ImmuCell Corporation (ICCC) Earnings Call Transcript & Summary

Good day, and welcome to the ImmuCell Corporation Annual Shareholder Meeting. I would now like to turn the conference over to Michael Brigham, President and CEO. Please go ahead.

Okay. Thank you, Sarah, and good afternoon. It's 3:00. So let's get started. Thank you, I'm pleased to welcome you to the 2022 Annual Meeting of Stockholders of ImmuCell Corporation, in the form of both a dial-in conference call and an audio webcast. I am Michael Brigham, President and CEO and a Director of the company. I would like now to take a role call and introduce to you to the other Directors Officers, Directors and Officers of the company, who are participating remotely in today's meeting. Gloria J. Basse, a Director.

Hello.

Thank you, Gloria. Bobbi Joe Brockmann, Vice President of Sales and Marketing and a Director.

Here.

Dave Cunningham, Director.

Present.

Steven Rosgen, Director.

Hi, everyone.

David Tomsche, the Chair of our Board of Directors.

Good afternoon.

And Paul Wainman, Director.

Good afternoon, everybody.

All right. Thank you, Board. Also present with us today is David Champoux, a partner with the law firm of Pierce Atwood, the company's legal counsel. David?

Good afternoon, everyone.

Great. And also, with us today is Christian Smith, a partner with the accounting firm of Wipfli LLP, the company's independent registered public accounting firm. Christian?

Good afternoon.

Okay. Great. Thank you all. I've asked some of the individuals who were just introduced to make various motions necessary to keep the formal part of the meeting moving. After the formal part of the meeting is over, I would like to discuss Slides #8 and 9 to our updated May 2022 corporate presentation slide deck, which provides an overview of the company's business and is available under the Investors tab of the company's website at www.immucell.com or by request to the company. After that, we will have the time for a brief and informal discussion to address any business questions or issues that you may have. Please note that only participants utilizing the dial-in conference call as opposed to the audio webcast will be able to ask questions. That phone number is (844) 855-9502 toll-free or (412)317-5499 for international access. I will now begin to conduct the formal business portion of today's meeting. I ask the voting inspector to help get us started. Beth?

As evidenced, the notice of this meeting was duly given, I have here an affidavit of American Stock Transfer & Trust Company, the company's transfer agent, that notice of this meeting has been duly given and that a proxy statement has been furnished by the company to every holder of the common stock of record as of April 14, 2022. There is also available for inspection here a complete list of the stockholders entitled to vote at this meeting. I will now report the number of shares held by persons attending this meeting in person are represented at this meeting by proxy. Out of a total of 7,742,864 shares outstanding and entitled to vote at this meeting. They are present at this meeting in person or by proxy, the holders of approximately 5,812,905 shares, which constitute more than 75% of the outstanding shares entitled to vote.

Thank you, Beth. On the basis of the figures just reported by the voting inspector, I declare the presence of a quorum at this meeting. As Secretary of the company, I will now present to the meeting, the minutes of the Annual Meeting of Stockholders held on June 16, 2021. I have a copy of those minutes with me unless there is an objection, I will now entertain a motion to waive the reading of the minutes.

I move that the reading of the minutes of the Annual Meeting of the Stockholders held on June 16, 2021, be and is hereby waived.

I second the motion.

Okay. Thank you, David and Beth. The proxy holder has voted in favor. Therefore, I declare the motion carried. I believe you'll have all received copies of the company's proxy statement containing a description of the matters which you were asked to consider and act upon for this meeting. We will now proceed to those matters. Beth?

We ask that any stockholder who wish to vote their shares in person rather than by proxy, contact the company in advance of this meeting to facilitate remote voting. I report that no stockholders contacted the company to vote in this manner.

Therefore, let's proceed right to the voting. The first order of business is the election of directors to serve the company until the next Annual Meeting of Stockholders and until their successors are elected and qualified.

I nominate for reelection Gloria J. Basse, Michael F. Brigham, Bobbi Jo Brockmann, David S. Cunningham; Steven T. Rosgen, David S. Tomsche, Paul R. Wainman, to act as directors of the company until the next Annual Meeting of Stockholders and until their successors are elected and qualified.

I second the nominations.

Thank you, David and Beth. I declare the polls are now closed, and I ask the voting inspector to report the results of the voting. Beth?

I report that each of the 7 persons nominated for the Office of Director has received a plurality of votes cast at the meeting.

Okay. With that, I declare that Ms. Basse, Mr. Brigham, Ms. Brockmann, Mr. Cunningham, Mr. Rosgen, Dr. Tomsche and Mr. Wainman our elected Directors of the company. The second order of business is to consider a nonbinding advisory resolution on the company's executive compensation program.

