What changed in this filing

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Item 2. Properties

2023-03-29 compared with 2022-03-30 · 76 added, 49 removed, 8 unchanged (94% of the section changed)

ITEM 2 — PROPERTIES

We own a 35,000 square foot (approximately) building

at 56 Evergreen Drive in Portland, Maine.

We currently use this space for substantially all of our office and laboratory needs and some

of our liquid processing and vaccine manufacturing needs for our USDA-regulated product line.

All of our powder filling, gel formulation

and assembly services have been relocated out of this building, and this space continues to be used for all of our vaccine production,

liquid processing and freeze-drying operations.

When we originally purchased this building in 1993, its size was 15,000 square feet, including

5,000 square feet of unfinished space on the second floor.

In 2001, we completed a construction project that added approximately 5,200

square feet of new manufacturing space on the first floor and approximately 4,100 square feet of storage space on the second floor.

2007, we built out the 5,000 square feet of unfinished space on the second floor into usable office space.

After moving first floor offices

into this new space on the second floor, we modified and expanded the laboratory space on the first floor and added approximately 2,500

additional square feet of storage space on the second floor.

During 2009, we added 350 square feet of cold storage space connected to

our first floor production area and added an additional 600 square feet to the second floor storage area.

During the first quarter of

2015, we completed construction of a two-story addition connected to our facility to provide us with approximately 7,100 additional square

feet for cold storage, production and warehouse space for our operations.

During the fourth quarter of 2015, we exercised

an option to acquire land at 33 Caddie Lane in Portland, Maine which is near our facility at 56 Evergreen Drive, on which we initiated

construction of our Drug Substance production facility for Re-Tain ®

During 1993, we purchased a 15,000 square foot

facility (that included 5,000 square feet of unfinished office space on the second floor) at 56 Evergreen Drive in Portland, Maine.

currently use this space for substantially all of our:

i) office and laboratory needs, ii) vaccine manufacturing operations, iii) liquid

processing operations and iv) freeze-drying operations for our USDA-regulated product line.

All of our powder milling and filling operations,

gel formulation operations and assembly services have been relocated out of this building.

During 2001, we completed a construction project

that added approximately 5,200 square feet of new manufacturing space on the first floor and approximately 4,100 square feet of storage

space on the second floor.

During 2007, we built out the 5,000 square feet of unfinished space on the second floor into usable office

After moving offices from the first floor into this new space on the second floor, we modified and expanded the laboratory space

on the first floor and added approximately 2,500 additional square feet of storage space on the second floor.

During 2009, we added 350

square feet of cold storage space connected to our first floor production area and added an additional 600 square feet to the second floor

storage area.

During 2015, we completed construction of a two-story addition connected to our facility to provide us with approximately

7,100 additional square feet for cold storage, production and warehouse space for our operations.

These additions increased the size of

the facility to approximately 34,850 square feet.

During 2015, we exercised an option to acquire

land at 33 Caddie Lane in Portland, Maine which is near our facility at 56 Evergreen Drive, on which we initiated construction of our

Drug Substance production facility for Re-Tain ®

during the third quarter of 2016.

3 unchanged sentences

operations are conducted in this building.

During the first quarter of 2017, we purchased a

4,080 square foot facility adjacent to the Drug Substance production facility for Re-Tain ® .

During 2017, we purchased a 4,080 square foot

facility adjacent to the Drug Substance production facility for Re-Tain ®

at 14 Wedge Way in Portland, Maine.

We are using this warehouse space primarily for storage of inventory, materials and equipment.

We intend to modify this facility to conduct

cold storage, assembly and pack & ship services for Re-Tain ® .

During the first quarter of 2017, we entered into

a renewable, two-year lease for approximately 1,350 square feet of office, warehouse and garage space in New York to support our farm

are presently modifying this facility for packing, shipping and cold storage for Re-Tain ®

and other warehousing needs.

We expect these modifications to be complete during the middle of 2023.

Building 175:

During 2019, we entered into a lease covering

approximately 14,300 square feet of office and warehouse space to expand our USDA-regulated manufacturing operations.

We have renovated

this space (a Certificate of Occupancy was issued during the second quarter of 2020) to help us expand our production capacity and improve

quality for the First Defense ® product line.

This space is being used for all of our powder milling and filling,

gel formulation and assembly services.

The original lease term was ten years with a right to renew for a second ten-year term and a right

of first offer to purchase.

During the third quarter of 2022, we entered into a new 20-year lease covering a facility that is now being

constructed by our landlord ( Building 165 , described below), which is adjacent to (and could be connected to) Building 175 .

In connection with this new lease, the lease to Building 175 was extended by approximately 13 years to match the expiration of

the other lease to Building 165 .

Building 165:

During the third quarter of 2022, we committed

to lease an additional 15,400 square feet of space at 165 Industrial Way in Portland, Maine, which could be connected to Building 175 ,

over a 20-year term.

The lease commencement date is when the landlord is issued a Certificate of Occupancy for the building shell, which

is anticipated to be around the beginning of the second quarter of 2023.

Lease payments begin four months after this date.

use this space for the following three purposes:

1) improve product quality by moving powder milling out of Building 56 , 2) provide

much needed additional warehouse space and 3) provide space for additional freeze-drying equipment to increase our production capacity

to approximately $40 million per year.

Due to the loss in gross margin on product sales during the first quarter of 2023 caused by the

slowdown in production output necessary to remediate a product contamination event, we have decided to defer, for the time being, completion

of the investment to build out Building 165 .

The objective to separate our powder milling operations out of Building 56

has been achieved by moving milling to Building 175 for the time being.

During the first quarter of 2017, we entered

into a renewable, two-year lease for approximately 1,350 square feet of office, warehouse and garage space in Warsaw, New York to support

our farm operations.

This lease was extended through and terminated at the end of March of 2021.

During March of 2021, we entered into a renewable,

two-year lease for approximately 1,300 square feet of office, storage and parking space in New York.

We are renting approximately 960 square feet

in Minnesota for a sales office through at least June 2022.

This lease automatically renews for one-year terms unless we or the landlord

give 60-days’ notice of a change.

On September 12, 2019, we entered into a lease

covering approximately 14,300 square feet of office and warehouse space with a lease possession date of November 15, 2019 and a lease

commencement date of February 13, 2020 for some of our USDA-regulated manufacturing operations.

We have renovated this space (a Certificate

of Occupancy was issued during the second quarter of 2020) to help us expand our production capacity for the First Defense ®

product line.

This space is being used for all of our powder filling, gel formulation and assembly services.

The lease term is ten years

with a right to renew for a second ten-year term and a right of first offer to purchase.

We maintain property insurance in amounts that

approximate replacement cost and a modest amount of business interruption insurance.

We also maintain access to certain animals, primarily

cows as a source of colostrum used in the production of the First Defense ®

product line, through contractual relationships with commercial dairy farms.

During March of 2021, we entered into

a different renewable, two-year lease for approximately 1,300 square feet of office, storage and parking space in New York.

Subsequently,

we entered into a new two-year lease to the same property through March of 2025 that includes an option to renew for an additional two-year

We are renting approximately 960 square feet in Winona, Minnesota for a sales office.

This lease automatically renews with 4% increases

for one-year terms unless we or the landlord give 60-days’ notice of a change.

The current term expires in June 2023.

expect to provide notice of cancellation at this time.

We also maintain access to cows (as a source of colostrum used in the production

of the First Defense ® product line) through contractual

relationships with commercial dairy farms.

We maintain property insurance in amounts that approximate replacement cost and a modest amount

of business interruption insurance.

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 2. Properties