of Re-Tain ®

can be provided with our available resources.

Our overarching objective is to minimize the risk of early stage unsatisfactory

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launch strategies.

We are developing detailed launch plans, focusing on the readiness of dairy operators to successfully introduce Re-Tain ®

to their herds.

We believe that these prudent steps, while potentially leading to lower initial Re-Tain ® revenues,

may create a smooth and successful launch and could safeguard the longer term performance of our investment in Re-Tain ® .

In the big picture, we are introducing an entirely

new class of antimicrobial as an animal drug, a bacteriocin, that does not promote resistance against antibiotics used in human medicine

making it more socially responsible.

As the great NHL hockey player, Wayne Gretzky, is known to have said, “I skate to where the

puck is going to be, not where it has been.” This is motivational to us.

We believe our product fits very well with where the industry

is going to be in the coming years.

Sustainability objectives of the industry require that less antibiotics be used in food producing

animals, yet a new product to treat mastitis has not been developed in years (other than new formulations of the same old stuff).

over-use of antibiotics that are medically important to human healthcare is a growing concern of our society and an active issue with

the FDA, largely because of the growing evidence that this over-use contributes to antibiotic resistance and the rise of “super-bugs”.

The industry could keep treating this very significant disease with traditional antibiotics, but it takes innovation to bring a polypeptide

antimicrobial like Nisin to market.

We continue to develop detailed launch plans, focusing on the readiness of dairy operators to successfully introduce

Re-Tain ® to their herds.

We believe that these prudent steps, while potentially leading to lower initial Re-Tain ®

revenues, may create a smooth and successful launch and could safeguard the longer term performance of our investment in Re-Tain ® .

Nisin is a naturally occurring bacteriocin that is not used in human medicines, it could alleviate some of the social and public health

concerns that the widespread use of antibiotics encourages the growth of antibiotic-resistant bacteria.

For example, there is a fear

that the possible overuse of antibiotics in livestock undermines the effectiveness of these drugs to combat human illnesses and contributes

to a rising number of life-threatening human infections from antibiotic-resistant bacteria, commonly known as “superbugs”.

The FDA has expressed a commitment to addressing this public health risk.

Citing concerns about untreatable, life-threatening infections

in humans, new FDA and European regulations are aimed at restricting the use of antibiotics (including cephalosporins) in food animals

and at improving milk quality.

By reducing the risk of antibiotic residues and slowing the development of antibiotic-resistant organisms,

we believe that we can improve food quality and preserve medically important antibiotics for human disease treatment.

This current environment

is favorable to the introduction of our new product as an alternative to traditional antibiotics such as penicillin and cephalosporins.

We believe that this changing environment of new regulations and public opinion supports the value of our ongoing development and commercialization

efforts for Re-Tain ® .

Additionally, we believe that the use of our First Defense ® product

line is consistent with this trend of reducing the use of antibiotics because the prevention of calf scours early in life with our purified

colostrum antibodies can reduce the need to use treatment antibiotics later in a calf’s life.

the big picture, we are introducing an entirely new class of antimicrobials as an animal drug, a bacteriocin, that does not promote resistance

against antibiotics used in human medicine, making it more socially responsible.

As the great NHL hockey player, Wayne Gretzky, is known

to have said, “I skate to where the puck is going to be, not where it has been.” This is motivational to us.

We believe our

product fits very well with where the industry is going to be in the coming years.

Sustainability objectives of the industry require

that less antibiotics be used in food producing animals, yet a new product to treat mastitis has not been developed in years (other than

new formulations of the same old stuff).

The over-use of antibiotics that are medically important to human healthcare is a growing concern

of our society and an active issue with the FDA, largely because of the growing evidence that this over-use contributes to antibiotic

The industry could keep treating this very significant disease with traditional antibiotics, but it takes innovation to bring

a bacteriocin like Nisin to market.

Re-Tain ® will, when introduced, offer a needed alternative to these traditional

antibiotics, while at the same time improving milk quality and the quantity of milk produced by treated cows.

We also know that animals

infected with subclinical mastitis have higher abortion rates and often progress to the clinical disease state.

We believe that societal

animal welfare objectives will put more and more pressure on the industry to treat cows with subclinical infections.

ImmuCell Corporation

We expect the Drug Substance production facility

that we constructed for approximately $20.8 million to have initial annual production capacity sufficient to meet at least $10 million

in sales of Re-Tain ® at current production yields.

This production capacity estimate does not yet reflect any inventory

build strategies or ongoing yield improvement initiatives.