I move the adoption of the following resolution resolved that a nonbinding advisory vote and the company's executive compensation program be and it is hereby approved.

I second the motion.

Thank you again, Dave and Beth. I declare the polls are now closed, and I ask the voting inspector to report the results of the voting. Beth?

I report that of the shares present and entitled to vote on this matter 3,168,010 shares voted for 34,636 shares voted against and 288,196 shares abstained. The shares voted in favor of this nonbinding advisory resolution represents 54% of the shares that voted at this meeting.

Thank you, Beth. I declare that the nonbinding advisory vote on executive compensation has been approved. The third item of business is to consider a nonbinding advisory resolution on the frequency of the company's voting on the compensation paid to the company's named executive officers.

I move the adoption of the following resolution resolved that a nonbinding advisory vote to conduct future advisory votes on the compensation paid to executive officers every year be and it hereby is approved.

I second the motion.

Thank you, David and Beth. I declare the polls are now closed, and I ask the voting inspector to report the results of the voting?

I report that the nonbinding and advisory resolution on conducting future advisory votes on the compensation paid to executive officers every year has received a plurality of the votes cast at the meeting.

Thank you, Beth. I declare the nonbinding advisory vote on conducting annual advisory votes on compensation paid to executive officers every year has received the plurality of the votes cast at the meeting. The fourth item of business is to consider and act upon a proposal to approve an amendment to the company's 2017 stock option and incentive plan, increasing the number of shares of the company's common stock reserve issuance under such plan from 300,000 shares to 650,000 shares.

I move the adoption of the following resolution resolved that the company's 2017 stock option and incentive plan be amended to increase the number of shares of the company's common stock reserved for issuance under such plan from 300,000 shares to 650,000 shares.

I second the motion.

Thank you again, David and Beth, and I declare that the polls are now closed. I ask the voting inspector to report the results of the voting.

I report that of the shares present and entitled to vote on this matter 3,148,870 shares voted for, 325,693 shares voted against, and 16,279 shares abstained. The shares voted in favor of this resolution represent 54% of the shares that voted on this matter -- at this meeting, excuse me.

Thank you, Beth. I declare that the amendment to the 2017 stock option incentive plan has been approved. The fifth item of business is to consider an act on a nonbinding advisory vote on whether to amend the company's common stock rights plan, extending its expiration by 1 year to September 19, 2023.

I move the adoption of the following resolution resolved that the nonbinding advisory resolution on whether to extend the expiration date of the company's common stock rights plan by 1 year to September 19, 2023, be approved.

I second the motion.

Thank you, David and Beth. I declare that the polls are now closed. I ask the voting inspector to report the results of the voting. Beth?

I report that of the shares present and entitled to vote on this matter 2,282,818 shares voted for, 1,104,369 shares voted against, and 103,655 shares abstained. The shares voted in favor of this nonbinding resolution represents 39% of the shares that voted at this meeting.

Okay. Thank you, Beth. I declare that the nonbinding advisory vote on extending the expiration date of company's common stock rights plan to September 19, 2023, has not been approved. Sixth and final, item of business scheduled on this meeting is to consider and act on is a proposal to ratify the appointment by the Audit Committee of the Board of Directors of Wipfli LLP as the independent registered public accounting firm for the company for the year ending December 31, 2022.

I move the adoption of the following resolution resolved that the appointment by the Audit Committee and the Board of Directors of Wipfli LLP as the independent registered public accounting firm for the company for the year ending December 31, 2022, be and it is hereby ratified.

I second the motion.

Thank you, Beth and David. I declare the polls are now closed. I ask the voting inspector to report the results of the voting.

I report that the shares present and entitled to vote on this matter 5,791,628 shares voted for, 14,005 shares voted against, and 7,272 shares abstained. The shares voted in favor of this ratification represent over 99% of the shares that voted at this meeting.

Okay. Thank you, Beth. I declare the proposal to ratify the appointment by the Audit Committee of the Board of Directors of Wipfli LLP as independent registered public accounting firm for the company for the year ending December 31, 2022, has been approved. Okay. So I believe that all stockholders received, along with the company's proxy statement, a copy of the company's annual report on Form 10-K for the fiscal year ended December 31, 2021. The annual report contains the audited financial statements for the year. I will be commenting on our current business following the adjournment of the formal part of this meeting. There being no other business to properly come before this meeting, then this completes the formal business of the meeting. A motion to adjourn would now be in order.

