Item 5. Market for Registrant’s Common Equity
ITEM 5 — MARKET FOR REGISTRANT ’ S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Our common stock trades on The Nasdaq Capital Market tier of The Nasdaq Stock Market under the symbol ICCC. As of March 20, 2026, we had 15,000,000 common shares authorized and 9,046,799 common shares outstanding, and there were approximately 552 stockholders of record. We have not paid dividends on our common stock and do not have any present plan or expectation to pay dividends.
ITEM 6 — [RESERVED]
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ImmuCell Corporation
ITEM 7 — MANAGEMENT ’ S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read together with our audited financial statements and the related notes and other financial information included in Part II: Item 8 — Financial Statements and Supplementary Data of this Annual Report. Some of the information contained in this discussion and analysis or set forth elsewhere in this Annual Report, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. One should review the Cautionary Note Regarding Forward-Looking Statements before Part I: Item 1 — Business and Part I: Item 1A — Risk Factors of this Annual Report for a discussion of some of the important factors that could cause actual results to differ materially from the results, objectives or expectations described in, or implied by, the forward-looking statements contained in the following discussion and analysis.
Overview
ImmuCell Corporation is an animal‑health biologics company that develops, manufactures, and commercializes products designed to improve the survival, health, and long‑term performance of newborn dairy and beef calves. The Company's practical, science-based solutions help prevent calf scours, one of the most prevalent diseases in neonatal calves worldwide that accounts for 30-40% of pre-weaning mortality in many production systems. The Company’s primary product line, First Defense ® utilizes hyperimmunized bovine colostrum to provide pathogen-specific antibodies and other bioactive components. First Defense ® is designed to provide Immediate Immunity™ through orally delivered antibodies against the principal viral and bacterial causes of neonatal calf diarrhea (scours), including Escherichia coli (E.coli) , bovine coronavirus, and bovine rotavirus. First Defense® is available in several formats—single‑dose boluses, gel syringes, and multi‑dose powder options—to fit different calf‑management needs. The Company’s manufacturing platform includes proprietary vaccine development, dairy herd hyperimmunization management, colostrum sourcing and qualification, antibody concentration and purification processes, blending, fill-finish operations, and final product testing and release. The Company markets its products through its commercial sales team, in partnership with national and regional animal‑health distributors. Its primary customers are U.S. and Canadian dairy operations, calf ranches, and beef producers, all of whom must manage calves during the critical first weeks of life—a period in which scours and other early‑life health issues can materially affect survival of the calf, farm labor inputs, growth rates, and lifetime productivity per head of cattle. Although our commercial presence outside North America is currently limited, the Company is pursuing international expansion by seeking additional regulatory approvals and building distributor partnerships. The Company has recently increased its focus on and resources for global business development as part of its long‑term growth strategy.
Key Highlights and Developments in the Year Ended December 31, 2025
We expanded our manufacturing capacity from approximately 3 million manufactured units during the year ended December 31, 2023 to 4.1 million manufactured units during the year ended December 31, 2024, and 4.6 million manufactured units during the year ended December 31, 2025. We eliminated a production contamination related backlog by the end of June 2025. We are currently identifying additional opportunities to further increase our manufacturing capacity in the future. See Item 1 — Business for further discussion about the Company's strategy for expanding production.
For the year ended December 31, 2025 compared to the year ended December 31, 2024, we grew revenue by 4.3%, and improved gross margin from 30% to 41% of product sales.
In December of 2025, we announced a strategy pivot to focus on First Defense ® and pause further investment in manufacturing Re-Tain ® , to allow us to focus on the scours market opportunity. Re-Tain ® was a product development initiative that the Company had pursued for some time. As a result of this decision, we recognized a $2.7 million non-cash impairment charge related to property, plant and equipment, which is included in other expenses, net. Beginning in 2026, we expect that certain product development expenses formerly associated with Re-Tain ® manufacturing, including depreciation expense for manufacturing facilities and equipment that we plan to repurpose for the production of First Defense ® , as well as other costs including employee-related expenses, will be included in First Defense ® costs of goods sold. Furthermore, depreciation expense for idle assets, which were formerly associated with Re-Tain ® , that we plan to refit for the purpose of manufacturing First Defense ® , may fluctuate as a result of re-evaluating the useful life of the assets.
Fiscal 2025 also saw significant realignments in company management. We hired a new President and Chief Executive Officer, created and filled a Chief Financial Officer position, and eliminated the Vice President of Operations role.
