What changed in this filing

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Item 1. Business

2024-04-01 compared with 2023-03-29 · 716 added, 695 removed, 60 unchanged (96% of the section changed)

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;

ITEM 1 – BUSINESS

Cautionary Note Regarding Forward-Looking Statements (Safe Harbor

This Annual Report on Form 10-K (Annual Report) 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;

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 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 unprovoked military invasion of Ukraine

(and attack on its people) and the war in the Middle East 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 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 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;

future regulatory

requirements relating to our products;

the efficacy, success and timeline to complete our contamination remediation efforts;

the likelihood, severity or impact of future contamination

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;

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;

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.

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;

of our investments in our business;

future compliance with bank debt covenants;

anticipated changes in our manufacturing capabilities

and efficiencies;

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

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

and any other statements that are not historical

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:

difficulties or delays in development, testing, regulatory approval, production and marketing of our products

(including the First Defense ® product line and Re-Tain ® ), competition within our anticipated

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), 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.

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:

difficulties or delays in development, testing, regulatory approval, production

and marketing of our products (including the First Defense ® product line and Re-Tain ® ), competition

within our anticipated 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), 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 PART I:

ITEM 1A – RISK FACTORS of this Annual Report and uncertainties otherwise referred to

in this Annual Report.

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.

ImmuCell Corporation

OUTLINE TO ITEM 1 – BUSINESS:

- Production Capacity Increase and Product Contamination

- Animal Health Products

- Sales and Markets

- Product Development

- Competition

- Intellectual Property

- Government Regulation

- Public Information

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, protein-rich food 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.

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.

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 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.

We have achieved

FDA approval for four out of five of the significant Technical Sections required for product approval, and we have made our third submission

of the fifth Technical Section.

We expect a response to this third submission from the FDA by May of 2024.

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

Net working capital

Stockholders’ equity

Market capitalization

Common shares outstanding (1)

(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.

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.

During the eight-year period beginning January 1,

2016 and ended December 31, 2023, we funded our operations, constructed an FDA-regulated Drug Substance (DS) manufacturing facility for

Re-Tain ® and invested capital to increase our production capacity for the First Defense ® product

We have also initiated another capital investment (which investment is currently paused) to bring the formulation and aseptic filling

capabilities for Re-Tain ® in house in order to end our present reliance on an outside contractor.

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.

Net of debt issuance and debt discount costs, we had approximately $12 million in outstanding debt as of December 31, 2023 compared to

approximately $3.2 million as of December 31, 2015.

This 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 this time, our total assets have increased to $43.8 million as of December 31, 2023

from $14.6 million as of December 31, 2015, and our stockholders’ equity has increased to $25 million as of December 31, 2023 from

$10.6 million as of December 31, 2015.

This represents a 200%, or $29 million, increase in total assets and a 135%, or $14.4 million,

increase in stockholders’ equity over this eight-year period.

ImmuCell Corporation

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.

Production Capacity Increase and Product Contamination

During 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

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

for more detail about our investments to increase production capacity.

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

Scrapped product from contamination events (largely this one around the end of the third quarter) and other production process

losses resulted in a total charge to costs of goods sold of approximately $589,000 during 2022.

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.

We slowed down our production output to take the

necessary steps to assess and remediate the issues and perform a deep sanitization of our facilities and process equipment.

After several

months of processing without further contamination, we experienced a third contamination event during the third quarter of 2023.

product from contamination events and other production process losses resulted in a total charge to costs of goods sold of approximately

$527,000 during 2023.

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 worked 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, while

continuing to ensure that any product that is put to market meets all quality standards.

We believe that our efforts to increase production

capacity for the First Defense ® product line are linked to our product contaminations.

It was relatively simple

to run at lower production capacities for the 30 years between 1991 (the original USDA approval of First Defense ® )

The contamination events we suffered during 2022 and 2023 were largely the result of us processing more milk (colostrum) than

ever before in order to meet increasing customer demand.

As we enter 2024, we believe that we have much improved processes and controls

in place to better support large-scale production from our raw material source farms through liquid processing.

Our most important customer-focused

objectives going forward are to fulfill the large backlog of orders and then again be a reliable supplier of a very effective product

to the dairy and beef calf market.

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.

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,

while 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 2023 marked the 32 nd

anniversary of the original USDA approval of this product in 1991.

During the fourth quarter of 2023, our cumulative sales of First

Defense ® since inception exceeded 33 million doses.

ImmuCell Corporation

The 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 scours ( E.

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.

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.

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.

The First Defense ® product

line continues to benefit from wide acceptance by dairy and beef producers as an effective tool to prevent scours 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

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 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 most common scour pathogens.

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.

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

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.

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

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 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,

leaving even more calves compromised.

