UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2025

001-12934

(Commission file number)

ImmuCell Corporation

(Exact name of registrant as specified in its charter)

Delaware

01-0382980

(State of Incorporation)

(I.R.S. Employer

Identification No.)

56 Evergreen Drive, Portland, ME		04103
(Address of principal executive office)		(Zip Code)

(207) 878-2770

(Registrant’s telephone number)

Securities registered pursuant to Section 12(b) of the Exchange Act:

Title of each class		Trading symbol(s)		Name of each exchange on which registered
Common Stock, $0.10 par value per share		ICCC		The Nasdaq Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of the registrant’s common stock outstanding as of August 7, 2025 was 9,045,851.

ImmuCell Corporation

TABLE OF CONTENTS

June 30, 2025

PART I: FINANCIAL INFORMATION

ITEM 1.	Unaudited Financial Statements

	Balance Sheets as of June 30, 2025 and December 31, 2024	1

	Statements of Operations during the three-month and six-month periods ended June 30, 2025 and 2024	2

	Statements of Stockholders’ Equity during the three-month and six-month periods ended June 30, 2025 and 2024	3

	Statements of Cash Flows during the six-month periods ended June 30, 2025 and 2024	4-5

	Notes to Unaudited Financial Statements	6-23

ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24-39

ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk	39

ITEM 4.	Controls and Procedures	39

PART II: OTHER INFORMATION

ITEM 1 THROUGH 6.		40-49

	Signatures	50

ImmuCell Corporation

Part 1. FINANCIAL INFORMATION

ITEM 1. UNAUDITED FINANCIAL STATEMENTS

BALANCE SHEETS

(Unaudited)

	As of June 30, 2025			As of December 31, 2024

ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	5,998,494		$	3,758,232
Trade accounts receivable		2,378,823			3,771,133
Inventory		8,294,426			7,112,623
Prepaid expenses and other current assets		464,566			400,762
Total current assets		17,136,309			15,042,750

Property, plant and equipment, net		24,882,998			25,349,019
Operating lease right-of-use asset		4,542,863			4,560,679
Goodwill		95,557			95,557
Intangible assets, net		9,552			19,104
Other assets		53,619			33,368
TOTAL ASSETS	$	46,720,898		$	45,100,477

LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Current portion of debt obligations	$	1,535,439		$	1,497,619
Current portion of operating lease liability		322,753			432,072
Accounts payable and accrued expenses		2,588,223			2,482,522
Total current liabilities		4,446,415			4,412,213

LONG-TERM LIABILITIES:
Debt obligations, net of current portion		8,263,223			9,040,975
Operating lease liability, net of current portion		4,143,832			4,129,102
Total long-term liabilities		12,407,055			13,170,077

TOTAL LIABILITIES		16,853,470			17,582,290

CONTINGENT LIABILITIES AND COMMITMENTS (See Note 10)

STOCKHOLDERS’ EQUITY:
Common stock, $0.10 par value per share, 15,000,000 and 15,000,000 shares authorized, 9,105,622 and 9,042,392 shares issued and 9,045,851 and 8,979,091 shares outstanding, as of June 30, 2025 and December 31, 2024, respectively.		910,563			904,240
Additional paid-in capital		41,302,488			40,916,155
Accumulated deficit		(12,214,863	)		(14,163,726	)
Treasury stock, at cost, 59,771 and 63,301 shares as of June 30, 2025 and December 31, 2024, respectively		(130,760	)		(138,482	)
TOTAL STOCKHOLDERS’ EQUITY		29,867,428			27,518,187

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	46,720,898		$	45,100,477

The accompanying notes are an integral part of these unaudited financial statements.

ImmuCell Corporation

STATEMENTS OF OPERATIONS

(Unaudited)

	During the Three-Month Periods Ended June 30,						During the Six-Month Periods Ended June 30,
	2025			2024			2025		2024

Product sales	$	6,444,880		$	5,472,890		$	14,512,054	$	12,730,467
Costs of goods sold		3,626,956			4,242,404			8,340,158		9,204,622
Gross margin		2,817,924			1,230,486			6,171,896		3,525,845

Product development expenses		831,858			1,030,502			1,588,705		2,293,053
Sales and marketing expenses		696,086			984,957			1,552,744		1,785,880
Administrative expenses		720,418			601,634			1,343,260		1,133,572
Operating expenses		2,248,362			2,617,093			4,484,709		5,212,505

