IMMUCELL CORP /DE/

1. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations

ImmuCell Corporation, founded in1982 and an SEC-registered public company since1987, is an animal health biologics company focused on the development, manufacture, and commercialization of products intended to improve the survivability, health, and long-term performance of neonatal dairy and beef calves. Our primary product line, First Defense®, utilizes hyperimmunized bovine colostrum to provide pathogen-specific antibodies and other bioactive components. In the United States, First Defense® products are regulated as veterinary biologics by the U.S. Department of Agriculture’s Center for Veterinary Biologics under the Virus-Serum-Toxin Act. In Canada, products are regulated by the Canadian Food Inspection Agency and in other countries, the products are regulated by similar agencies. Certain product formats are marketed as feed supplements regulated by the U.S. Food and Drug Administration under the Federal Food, Drug, and Cosmetic Act. References to ImmuCell (“the Company”) throughout this document are made using thefirst person notations of “we”, “us” and “our”. See our Annual Report on Form10-K for the year ended* December 31, 2025*for further information about our company and strategy.

Seasonality of Sales

Sales of the First Defense® product line are seasonal, with higher sales expected during thefirst quarter of the calendar year, largely driven by the beef calving season, which runs primarily from* Januaryto 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.

Basis of Presentation

The accompanying condensed unaudited financial statements have been prepared in accordance with (i) United States generally accepted accounting principles (“U.S. GAAP”) for interim financial information and (ii) the instructions to Form10-Q and Article8 of Regulation S-X. In the opinion of our management, our condensed unaudited financial statements and accompanying notes (the “Financial Statements”) include all normal recurring adjustments that are necessary for the fair statement of the interim periods presented. Interim results of operations arenot necessarily indicative of results for the full year. The Financial Statements should be read in conjunction with our audited financial statements (and notes thereto) in our Annual Report on Form10-K for the year ended* December 31, 2025.*

Estimates and Assumptions

The preparation of financial statements in conformity with U.S. 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, but arenot limited to, our valuation of inventory, deferred tax assets, and the impairment of long-lived assets.

In connection with the idle status of certain property, plant and equipment, net (related to the repurposing of certain equipment previously utilized in the manufacturing of Re-Tain®), we reassessed prior estimates of the useful lives of that manufacturing equipment during* December 2025.Because the equipment had seen such limited use since installation, we increased the estimated remaining useful lives on certain equipment by a weighted average offive years. The effect of this change in estimate, effective January 1, 2026,for thethree* months ended* June30,* 2026 was a $0.1 million decrease to depreciation expense included in costs of goods sold, and an increase in operating income and net income of $0.1 million, or $0.01 per both basic and diluted share. The effect of this change in estimate for thesix months ended* June30,* 2026 was a $0.2 million decrease to depreciation expense included in costs of goods sold, and an increase in operating income and net income of $0.2 million, or $0.02 per both basic and diluted share.

See Note5, “Property, Plant and Equipment” for further information.

Significant Accounting Policies

The accounting policies used in preparing these condensed financial statements are the same as those described in our Annual Report on Form10-K for the year ended* December 31, 2025.Unless otherwise indicated, all references to years are to our fiscal years, which end on December**31.*

Accounting PronouncementNot Yet Adopted

In* Novemberof2024,* the FASB issued ASU2024-03, 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 ASU2024*-03 to determine its impact on our financial statements and expect to apply the standard on a prospective basis.

During thesix months ended* June 30, 2026*, there wereno other newly issued or newly applicable accounting pronouncements that had, or are expected to have, a material impact on the Company’s Financial Statements.

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2. TRADE ACCOUNTS RECEIVABLE AND CONCENTRATION OF RISK

Allowance for Credit and Sales Losses

As of* June 30, 2026* or* December 31, 2025* we determined thatno allowance for credit losses or product returns was necessary. 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 anticipateno 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 isnot expected to be significantly impacted by events occurring after the balance sheet date.No accounts receivable were written off during thethree orsix months ended* June 30, 2026* or2025.

