=====================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1999
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
0-15507
-------
Commission file number
IMMUCELL CORPORATION
-----------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 01-0382980
- ------------------------------ -------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification No.)
56 Evergreen Drive
Portland, ME 04103
----------------------------------------------------
(Address of principal executive office and zip code)
(207) 878-2770
----------------------------------------------------
(Registrant's telephone number, including area code)
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 X No
Class of Securities: Outstanding at August 11, 1999:
Common Stock, par value $.10 per share 2,428,884
===========================================================================
IMMUCELL CORPORATION
INDEX TO FORM 10-Q
June 30, 1999
PART I: FINANCIAL INFORMATION Page
ITEM 1. UNAUDITED CONSOLIDATED FINANCIAL
STATEMENTS
Consolidated Balance Sheets-
June 30, 1999 and December 31, 1998 3-4
Consolidated Statements of Operations for the
three and six month periods ended June 30, 1999 and 1998 5
Consolidated Statement of Stockholders' Equity for the
six month period ended June 30, 1999 6
Consolidated Statements of Cash Flows for the
six month periods ended June 30, 1999 and 1998 7
Notes to Unaudited Consolidated Financial Statements 8-10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS 10-12
PART II: OTHER INFORMATION
Items 1 through 6 13
Signatures 13
IMMUCELL CORPORATION
PART 1. FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
June 30, December 31,
1999 1998
____________ _____________
(unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $1,748,035 $1,538,905
Accounts receivable, net of
allowance for doubtful accounts
of $42,000 and $44,000 at June
30, 1999 and December 31, 1998,
respectively 371,810 249,754
Inventories 415,146 475,949
Prepaid expenses 69,358 45,516
-------------------------------
Total current assets 2,604,349 2,310,124
PROPERTY, PLANT AND
EQUIPMENT, at cost:
Laboratory and manufacturing
equipment 834,543 837,179
Building and improvements 583,472 583,472
Office furniture and equipment 80,542 68,540
Land 50,000 50,000
-------------------------------
1,548,557 1,539,191
Less - accumulated depreciation 839,103 789,419
-------------------------------
Net property, plant and
equipment 709,454 749,772
INVESTMENT IN JOINT VENTURE 78,004 84,111
OTHER ASSETS 840 840
-------------------------------
TOTAL ASSETS $3,392,647 $3,144,847
===============================
The accompanying notes are an integral part of the financial statements.
</TABLE>
IMMUCELL CORPORATION
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
June 30, December 31,
1999 1998
____________ _____________
(unaudited)
<S> <C> <C>
CURRENT LIABILITIES:
Accrued expenses $ 185,847 $ 286,333
Accounts payable 164,215 140,312
Current portion of long term debt 17,903 17,257
----------------------------
Total current liabilities 367,965 443,902
LONG TERM DEBT:
Mortgage loan 444,204 453,349
----------------------------
Total long term debt 444,204 453,349
STOCKHOLDERS' EQUITY:
Common stock, Par value--$.10 per share
Authorized--8,000,000 shares
Issued--2,818,482 shares
at June 30, 1999 and
December 31, 1998 281,848 281,848
Capital in excess of par value 8,338,907 8,338,907
Accumulated deficit (5,453,542) (5,786,424)
Treasury stock, at cost --
389,598 shares (586,735) (586,735)
----------------------------
Total stockholders' equity 2,580,478 2,247,596
----------------------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $3,392,647 $3,144,847
============================
The accompanying notes are an integral part of the financial statements.
</TABLE>
IMMUCELL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE
AND SIX MONTH PERIODS ENDED JUNE 30, 1999 and 1998
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
____________________________ ____________________________
1999 1998 1999 1998
<S> <C> <C> <C> <C>
REVENUES:
Product sales $ 988,860 $ 818,251 $2,355,583 $2,128,650
Grant income 54,269 38,136 91,145 62,772
---------------------------------------------------------------
Total revenues 1,043,129 856,387 2,446,728 2,191,422
---------------------------------------------------------------
COSTS AND EXPENSES:
Product costs 467,037 397,726 1,052,093 950,724
Research and development
expenses 184,983 215,491 417,792 411,861
Sales and marketing
expenses 196,379 175,035 425,140 417,639
General and administrative
expenses 103,249 156,416 209,066 294,310
---------------------------------------------------------------
Total costs and expenses 951,648 944,668 2,104,091 2,074,534
---------------------------------------------------------------
Operating income 91,481 (88,281) 342,637 116,888
---------------------------------------------------------------
OTHER (EXPENSE) INCOME:
Equity in earnings of
joint venture (19,130) -- (19,130) 13,000
Interest and other income 16,591 19,550 29,276 33,766
Interest expense (9,959) (11,502) (19,901) (24,626)
---------------------------------------------------------------
Net other (expense) income (12,498) 8,048 (9,755) 22,140
---------------------------------------------------------------
NET PROFIT (LOSS) $ 78,983 $ (80,233) $ 332,882 $ 139,028
===============================================================
NET PROFIT (LOSS) PER
COMMON SHARE:
Basic $ 0.03 $ (0.03) $ 0.14 $ 0.06
Diluted $ 0.03 $ (0.03) $ 0.13 $ 0.05
===============================================================
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING:
Basic 2,428,884 2,428,884 2,428,884 2,424,025
Diluted 2,479,075 2,428,884 2,479,075 2,574,875
===============================================================
The accompanying notes are an integral part of the financial statements.