NET OPERATING INCOME (LOSS)		569,562			(1,386,607	)		1,687,187		(1,686,660	)

Other (expenses) income, net		(65,778	)		(143,679	)		265,485		(280,154	)

INCOME (LOSS) BEFORE INCOME TAXES		503,784			(1,530,286	)		1,952,672		(1,966,814	)

Income tax expense		1,904			1,340			3,809		2,680

NET INCOME (LOSS)	$	501,880		$	(1,531,626	)	$	1,948,863	$	(1,969,494	)

Basic weighted average common shares outstanding		9,031,282			7,810,037			9,006,082		7,780,450
Basic net income (loss) per share	$	0.06		$	(0.20	)	$	0.22	$	(0.25	)
Diluted weighted average common shares outstanding		9,031,282			7,810,037			9,006,082		7,780,450
Diluted net income (loss) per share	$	0.06		$	(0.20	)	$	0.22	$	(0.25	)

The accompanying notes are an integral part of these unaudited financial statements.

ImmuCell Corporation

STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

	Common Stock										Treasury Stock
	Shares		Amount		Additional paid-in capital			Accumulated Deficit			Shares			Amount			Total Stockholders’ Equity
During the Three-Month Period Ended June 30, 2025:
BALANCE,
March 31, 2025		9,045,924	$	904,593	$	40,944,476		$	(12,716,743	)		63,301		$	(138,482	)	$	28,993,844
Net income		—		—		—			501,880			—			—			501,880
Exercise of stock options		—		—		(7,719	)		—			(3,530	)		7,722			3
At-The-Market Offering (ATM) of common stock, net of $24,905 of offering costs		59,698		5,970		299,017			—			—			—			304,987
Stock-based compensation		—		—		66,714			—			—			—			66,714
BALANCE,
June 30, 2025		9,105,622	$	910,563	$	41,302,488		$	(12,214,863	)		59,771		$	(130,760	)	$	29,867,428

During the Three-Month Period Ended June 30, 2024:
BALANCE,
March 31, 2024		7,814,165	$	781,417	$	36,438,349		$	(12,444,965	)		63,301		$	(138,482	)	$	24,636,319
Net loss		—		—		—			(1,531,626	)		—			—			(1,531,626	)
At-The-Market Offering of common stock, net of $164,802 of offering costs		82,216		8,222		244,527			—			—			—			252,749
Stock-based compensation		—		—		98,021			—			—			—			98,021
BALANCE,
June 30, 2024		7,896,381	$	789,639	$	36,780,897		$	(13,976,591	)		63,301		$	(138,482	)	$	23,455,463

During the Six-Month Period Ended June 30, 2025:
BALANCE,
December 31, 2024		9,042,392	$	904,240	$	40,916,155		$	(14,163,726	)		63,301		$	(138,482	)	$	27,518,187
Net income		—		—		—			1,948,863			—			—			1,948,863
Exercise of stock options		—		—		(7,719	)		—			(3,530	)		7,722			3
At-The-Market Offering of common stock, net of $67,880 of offering costs		63,230		6,323		275,123			—			—			—			281,446
Stock-based compensation		—		—		118,929			—			—			—			118,929
BALANCE,
June 30, 2025		9,105,622	$	910,563	$	41,302,488		$	(12,214,863	)		59,771		$	(130,760	)	$	29,867,428

During the Six-Month Period Ended June 30, 2024:
BALANCE,
December 31, 2023		7,814,165	$	781,417	$	36,357,239		$	(12,007,097	)		63,301		$	(138,482	)	$	24,993,077
Net loss		—		—		—			(1,969,494	)		—			—			(1,969,494	)
At-The-Market Offering of common stock, net of $164,802 of offering costs		82,216		8,222		244,527			—			—			—			252,749
Stock-based compensation		—		—		179,131			—			—			—			179,131
BALANCE,
June 30, 2024		7,896,381	$	789,639	$	36,780,897		$	(13,976,591	)		63,301		$	(138,482	)	$	23,455,463

The accompanying notes are an integral part of these unaudited financial statements.

