NASDAQ: ICCC

Key Highlights and Developments in the Year Ended December 31, 2025

We grew 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. Our current business strategy calls for us to further increase our manufacturing capacity in the future.

We grew product sales by 4.3% during the year ended December 31, 2025 compared to the year ended December 31, 2024, and improved gross margin from 30% to 41% of product sales, including a non-cash write off of certain inventories equal to approximately 2.4% of full-year product sales.

In December 2025, we announced our strategy to focus on First Defense® and paused further investment in manufacturing Re-Tain®, to allow us to focus on the scours market opportunity. Re-Tain®, an innovative new treatment for subclinical mastitis, 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.

During 2025, 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.

Strategy

ImmuCell's scours solutions serve the calf health market, which includes commercial dairy operations, specialized calf ranches, and beef producers managing newborn calves during the first weeks of life. The number of calves using scours preventatives is increasing, creating an attractive double-digit growth market that is driven by the rising values of calves and increased awareness of scours solutions. Based on market data we acquire from a market leading animal health data provider, spend on biological scours preventative was more than $90 million in 2025, an increase of approximately 14% from 2024, representing a cumulative average growth rate of 6.9% since 2021. The Company's strategy is to focus on building it's First Defense® franchise in the large, attractive and growing scours and calf health markets. Specifically, the Company plans to (1) increase the share of calves in the U.S. using our products through more frequent and intensive customer outreach, by expanding its commercial team; (2) drive international growth with entry into new international markets, by adding an experienced international market development leader to the commercial team; (3) innovate in the First Defense® franchise, by adding attractive product features and extensions to the portfolio; and (4) increase manufacturing capacity ahead of demand, by improving yields and investing in major capacity expansion leveraging former Re-Tain® assets.

Our Products

The First Defense® product line is manufactured from hyperimmunized bovine colostrum using proprietary vaccination and milk protein purification technologies. These products deliver pathogen-specific antibodies that newborn calves cannot produce on their own immediately after birth, providing Immediate Immunity™ against the leading causes of neonatal calf scours (bovine enteritis), a disease that causes diarrhea, dehydration, illness and death in young calves. Our single-dose calf-level products, marketed as Dual-Force® and Tri-Shield® are the only USDA-licensed, orally delivered scours preventives delivering a guaranteed dose of pathogen-specific antibodies. Dual-Force® products are labeled with claims against E. coli and coronavirus, while Tri-Shield® is labeled to protect against E. coli, coronavirus, and rotavirus. When administered within the first 12 hours after birth, a single dose has been proven to reduce calf morbidity and mortality in USDA sanctioned challenge trials. These products work through a two-part mode of action: antibodies act locally in the gut to neutralize pathogens while additional antibodies are absorbed into the bloodstream and later re-secreted into the gut to provide extended protection during the calf’s most vulnerable early weeks. These single-dose formats in either a bolus or gel tube are also listed by the Organic Materials Review Institute (OMRI), allowing their use in certified organic dairy and beef operations.

In addition to these single-dose formats, the Company also offers bulk powder functional feed ingredients marketed as First Defense Technology® that are also derived from the same hyperimmune colostrum that is used for USDA licensed products. The functional feed products are designed for incorporation into liquid feeding programs and are used for batch mixing to support groups of calves in larger calf-rearing operations. These products are not licensed by the USDA and are regulated by the U.S. Food and Drug Administration under the Federal Food, Drug, and Cosmetic Act.

We also offer a California Mastitis Test (CMT) that is used as a quick on-farm diagnostic to determine which quarter of the udder is mastitic.

Sales and Marketing

ImmuCell competes in a large and growing market for calf health solutions with its First Defense® product line. Calf health has become an increasingly dynamic segment of the livestock industry, with calf values rising significantly in recent years due in part to dairy–beef crossbreeding and a limited supply of calves relative to market demand. Scours is a disease that affects approximately 14–15% of pre-weaning calves and is the leading cause of death during this stage of life. It is estimated to create up to a $1 billion economic burden in the U.S. each year through treatment costs, lost performance and mortality. In the U.S., producers currently spend more than $90 million annually on scours prevention.