Expansion of the estimated

annual capacity of the Drug Substance facility beyond approximately $10 million (without factoring in potential yield improvements) would

require relocation of the Drug Product formulation and aseptic filling module to another facility, or the acquisition and equipping of

other Drug Substance production facilities or adopting alternative manufacturing strategies.

As disclosed in previously filed reports, we

have made preliminary assessments and estimates relating to the market opportunity for Re-Tain ® , both during and

after its initial launch, and have described the principal challenges facing the launch of a new product by a company such as ours with

limited sales, marketing and financial resources into a competitive market populated with several global pharmaceutical enterprises.

expect annual sales to be well below the $36.1 million level that we previously estimated as the potential of the market opportunity for

our product five years after product launch.

This is because we are taking a more controlled launch approach, respecting the challenges

of introducing a paradigm changing technology.

We are going to be very transparent with the launch of Re-Tain ® .

To that end, we have expanded Note 17, “Segment Information”, to the accompanying audited financial statements to now display

a break-out of our financial results among the following two components of our business:

i) First Defense ® and ii)

This will allow investors to see our progress with both products.

We generally do not provide financial

projections, as we know such projections can prove to be materially inaccurate.

However, in this case, we are providing a high-level projection

for Re-Tain ® that under this controlled launch plan strategy, we think we can achieve sales of approximately $1

million in 2023 and then about double that in 2024.

This assumes FDA approval is achieved and that product launch is initiated around

the beginning of the fourth quarter of 2022.

If we are successful with this launch strategy, we would aim to grow this curve in 2024 and

We believe this strategy lends itself to a more gradual adoption curve but higher and more sustainable sales over the long-term.

We believe that societal animal welfare objectives will put more and more pressure on the industry to treat cows with subclinical

expect the Drug Substance production facility that we constructed for approximately $20.8 million to have initial annual production capacity

sufficient to meet at least $10 million in sales of Re-Tain ® at current production yields.

This production capacity

estimate does not yet reflect any inventory build strategies or ongoing yield improvement initiatives.

Expansion of the estimated annual

capacity of the Drug Substance facility beyond approximately $10 million (without factoring in potential yield improvements) would require

relocation of the Drug Product formulation and aseptic filling module to another facility, or the acquisition and equipping of other

Drug Substance production facilities or adopting alternative manufacturing strategies.

an effort to provide greater visibility into the launch of Re-Tain ® , we have expanded Note 17, “Segment Information”,

to the accompanying audited financial statements to now display a break-out of our financial results among the following three components

of our business:

i) Scours, ii) Mastitis and iii) Other.

This will allow investors to see our progress with both product lines.

do not provide financial projections, as we know such projections can prove to be materially inaccurate.

However, in this case, we are

providing a high-level projection for Re-Tain ® that under our controlled launch plan strategy, we estimate that

we can achieve sales of approximately $1 million in 2024 and then achieve approximately twice that in 2025.

This assumes FDA approval

is achieved and that product launch is initiated around the end of 2023.

If we are successful with this launch strategy, we would aim

to grow this curve in 2026 and after.

We believe this strategy lends itself to a more gradual adoption curve but higher and more sustainable

sales over the long-term.

Actual sales results will vary from these projections up or down.

Through both continued growth in sales of the First

Defense ® product line and a successful launch of Re-Tain ®

as soon as possible and with a measured approach to expanding our customer-facing staff, it is our objective to increase our current annual

level of total product sales of just over $19 million to approximately $23 million.

As additional resources are dedicated to production,

sales, marketing and technical services, our longer-term goal is to exceed $35 million of annual total product sales as soon as possible

during the five-year period after the market launch of Re-Tain ® .

Product Development

The majority of our product development spending

has been focused on the development of Re-Tain ® ,

our purified Nisin treatment for subclinical mastitis in lactating cows.

During the 22-year period that began on January 1, 2000 and ended

on December 31, 2021, we invested an aggregate of approximately $22.3 million (excluding depreciation and the capital cost of our Drug

Substance production facility) in the development of this product.

This estimation reflects only direct expenditures and includes no allocation

of product development or administrative overhead expenses.

Approximately $2.9 million of this investment was offset by related product

licensing revenues and grant income, most of which was earned from 2001 to 2007.

During 2000, we acquired an exclusive license from

Nutrition 21, Inc.

continued growth in sales of the First Defense ® product line, and as additional resources are dedicated to production,

sales, marketing and technical services, it is our objective to exceed our total product sales of approximately $19 million achieved

during the year ended December 31, 2022 as soon as possible.