ImmuCell Corporation

STATEMENTS OF CASH FLOWS

(Unaudited)

	During the Six-Month Periods Ended June 30,
	2025			2024
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	1,948,863		$	(1,969,494	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation		1,334,646			1,328,659
Amortization of intangible assets		9,552			9,552
Amortization of debt issuance costs and debt discounts		21,612			21,054
Stock-based compensation		118,929			179,131
(Gain) loss on disposal of property, plant and equipment		(2,263	)		14,557
Non-cash rent benefit		(76,773	)		(74,871	)
Changes in:
Trade accounts receivable		1,392,310			234,933
Inventory		(1,181,803	)		512,235
Prepaid expenses and other current assets		(63,804	)		274,314
Other assets		(20,251	)		19,976
Accounts payable and accrued expenses		(305,684	)		450,239
Net cash provided by operating activities		3,175,334			1,000,285

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and equipment		(484,209	)		(181,097	)
Proceeds from sale of property, plant and equipment		29,232			4,500
Net cash used for investing activities		(454,977	)		(176,597	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from At-The-Market Offering, gross		349,326			417,551
Debt principal repayments		(761,544	)		(725,856	)
Payments of debt issuance costs		—			(5,037	)
Payments of equity offering costs		(67,880	)		(164,802	)
Proceeds from exercise of stock options		3			—
Net cash used for financing activities		(480,095	)		(478,144	)

NET INCREASE IN CASH AND CASH EQUIVALENTS		2,240,262			345,544

BEGINNING CASH AND CASH EQUIVALENTS		3,758,232			978,741

ENDING CASH AND CASH EQUIVALENTS	$	5,998,494		$	1,324,285

The accompanying notes are an integral part of these unaudited financial statements.

ImmuCell Corporation

STATEMENTS OF CASH FLOWS

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

(Unaudited)

	During the Six-Month Periods Ended June 30,
	2025			2024
CASH PAID FOR:
Income taxes	$	10,205		$	5,905
Interest	$	234,380		$	270,068

NON-CASH ACTIVITIES:
(Increase) decrease in capital expenditures included in accounts payable and accrued expenses	$	(411,385	)	$	12,005
Increase (decrease) in operating lease right-of-use asset and operating lease liability	$	—		$	(17,012	)

The accompanying notes are an integral part of these unaudited financial statements.

ImmuCell Corporation

Notes to Unaudited Financial Statements

1. BUSINESS OPERATIONS

ImmuCell Corporation (the “Company”, “we”, “us”, “our”) was originally incorporated in Maine in 1982 and reincorporated in Delaware in 1987, in conjunction with an initial public offering of common stock. We are an animal health company whose purpose is to create scientifically proven and practical products that improve the health and productivity of dairy and beef cattle. We focus on the two most critical stages of dairy productivity, those being the first 30 days of life and the first 30 days of lactation. Our concentrated colostrum and purified Nisin technologies could offer unique animal health solutions during these periods when immunity is at its most vulnerable. As disclosed in Note 16, “Segment Information”, one of our business segments is dedicated to Scours and the other is focused on Mastitis. We manufacture and market the First Defense^® product line, providing Immediate Immunity™ to prevent scours in newborn dairy and beef calves. Our product line offers three formats in two distinct platforms: veterinary biologics providing protection against E. coli, coronavirus, and rotavirus, and functional feed products delivering concentrated bioactive colostrum proteins. We are developing Re-Tain^® – a treatment for subclinical mastitis in lactating dairy cows. Upon approval, it could represent a first-of-its-kind new animal drug, unrelated to human-use antibiotics. The governing regulatory authorities are Center for Veterinary Biologics, U.S. Department of Agriculture and American Association of Feed Control Officials for First Defense^®, and Center for Veterinary Medicine, U.S. Food and Drug Administration for Re-Tain^®. We are subject to certain risks including dependence on key individuals and third-party providers of critical goods and services, competition from other larger companies, the successful sale of existing products and the development of new viable products with appropriate regulatory approvals, where applicable. A combination of the conditions, trends and concerns related to or arising from tariffs, inflation, rising interest rates and potential recessionary conditions in the United States and/or internationally, could have a corresponding negative effect on our business and operations. We are experiencing price increases in key components, supportive services, transportation and other supplies that are causing our costs of goods sold to increase. We experienced contamination events in our production process, beginning in the third quarter of 2022 and through April of 2024, as disclosed previously. We implemented a production slowdown during 2023 to remediate this problem, which led to the recognition of lower sales and gross margin. We have experienced just one further contamination event since April of 2024, which occurred during the second quarter of 2025.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of Presentation