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 havenot 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 to10 percent or more of total product sales are detailed in the following table:

Trade accounts receivable due from significant customers that amounted to10 percent or more of our total trade accounts receivable are detailed in the following table:

3. INVENTORY

Inventory consisted of the following:

4. PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid expenses and other current assets consisted of the following:

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5. PROPERTY, PLANT AND EQUIPMENT, NET

As of* June 30, 2026* and* December 31, 2025*, property, plant and equipment, net includes approximately $12,000,000 and $12,300,000, respectively, of idle assets, which primarily relate toone of our manufacturing facilities that was previously utilized for Re-Tain® that we now plan to refit for use in producing First Defense® products. In connection with the idle status of the assets, during* December 2025,we reassessed the useful lives of the manufacturing equipment, with impacts effective January 1, 2026.See Note1,* “Basis of Presentation and Significant Accounting Policies” for further information. We are monitoring these assets for impairment. No impairment expense was recognized during thethree orsix months ended* June 30, 2026and2025.*

Depreciation expense was $470,621 and $663,455 during thethree months ended* June 30, 2026and2025,* respectively, and $998,915 and $1,334,646 during thesix months ended* June 30, 2026and2025,* respectively.

6. ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consisted of the following:

7. Fair Value Measurements

The carrying value and estimated fair value of financial instruments are reflected in the following tables:

(1)Cash and cash equivalents are stated at nominal value, which equals fair value. A portion of our cash and cash equivalents is invested in money market accounts. The fair value of these investments is based on their closing published net asset value.

(2) Due to inflation and the changing interest rate environment, the carrying values of our fixed rate bank debt as of* June 30, 2026and December 31, 2025*differed from their fair market values. The amount outstanding under our bank debt facilities is measured at carrying value in our accompanying balance sheets.

We evaluate assets and liabilities subject to fair value measurements on a recurring and nonrecurring basis to determine the appropriate level at which to classify them for each reporting period. Some nonfinancial assets are measured at fair value only in certain circumstances, including the event of impairment.

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We assess the levels of assets and liabilities 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 thesix months ended* June 30, 2026and2025*, there wereno transfers between levels.

As of* June 30, 2026and December 31, 2025,*the carrying amounts of 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.

8. DEBT OBLIGATIONS

Loans #1 and#2**: During thefirst quarter of2020, we closed on a debt financing with Maine Community Bank (formerly known as Gorham Savings Bank) (MCB) aggregating $8,600,000, which was comprised of a $5,100,000 mortgage note (Loan*#1*) that bears interest at a fixed rate of 3.50% per annum (with a 10-year term and 25-year amortization schedule and a balloon principal payment of $3,145,888 due during thefirst quarter of2030) and a $3,500,000 note (Loan*#2*) that bears interest at a fixed rate of 3.50% per annum (with a 7-year term and amortization schedule). During thefirst quarter of2022, we closed on an additional $2,000,000 in mortgage debt, which bears interest at the fixed rate of 3.58% per annum. This was accomplished through an amendment of the original mortgage note (Loan*#1*) that increased the then outstanding principal balance from $4,233,957 to $6,233,957 bearing interest at the blended fixed rate of 3.53% per annum. This increased the balloon payment from $3,145,888 to $3,687,751 and extended the due date of the balloon payment from thefirst quarter of2030 to thefirst quarter of2032.

Loan#3**: During thesecond quarter of2020, we received a loan from the Maine Technology Institute (MTI) in the aggregate principal amount of $500,000. Thefirst 2.25 years of this loan were interest-free withno interest accrual or required principal payments. Beginning during thefourth quarter of2022, Loan*#3* became subject to quarterly principal and interest payments at a fixed rate of 5% per annum over the final five years of the loan, through thethird quarter of2027 ifnot repaid before then.

Loan#4**: During thefourth quarter of2020, we closed on a $1,500,000 note with MCB that bears interest at a fixed rate of 3.50% per annum (with a 7-year term and amortization schedule). Proceeds of $624,167 were used to prepay a portion of the outstanding principal on our mortgage note (Loan*#1*), which reduced the outstanding balance to 80% of the most recent appraised value of the property securing the debt, which allowed MCB to release the $1,400,000 that had been held in escrow.

Loan#5**: On* June 30, 2021,we executed definitive agreements covering asecond* loan from the MTI in the aggregate principal amount of $400,000, proceeds from which were received in* Julyof2021.* Thefirst two years of this loan were interest-free withno interest accrual or required principal payments. Principal and interest payments at a fixed rate of 5% per annum are due quarterly over the final 5.5 years of the loan, beginning during thethird quarter of2023 and continuing through thefourth quarter of2028 ifnot repaid before then.