Our longer-term goal is to exceed $35 million of annual total product sales

as soon as possible during the five-year period after the market launch of Re-Tain ® .

of our product development spending has been focused on the development of Re-Tain ® , our purified Nisin treatment

for subclinical mastitis in lactating cows.

During the 23-year period that began on January 1, 2000 and ended on December 31, 2022, we

invested an aggregate of approximately $25.2 million (excluding depreciation and the capital cost of our Drug Substance production facility)

in the development of this product.

This estimation reflects only direct expenditures and includes no allocation of product development

or administrative overhead expenses.

Approximately $2.9 million of this investment was offset by related product licensing revenues and

grant income, most of which was earned from 2001 to 2007.

2000, we acquired an exclusive license from Nutrition 21, Inc.

(formerly Applied Microbiology Inc.

or AMBI) to develop and market Nisin-based products for animal health applications,

which allowed us to initiate the development of Re-Tain ® .

In 2004, we paid Nutrition 21 approximately $965,000 to

buy out this royalty and milestone-based license to Nisin, thereby acquiring control of the animal health applications of Nisin.

is a well characterized substance, having been used in food preservation applications for over 50 years.

Food-grade Nisin, however, cannot

be used in pharmaceutical applications because of its low purity.

A much less pure preparation of our active ingredient, Nisin, is commonly

used as a food preservative and has been given Generally Regarded as Safe (GRAS) status by the FDA.

Our Nisin technology includes patented

processing and purification methods to achieve pharmaceutical-grade purity.

ImmuCell Corporation

or AMBI) to develop and market Nisin-based

products for animal health applications, which allowed us to initiate the development of Re-Tain ® .

paid Nutrition 21 approximately $965,000 to buy out this royalty and milestone-based license to Nisin, thereby acquiring control of the

animal health applications of Nisin.

Nisin is a well characterized substance, having been used in food preservation applications for

over 50 years.

Food-grade Nisin, however, cannot be used in pharmaceutical applications because of its low purity.

A much less pure preparation

of our active ingredient, Nisin, is commonly used as a food preservative and has been given “Generally Regarded as Safe”

(GRAS) status by the FDA.

Our Nisin technology includes patented processing and purification methods to achieve pharmaceutical-grade

2004, we entered into a product development and marketing agreement with Zoetis (formerly Pfizer Animal Health, a division of Pfizer,

1 unchanged sentence

That company elected to terminate the agreement in 2007.

We believe that this decision was not based on any

unanticipated efficacy or regulatory issues.

Rather, we believe the decision was primarily driven by a marketing concern relating to their

fear that the milk from treated cows could interfere with the manufacture of certain cultured dairy products.

Due to the zero milk discard

feature, there is a risk that Nisin from the milk of treated cows could interfere with the manufacture of certain (but not all) commercial

cultured dairy products, such as some kinds of cheese and yogurt, if a process tank contains a high enough percentage of milk from treated

The impact of this potential interference ranges from a delay in the manufacturing process (which does happen at times for other

reasons) to the less likely stopping of a cheese starter culture.

Milk from cows that have been treated with our product that is sold

exclusively for fluid milk products presents no such risk.

We worked with scientists and mastitis experts to conduct a formal risk assessment

to quantify the impact that milk from treated cows may have on cultured dairy products.

This study concluded that the dilution of milk

from treated cows through comingling with milk from untreated cows during normal milk hauling and storage practices reduces the risk of

interference with commercial dairy cultures to a negligible level when the product is used in accordance with the product label.

we believe that such a premium-priced product will be used selectively, which reduces the risk of cheese interference and is consistent

with modern “precision dairying” practices that discourage the indiscriminate use of drug treatments.

Among the measures that

we intend to deploy will be detailed guidance on limiting the portion of a herd that is treated with Re-Tain ®

at any one time in order to avoid concentration levels in the milk that could lead to the rejection of the contents in a cheese tank.

Subclinical mastitis, and the study required to

achieve an effectiveness claim for it, is defined under the FDA/Center for Veterinary Medicine Guidance #49:

Target Animal Safety and

Drug Effectiveness Studies for Anti-Microbial Bovine Mastitis Products (Lactating and Non-Lactating Cow Products).

Trial eligibility

requires both pretreatment samples to be positive for the mastitis pathogen (except for Staphylococcus aureus and Streptococcus

agalactiae , where a single pretreatment sample qualifies a cow for enrollment).

For all pathogens, both samples taken between

14 and 28 days post treatment (and at least 5 days apart) must be negative to be judged a cure.

These conservative criteria generally

result in enrolling cows with chronic subclinical disease, which rarely self-resolves.