We have prepared the accompanying unaudited financial statements reflecting all adjustments (which are of a normal recurring nature) that are, in our opinion, necessary in order to ensure that the financial statements are not misleading. We follow accounting standards set by the Financial Accounting Standards Board (FASB). The FASB sets Generally Accepted Accounting Principles (GAAP) that we follow to ensure we accurately report our financial condition, results of operations, earnings per share and cash flows. References to GAAP in these footnotes are to the FASB Accounting Standards Codification™ (Codification). We believe that the disclosures are adequate to ensure that the information presented is not misleading.

(b) Cash and Cash Equivalents

We consider all highly liquid investment instruments that mature within three months of their purchase dates to be cash equivalents. Cash equivalents are principally invested in securities backed by the U.S. government. We hold no cash or cash equivalents in excess of Federal Deposit Insurance Corporation (FDIC) limits of $250,000 per financial institution per depositor.

(c) Trade Accounts Receivable

Accounts receivable are carried at the original invoice amount less an estimate made for credit losses, when applicable. Management determines the allowance for credit losses on a monthly basis by identifying troubled accounts and by using historical experience applied to an aging of accounts and other relevant factors. Accounts receivable are considered to be past due if a portion of the receivable balance is outstanding for more than 30 days. Past due accounts receivable are subject to an interest charge. It was not necessary to charge interest on past due accounts during the three-month or six-month periods ended June 30, 2025 or 2024 because the time past due was not significant, and there was no accrual for such interest charges as of June 30, 2025 or December 31, 2024. As of June 30, 2025 and December 31, 2024, we determined that no allowance for credit losses was necessary. Accounts receivable are written off when deemed uncollectible. No accounts receivable were written off during the three-month or six-month periods ended June 30, 2025 or 2024. Recoveries of accounts receivable previously written off are recorded as income when received. No such recoveries were recorded during the three-month or six-month periods ended June 30, 2025 or 2024. See Note 3.

ImmuCell Corporation

Notes to Unaudited Financial Statements (continued)

(d) 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. At each balance sheet date, we evaluate our ending inventories for excess quantities and obsolescence. Inventories that we consider excess or obsolete are written down to estimated net realizable value. Once inventory is written down and a new cost basis is established, it is not written back up. We believe that supplies and raw materials for the production of our products are available from more than one vendor or farm. Our policy is to maintain more than one source of supply for the components used in our products when feasible. See Note 4.

(e) Property, Plant and Equipment, net

We depreciate property, plant and equipment on the straight-line method by charges to operations and costs of goods sold in amounts estimated to expense the cost of the assets from the date they are first put into service to the end of the estimated useful lives of the assets. The facility we have constructed at 33 Caddie Lane to produce the Nisin Drug Substance (DS) for Re-Tain^® (Building 33) is being depreciated over 39 years from when a Certificate of Occupancy was issued during the fourth quarter of 2017. We began depreciating the equipment for our Nisin DS facility when it was placed in service during the third quarter of 2018. Approximately 86% of these assets are being depreciated over 10 years. We began depreciating the leasehold improvements to our new First Defense^®production facility at 175 Industrial Way (Building 175A) over the remainder of the 10-year lease term beginning when a Certificate of Occupancy was issued during the second quarter of 2020. During August of 2022, this lease term was extended to January of 2043 in connection with a new lease covering additional space at 175 Industrial Way (Building 175B). As a result, the net book value of these leasehold improvements as of August 31, 2022 is now being depreciated over the remainder of the extended lease term. Significant repairs to property, plant and equipment that benefit more than a current period are capitalized and depreciated over their useful lives. Insignificant repairs are expensed when incurred. See Notes 2(h) and 6 for additional disclosures.