Loan#6: During thethird quarter of2023, we closed on a $2,000,000 term loan bearing interest at a fixed rate of 7% per annum from MCB. The Finance Authority of Maine (FAME) provided $1,000,000 of loan insurance to MCB. This loan was repayable under a 7-year amortization schedule with a balloon payment of $1,285,029 due during thethird quarter of2026. This loan was refinanced during the year ended December 31, 2025,utilizing the proceeds from Loan#8 discussed below.

Loan#7:** Also during thethird quarter of2023, we closed on a $1,000,000 term loan bearing interest at a fixed rate of 8% per annum from FAME. The loan was repayable under a 7-year amortization schedule with a balloon payment of $649,267 due during thethird quarter of2026. This loan was refinanced during the year ended* December 31, 2025,utilizing the proceeds from Loan#8* discussed below.

Loan#8:** During the year ended* December 31, 2025,we refinanced some of our bank debt. The principal amount of $1,525,852 outstanding as of the closing date under Loan#6* and the principal amount of $768,209 outstanding as of the closing date under Loan*#7* were both refinanced intoone MCB loan with a principal amount of $2,327,119 bearing interest at a fixed rate of 6.5% per annum, a reduction from both Loan*#6* and Loan*#7.* This refinancing also removed the balloon principal payments that were due in* Julyof2026* under both Loans*#6* and*#7.* Principal and interest payments under the new loan of $45,637 per month are due over afive-year term ending during thethird quarter of2030.

Loans*#1,* #2, #4, and*#8* are secured by liens on substantially all of our assets and are subject to certain restrictions and annual financial covenants. Loans*#3* and*#5* are unsecured and subordinated to our indebtedness to MCB. Failure to make timely payments of principal and interest, or otherwise to comply with the terms of the agreements of Loans*#3* and*#5,* would entitle the MTI to accelerate the maturity of such debt and demand repayment in full. These loans* may*be prepaid without penalty at any time.

During thesix months ended* June 30, 2026,* we made principal payments under bank loans of $802,536. As of* June 30, 2026,* the following principal payments are required:

(1) The amortization of these debt issuance costs and debt discount costs is being recorded as a component of interest expense, included in other income (expenses), net and is being amortized on a straight-line basis over the underlying terms of the notes.

(2) At* June 30, 2026* and* December 31, 2025*, the weighted average interest rate on all outstanding borrowings was 4.29% and 4.31%, respectively.

We maintain a $1,000,000 line of credit (LOC) with MCB, which is available, as needed, through* September 11, 2026.Interest on borrowings against the LOC is variable at the National Prime Rate per annum. There wasno outstanding balance under this LOC as of June 30, 2026* or* December 31, 2025*.

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9. COMMITMENTS AND CONTINGENCIES

Litigation and Regulatory

Our bylaws, as amended, in effect provide that we will indemnify our officers and directors against any liability arising from their responsibilities as officers and directors to the maximum extent permitted by Delaware law. In addition, we make similar indemnity undertakings with each director and executive officer through a separate indemnification agreement with that director or officer. The maximum payment that we* maybe required to make under such provisions is theoretically unlimited and is impossible to determine. We maintain directors’ and officers’ liability insurance, which mayprovide us reimbursement for payments made to, or on behalf of, officers and directors pursuant to the indemnification provisions. Our indemnification obligations were grandfathered under the provisions of Codification Topic460**, Guarantees*. Accordingly, we have recordedno liability for such obligations as of* June 30, 2026* or* December 31, 2025*. Since our incorporation, we have hadno occasion to make any indemnification payment to any of our officers or directors for any reason.

The development, manufacturing and marketing of animal health and nutrition products entails an inherent risk that liability claims will be asserted against us during the normal course of business. We are aware ofno such claims against us as of the time of this filing on* August 13, 2026*. We believe that we have reasonable levels of liability insurance to support our operations.