Milk from cows infected with subclinical mastitis

has greater somatic cell counts (SCC), and producers may be paid less for this lower quality milk.

Cows with subclinical mastitis

infections are known to produce less milk, and cows that maintain subclinical mastitis across the dry period have been shown to produce

significantly less milk.

The failure to treat subclinical mastitis may result in chronic infections that are unlikely to respond

to antibiotic therapy.

Finally, cows with subclinical mastitis maintain a reservoir of infection within the herd and increase exposure

of healthy cows to contagious pathogens.

We believe that this decision was not based on

any unanticipated efficacy or regulatory issues.

Rather, we believe the decision was primarily driven by a marketing concern relating

to their fear that the milk from treated cows could interfere with the manufacture of certain cultured dairy products.

Due to the zero-milk

discard feature, there is a risk that Nisin from the milk of treated cows could interfere with the manufacture of certain (but not all)

commercial cultured dairy products, such as some kinds of cheese and yogurt, if a process tank contains a high enough percentage of milk

from treated cows.

The impact of this potential interference ranges from a delay in the manufacturing process (which does happen at times

for other reasons) to the less likely stopping of a cheese starter culture.

Milk from cows that have been treated with our product that

is sold exclusively for fluid milk products presents no such risk.

We worked with scientists and mastitis experts to conduct a formal

risk assessment to quantify the impact that milk from treated cows may have on cultured dairy products.

This study concluded that the

dilution of milk from treated cows through comingling with milk from untreated cows during normal milk hauling and storage practices

reduces the risk of interference with commercial dairy cultures to a negligible level when the product is used in accordance with the

product label.

Further, we believe that such a premium-priced product will be used selectively, which reduces the risk of cheese interference

and is consistent with modern “precision dairying” practices that discourage the indiscriminate use of drug treatments.

the measures that we intend to deploy will be detailed guidance on limiting the portion of a herd that is treated with Re-Tain ®

at any one time in order to avoid concentration levels in the milk that could lead to the rejection of the contents in a cheese

mastitis, and the study required to achieve an effectiveness claim for it, is defined under the FDA/Center for Veterinary Medicine Guidance

Target Animal Safety and Drug Effectiveness Studies for Anti-Microbial Bovine Mastitis Products (Lactating and Non-Lactating Cow

Trial eligibility requires both pretreatment samples to be positive for the mastitis pathogen (except for Staphylococcus

aureus and Streptococcus agalactiae , where a single pretreatment sample qualifies a cow for enrollment).

For all pathogens,

both samples taken between 14 and 28 days post treatment (and at least 5 days apart) must be negative to be judged a cure.

conservative criteria generally result in enrolling cows with chronic subclinical disease, which rarely self-resolves.

Our second most important product development

13 unchanged sentences

We are currently working to establish USDA claims for our bivalent bulk powder formulation of First Defense Technology ® .

We are also working to expand our product development

pipeline of antimicrobials that can be used as alternatives to traditional antibiotics through expansions of our Nisin technology and

yield improvements.

We intend to begin new development projects that are aligned with our core competencies and market focus.

remain interested in acquiring, on suitable terms, other new products and technologies that fit with our sales focus on the dairy and

beef industries.

Our competition in the animal health market includes

other biotechnology companies and major animal health companies.

Most, if not all, of these competitors have substantially greater financial,

marketing, manufacturing and human resources and more extensive product development capabilities than we do.

We are also working to expand our product development pipeline of antimicrobials that can be used as alternatives to traditional antibiotics

through expansions of our Nisin technology and yield improvements.

We intend to begin new development projects that are aligned with our

core competencies and market focus.

We also remain interested in acquiring, on suitable terms, other new products and technologies that

fit with our sales focus on the dairy and beef industries.

ImmuCell Corporation

We would consider any company that sells an antibiotic

to treat mastitis, such as Boehringer Ingelheim, Merck Animal Health and Zoetis, to be among the potential competitors with respect to

We expect the FDA to grant a period of

five years of market exclusivity for our product (meaning the FDA would not grant approval to a second NADA with the same active drug

for a period of five years after the first NADA approval is granted) under Section 512(c)(2)F of the Federal Food, Drug, and Cosmetic

Our Nisin A is produced from our high-yielding, proprietary L.

lactis strain and purified to a high level, providing us with

a level of protection over a competitor that might try to develop a similar product.

There are several other products on the market (some

with claims and some without) that are delivered to newborn calves to prevent scours.

We believe that the First Defense ®

product line offers two significant competitive advantages.