(f) Operating Leases

We account for our real estate leases using a right-of-use model, which recognizes that at the date of commencement, a lessee has a financial obligation to make lease payments to the lessor for the right to use the underlying asset during the lease term and recognizes a corresponding right-of-use (ROU) asset related to this right. ROU assets and lease liabilities are recognized at the lease commencement date based on the present value of the future lease payments over the expected lease term. The ROU asset is also adjusted for any lease prepayments made, lease incentives received and initial direct costs incurred. For operating leases with lease payments that fluctuate over the lease term, the total lease costs are recognized on a straight-line basis over the lease term. Our leases, at times, may include options to extend the term of the lease. When it is reasonably certain that we will exercise the option, we include the impact of the option in the lease term for purposes of determining future lease payments. For all underlying classes of assets, we made an accounting policy election to not recognize assets or liabilities for leases with a term of twelve months or less and to account for all components in a lease arrangement as a single combined lease component. Short-term lease payments are recognized on a straight-line basis. Certain of our lease agreements include variable rent payments, consisting primarily of amounts paid to the lessor based on cost or consumption, such as maintenance and real estate taxes. These costs are recognized in the period in which the obligation is incurred. Because our leases do not specify an implicit rate, we use an incremental borrowing rate based on information available at the lease commencement date to determine the present value of the lease payments. We evaluate our ROU asset for impairment when events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. See Notes 2(h) and 11 for additional disclosures.

(g) Intangible Assets and Goodwill

We amortize intangible assets on the straight-line method by charges to costs of goods sold in amounts estimated to expense the cost of the assets from the date they are first put into service to the end of the estimated useful lives of the assets. We have recorded intangible assets related to customer relationships, non-compete agreements and developed technology, each with defined useful lives. Amounts paid in excess of the fair value of the net assets (including tax attributes) are recorded as goodwill under the acquisition method of accounting. We assess the impairment of intangible assets that have indefinite lives (when applicable) and goodwill (at the reporting unit level) on an annual basis (as of December 31^st) and whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. We would record an impairment charge if such an assessment were to indicate that the fair value of such assets was less than the carrying value. Judgment is required in determining whether an event has occurred that may impair the value of goodwill or identifiable intangible assets. Factors that could indicate that an impairment may exist include significant under-performance relative to plan or long-term projections, significant changes in business strategy and significant negative industry or economic trends. Although we believe intangible assets and goodwill are properly stated in the accompanying financial statements, changes in strategy or market conditions could significantly impact these judgments and require an adjustment to the recorded balance in the future. No goodwill impairments were recorded during the three-month or six-month periods ended June 30, 2025 or 2024. See Notes 2(h) and 7 for additional disclosures.

ImmuCell Corporation

Notes to Unaudited Financial Statements (continued)

(h) Valuation of Long-Lived Assets

We periodically evaluate our long-lived assets, consisting principally of property, plant and equipment, operating lease right-of-use 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. One example of an asset category we are carefully monitoring is property, plant and equipment related to Re-Tain^®.

	Re-Tain^® Assets as of June 30, 2025
Land	$	448,201
Buildings and improvements		12,725,789
Laboratory and manufacturing equipment		9,769,049
Construction in progress		2,316,951
Total		25,259,990
Accumulated depreciation		(9,496,221	)
Net book value	$	15,763,769

No impairment was recognized during the three-month or six-month periods ended June 30, 2025 or 2024.

(i) Fair Value Measurements

In determining fair value measurements, we follow the provisions of Codification Topic 820, Fair Value Measurements and Disclosures. Codification Topic 820 defines fair value, establishes a framework for measuring fair value under GAAP and enhances disclosures about fair value measurements. The topic provides a consistent definition of fair value which focuses on an exit price, which is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The topic also prioritizes, within the measurement of fair value, the use of market-based information over entity-specific information and establishes a three-level hierarchy for fair value measurements based on the nature of inputs used in the valuation of an asset or liability as of the measurement date. As of June 30, 2025 and December 31, 2024, the carrying amounts of cash and cash equivalents, accounts receivable, inventory, prepaid expenses and other current assets, other assets, accounts payable and accrued expenses approximate fair value because of their short-term nature. The amount outstanding under our bank debt facilities is measured at carrying value in our accompanying balance sheets. Our bank debt facilities are valued using Level 2 inputs. The three-level hierarchy is as follows:

Level 1

—

Pricing inputs are quoted prices available in active markets for identical assets or liabilities as of the measurement date.

Level 2

—

Pricing inputs are quoted prices for similar assets or liabilities, or inputs that are observable, either directly or indirectly, for substantially the full term through corroboration with observable market data.