We enter into agreements withthird parties in the ordinary course of business under which we are obligated to indemnify suchthird parties from and against various risks and losses. The precise terms of such indemnities vary with the nature of the agreement. In some cases those obligations* maybe theoretically unlimited. We havenot incurred material expenses in discharging any of these indemnification obligations and based on our analysis of the nature of the risks involved, we believe that the fair value of the liabilities potentially arising under these agreements is minimal. Accordingly, we recordedno liabilities for such obligations as of June 30, 2026* or* December 31, 2025*.

During thethree andsix months ended* June 30, 2026,the Company recorded a $2.0 million settlement with a former contract manufacturer that compensated the Company for operating costs incurred in product development and contract performance related to the development of the Company’s Re-Tain® product. The settlement resolved claims for operating costs the Company incurred in developing the product. The settlement agreement fully released the parties withno* further material obligations. We recorded the $2.0 million as other operating income in the condensed statements of operations for thethree andsix months ended* June 30,*2026 since we couldnot match the proceeds to specific product development costs. Management believes presentation within operating income best reflects the nature of the underlying activity and enhances comparability. There areno remaining material contingent amounts related to this settlement.

Employee Compensation

Upon retirement from the Company during* January 2026,Mr. Brigham (our former President and Chief Executive Officer), was paid $239,369 for all earned and unused paid time off, as well as $100,000 related to a retention and performance bonus in equal amounts. Both amounts were included in accounts payable and accrued expenses as of December 31, 2025.*

As of* September 29, 2025,we entered into an employment agreement with Mr. te Boekhorst, which includes the potential for annual cash bonuses, with the payout amount subject to the Company having achieved financial improvement targets from the prior year, as set in advance by our Board of Directors or its Compensation and Stock Option Committee of our Board of Directors (the “Committee”). The targets for2026* have been set based on the board approved budget in thefirst quarter of2026.

Effective as of* January 27, 2026,we entered into new employment agreements with Timothy C. Fiori, the Company’s Chief Financial Officer, and Bobbi Jo Brockmann, the Company’s Senior Vice President of Sales and Marketing. Under the new employment agreements, both individuals have the potential to earn a formulaic annual cash bonus if various preset financial and strategic targets are achieved. The financial and strategic targets for2026* were approved by the Committee.

Amounts potentially owed under these employment agreements are accrued over the period they are earned (when it is probable that the amounts will be earned) based on our best estimate of the amount expected to be earned. As with other incentive-based compensation, payouts of annual cash bonuses are subject to possible retroactive claw back if and to the extent mandated by Company policy or applicable laws or listing requirements.

Other Commitments

In addition to the commitments discussed above, we had committed i)$2,940,000 to the purchase of inventory, ii)$1,202,000 to increase our production capacity for the First Defense® product line, iii) $199,000 to information technology services, iv) $179,000 to cold storage services, and v) $745,000 for other obligations as of* June 30, 2026*.

10. OPERATING LEASES

During thethree months ended* June 30, 2026**,* the Company entered into lease agreements forthree vehicles used by the sales team, resulting in an operating lease right-of-use asset of $90,009 and corresponding current portion of operating lease liability of $30,123 and operating lease liability, net of current portion of $59,886 recorded on the condensed balance sheet as of* June 30, 2026.*

There wereno other changes to our operating leases during thethree andsix months ended* June 30, 2026.*

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11. STOCKHOLDERS’** EQUITY**

Common Stock Issuances

In thethree andsix months ended* June**30,* 2025, the Company sold shares pursuant to the At-The-Market (ATM) agreement (net of legal, accounting, sales commissions and other fees) for net proceeds of $304,987 and $281,446, respectively. There wasno ATM activity during either of thethree orsix months ended* June 30, 2026.*

Stock Option Plans

On* November 7, 2025,the Board of Directors adopted a new2025* Stock Option and Incentive Plan (the*“2025* Plan”), under which employees, directors and other service providers* maybe granted options to purchase shares of the Company’s common stock atno* less than fair market value on the date of grant. The Board further revised the2025 Plan on* March 26, 2026and April 7,2026, including revising the number of shares from 500,000 to 650,000, as well as revisions to the change in control provisions, minimum vesting period and exercise period for retiring directors. The impact of these changes were immaterial to our Financial Statements as of and for thethree andsix months ending June 30, 2026.The Company’s stockholders approved the2025* Plan (as so revised) at the* June 11, 2026*Annual Meeting of Stockholders.