First, the First Defense ® product line is the only calf-level

product that provides protection against E.

coli, coronavirus and rotavirus, three of the leading causes of calf scours.

being derived from colostrum, our product offers Immediate Immunity TM through antibodies that both function at the gut

level and are absorbed into the blood stream for future protection.

All formats of our product can be administered immediately after birth

and are not negatively affected by maternal colostrum.

Zoetis sells a product that competes directly with

the First Defense ® product line in preventing scours via oral delivery to newborn calves.

Their product (Calf-Guard ® )

is a modified-live virus vaccine.

Newborn calves respond poorly to vaccines and the immune system must be given time to develop a response

Both our product and Calf-Guard ® carry claims against coronavirus and rotavirus infections, but this competing

product does not carry a claim against E.

coli infections like our product does.

It is common practice to delay colostrum feeding

when dosing a calf with Calf-Guard ® so that the antibodies in the colostrum do not inactivate this vaccine product.

is no nutritional or health benefit to withholding milk from newborn calves.

In contrast, we encourage the feeding of four quarts of high

quality colostrum immediately after birth when dosing a calf with our product, which is standard practice for good calf health.

the antibodies in our product would likely work to inactivate a modified-live virus vaccine, rendering it useless or less useful, our

product label historically included a precaution that First Defense ® should not be used within five days of such

During the first quarter of 2015, the USDA granted us permission to remove this precaution from our label, and we have done

We believe that this precaution should be required on the Calf-Guard ® label to prevent inactivation of that product

by First Defense ® antibodies or by colostrum.

Our product is priced at a premium to Calf-Guard ® .

During the fourth quarter of 2016, Merck launched

a new competing product into this market space.

This product (BOVILIS ® Coronavirus) is a modified-live virus intranasal

vaccine that carries a claim against coronavirus only.

Around the end of 2019, Elanco Animal Health gave

notice to the market that it had discontinued the manufacture of its competing products, Bovine Ecolizer ® and Bovine Ecolizer

+ C20, and subsequently exited the market during the first quarter of 2021.

This product was the smallest of our three significant calf-level

When compared to the other USDA-approved calf-level

scours preventatives, we lead in both sales dollars and calves treated within the U.S.

This product category is comprised of the

three primary brands discussed above that are given either orally or intranasally to newborn dairy and beef calves immediately after birth.

With the new rotavirus claim for our product ( Tri-Shield First Defense ® ), we are now also competing against dam-level

vaccine products that are given to the mother cow to increase the antibody level against scours-causing pathogens in the colostrum that

she produces for her newborn.

Those products are sold by Elanco (Scour Bos™), Merck (Guardian ® ) and Zoetis (ScourGuard ® ).

Despite the best-managed dam vaccine program, colostrum quality is naturally variable and newborn calves do not always get the antibodies

they need from maternal colostrum.

We believe that the measured dose of antibodies in our product provides more consistent protection

than such vaccine products.

We may not be aware of competition that we face,

or may face in the future, from other companies.

Our competitive position will be highly influenced by our ability to attract and retain

key scientific, manufacturing, managerial and sales and marketing personnel, to develop and effectively produce and market proprietary

technologies and products.

We need to obtain USDA, FDA or foreign approvals for new products to effectively promote and market our products.

We must have available properly licensed, efficient and effective raw material and finished product manufacturing resources to continue

to profitably sell our current products.

We currently compete on the basis of product performance, price, distribution capability and

customer support.

We continue to monitor our network of independent distributors to maintain our competitive position.

competition in the animal health market includes other biotechnology companies and major animal health companies.

Most, if not all, of

these competitors have substantially greater financial, marketing, manufacturing and human resources and more extensive product development

capabilities than we do.

would consider any company that sells an antibiotic to treat mastitis, such as Boehringer Ingelheim, Merck Animal Health and Zoetis,

to be among the potential competitors with respect to Re-Tain ® .

We expect the FDA to grant a period of five years

of market exclusivity for our product (meaning the FDA would not grant approval to a second NADA with the same active drug for a period

of five years after the first NADA approval is granted) under Section 512(c)(2)F of the Federal Food, Drug, and Cosmetic Act.

A is produced from our high-yielding, proprietary L.

lactis strain and purified to a high level, providing us with a level of

protection over a competitor that might try to develop a similar product.

are several other products on the market (some with claims and some without) that are delivered to newborn calves to prevent scours.

We believe that the First Defense ® product line offers two significant competitive advantages.

First, the First

Defense ® product line is the only calf-level product that provides protection against E.

coli, coronavirus

and rotavirus, three of the leading causes of calf scours.

