Item 2. Properties
ITEM 2 — PROPERTIES
Building 56:
During 1993, we purchased a 15,000 square foot
facility (that included 5,000 square feet of unfinished office space on the second floor) at 56 Evergreen Drive in Portland, Maine. We
currently use this space for substantially all of our: i) office and laboratory needs, ii) vaccine manufacturing operations, iii) liquid
processing operations and iv) freeze-drying operations for our USDA-regulated product line. All of our powder milling and filling operations,
gel formulation operations and assembly services have been relocated out of this building. During 2001, we completed a construction project
that added approximately 5,200 square feet of new manufacturing space on the first floor and approximately 4,100 square feet of storage
space on the second floor. During 2007, we built out the 5,000 square feet of unfinished space on the second floor into usable office
space. After moving offices from the first floor into this new space on the second floor, we modified and expanded the laboratory space
on the first floor and added approximately 2,500 additional square feet of storage space on the second floor. During 2009, we added 350
square feet of cold storage space connected to our first floor production area and added an additional 600 square feet to the second floor
storage area. During 2015, we completed construction of a two-story addition connected to our facility to provide us with approximately
7,100 additional square feet for cold storage, production and warehouse space for our operations. These additions increased the size of
the facility to approximately 34,850 square feet.
Building 33:
During 2015, we exercised an option to acquire
land at 33 Caddie Lane in Portland, Maine which is near our facility at 56 Evergreen Drive, on which we initiated construction of our
DS production facility for Re-Tain ® during the third
quarter of 2016. During the fourth quarter of 2017, we obtained a Certificate of Occupancy from the City of Portland for our 16,202 square
foot (9,803 on the first floor and 6,399 on the second floor) DS production facility. Our FDA-regulated operations are conducted in this
building.
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ImmuCell Corporation
Building 14:
During 2017, we purchased a 4,080 square foot
facility adjacent to the DS production facility for Re-Tain ®
at 14 Wedge Way in Portland, Maine. We are using this warehouse space primarily for storage of inventory, materials and equipment. During
the middle of 2023, we completed modifications to this facility for packing, shipping and cold storage for Re-Tain ®
and other warehousing needs.
Building 175A:
During 2019, we entered into a lease covering
approximately 14,300 square feet of office and warehouse space at 175 Industrial Way in Portland, Maine to expand our USDA-regulated manufacturing
operations. We have renovated this space (a Certificate of Occupancy was issued during the second quarter of 2020) to help us expand our
production capacity and improve quality for the First Defense ® product line. This space is being used for all of
our powder milling and filling, gel formulation and assembly services. The original lease term was ten years with a right to renew for
a second ten-year term and a right of first offer to purchase. During the third quarter of 2022, we entered into a new 20-year lease covering
a facility that has been constructed for us by our landlord ( Building 175B , described below), which is adjacent to (and has been
connected to) Building 175A . In connection with this new lease, the lease to Building 175A was extended by approximately
13 years to match the expiration of the other lease to Building 175B .
Building 175B:
During 2022, we committed to lease an additional
15,400 square feet of space at 175 Industrial Way in Portland, Maine, which has been constructed and connected to Building 175A ,
over a 20-year term. The lease commencement date was April 1, 2023. Lease payments began four months after this date. In connection with
the lease commitment for space in Building 175B , the term of the original lease for Building 175A was extended by approximately
13 years. We intend to use this space for the following three purposes: 1) improve product quality by moving powder milling out of Building
56 , 2) provide much needed additional warehouse space and 3) provide space for additional freeze-drying equipment to increase our
production capacity to approximately $40 million per year. Due to the loss in gross margin on product sales during 2023 caused by the
slowdown in production output necessary to remediate product contamination events, we reduced the scope of the investment to build out
Building 175B at least for the time being. The objective of moving our powder milling operations out of Building 56 has
been achieved by moving powder milling to Building 175A for the time being. We have completed Phase I of this build out plan, which
included pouring a concrete floor and bringing utilities and heat to the space. Upon issuance of a Certificate of Occupancy by the city,
we plan to relocate all shipping and receiving operations from Building 56 to Building 175B and benefit from the new warehouse
space. When we have adequate cash, we will initiate Phase II of the build out plan, which includes construction of process rooms and installation
of production equipment necessary to further increase our production capacity.
Other:
During March of 2021, we entered into a renewable,
two-year lease for approximately 1,300 square feet of office, storage and parking space in New York. Subsequently, we entered into a new
two-year lease to the same property through March of 2025 that includes an option to renew for an additional two-year term. We are renting
approximately 960 square feet in Winona, Minnesota for a sales office. This lease automatically renews with 4% increases for one-year
terms unless we or the landlord give 60-days’ notice of a change. The current term expires in June 2024. We do not expect to provide
notice of cancellation at this time. We also maintain access to cows (as a source of colostrum used in the production of the First
Defense ® product line) through contractual relationships
with commercial dairy farms. We maintain property insurance in amounts that approximate replacement cost and a modest amount of business
interruption insurance.