Level 3

—

Pricing inputs are unobservable for the assets or liabilities, that is, inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level of an asset or liability within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the investment. We also hold money market accounts in our bank account, which are classified as cash equivalents and measured at fair value. The fair value of these investments is based on their closing published net asset value.

ImmuCell Corporation

Notes to Unaudited Financial Statements (continued)

We assess the levels of the investments at each measurement date, and transfers between levels are recognized on the actual date of the event or change in circumstances that caused the transfer in accordance with our accounting policy regarding the recognition of transfers between levels of the fair value hierarchy. During the six-month periods ended June 30, 2025 and 2024, there were no transfers between levels. As of June 30, 2025 and December 31, 2024, our Level 1 assets measured at fair value by quoted prices in active markets consisted of cash and money market accounts. There were no assets or liabilities measured at fair value on a nonrecurring basis as of June 30, 2025 and December 31, 2024. The carrying values of our cash and money market accounts as of June 30, 2025 and December 31, 2024 approximated their fair market values. Due to inflation and the changing interest rate environment, the carrying values of our fixed rate bank debt as of June 30, 2025 and December 31, 2024 differed from its fair market values. These fair market values are reflected in the following tables:

	As of June 30, 2025
	Level 1		Level 2		Level 3		Total
Assets:
Cash and money market accounts	$	5,998,494	$	—	$	—	$	5,998,494

Liabilities:
Bank debt	$	—	$	9,016,678	$	—	$	9,016,678

	As of December 31, 2024
	Level 1		Level 2		Level 3		Total
Assets:
Cash and money market accounts	$	3,758,232	$	—	$	—	$	3,758,232

Liabilities:
Bank debt	$	—	$	9,465,500	$	—	$	9,465,500

(j) Concentration of Risk

Concentration of credit risk with respect to accounts receivable is principally limited to certain customers to whom we make substantial sales. To reduce risk, we routinely assess the financial strength of our customers and, therefore, believe that our accounts receivable credit risk exposure is limited. We maintain an allowance for potential credit losses when deemed necessary, but historically we have not experienced significant credit losses related to an individual customer or groups of customers in any particular industry or geographic area. Sales to significant customers that amounted to 10% or more of total product sales are detailed in the following table:

	During the Three-Month Periods Ended June 30,						During the Six-Month Periods Ended June 30,
	2025			2024			2025			2024
Company A		52	%		44	%		47	%		45	%
Company B		29	%		33	%		28	%		34	%
Total		81	%		77	%		75	%		79	%

Trade accounts receivable due from significant customers that amounted to 10% or more of our total trade accounts receivable are detailed in the following table:

	As of June 30, 2025			As of December 31, 2024
Company A		44	%		57	%
Company B		35	%		21	%
Total		79	%		78	%

ImmuCell Corporation

Notes to Unaudited Financial Statements (continued)

(k) Revenue Recognition

We recognize revenue in accordance with Codification Topic 606, Revenue from Contracts with Customers (ASC 606). ASC 606 is a single comprehensive model for companies to use in accounting for revenue arising from contracts with customers. The core principle is that we recognize the amount of revenue to which we expect to be entitled for the transfer of promised goods or services to customers when a customer obtains control of promised goods or services in an amount that reflects the consideration we expect to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. We conduct our business with customers through valid purchase orders or sales orders which are considered contracts and are not interdependent on one another. A performance obligation is a promise in a contract to transfer a distinct product to the customer. The transaction price is the amount of consideration we expect to receive under the arrangement. Revenue is measured based on consideration specified in a contract with a customer. The transaction price of a contract is allocated to each distinct performance obligation and recognized when or as the customer receives the benefit of the performance obligation. Product transaction prices on a purchase or sales order are discrete and stand-alone. We recognize revenue when we satisfy a performance obligation in a contract by transferring control over a product to a customer when product ships to a customer. Amounts due are typically paid approximately 30 days from the time control is transferred. Shipping and handling costs associated with outbound freight are accounted for as a fulfillment cost in costs of goods sold. We do not bill for or collect sales tax because our sales are generally made to distributors and thus our sales to them are not subject to sales tax. We generally have experienced an immaterial amount of product returns. See Note 13 for additional disclosures.