On* January 27, 2026,we granted stock options to purchase 220,000 shares of the Company's common stock totwo* executive officers of the Company. Such options have a grant-date fair value of $3.51 per share and vest ratably over three years from date of grant. We record stock-based compensation expense on a straight-line basis for all stock options. On* January 27, 2026,we granted an additional stock option to purchase 109,500 shares of the Company's common stock to the Company's President and CEO, contingent on achieving certain internal performance metrics. Such option has a grant-date fair value of $3.51 and vests only if and when the Company’s net operating income forfour* consecutive calendar quarters equals or exceeds 300% of the Company’s audited net operating income for its2025 fiscal year. As of* June 30, 2026,we believe that the vesting of the option is probable. There wereno* other stock options granted during thethree andsix months ended* June 30, 2026,other than annual grants made to outside Board of Directors and routine grants to employees. Grants made during thethree* andsix months ended* June 30, 2025,*consisted of annual grants made to outside Board of Directors and routine grants to employees.

The fair value of stock options, including performance-based stock options, is estimated on the grant date using a Black-Scholes option-pricing model. We recorded compensation expense pertaining to stock-based awards of $239,867 and $66,714 during thethree months ended* June 30, 2026and2025,* respectively and $377,816 and $118,929 during thesix months ended* June 30, 2026and2025.* The year over year increases in stock-based compensation expense are due to grants to our executive officers beginning in* April 2025.*

12. Net Income Per Share

Basic net income per share is computed by dividing net income by the weighted average common shares outstanding during the period. The computation of diluted net income per share is similar to the computation of basic net income per share, except that the weighted average common shares outstanding includes the assumed exercise of in-the-money options and contingently issuable shares that would be issuable if the end of the reporting period was the end of the contingency period, unless the effect is anti-dilutive. We use the treasury stock method, which assumes that proceeds, including cash received from the exercise of employee stock options and the average unrecognized compensation expense for unvested awards during the period, would be used to purchase the Company’s common stock at the average market price during the period.

(1) Outstanding stock options that werenot included in this calculation because the effect would be anti-dilutive amounted to 599,256 and 414,939 during thethree andsix months ended* June 30, 2026,respectively. Outstanding stock options that werenot* included in this calculation because the effect would be anti-dilutive amounted to 717,000 during both thethree andsix months ended* June 30, 2025.*

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13. REVENUE

We primarily offer the First Defense® product line to dairy and beef producers to prevent scours in newborn calves. This line offerstwo distinct platforms: i) veterinary biologics providing scours protection with USDA-approved claims againstE.coli, coronavirus and rotavirus and ii) functional feed products delivering concentrated bioactive colostrum proteins. Generally, our products are promoted to veterinarians as well as dairy and beef producers by our sales team and then sold through distributors.

We have determined that each unit within each purchase order we receive from our customers is distinct, can be used on its own, and isnot combined with another promise. As such, each unit constitutes a distinct performance obligation. The transaction price is determined based on the pricing noted within each written contract or provided to customers via standard price lists and with payments typically due in full within30 days of invoicing. Our contracts donot include significant financing components.

We recognize revenue at a point in time, when we invoice at shipment, which is when the customer assumes legal title and we have the right to payment.

There wereno material changes between the allocation and timing of revenue recognition during thethree orsix months ended* June 30, 2026* or2025.

The following table presents our product sales disaggregated by geographic area:

All trade receivables on our balance sheet date are from contracts with customers. As of* January 1, 2025,trade accounts receivable (all of which relates to contracts with customers) totaled $3,771,133. We donot* have any contract assets for which we have satisfied the performance obligation, but donot yet have the right to payment. We donot have any contract liabilities such as upfront customer payments or deferred revenue. We incurno material costs to obtain or fulfill contracts with customers.

14. OTHER (EXPENSES) INCOME, NET

Other (expenses) income, net consisted of the following:

15. INCOME TAXES

Our income tax expense aggregated $45,950 and $1,904 (amounting to 2.44% and less than 1% of our income before income taxes) during thethree months ended* June 30, 2026and2025*, respectively, and $58,472 and $3,809 (amounting to 1.52% and less than 1% of our income before income taxes) during thesix months ended* June 30, 2026and2025*, respectively.

