ImmuCell Corporation (ICCC) Earnings Call Transcript & Summary

Good morning, everyone, and welcome to the ImmuCell Corporation Annual Stockholders Meeting. [Operator Instructions] Please also note today's event is being recorded. At this time, I'd like to turn the floor over to Michael Brigham, CEO of ImmuCell Corporation. Sir, please go ahead.

Okay. Great. Thanks, Jamie. Let's get started. So good morning, stockholders and other invited guests. I'm pleased to welcome you to the 2023 Annual Meeting of Stockholders of ImmuCell Corporation in the form of both a dial-in conference call and audio webcast. I'm Michael F. Brigham, President and CEO and a Director of the company. I would like to now take a role call and introduce you to the other directors, officers and employees of the company who are participating remotely today. Gloria J. Basse, Director.

Present.

Bobbi Jo Brockmann, our Vice President of Sales and Marketing and a Director.

On the line, thank you.

Thanks. Dave Cunningham, Director.

Present.

Thank you, Dave. And I should note, Dave opted not to stand for reelection to another term, and our entire Board would like to thank him for his service to the company since 2011. Steven Rosgen, Director. Steven, you may have on mute.

Hello. Hello, everyone.

Yes. Thank you.

Hello, everyone.

And David Tomsche is our Chair of Directors, but he is traveling internationally this week in a very different time zone and is not available to attend our meeting. Paul Wainman, Director.

Good morning, everybody.

And also present with us today are the following employees, Gustavo Scaffa, Senior Director of Quality.

Present.

Beth -- excuse me. Sorry, Beth. Beth Toothaker, Director of Finance and Administration and the voting inspector for today's meeting.

Good morning.

And Betsy Williams, Vice President of our Manufacturing, Operations.

Present.

And John Zinckgraf, Director of Product Development.

Good morning.

Great. Also with us today is Michael Anderson, the partner of the law firm of Pierce Atwood, the company's legal counsel.

Here. Good morning, everyone.

Thank you. And lastly, also with us today is Tracy Grosskreutz, partner with the accounting firm of Wipfli LLP, the company's independent registered public accounting firm. Tracy?

Good morning, everyone.

Great. All right. Thanks for your attendance and timeliness. I've asked some of those individuals who 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 review Slide #9 from our updated May 2023 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'll have time for a brief and informal discussion to address any business questions 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. Again, that phone number is (844) 855-9502 toll free or internationally (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 that 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 common stock of record as of April 14, 2023. There is also available for inspection 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 or represented at this meeting by proxy. Out of a total of 7,746,864 shares outstanding and entitled to vote at this meeting, they are present at this meeting in person or by proxy the holders of approximately 5,705,445 shares, which constitute more than 73% 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 15, 2022. 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 Stockholders held on June 15, 2022, be and is hereby waived.

I second the motion.

Thank you, Steven and Beth. The proxy holder has voted in favor. Therefore, I declare the motion carried. I believe you all have 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.

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

I nominate for election Gloria J. Basse; Michael F. Brigham; Bobbi Jo Brockmann; Steven T. Rosgen; David S. Tomsche; and 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, Steven 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 each of the 6 persons nominated for the Office of Director has received a plurality of the votes cast at the meeting.

With that, I declare that Ms. Basse; Mr. Brigham; Ms. Brockmann; 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 the compensation paid to the named executive officers of the company as disclosed in the company's proxy statement pursuant to Item 402 of Regulation S-K, including the summary compensation table and outstanding equity awards table is hereby approved.

I second the motion.

Thank you again, Steven 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, 3,293,46 shares voted for, 76,241 shares voted against and 303,370 shares abstained. The votes voted in favor of this nonbinding advisory resolution represent 58% of the shares represented at this meeting, including broker non-votes.

Okay. Thanks, Beth. I declare that the nonbinding advisory vote on executive compensation has been approved. The third item of business is to consider an act on a nonbinding advisory vote on whether to amend the company's stock -- company's common stock rights plan extending its expiration by 1 year to the September 19, 2024.

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, 2024, be approved.

I second the motion.

Thank you, Steven and Beth. 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, 2,390,931 shares voted for, 1,270,796 shares voted against and 10,930 shares abstained. On this basis, the shares voted in favor of this nonbinding resolution represent 42% of the shares represented at this meeting, including broker nonvotes. I also report that of the votes actually cast on this matter, 65.1% voted in favor, 34.6% voted against and 0.3% abstained.