Second, being derived from colostrum, our product offers Immediate Immunity TM

through antibodies that both function at the gut level and are absorbed into the blood stream for future protection.

of our product can be administered immediately after birth and are not negatively affected by maternal colostrum.

sells a product that competes directly with the First Defense ® product line in preventing scours via oral delivery

to newborn calves.

Their product (Calf-Guard ® ) is a modified-live virus vaccine.

Newborn calves respond poorly to vaccines

and the immune system must be given time to develop a response to vaccines.

Both our product and Calf-Guard ® carry claims

against coronavirus and rotavirus infections, but this competing product does not carry a claim against E.

coli infections like

our product does.

It is common practice to delay colostrum feeding when dosing a calf with Calf-Guard ® so that the antibodies

in the colostrum do not inactivate this vaccine product.

There is no nutritional or health benefit to withholding milk from newborn calves.

In contrast, we encourage the feeding of four quarts of high quality colostrum immediately after birth when dosing a calf with our product,

which is standard practice for good calf health.

Because the antibodies in our product would likely work to inactivate a modified-live

virus vaccine, rendering it useless or less useful, our product label historically included a precaution that First Defense ®

should not be used within five days of such a vaccine.

During the first quarter of 2015, the USDA granted us permission to remove

this precaution from our label, and we have done so.

We believe that this precaution should be required on the Calf-Guard ®

label to prevent inactivation of that product by First Defense ® antibodies or by colostrum.

Our product is priced

at a premium to Calf-Guard ® .

the fourth quarter of 2016, Merck launched a new competing product into this market space.

This product (BOVILIS ® Coronavirus)

is a modified-live virus intranasal vaccine that carries a claim against coronavirus only.

Around the end of 2019, Elanco Animal Health

gave notice to the market that it had discontinued the manufacture of its competing products, Bovine Ecolizer ® and Bovine

Ecolizer + C20, and subsequently exited the market during the first quarter of 2021.

This product was the smallest of our three significant

calf-level competitors.

During the first quarter of 2023, we learned that some of our dam-level scour competitors were tight in supply

and may not be able to meet all of their marketing demand.

compared to the other USDA-approved calf-level scours preventatives, we lead in both sales dollars and calves treated within the U.S.

This product category is comprised of the three primary brands discussed above that are given either orally or intranasally to

newborn dairy and beef calves immediately after birth.

With the rotavirus claim for our product ( Tri-Shield First Defense ® ),

we are now also competing against dam-level vaccine products that are given to the mother cow to increase the antibody level against

scours-causing pathogens in the colostrum that she produces for her newborn.

Those products are sold by Elanco (Scour Bos™), Merck

(Guardian ® ) and Zoetis (ScourGuard ® ).

Despite the best-managed dam vaccine program, colostrum quality is

naturally variable and newborn calves do not always get the antibodies they need from maternal colostrum.

We believe that the measured

dose of antibodies in our product provides more consistent protection than such vaccine products.

may not be aware of competition that we face, or may face in the future, from other companies.

Our competitive position will be highly

influenced by our ability to attract and retain key scientific, manufacturing, managerial and sales and marketing personnel, to develop

and effectively produce and market proprietary technologies and products.

We need to obtain USDA, FDA or foreign approvals for new products

to effectively promote and market our products.

We must have available properly licensed, efficient and effective raw material and finished

product manufacturing resources to continue to profitably sell our current products.

We currently compete on the basis of product performance,

price, distribution capability and customer support.

We continue to monitor our network of independent distributors to maintain our competitive

ImmuCell Corporation

Intellectual Property

We own a broad

collection of intellectual property rights relating to our research, products and processes.

This includes:

patents, copyrights, trademarks,

trade dress, trade secrets, know-how and other intellectual property rights in the United States and other countries.

We believe the ownership

of our intellectual property rights is an important factor in our business and that our success depends in part on such ownership.

also rely heavily on the innovative skills, technical competence and marketing abilities of our personnel.

The Nisin A that is produced

from our proprietary strain of L.

lactis is an essential component of our intellectual property covering Re-Tain ® .

6,794,181 entitled

“Method of Purifying Lantibiotics”, which covers a manufacturing process for preparing pharmaceutical-grade Nisin, which was

issued in 2004;

10,023,617 entitled “Methods and Systems of Producing Pharmaceutical Grade Lantibiotics”,

which covers key, novel and proprietary aspects of our manufacturing process for preparing pharmaceutical-grade Nisin, and was issued

during the third quarter of 2018.

In the future, we may file additional patent applications for certain products under development.

can be no assurance that patents will be issued with respect to any pending or future applications.