Preventing newborn calves from becoming sick helps them to reach their genetic potential and reduces

the need to use treatment antibiotics later in life.

Plus, an effectively treated

calf is much less likely to require expensive antibiotic treatments or 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.

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 in her milk to the

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

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, leaving even more calves compromised.

We are competing effectively against these dam-level vaccine products.

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 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.

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 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 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 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.

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.

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.

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.

ImmuCell Corporation

Sales and Markets

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

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.

Our sales and marketing team consists of one vice president, one commercial research and technical services veterinarian, one commercial

leader of stakeholder engagement, one director of marketing 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.

Our expanded sales and marketing team has proven to be a worthy investment, validating that our message resonates

well with customers.

Now that our increased production capacity is in place, we anticipate being able to escalate our growth curve after

we recover from the brand damage that can come with an extended duration of short supply.

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

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.

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 $25.6

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 $75.4 million per year.

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

gaining market share in the United States year after year.

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

Our share of the dairy and beef market (calculated on the basis of calves treated) of the scour preventative products administered

at the calf-level was approximately:

Our share of the dairy and beef 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:

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 approximately 4.5 million dairy and beef cows in Canada.

We believe that significant market opportunities exist in other international

The majority of our international sales are to Canada.

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

into Japan in 2007 through NYS Co., Ltd of Iwate, Japan.

We are working with Medexx to expand our business in South Korea to include

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, 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

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.

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.

ImmuCell Corporation

We introduced First Defense ®

into South Korea in 2005 through Medexx Co., Ltd of Gyeonggi-do, Korea and its equivalent into Japan in 2007 through NYS Co., Ltd of Iwate,

We are working with Medexx to expand our business in South Korea to include 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, Pakistan and India.

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 infection.

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.

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.

dairy industry approximately $2 billion

in economic harm per year.

It is the most costly and common disease affecting the dairy industry.

This illness is categorized as either

clinical mastitis or subclinical mastitis.

Clinical mastitis infections cause visibly abnormal milk which cannot be sold.

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.

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 was used.

The cost of that milk discard along with the stress and risk in moving the cow to

the hospital pen is thought to be a primary reason 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.

C ows with subclinical

mastitis maintain a reservoir of infection within the herd and increase exposure of healthy cows to contagious pathogens.

mastitis also increases the risk of various quality defects on a variety of final dairy products.

active ingredient in Re-Tain ® is pharmaceutical-grade

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.

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 an FDA-required milk discard or meat withhold.

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

specifically designed to treat ahead of clinical signs without an FDA-required milk discard or meat withhold.

As a result, we believe

that our product can help cows reach their peak milk production and not be sent to the hospital pen.

Referencing the big picture, we are introducing

an entirely new class of socially-responsible antimicrobials as an animal drug, a bacteriocin, that does not promote resistance against

antibiotics used in human medicine.

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.

The industry could keep treating

this very significant disease with traditional antibiotics, but it takes innovation to bring a bacteriocin like Nisin to market.

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

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 (such as penicillin and 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.

current environment is favorable to the introduction of our new product as an alternative to traditional antibiotics.

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.

ImmuCell Corporation

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

dairy industry of this discarded milk may be around $300

dairy industry of discarded milk associated with the use of traditional antibiotic products currently on the market may be around $300

million per year.

1 unchanged sentence

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.

The Re-Tain ® label will be

for subclinical mastitis (not clinical).

Without an FDA-required milk discard or meat withhold cost, we expect producers to be more motivated

to identify and treat cows at the subclinical stage.

In addition, we expect that Re-Tain ® likely will be

priced at a premium to the traditional antibiotic products currently on the market, which are all sold subject to milk discard and meat

withhold requirements.

To validate our confidence in the value proposition of our product, we initiated a stochastic model led by researchers

at Michigan State University.

This model simulated the dynamics of subclinical mastitis detected during the first week of lactation.

study involved assessing probabilities of events, both production and health related, and their associated costs using a model grounded

in pathogen-specific assumptions drawn from peer-reviewed literature.

The study indicated that treatment with our product generated a

positive economic benefit and was the optimal economic strategy for treating subclinical mastitis in most herds.

The extent of the economic

benefit varies depending on factors such as bacteriological cure rates, parity of the animal and the cost of Re-Tain ® .

These findings, which were subsequently published in the Journal of Dairy Science in January 2024, will guide our pricing strategies.

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

2 unchanged sentences

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.

herd that is thought to be infected with clinical mastitis, where approximately $65 million per

year is spent on drug treatments.

Rarely is an industry revolutionized overnight.

2 unchanged sentences

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

outcomes that could harm the longer term prospects and market acceptance of Re-Tain ® .