Thank you, Beth. I declare that the nonbinding advisory vote on extending the expiration date of the company's common stock rights plan to September 19, 2024, has not been approved. I note, that as stated in our proxy statement and deciding whether to extend the expiration date of the rights plan, our Board intends to be guided by the votes actually cast. The fourth item of business is to consider and act on this proposal -- the 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, 2023.

I move the adoption of the following resolution resolved that 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, 2023, be and it is hereby ratified.

I second the motion.

Okay. Thank you, Beth and Steven. I declare 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, 5,687,633 shares voted for, 9,343 shares voted against and 8,569 shares abstained. The shares voted in favor of this ratification represent 99.7% of the shares that voted at this meeting.

Okay. That's great. Thank you, Beth. I declare that 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, 2023, has been approved. 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, 2022. The annual report contains the audited financial statements for that year. I will be commenting on the current business of the company 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 that the meeting be adjourned.

I second the motion.

Thank you, Steven and Beth. The meeting is now adjourned. Next, I would like to review Slide #9 from our updated May 2023 corporate presentation slide deck and then open the floor to any informal discussion and Q&A session. Please remember that you must dial in to the conference call line as opposed to the live audio webcast to ask a question, again, that phone numbers (844) 855-9502 or toll-free -- for toll free or internationally (412) 317-5499. Before doing so, I would like to ask our attorney to provide you with a disclaimer regarding any forward-looking statements made at this meeting. Michael?

Thanks, Michael. 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. It is important for you to understand that these so-called forward-looking statements are subject to significant risks and uncertainties and are based on current expectations and that the actual results or outcomes might differ materially from those projected or anticipated in these 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 of 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 known and unknown factors that could keep these from happening in the way that these representatives might suggest or predict. The company undertakes no obligation to update any forward-looking statements made here today whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.

Thank you, Michael. So our updated May '23 corporate presentation slide deck does provide 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, hit extension 0 or send an e-mail to [email protected] for help, and Jen will be very happy to send the slide deck directly to you. To keep things simple in this virtual meeting format, I'm going to just speak directly to Slide #9, which outlines our 3 most critical action items. The other slides in the deck are in one way or another related to what we are doing to achieve these 3 objectives. So number one is significantly grow sales of First Defense product line. As I'm sure most of you may be following, we have been challenged with the contamination event in our production process during the first quarter of this year. It has been addressed very effectively. And this -- the objective, we're getting right now right back on track of this objective to significantly grow the sales of the First Defense product line. When I say effectively addressed, I think the most descriptive and clear way to describe that is to explain that we run quality control test at 3 steps in our process, incoming, mid-process and end process. And since January, when we were in the thick of the contamination where we're having failures throughout all 3 steps, we've seen great improvement, great work by our team to remediate this contamination issue and make other process improvements. So the data speaks, the incoming quality control test since February 1 through just last Friday, June 9, is meeting specifications 93% of the time. If we move that starting point up to mid-February, from February 1, it's meeting specifications 97% of the time. What perhaps is most important is that the mid-process test and the end process test are meeting specifications during that same time period, 100% of the time. So we've made those fixes. We move forward. We are -- as we go through the second half of the year, we filled the backlog and we take advantage of the strong demand we've seen that's caused that backlog to grow up -- to increase while we've been on short supply. Number two is to achieve FDA approval of Re-Tain. And as we've publicly disclosed, we are working to make the final CMC resubmission, the final of the 5 technical sections, it's called the CMC, chemistry manufacturing controls. That resubmission should go in, in June as we -- as previously disclosed. That would set us up for a response from the FDA at the end of the year. So second half of '23 has some huge milestones. And then we add number three, after the regulatory execs are working so hard to achieve the next lowest improved market acceptance of Re-Tain with the current $10 million worth of annual production capacity that we've built. So with some good fortune and success with the FDA submission, we will move on to that third objective during the year 2024. So with that, let's move to the Q&A session. Again only -- I don't even think I'll repeat that. Just if you're on the webcast and you hear this through the phone line, bring your questions through the phone line, not the webcast. So let's pause a moment to allow Jamie to assemble the roster.

[Operator Instructions] And ladies and gentlemen, at this time, I'm showing no questions.

Okay. I see that there are no more questions or no questions at all. You know how to reach us if questions come up outside of this meeting. So with that, this concludes the informal portion of our meeting. Thank you all for attending the virtual meeting. I look forward to speaking with you most of you again to review our second quarter financial results on or about Friday, August 11. Be well and be safe. Have a great rest of the week.

Ladies and gentlemen, with that, we'll conclude today's conference call. We do thank you for joining. You may now disconnect your lines.