In some cases, we have chosen (and

may choose in the future) not to seek patent protection for certain products or processes.

In those instances, we have sought (and may

seek in the future) to maintain the confidentiality of any relevant intellectual property and other proprietary rights through operational

measures and contractual agreements.

We own numerous trademarks and trade dress that

are very important to our business, and have several trademark and trade dress applications and registrations in the United States, Canada,

Iran and Turkey.

own a broad collection of registered and unregistered intellectual property rights relating to our research, products and processes.

These rights include patents, copyrights, trademarks, trade dress, trade secrets, know-how and other intellectual property rights in

the United States and other countries.

We believe the ownership of our intellectual property rights is an important factor in our business

and that our success depends in part on such ownership.

We also rely heavily on the innovative skills, technical competence and marketing

abilities of our personnel.

The Nisin A that is produced from our proprietary strain of L.

lactis is an essential component of

our intellectual property covering Re-Tain ® .

We enter into and rely on confidentiality and proprietary rights agreements

with our employees, contractors and business partners to protect our trade secrets, proprietary developments and confidential information.

6,794,181 entitled “Method of Purifying Lantibiotics”, which covers a manufacturing process for

preparing pharmaceutical-grade Nisin, which was issued in 2004;

10,023,617 entitled “Methods and Systems

of Producing Pharmaceutical Grade Lantibiotics”, which covers key, novel and proprietary aspects of our manufacturing process for

preparing pharmaceutical-grade Nisin and was issued during the third quarter of 2018.

In the future, we may file additional patent applications

for certain products under development.

There can be no assurance that patents will be issued with respect to any pending or future applications.

In some cases, we have chosen (and may choose in the future) not to seek patent protection for certain products or processes.

instances, we have sought (and may seek in the future) to maintain the confidentiality of any relevant intellectual property and other

proprietary rights through operational measures and contractual agreements.

own numerous trademarks and trade dress that are very important to our business and have several trademark and trade dress registrations

in the United States, Canada and Iran.

We own the following U.S.

trademark registrations:

IMMUCELL , FIRST DEFENSE , FD FIRST DEFENSE (&

Design), FIRST DEFENSE TECHNOLOGY , TRI-SHIELD FIRST DEFENSE, TRI-SHIELD FIRST DEFENSE (& Design), YOUR CALF CREW, BEYOND VACCINATION,

BEYOND VACCINATION (& Design), CALF HERO, DUAL-FORCE, TRI-SHIELD and RE-TAIN.

IMMUCELL , FIRST DEFENSE , FD

FIRST DEFENSE (& Design), FIRST DEFENSE TECHNOLOGY , TRI-SHIELD FIRST DEFENSE, TRI-SHIELD FIRST DEFENSE (& Design), YOUR

CALF CREW, BEYOND VACCINATION, BEYOND VACCINATION (& Design), CALF HERO, DUAL-FORCE, TRI-SHIELD and RE-TAIN.

We also own U.S.

registrations claiming rights

in the color blue for our blue gel and blue bolus FIRST DEFENSE products.

The United States Patent and Trademark Office refused

registration of our IMMEDIATE IMMUNITY trademark, which we use extensively in connection with marketing of all of our products,

on the grounds that the mark is generic.

Rather than appeal this finding, we are continuing to build our common law rights in the brand.

The FDA issued a determination that the name, MAST OUT , which we had intended to use for our purified Nisin product, is overly

Rather than continuing an appeal of this decision, we selected a new product name, RE-TAIN , which was approved by

the FDA during the first quarter of 2019.

Government Regulation

We believe that we are in compliance with current

regulatory requirements relating to our business and products.

The manufacture and sale of animal health biologicals within the United

States is generally regulated by the USDA.

We have received USDA and Canadian Food Inspection Agency approval for the bolus format of

First Defense ® and for the gel tube formats of Tri-Shield First Defense ® and Dual-Force

First Defense ® .

Re-Tain ® is regulated by the FDA, which regulates veterinary drugs.

in the European Union will likely require that Re-Tain ® be sold subject to a milk discard requirement in that territory,

although the duration of the milk discard requirement may be shorter than the discard requirement applicable to competing antibiotic products

in that market.

Comparable agencies exist in foreign countries, and foreign sales of our products will be subject to regulation by such

Many countries have laws regulating the production, sale, distribution or use of biological products, and we may have to obtain

approvals from regulatory authorities in countries in which we propose to sell our products.

Depending upon the product and its applications,

obtaining regulatory approvals may be a relatively brief and inexpensive procedure or it may involve extensive clinical tests, incurring

significant expenses and an approval process of several years’ duration.