(l) Expense Recognition

We do not incur costs in connection with product sales to customers that are eligible for capitalization. Advertising costs are expensed when incurred, which is generally during the month in which the advertisement is published. All product development expenses are expensed as incurred, as are all related patent costs. We capitalize costs to produce inventory during the production cycle, and these costs are charged to costs of goods sold when the inventory is sold to a customer or is deemed to be in excess or obsolete.

(m) Income Taxes

We account for income taxes in accordance with Codification Topic 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.

Codification Topic 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 2021. We have evaluated the positions taken on our filed tax returns and have concluded that no uncertain tax positions existed as of June 30, 2025 or December 31, 2024. Although we believe that our estimates are reasonable, actual results could differ from these estimates. See Note 15.

(n) Stock-Based Compensation

We account for stock-based compensation in accordance with Codification Topic 718, Compensation-Stock Compensation, which generally requires us to recognize non-cash compensation expense for stock-based payments using the fair-value-based method. The fair value of each stock option grant has been estimated on the date of grant using the Black-Scholes option pricing model. Accordingly, we recorded compensation expense pertaining to stock-based compensation of $66,714 and $98,021 during the three-month periods ended June 30, 2025 and 2024, respectively and $118,929 and $179,131 during the six-month periods ended June 30, 2025 and 2024, respectively. See Note 12.

(o) Net Income (Loss) Per Common Share

Net income (loss) per common share has been computed in accordance with Codification Topic 260-10, Earnings Per Share. The basic net income per share has been computed by dividing net income by the weighted average number of common shares outstanding during the period. The diluted net income per share has been computed by dividing net income by the weighted average number of shares outstanding during the period, plus all outstanding stock options with an exercise price that is less than the average market price of the common stock during the period, less the number of shares that could have been repurchased at this average market price, with the proceeds from the hypothetical stock option exercises and proceeds from unrecognized compensation. In no event can the diluted number of common shares outstanding be less than the weighted average number of common shares outstanding. The basic net (loss) per share has been computed by dividing the net (loss) by the weighted average number of common shares outstanding during the period. All stock options are excluded from the denominator in the calculation of dilutive earnings per share when we are in a loss position because their inclusion would be anti-dilutive. Outstanding stock options that were not included in this calculation because the effect would be anti-dilutive amounted to 618,000 during both the three-month period and the six-month period ended June 30, 2024.

ImmuCell Corporation

Notes to Unaudited Financial Statements (continued)

	During the Three-Month Periods Ended June 30,					During the Six-Month Periods Ended June 30,
	2025		2024			2025		2024
Net income (loss) attributable to stockholders	$	501,880	$	(1,531,626	)		1,948,863	$	(1,969,494	)

Weighted average common shares outstanding - Basic		9,031,282		7,810,037			9,006,082		7,780,450
Dilutive impact of share-based compensation awards		—		—			—		—
Weighted average common shares outstanding - Diluted		9,031,282		7,810,037			9,006,082		7,780,450

Net income (loss) per share:
Basic	$	0.06	$	(0.20	)	$	0.22	$	(0.25	)
Diluted	$	0.06	$	(0.20	)	$	0.22	$	(0.25	)

(p) Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Although we regularly assess these estimates, actual amounts could differ from those estimates and are subject to change in the near term. Changes in estimates are recorded during the period in which they become known. Significant estimates include our valuation of inventory, certain other assets related to Re-Tain^®, deferred tax assets and costs of goods sold.

(q) New Accounting Pronouncements Not Yet Adopted

In November of 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses, to provide disaggregated disclosures of specific expense categories underlying all relevant income statement expense line items on an annual and interim basis. The disclosure requirements will be applied on a prospective basis, with the option to apply it retrospectively. The effective date for the standard is for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. We are evaluating ASU 2024-03 to determine its impact on our financial statements.

In December of 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which includes amendments that enhance income tax disclosures, primarily through standardization and disaggregation of income tax rate reconciliation categories and income taxes paid by jurisdiction. The amendments are effective for annual periods beginning after December 15, 2024, with early adoption permitted, and may be applied either prospectively or retrospectively. We are currently evaluating ASU 2023-09 to assess the impact on our financial statement disclosures and to determine the transition method in which the new guidance will be adopted.