This strategy also reduces

the amount of inventory that we would need to build at risk before regulatory approval is achieved, and it reduces the amount of cash

we would need to spend to purchase inventory from our contract manufacturer before our in-house aseptic filling services are approved

This strategic choice means that we have elected not to pursue an alternative strategy that might have maximized short-term,

initial sales quickly through a mass market approach where we provide product to distribution and let them sell it to as many farms as

While we are dedicated to increasing our sales revenue, we must consider the damage a mass market strategy could cause to the

long-term value of the product.

We have seen products sold by much larger companies that were substantially damaged by such failed market

launch strategies.

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

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.

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)

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.

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 18 to 24 months after FDA

approval, as we seek to transform the way that mastitis is treated in the dairy industry over the long term, which we refer to as our

“Controlled Launch” strategy.

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 outcomes that could harm the longer-term prospects and market acceptance of Re-Tain ® .

This strategy

is also prudent since our saleable inventory is fixed until an FDA-approved alternative contract manufacturer for aseptic filling is identified

or our own aseptic filling capability is developed and approved by the FDA.

While we are dedicated to increasing our sales revenue, we

must consider the damage a mass market strategy could cause to the long-term value of the product.

We have seen products sold by much

larger companies that were substantially damaged by such failed market launch strategies.

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 ® .

We expect the DS production facility that we

constructed to have initial annual production capacity sufficient to meet approximately $7 million to $10 million in sales of Re-Tain ®

at current production yields without factoring in potential yield improvements, but our supply of finished Drug Product (DP) will be limited

until we find an alternative aseptic formulation and filling capability, as discussed above.

This production capacity estimate does not

yet reflect any inventory build strategies or ongoing yield improvement initiatives.

We have available space in our existing facilities

to double the production capacity by installing a second equipment train.

A decision on whether to use this space for a doubling of the

DS production capacity or for in-house aseptic formulation and filling DP equipment will be made post-approval.

Our objective is to supply

initial market launch with approximately 100,000 to 150,000 doses of Re-Tain ® (enough to treat up to 50,000 cows

with three doses per cow) that would be aseptically formulated and filled by our DP manufacturer.

The expiry dates on this product would

be 18-24 months after the date of production, meaning that product expiry could be approximately between September of 2025 and March of

We may not reach 50,000 cows during the Controlled Launch.

Further, early adopters may be offered discounted or promotional goods

as an incentive to collaborate with us on data collection during the Controlled Launch.

are expecting a pause in supply to the market after the Controlled Launch after goods produced by our contract DP manufacturer are consumed

and before we obtain FDA approval of an alternative DP manufacturing option.

Although these projections are subject to many risks and

uncertainties (some of which are detailed in this Annual Report), if executed correctly, we believe this strategy will lend itself to

a more gradual adoption curve but higher and more sustainable sales over the long-term.

In 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:

ii) Mastitis and iii) Other, in order to allow investors to see our progress with both products.

ImmuCell Corporation

Through our anticipated 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 $17.5 million achieved during the year ended December 31, 2023

as soon as possible.

Our longer-term goal is to exceed $35 million of annual total product sales as soon as possible during the four-year

period after the market launch of Re-Tain ® .

Product Development

Most 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 24-year period that began on January 1, 2000 and ended on December

31, 2023, we invested an aggregate of approximately $28.1 million (excluding depreciation and the capital cost of our DS production facility)

in the development of this product.

3 unchanged sentences

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

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

During 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 ® .

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

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.

We are also investigating

potential applications of Nisin for other animal health applications as well as for humans.

Our Nisin technology includes patented processing

and purification methods to achieve pharmaceutical-grade purity.

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 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.

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.

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.

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

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.

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 when we have adequate cash reserves.

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.

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

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.

All formats of our product can be administered

immediately after birth and are not negatively affected by maternal colostrum.

Zoetis sells a product (Calf-Guard ® )

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

Their product 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

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

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

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 ® .

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 competitors.

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 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 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.

ImmuCell Corporation

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.

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.

Intellectual Property

We own a broad

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

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.

lactis is an essential component of our Re-Tain ®

product and related intellectual property.

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

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.

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 registrations in the United States, Canada and Iran.

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.

We also own U.S.

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.

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 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.

We also own common law rights in the IMMEDIATE IMMUNITY trademark and other trademarks.

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.

ImmuCell Corporation

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 .

We currently employ 79 employees (including 5 part-time

employees) in comparison to 74 employees (including 7 part-time employees) approximately a year ago.

Approximately 51 full-time equivalent

employees are engaged in quality and manufacturing operations, 13 full-time equivalent employees in sales and marketing, 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 6 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.

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, 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.

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 .

Our internet address is http://www.immucell.com.

References to our website in this Annual Report are inactive textual references only and the content of our website should not be deemed

incorporated by reference for any purpose.

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