Results of Operations for the Year Ended December 31, 2025, Compared with the Year Ended December 31, 2024
For the Years Ended December 31,
Increase/(Decrease)
2025
2024
Amount
Percent
Product sales
$
27,644,174
$
26,493,169
$
1,151,005
4
%
Costs of goods sold
16,198,971
18,552,125
(2,353,154
)
-13
%
Gross profit
11,445,203
7,941,044
3,504,159
44
%
Product development expenses
3,041,880
3,898,582
(856,702
)
-22
%
Sales and marketing expenses
3,553,375
3,466,072
87,303
3
%
Administrative expenses
3,200,643
2,216,549
984,094
44
%
Operating expenses
9,795,898
9,581,203
214,695
2
%
NET OPERATING INCOME (LOSS)
1,649,305
(1,640,159
)
3,289,464
201
%
Other expenses, net
2,677,762
506,414
2,171,348
429
%
LOSS BEFORE INCOME TAXES
(1,028,457
)
(2,146,573
)
1,118,116
52
%
Income tax expense
11,570
10,056
1,514
15
%
NET LOSS
$
(1,040,027
)
$
(2,156,629
)
$
1,116,602
52
%
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ImmuCell Corporation
Product Sales
Sales of the First Defense ® product line made up 99% of our total product sales during both of the years ended December 31, 2025 and 2024. We also sell our own CMT, which is used to detect somatic cell counts in milk. Sales of CMT aggregated approximately 1% of our total product sales during the periods reported.
Product sales during the year ended December 31, 2025 were $27.6 million representing a 4%, or $1.2 million, increase over product sales of $26.5 million during the year ended December 31, 2024. The increase was primarily due to an additional $4.2 million of sales of our Tri-Shield ® product as a result of higher purchasing volume from existing customers and new dairy and beef customers seeking protection for their calves. The increase was partly offset by an anticipated migration from Dual-Force ® products of $2.6 million, as well as $0.4 million decrease in our First Defense Technology ® product. We had an order backlog heading into 2024, which benefited product sales in the year ended December 31, 2024 as compared to the year ended December 31, 2025. We entered 2024 with $9.4 million of order backlog, reducing it to $4.4 million by December 31, 2024. By the end of June 2025, we had substantially eliminated the order backlog but still managed to post this increase in product sales for the year ended December 31, 2025. We ended 2025 with no material order backlog. While there is always uncertainty in manufacturing with biological materials, we do not anticipate recurrence of significant future order backlog at this time.
Domestic sales during the year ended December 31, 2025 increased by 6.5%, and international sales decreased by 9.6%, in comparison to the year ended December 31, 2024. The decrease in international sales was primarily driven by order timing in Canada. International sales aggregated 12% and 14% of total sales during the years ended December 31, 2025 and 2024, respectively.
Costs of Goods Sold
Costs of goods sold during the year ended December 31, 2025 were $16.2 million representing a 13%, or $2.4 million, decrease over costs of goods sold of $18.6 million during the year ended December 31, 2024. The decrease was primarily due to manufacturing volumes and efficiencies, partly offset by approximately $0.7 million of inventory write-downs on a portion of the Company's colostrum inventory.
Product Development Expenses
The majority of our product development expenses pertain to the development of Re-Tain ® , our purified Nisin treatment for subclinical mastitis in lactating cows. During the year ended December 31, 2025, product development expenses decreased by 22%, or $0.9 million, to $3.0 million in comparison to $3.9 million during the year ended December 31, 2024. This decrease was driven by a reduction in product development expenses related to Re-Tain ® as part of an aggressive idle of product development expenses as we awaited what we believed would be the fifth and final Technical Section Complete Letter from the FDA. As discussed under "Key Highlights and Developments in the Year Ended December 31, 2025" above, we made the decision to no longer pursue the fifth Technical Section Complete Letter from the FDA during December 2025.
Sales and Marketing Expenses
During the year ended December 31, 2025, sales and marketing expenses increased by 3%, or $0.1 million, to $3.6 million in comparison to $3.5 million during the year ended December 31, 2024. This increase was primarily due to $0.4 million higher marketing and consulting as a result of increased commercial activity and inflation. Exiting the backorder situation led us to increase commercial activity generally during 2025. This increase was almost fully offset by a $0.4 million decrease in salaries and wages as a result of open positions during the year ended December 31, 2025. We are planning investments to support increased sales capacity in the year ended December 31, 2026 in both the U.S. and international markets. Sales and marketing expenses amounted to approximately 13% of product sales in both of the years ended December 31, 2025 and 2024.