3. TRADE ACCOUNTS RECEIVABLE

Trade accounts receivable amounted to $2,378,823 and $3,771,133 as of June 30, 2025 and December 31, 2024, respectively. No allowance for credit losses or product returns was recorded as of June 30, 2025 or December 31, 2024. We consider a broad range of information to estimate credit losses. Historically, we have experienced a very low level of credit loss expense, and most of our trade receivables are collected by the due date or within a few days of the due date. We anticipate no future events or conditions that would impact our ability to collect our accounts receivable. Because of the generally short duration from the balance sheet date to the date of collection, our collection rate is not expected to be significantly impacted by events occurring after the balance sheet date. The trade accounts receivable balances included $46,365 and $52,097 due from a related party as of June 30, 2025 and December 31, 2024, respectively. See Note 17.

ImmuCell Corporation

Notes to Unaudited Financial Statements (continued)

4. INVENTORY

Inventory consisted of the following:

	As of June 30, 2025		As of December 31, 2024
Raw materials	$	1,514,140	$	1,356,228
Work-in-process		5,582,991		5,746,865
Finished goods		1,197,295		9,530
Total	$	8,294,426	$	7,112,623

5. PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid expenses and other current assets consisted of the following:

	As of June 30, 2025		As of December 31, 2024
Prepaid expenses	$	419,653	$	360,207
Other receivables		44,913		40,555
Total	$	464,566	$	400,762

6. PROPERTY, PLANT AND EQUIPMENT, net

Property, plant and equipment consisted of the following:

	Estimated Useful Lives (in years)	As of June 30, 2025			As of December 31, 2024
Laboratory and manufacturing equipment	3-10	$	21,710,507		$	21,234,259
Buildings and improvements	10-39		21,309,272			20,889,395
Office furniture and equipment	3-10		1,018,050			1,056,145
Construction in progress	n/a		2,595,063			2,693,904
Land	n/a		516,867			516,867
Property, plant and equipment, gross			47,149,759			46,390,570
Accumulated depreciation			(22,266,761	)		(21,041,551	)
Property, plant and equipment, net		$	24,882,998		$	25,349,019

As of June 30, 2025 and December 31, 2024, construction in progress consisted principally of payments toward the First Defense^® production capacity expansion project and equipment needed to bring the formulation and aseptic filling for Re-Tain^® in-house. The costs associated with property, plant and equipment disposals were $99,918 and $71,162 during the three-month periods ended June 30, 2025 and 2024, respectively and $136,405 and $71,162 during the six-month periods ended June 30, 2025 and 2024, respectively. Depreciation expense was $663,455 and $666,182 during the three-month periods ended June 30, 2025 and 2024, respectively, and $1,334,646 and $1,328,659 during the six-month periods ended June 30, 2025 and 2024, respectively.

7. INTANGIBLE ASSETS

Intangible assets of $191,040 were valued using the relief from royalty method and are being amortized to costs of goods sold over their useful lives, which are estimated to be 10 years. Intangible amortization expense was $4,776 during both of the three-month periods ended June 30, 2025 and 2024 and $9,552 during both of the six-month periods ended June 30, 2025 and 2024. The net value of these intangibles was $9,552 and $19,104 as of June 30, 2025 and December 31, 2024, respectively. Intangible asset amortization expense is estimated to be $19,104 during the year ending December 31, 2025.

Intangible assets as of June 30, 2025 consisted of the following:

	Gross Carrying Value		Accumulated Amortization			Net Book Value
Developed technology	$	184,100	$	(174,895	)	$	9,205
Customer relationships		1,300		(1,235	)		65
Non-compete agreements		5,640		(5,358	)		282
Total	$	191,040	$	(181,488	)	$	9,552

ImmuCell Corporation

Notes to Unaudited Financial Statements (continued)

Intangible assets as of December 31, 2024 consisted of the following:

	Gross Carrying Value		Accumulated Amortization			Net Book Value
Developed technology	$	184,100	$	(165,690	)	$	18,410
Customer relationships		1,300		(1,170	)		130
Non-compete agreements		5,640		(5,076	)		564
Total	$	191,040	$	(171,936	)	$	19,104

8. ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consisted of the following:

	As of June 30, 2025		As of December 31, 2024
Accounts payable – trade	$	884,854	$	934,883
Accounts payable – capital		420,139		8,754
Accrued payroll		1,053,746		1,195,703
Accrued professional fees		81,694		102,815
Accrued other		147,790		234,552
Income tax payable

SEC Form 10-Q filed by ImmuCell Corporation