Our First Defense® product line is given to newborn calves (the calf-level market) and also competes with scours preventative products that are given to pregnant mother cows (the dam-level market). The dam-level vaccine products 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. First Defense® historically competed mostly in the calf-level market and with the additional claim for our Tri-Shield® product against rotavirus, we now compete against the dam-level vaccines. We estimate that the dam-level product category covers approximately twice as many calves as the calf-level product segment reaches. Based on market information that we purchase from a leading source of data for the animal health sector, the Company estimates the number of calves subject to scours preventatives has increased from 13.8 million in 2021 to 14.8 million in 2025, driven by the rapid increase in the value of calves during that period. We estimate that our First Defense® product line represents approximately 29% of total market spend in 2025, which is an increase from 24% in 2021. The Company also estimates that its First Defense® product line is used to protect approximately 15% of the calves that are on preventative programs, which is an increase from 13% in 2021. First Defense® products are priced at approximately 2.5 times those of leading competitors, for reasons discussed below. We estimate that approximately 55% of U.S. calves are not yet protected by a biological scours prevention product, representing significant opportunity for expanded adoption of preventative solutions in addition to market share gains from existing alternatives. This domestic opportunity, combined with continued success addressing the approximately 9.9 million calf market in Canada and expanding our global reach, represents our primary near-term growth focus.

The First Defense® product line continues to be widely adopted by dairy and beef producers as a tool to help prevent scours in newborn calves, the leading cause of death in pre-weaned calves. Unlike vaccines, which rely on a biological response that can vary between animals, First Defense® products provide a measured dose of pre-formed antibodies to deliver Immediate Immunity™ and a consistent level of protection for each calf. We believe the continued growth of this product line reflects both strong customer acceptance and our ongoing investment in sales and marketing efforts to expand awareness and adoption among dairy and beef producers, highlighting the product line's ability to provide reliable protection and an attractive return on investment.

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. With increased production capacity in place, we are in a position to more actively market our products to customers including in new international territories.

Seasonality

Sales of the First Defense® product line are seasonal, with higher sales expected during the first quarter of the calendar year, largely driven by the beef calving season, which runs primarily from January to April, unlike the dairy industry where operations generally calve year-round. Warm and dry weather conditions may reduce the producers' perceived need for disease prevention products such as the First Defense® product line. However, heat stress on calves caused by extremely hot summer weather and cold stress during the winter months can increase the incidence of scours and the need for our products.

Product Development

Re-Tain®

Over the past 25 years, most of our product development spending has been focused on the development of Re-Tain®, a purified Nisin treatment for subclinical mastitis in lactating cows. Between 2000 and 2025, we invested an aggregate of approximately $31.4 million in direct expenditures for the development of this product (excluding depreciation and overhead expenses), plus $21.6 million in capital cost for our Re-Tain® manufacturing facilities. Approximately $2.9 million of this investment was offset by related product licensing revenues and grant income, most of which was earned from 2001 to 2007.

Approval by the FDA of a New Animal Drug Application (NADA) for Re-Tain® is required before any sales of the product can be initiated. Since 2014, our strategy had been to manufacture the active ingredient in our own facilities and employ an experienced contract manufacturer for filling the active ingredient into final product in order to limit our capital expenditure and reduce our risk. As of June 2024, the Company had received Technical Section Complete Letters for safety, efficacy and four of the five required Technical Sections related to our manufacturing processes, and we had expected that completion of the fifth Technical Section related to our outside contract manufacturer would soon follow. We subsequently learned that the contract manufacturer had again failed an onsite inspection by the FDA, its second in 12 months. On December 23, 2025, we received an Incomplete Letter for Re-Tain® issued by the FDA, which stated that the sole reason the FDA declined to approve our NADA was that the contract manufacturer had still not met necessary Good Manufacturing Practice requirements. The Incomplete Letter from the FDA, combined with our contract manufacturer’s refusal to extend their contract beyond March 2026, left us facing a decision on whether to restart our manufacturing section, and thereby commit to investing a large amount of additional expense over multiple years to do so, before obtaining approval for commercial launch of the product. We decided against this course of action, deciding instead to redeploy most of the manufacturing assets built for Re-Tain® toward expansion of First Defense® capacity.