Administrative Expenses
During the year ended December 31, 2025, administrative expenses increased by 44%, or $1.0 million, to $3.2 million in comparison to $2.2 million during the year ended December 31, 2024. The increase was primarily due to $0.8 million of costs associated with executive officer changes and additions. On April 7, 2025, we added a chief financial officer to the administrative team. On November 1, 2025, we hired a new President and CEO because of the pending retirement of our former President and CEO. In connection with this hire, we incurred certain one-time expenses, including recruiting fees, a signing bonus and overlapping transitional wages for two months with our former President and CEO. These one-time items contributed to $0.3 million of the $0.8 million costs associated with the executive officer changes and additions. Also contributing to the administrative expense increase was an additional $0.1 million of information technology costs as compared to the prior year. This increasing level of investment in executive staff and infrastructure is intended to support our anticipated growth. In 2026, we anticipate higher administrative expenses associated with the full-year impact of increased headcount and higher wages, much of which is non-cash share-based compensation and other incentive accruals.
Other Expenses, Net
During the year ended December 31, 2025, other expenses, net, increased by 429%, or $2.2 million, to $2.7 million in comparison to $0.5 million during the year ended December 31, 2024. The increase was primarily due a $2.7 million non-cash impairment charge related to property, plant and equipment, formally related to the Re-Tain ® product line. Partly offsetting the increase was insurance recoveries related to inventory damages occurring in prior periods of $0.4 million.
Income Tax Expense
During both of the years ended December 31, 2025 and 2024, we recorded insignificant income tax expense.
We have substantial net operating loss carryforwards that will largely offset future income tax liabilities. As of December 31, 2025, our federal net operating loss carryforward was $17.5 million. As of December 31, 2025, our state net operating loss carryforward was $7.7 million.
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ImmuCell Corporation
The Tax Cuts and Jobs Act of 2017 reduced the U.S. corporate income tax rate to 21% and modified rules governing net operating loss carryforwards and carrybacks, among other changes. On July 4, 2025, the One Big Beautiful Bill Act was enacted, which permanently extends and modifies certain provisions of the Tax Cuts and Jobs Act. Key provisions include 100% bonus depreciation for qualified property, immediate expensing of domestic research and experimental expenditures under IRC Section 174A, and restoration of an Earnings Before Interest Taxes Depreciation and Amortization (EBITDA)-based calculation for the business interest expense limitation under IRC Section 163(j). The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The legislation did not have a material impact on our effective tax rate for the year ended December 31, 2025 or our financial statements. We continue to evaluate the impact of these provisions on our tax position, including their effect on our deferred tax assets and related valuation allowance.
Our effective income tax rate differs from the statutory U.S. corporate tax rate primarily because we continue to provide a full valuation allowance against our deferred tax assets. While this valuation allowance remains in place, we are not recognizing the benefit of our tax losses. We evaluate the realizability of our deferred tax assets at each reporting date, considering all available positive and negative evidence, and will reduce the valuation allowance to the extent it becomes more likely than not that some or all of the deferred tax assets will be realized.
Liquidity and Capital Resources
Our sources of liquidity and capital resources are cash flows from operations, proceeds from our sale of common stock under our At-The-Market Agreement with Craig-Hallum Capital Group LLC (ATM Agreement), and borrowings available under our bank line of credit.
In April of 2024, we entered into our ATM Agreement, which allows us to offer and sell up to $11 million of shares of our common stock. Proceeds, net of upfront legal, accounting and other fees, less sales commissions during the year ended December 31, 2025 and December 31, 2024 were $0.3 million and $4.4 million, respectively. Particularly in 2024, this provided a financial bridge to fund our operations during a backlog situation that lasted from 2022 to mid-2025. As of December 31, 2025, we have the capacity to sell $6 million of shares under the ATM Agreement but no pending plan to issue additional shares under that arrangement.
We had aggregate debt outstanding (net of debt issuance and debt discount costs) of $9.1 million and $10.5 million as of December 31, 2025 and 2024, respectively. Recurring debt principal repayments (excluding the line of credit) aggregated $1.5 million during both the years ended December 31, 2025 and 2024. We anticipate that recurring debt principal repayments will aggregate approximately $1.6 million and $1.2 million during the years ending December 31, 2026 and 2027, respectively. During the third quarter of 2025, the availability of our $1.0 million line of credit, which bears interest at the National Prime Rate per annum, was extended until September 11, 2026. No draw on our line of credit was outstanding as of December 31, 2025, or December 31, 2024. See Part II: Item 8 — Financial Statements and Supplementary Data: Note 9, "Bank Debt" for more information about our bank debt.