We generally rely on in-country experts to assist us with

or to perform international regulatory applications.

We currently employ 67 employees (including 7 part-time

employees) in comparison to 61 employees (including 5 part-time employees) approximately a year ago.

Approximately 38.9 full-time equivalent

employees are engaged in manufacturing operations, 12.5 full-time equivalent employees in sales and marketing, 6.6 full-time equivalent

employees in product development activities (primarily supporting facility maintenance and operation, regulatory filings and commercial

scale-up for Re-Tain ® ) and 5.5 full-time equivalent employees in finance and administration.

As needed, we augment

our staff with contracted temporary employees.

All of our employees are required to execute non-disclosure and invention assignment agreements

(and some are required to execute non-compete agreements) intended to protect our rights in our proprietary products.

We are not a party

to any collective bargaining agreement and consider our employee relations to be excellent.

registrations claiming rights in the color blue for our blue gel and blue bolus FIRST DEFENSE products.

The United States Patent

and Trademark Office refused registration of our IMMEDIATE IMMUNITY trademark, which we use in connection with marketing of all

of our products, on the grounds that the mark is generic.

Rather than appeal this finding, we are continuing to build our common law

rights in the brand as we do with other brands from time to time.

The FDA issued a determination that the name, MAST OUT , which

we had intended to use for our purified Nisin product, is overly promotional.

Rather than continuing an appeal of this decision, we selected

a new product name, RE-TAIN , which was approved by the FDA during the first quarter of 2019.

believe that we are in compliance with current regulatory requirements relating to our business and products.

The manufacture and sale

of animal health biologicals within the United States is generally regulated by the USDA.

We have received USDA and Canadian Food Inspection

Agency approval for the bolus format of First Defense ® and for the gel tube formats of Tri-Shield First Defense ®

and Dual-Force First Defense ® .

Re-Tain ® is regulated by the FDA, which regulates veterinary

Regulations in the European Union will likely require that Re-Tain ® be sold subject to a milk discard requirement

in that territory, although the duration of the milk discard requirement may be shorter than the discard requirement applicable to competing

antibiotic products in that market.

Comparable agencies exist in foreign countries, and foreign sales of our products will be subject

to regulation by such agencies.

Many countries have laws regulating the production, sale, distribution or use of biological products,

and we may have to obtain approvals from regulatory authorities in countries in which we propose to sell our products.

Depending upon

the product and its applications, obtaining regulatory approvals may be a relatively brief and inexpensive procedure or it may involve

extensive clinical tests, incurring significant expenses and an approval process of several years’ duration.

We generally rely

on in-country experts to assist us with or to perform international regulatory applications.

currently employ 74 employees (including 7 part-time employees) in comparison to 67 employees (including 7 part-time employees) approximately

Approximately 48.4 full-time equivalent employees are engaged in quality and manufacturing operations, 13.5 full-time equivalent

employees in sales and marketing, 6.7 full-time equivalent employees in product development activities (primarily supporting facility

maintenance and operation, regulatory filings and commercial scale-up for Re-Tain ® ) and 5.4 full-time equivalent

employees in finance and administration.

As needed, we augment our staff with contracted temporary employees.

All of our employees are

required to execute non-disclosure and invention assignment agreements (and some are required to execute non-compete agreements) intended

to protect our rights in our proprietary products.

We are not a party to any collective bargaining agreement and consider our employee

relations to be excellent.

ImmuCell Corporation

Public Information

As a reporting company, we file quarterly and

annual reports with the Securities and Exchange Commission (SEC) on Form 10-Q and Form 10-K.

We also file current reports on Form 8-K,

whenever events warrant or require such a filing.

The public may read and copy any materials that we file with the SEC at the SEC’s

Public Reference Room at 450 Fifth Street, N.W., Washington, D.C.

The public may obtain information on the operation of the Public

Reference Room by calling the SEC at 1-800-SEC-0330.

The SEC maintains an internet site that contains reports, proxy and information statements

and other information about us that we file electronically with the SEC at http://www.sec.gov .

a reporting company, we file quarterly and annual reports with the Securities and Exchange Commission (SEC) on Form 10-Q and Form 10-K,

respectively.

We also file current reports on Form 8-K, whenever events warrant or require such a filing.

The public may read and copy

any materials that we file with the SEC at the SEC’s Public Reference Room at 450 Fifth Street, N.W., Washington, D.C.

public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.

The SEC maintains an

internet site that contains reports, proxy and information statements and other information about us that we file electronically with

the SEC at http://www.sec.gov .

Our internet address is http://www.immucell.com.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business