We intend to complete the Re-Tain® investigational studies that are underway to assess opportunities for an improved set of claims and then will seek to license the product to interested parties or seek to partner with another organization, depending on the outcome of the studies. Our Re-Tain® strategy will not require further capital investment for in-house manufacturing capability, which means we will have increased resources and focus for maximizing the value of our market leading First Defense® franchise.

First Defense®

With our pivot to a new strategy to focus on First Defense®, we plan to develop improvements, extensions and additions to our First Defense® product line. For example, during the year ended December 31, 2025, we initiated commercial sales of a new spray-dried format of our First Defense Technology® in a bulk powder. This product line extension makes use of our existing vaccination and colostrum collection processes and gives us access to a segment of larger-scale operations. We will pursue an innovation strategy and create a project pipeline based on assessments of market demand, technical feasibility, regulatory requirements, and other criteria. We also are investing in optimizing our current First Defense® product manufacturing processes by re-developing or re-designing certain processing steps to improve yields and further improve our productivity.

Competition

The Company operates within a calf health market that includes vaccine manufacturers and nutritional supplement providers. Primary competitive alternatives include vaccines designed to stimulate the animal’s immune system to generate specific anti-scours antibodies. Vaccine manufacturers are generally large, well-capitalized pharmaceutical companies whose products are based on broadly similar active immunization technologies designed to stimulate an endogenous immune response. Our competitors in U.S. and international scours prevention markets are some of the largest animal health companies worldwide, including Zoetis, Elanco, Merck, Boehringer Ingelheim and CEVA, among others.

Vaccine platforms differ fundamentally from the Company’s antibody-based approach, which delivers pre-formed, pathogen-specific antibodies to the calf, as validated by the USDA and other agencies. Vaccination strategies depend on activation of the animal’s immune system and the associated metabolic impact required to generate an antibody response. The First Defense® product line delivers concentrated, pathogen-specific antibodies directly to the calf at birth when its immune system is not yet fully developed and the calf is most vulnerable to viral and bacterial causes of neonatal calf diarrhea. This approach provides more immediate passive immunity during the highest-risk period without reliance on the timing, variability, or biological cost of mounting an active immune response.

Approximately 55% of calves in the U.S. are not using vaccines or First Defense®. In these cases, producers rely on maternal colostrum that contain variable levels of specific antibodies, or producers utilize general immune-support supplements such as probiotics, egg-derived antibodies, or plasma-based products that typically require multi-day feeding regimens.

Our competitive strategy is to educate specific segments of producers about the opportunity to improve scours outcomes on farms with our products. The First Defense® line is distinct from vaccine-based approaches and in studies has been shown to deliver approximately 3.3 times to 5.6 times the level of neutralizing antibodies against major scours pathogens as the market leading vaccine. Because the product line is derived from bovine colostrum, the products also contain additional bioactive components that are found in colostrum that further support calf health. As a result of these differentiated attributes and the guaranteed level of pathogen-specific antibodies delivered in each dose, First Defense® products are the price leader compared to alternatives that rely on variable vaccine responses and do not provide a consistent level of specific antibody protection.

For accounts that rely on maternal antibodies or immune-support supplements, we educate producers that our products are validated by the USDA to consistently deliver concentrated, pathogen-specific antibodies in single-dose administration.

Intellectual Property

We own a 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 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.

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. We 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), DUAL-FORCE, TRI-SHIELD, and RE-TAIN. We also own U.S. trademark registrations claiming rights in the color blue for our blue gel and blue bolus FIRST DEFENSE products. We also own common law rights in the IMMEDIATE IMMUNITY trademark and other trademarks.

We own U.S. Patent No. 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. The patent expires October 31, 2034.

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.

Government Regulation

The manufacture and sale of animal health biologicals within the United States is 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® and Dual-Force®. 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. We have passed an in-depth USDA inspection in August of 2025. We are not currently commercializing Re-Tain®, which is regulated by the FDA.

Human Capital

We currently have 73 employees who are engaged primarily in quality and manufacturing operations, sales and marketing, product development and finance and administration. As needed, we augment our staff with contracted temporary employees. Our employees are central to the success of our business, and we are committed to attracting, developing, and retaining a highly skilled workforce capable of supporting our growth strategy. 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.

Available Information

As a public 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. 20549. 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 addresses are https://www.immucell.com and https://firstdefensecalfhealth.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.