Interest expense (excluding amortization of debt issuance and debt discount costs) was approximately $439,000 and $526,000 during the years ended December 31, 2025, and 2024, respectively. Our debt bears interest at fixed rates, which on a blended basis amounts to 4.31% per annum. We anticipate that interest expense (excluding amortization of debt issuance and debt discount costs) will be $367,000 and $297,000 during the years ending December 31, 2026 and 2027, respectively.
The table below summarizes the changes in selected key accounts:
As of
As of
Increase/(Decrease)
December 31, 2025
December 31, 2024
Amount
Percent
Cash and cash equivalents
$
3,806,831
$
3,758,232
$
48,599
1
%
Net working capital
$
12,966,625
$
10,630,537
$
2,336,088
22
%
Total assets
$
42,532,447
$
45,100,477
$
(2,568,030
)
(6
)%
Stockholders’ equity
$
27,055,480
$
27,518,187
$
(462,707
)
(2
)%
Common shares outstanding (1)
9,045,851
8,979,091
66,760
1
%
(1) There were 801,760 and 664,000 shares of common stock reserved for stock option issuance that were outstanding as of December 31, 2025 and 2024, respectively.
We continuously assess sources and uses of cash for our business. In addition to normal working capital requirements, we anticipate that our short-term and long-term cash requirements consist primarily of general corporate needs, capital expenditures, debt requirements, amounts due under operating lease agreements, and other commitments. Based on our current best estimates, we believe that our existing cash and cash equivalents, together with cash flows from operations and our bank line of credit, will be sufficient to meet our currently planned working capital, capital expenditure, and debt requirements and to finance our ongoing business operations for at least the next 12 months and the foreseeable future.
Cash Flows
During the Years Ended
December 31,
2025
2024
Net cash provided by operating activities
$
2,475,292
$
357,903
Net cash used for investing activities
$
(1,214,307
)
$
(461,225
)
Net cash (used for) provided by financing activities
$
(1,212,386
)
$
2,882,813
Net cash provided by operating activities increased $2.1 million during the year ended December 31, 2025 as compared to the year ended December 31, 2024. This increase was primarily due to $1.9 million less cash being used for accounts receivable and a $1.1 million decrease in net loss, which included a $2.7 million increase in non-cash adjustments. These factors were partly offset by a $2.9 million increase in cash used for inventory as a result of our efforts to replenish after periods of high backlog.
Net cash used for investing activities increased $0.8 million during the year ended December 31, 2025, as compared to the year ended December 31, 2024, primarily due to cash spent to fund the purchase of property, plant and equipment primarily for manufacturing. Cash used on property, plant and equipment represents more normalized spend levels than 2024, when there was a significant effort to conserve cash.
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Net cash used for financing activities increased $4.0 million during the year ended December 31, 2025 as compared to the year ended December 31, 2024. The increase in net cash used was primarily due to an approximate reduction of $4.3 million in proceeds from sales of common stock under the ATM Agreement, partly offset by lower payments of equity offering costs. During the year ended December 31, 2025, we refinanced a portion of our bank debt, resulting in borrowings and repayments in approximately the same amount. During the year ended December 31, 2025, we also made standard mandatory repayments on our bank debt of approximately $1.5 million, which were generally consistent with the same payments in the prior year.
Covenants and Restrictions
Our debt with Maine Community Bank is subject to certain financial covenants. We are required to meet a minimum debt service coverage (DSC) ratio of 1.35. Our actual DSC ratios were 2.65 and 0.73 for the years ended December 31, 2025, and 2024, respectively. In the second, third and fourth quarters of 2024, the bank preemptively waived the DSC waiver. There is no assurance that we will be able to achieve the required DSC ratio going forward. If we are unable to do so or reach a favorable agreement with our lenders regarding that requirement (including an amendment to or waiver of such requirement), we would be in violation of that covenant, which could result in unfavorable amendments to the terms of our bank debt (including a possible bank requirement to prepay our debt) or have other adverse impacts on our business and results of operations.
Commitments and Contingencies
See Part II: Item 8 — Financial Statements and Supplementary Data: Note 10, "Commitments and Contingencies" for disclosure of the Company's commitments and contingencies as of December 31, 2025.
Critical Accounting Policies and Estimates
The audited financial statements are presented on the basis of accounting principles that are generally accepted in the United States. All professional accounting standards that were effective and applicable to us as of December 31, 2025 have been taken into consideration in preparing the financial statements. The preparation of financial statements requires that we make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. See Part II: Item 8 — Financial Statements and Supplementary Data: Note 2, "Basis of Presentation and Use of Estimates and Significant Accounting Policies", for a complete discussion of recently issued accounting standards adopted and not yet adopted.