I move the meeting be adjourned.

I second the motion.

Thank you, David and Beth. So the meeting is now adjourned. Next, I would like to review Slides 8 and 9 from our updated May 2022 corporate presentation slide deck. And then I'll open the floor to an informal discussion and Q&A session. Please remember that you must dial into the conference call line as opposed to the live audio webcast to ask a question. That phone number is (844) 855-9502 toll-free or (412) 317-5499 for international access. Before doing so, I would like to ask our attorney to provide you with a standard legal disclaimer. David?

During the course of this meeting, company representatives might make reference to future events or expected future results or predictions about steps the company plans to take in the future or other possible future events. It is important for you to understand that these so-called forward-looking statements are subject to significant risks and uncertainties and that the actual results or outcomes may differ materially from those projected or anticipated in the forward-looking statements. The company's most recent annual report on Form 10-K and its most recent quarterly report on Form 10-Q contain more detailed descriptions of risk factors that make the company's future performance uncertain as well as other cautionary statements that should be considered in connection with any such forward-looking statements. These won't be read allowed to you today. But please note that copies of the company's 10-K and 10-Q are available online or by request to the company, and the company encourages you to familiarize yourself with the types of risk factors that affect its business. To summarize, to the extent that company representatives make statements here today about future events or developments or expectations, please recognize that there are many, many factors that could keep these from happening in the way that those representatives might suggest or predict.

Okay. Thank you, David. As I mentioned, I referred to our updated May 2022 corporate presentation slide deck. This provides an overview of the company's business with a fair amount of detail. To view that, please go to the Investors tab of our website at www.immucell.com, or call (207) 878-2770, extension 0, or send an e-mail to [email protected] for help, and Jen will be very happy to send the slide deck to you directly. To keep things simple in this virtual meeting format, I am going to just speak directly to Slides 8 and 9, which outline our 3 most critical action items. The other slides in the deck are in 1 way or another related to what we are doing to achieve these 3 key objectives. So number 1 is to significantly grow First Defense. We needed to grow -- continue to grow the First Defense production capacity, and that will enable us to sell without the restriction of a limited supply. So that's essential. Number one, grow First Defense production and sales. Two is -- brings to conclusion a long regulatory initiative to bring Re-Tain to the market. So we're seeking the FDA approval, and we're nearing the end of this long development path. And then 3 follows right on that with approval, the next significant business objective is to prove the market acceptance of Re-Tain with the current $10 million worth of annual production capacity that we have in place. So it's really about the 2 products, First Defense and Re-Tain. I'd like to look at moving to Slide 9, the disruption that these products offer and the catalyst to these, achieving these next milestones. So the disruption, which is exciting with First Defense, is that it really does disrupt the scours prevention market by providing an effective alternative to vaccines that are given to the mother cow. And probably the biggest catalyst coming our way is with production capacity coming online in the fourth quarter of '21 into the first quarter of '22, we're gaining on this backlog. We want to pass over and start to build inventory. So this catalyst, this event coming up is this transition from a long period of backlog to a period of sufficient supply, very important milestones that we're passing just this year. And then sort of the same little description or a discussion on Re-Tain. This is a very disruptive product. It disrupts the mastitis market by providing the only treatment that does not require a milk discard or a meat withhold, a very novel approach. And as I just mentioned, we're nearing the end of this development seeking the FDA's approval. We expect we're back on our last of 5 significant technical sections during the third quarter of this year. We'll see if the FDA approves that submission or issues and incomplete. If incomplete, we need to answer their questions and come back for another review. So the catalyst really here is just that these 4 technical sections are complete. The fifth is under review, and we'll have a word on that during the third quarter of this year. If approved, if the complete letter is issued by the FDA that would enable a fourth quarter commercial market launch for Re-Tain. So really, that's what I wanted going to highlight as far as some informal business discussion. So with that, let's now move to the Q&A session. Again, only participants utilizing the dial-in conference code as opposed to the audio webcast will be able to ask questions. Again, more and more time. That phone number is (844) 855-9502 for toll-free or (412) 317-5499 for international access. Let's pause for just a moment to allow the operator to assemble the roster.

[Operator Instructions]

Sarah, I'm going to pause for just another moment to see if any questions come in.

There are no questions at this time.

All right. Thanks for checking, Sarah. I guess, okay, with that, I do see that there are no questions. So this concludes the informal portion of our meeting. Thank you all for attending this virtual meeting. I look forward to speaking with most of you again to review our second quarter financial results towards the end of the week of August 8. Be well and be safe. Have a great rest of the week. Thank you.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.