During thesecond quarter of2018, we assessed our historical and near-term future profitability and recorded $563,252 in non-cash income tax expense to create a full valuation allowance against our net deferred tax assets (which consist largely of net operating loss carryforwards and federal and state credits) based on applicable accounting standards and practices. At that time, we had incurred a net loss forsix consecutive quarters, hadnot been profitable on a year-to-date basis since thenine months ended* September 30, 2017and projected additional net losses for some period going forward before returning to profitability. Since then, we have accumulated deferred tax assets amounting to $4,926,635 as of December 31, 2025.Currently, we adjust the valuation allowance at the end of each quarter to reduce the value of our net deferred tax assets to zero. Should future profitability be realized at an adequate level, we would be able to release this valuation allowance (resulting in a non-cash income tax benefit) and realize these deferred tax assets before they expire. We will continue to assess the need for the valuation allowance at each quarter and, in the event that actual results differ from these estimates, or we adjust these estimates in future periods, we may*need to adjust our valuation allowance.

16. SEGMENT INFORMATION

Our business operations (being the development, manufacture and sale of products that improve the health and productivity of dairy and beef cattle) are described in Note1, “Basis of Presentation and Significant Accounting Policies”. Our chief operating decision-maker (CODM), our President and CEO, regularly evaluatestwo operating segments: i) Scours and ii) Mastitis for purposes of deciding how to allocate resources and assess performance. Our CODM primarily evaluates performance based on product sales as well as net operating income (loss).No operating segments have been aggregated; therefore, ourtwo operating segments are the Company'stwo reportable segments.

Scourssegment - consists of the First Defense® product line. The core technology underlying the Scours segment is focused on polyclonal antibodies.

Mastitissegment - includes our CMT product line, consisting of reagents and equipment used for rapid cow-side testing to identify mastitic quarters by detecting elevated somatic cell counts. This segment also includes our Re-Tain® product in development for the treatment of subclinical mastitis based on the bacteriocin nisin. On* December 23, 2025,*we made the decision to cease our efforts to obtain FDA approval of Re-Tain® while continuing the stability testing and investigational studies to evaluate Re-Tain® performance.

Other- includes unallocated administrative and overhead expenses and other products.

(1) Includes a $0.1 million reversal of an annual regulatory sponsor fee that we wereno longer required to obtain as a result of the decision to cease focus on Re-Tain®.

(2) Includes a $2.0 million settlement with a former contract manufacturer that compensated the Company for operating costs incurred in product development and contract performance related to the development of the Company’s Re-Tain® product. See Note9 for additional discussion.

(1) Total assets for our Scours segment as of* June 30, 2026and December 31, 2025,includes property, plant and equipment, net of approximately $12,000,000 and $12,300,000, respectively, of idle assets, which primarily related toone* of our manufacturing facilities that was previously utilized for Re-Tain® that we now plan to refit for use in producing First Defense® products.

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(1) Includes a $2.0 million settlement with a former contract manufacturer that compensated the Company for operating costs incurred in product development and contract performance related to the development of the Company’s Re-Tain® product. See Note9 for additional discussion.

17. RELATED PARTY TRANSACTIONS

David S. Tomsche (Chair of our Board of Directors) is a controlling owner of Leedstone Inc., a domestic distributor of our products (the First Defense® product line and CMT). His affiliated company purchased $664,328 and $462,003 of products from us during thesix months ended* June 30, 2026and2025,* respectively, all on terms consistent with those offered to other distributors of similar status. Our accounts receivable (subject to standard and customary payment terms) due from this affiliated company aggregated $42,401 and $0 as of* June 30, 2026and December 31, 2025,*respectively.

18. SUBSEQUENT EVENTS

We have evaluated subsequent events through the time of filing on the date we have issued this Quarterly Report on Form10-Q.

On* July 31, 2026,the USDA approved an extension of expiration limits for colostrum used in the production of First Defense®. As of June 30, 2026,we had reserved $233,665 for colostrum then considered obsolete. We expect to release this reserve to costs of goods sold in thethree* months ended* September 30, 2026,though the total impact to our financial statements isnot* currently reasonably estimable due to unknown yield expectations and the timing of eventual sales.

No other subsequent events were identified.

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