On an on-going basis, we evaluate our estimates. Significant estimates include our valuation of inventory valuation, long-lived assets, and deferred tax assets. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We have chosen to highlight certain policies that we consider critical to the operations of our business and understanding of our financial statements. These critical accounting estimates have been consistently applied.
Inventory
Inventory includes raw materials, work-in-process and finished goods and is recorded at the lower of cost, on the first-in, first-out method, or net realizable value (determined as the estimated selling price in the normal course of business, less reasonably predictable costs of completion, disposal and transportation). Work-in-process and finished goods inventories include materials, labor and manufacturing overhead. Inventory valuations is a critical accounting policy because of the estimates and assumptions used by management to determine its cost accounting and because of the variability of the cost per dose due to fluctuations in the biological yield.
We evaluate inventory for excess, slow moving, and obsolete items and record an adjustment when the cost of inventory exceeds its estimated net realizable value. The inventory valuation adjustment to net realizable value establishes a new cost basis of the inventory that cannot be subsequently reversed. The effect of any inventory adjustment is recorded in costs of goods sold, as appropriate.
In developing inventory adjustments for excess, slow moving, and obsolete inventory, we are required to use judgment and make estimates of future sales demand and production requirements compared with current inventory levels. Our estimate of projected sales demand and production requirements is primarily based on actual orders received, historical demand, product life cycle changes, product pricing, economic trends, and competitive factors, such as market and pricing trends for similar products. Projecting sales demand and production requirements involves significant management judgment regarding future events. Future events that could significantly influence our judgments and related estimates include general economic conditions within the specific markets in which we operate, changes in demand for our products and customer preference, price fluctuations, and actions of our competitors, including the introduction of new products, technological advances, and pricing changes. Projected sales demand and production requirements can also be affected by the significant redesign of our existing products or the replacement of an existing product by an entirely new generation of product. It is possible that an unfavorable adjustment to our inventory for excess, slow moving, and obsolete inventory may be required in the future if there is a change in any of the aforementioned factors that adversely impacts our estimates of future demand for our products and we do not modify our purchases or production schedule accordingly.
Long-lived Assets
We periodically evaluate our long-lived assets, consisting principally of property, plant and equipment, net, operating lease ROU asset and amortizable intangible assets, for potential impairment. In accordance with the applicable accounting guidance for the treatment of long-lived assets, we review the carrying value of our long-lived assets or asset group that is held and used, including intangible assets subject to amortization, for impairment whenever events and circumstances indicate that the carrying value of the assets may not be recoverable. Under the held for use approach, the asset or asset group to be tested for impairment should represent the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities. If the carrying amount of a long-lived asset group exceeds the related undiscounted future cash flows, we recognize an impairment loss by the amount that the carrying value of the asset exceeds fair value.
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ImmuCell Corporation
Income Taxes
We account for income taxes in accordance with ASC 740, Income Taxes , which requires that we recognize a current tax liability or asset for current taxes payable or refundable and a deferred tax liability or asset for the estimated future tax effects of temporary differences and carryforwards to the extent they are realizable. We consider future taxable income and feasible tax planning strategies in assessing the need for a valuation allowance against our deferred tax assets at the end of each quarter. If we determine that it is more likely than not that we will realize our deferred tax assets in the future in excess of the net recorded amount over a reasonably short period of time, a reduction of the valuation allowance would increase income in the period such determination was made. Likewise, if we determine that it is more likely than not that we will not realize all or part of our net deferred tax asset in the future, an increase to the valuation allowance would be charged to income in the period such determination was made.
ASC 740-10 clarifies the accounting for income taxes by prescribing a minimum recognition threshold that a tax position must meet before being recognized in the financial statements. In the ordinary course of business, there are transactions and calculations where the ultimate tax outcome is uncertain. In addition, we are subject to periodic audits and examinations by the Internal Revenue Service and other taxing authorities. With few exceptions, we are no longer subject to income tax examinations by tax authorities for years before 2022. We have evaluated the positions taken on our filed tax returns and have concluded that no uncertain tax positions existed as of December 31, 2025 or 2024. Although we believe that our estimates are reasonable, actual results could differ from these estimates. See Part II: Item 8 — Financial Statements and Supplementary Data: Note 15, "Income Taxes".
ITEM 7A — QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not Applicable