</TABLE>
IMMUCELL CORPORATION
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE SIX MONTH PERIOD ENDED JUNE 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
Common Stock
$.10 Par Value Capital in Treasury Stock Total
-------------------------- Excess of Accumulated --------------------- Stockholders'
Shares Amount Par Value Deficit Shares Amount Equity
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE,
December 31, 1998 2,818,482 $281,848 $8,338,907 $(5,786,424) 389,598 $(586,735) $2,247,596
Net Profit -- -- -- 332,882 -- -- 332,882
--------------------------------------------------------------------------------------------------------------
BALANCE,
June 30, 1999 2,818,482 $281,848 $8,338,907 $(5,453,542) 389,598 $(586,735) $2,580,478
==============================================================================================================
The accompanying notes are an integral part of the financial statements.
</TABLE>
IMMUCELL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE
SIX MONTH PERIODS ENDED JUNE 30, 1999 AND 1998
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
________________________
1999 1998
___________ ___________
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net profit $ 332,882 $ 139,028
Adjustments to reconcile net
profit to net cash provided by
operating activities-
Depreciation 54,039 53,230
Equity share in joint venture loss 19,130 --
Changes in:
Accounts receivable (122,056) 354,467
Inventories 60,803 (60,575)
Prepaid expenses (23,842) (45,739)
Accounts payable 23,903 (21,392)
Accrued expenses (100,486) 20,175
___________ ___________
Net cash provided by
operating activities 244,373 439,194
___________ ___________
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant
and equipment, net (13,721) (46,862)
Distribution from (investment in)
joint venture (13,023) 12,000
___________ ___________
Net cash used for
investing activities (26,744) (34,862)
___________ ___________
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from debt obligation -- 480,000
Payments of debt obligations (8,499) (571,383)
Proceeds from exercise of stock options -- 20,606
Stock issuance costs -- (2,500)
___________ ___________
Net cash used for
financing activities (8,499) (73,277)
___________ ___________
NET INCREASE IN CASH AND
CASH EQUIVALENTS 209,130 331,055
BEGINNING CASH AND CASH EQUIVALENTS 1,538,905 1,021,324
___________ ___________
ENDING CASH AND CASH EQUIVALENTS $1,748,035 $1,352,379
=========== ============
The accompanying notes are an integral part of the financial statements.
</TABLE>
IMMUCELL CORPORATION
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(1) Basis of Presentation
The accompanying statements have been prepared by ImmuCell Corporation (the
"Company") without audit, and reflect the adjustments, all of which are of a
normal recurring nature, that are, in the opinion of management, necessary for a
fair statement of the results for the interim periods presented. Certain
information and footnote disclosures normally included in the annual financial
statements which are prepared in accordance with generally accepted accounting
principles have been condensed or omitted. Accordingly, the Company believes
that although the disclosures are adequate to make the information presented not
misleading, these financial statements should be read in conjunction with the
financial statements and the notes to the financial statements as of December
31, 1998, contained in the Company's Annual Report to shareholders on Form 10-K
as filed with the Securities and Exchange Commission.
The consolidated financial statements of the Company include the accounts of the
Company and its wholly-owned subsidiary, the Kamar Marketing Group, Inc. All
intercompany accounts and transactions have been eliminated in consolidation.
(2) Inventories
Inventories consist of the following:
<TABLE>
<CAPTION>
June 30, December 31,
1999 1998
-------- -----------
<S> <C> <C>
Raw materials $ 70,373 $ 61,938
Work-in-process 286,707 383,691
Finished goods 58,066 30,320
-------- -----------
$ 415,146 $ 475,949
======== ===========
</TABLE>
(3) Debt Obligations
The Company has long term debt obligations, net of current maturities, as
follows:
<TABLE>
<CAPTION>
June 30, December 31,
1999 1998
---------- ------------
<S> <C> <C>
8.62% Bank mortgage, collateralized by first
security interest in building, due 1999 to 2003 $462,107 $470,606
Less current portion 17,903 17,257
-------- --------
Long term debt $444,204 $453,349
======== ========
</TABLE>
The mortgage, which was entered into in May 1998, has a 15 year amortization
schedule with interest payable at the fixed rate of 8.62% per year for the first
five years. The Company intends to repay the then outstanding principal at the
end of this five year period, but the mortgage does provide the option of
resetting at a new fixed interest rate to be determined at that time for one
additional five year period. Principal payments under this mortgage obligation,
due in monthly installments subsequent to June 30, 1999, aggregate approximately
the following: $9,000 - 1999; $19,000 - 2000; $20,000 - 2001; $22,000 - 2002;
and $392,000 - 2003.
IMMUCELL CORPORATION
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
(4) Profit per Common Share
Effective for the 1997 fiscal year, the Company adopted Statement of Financial
Accounting Standards No. 128 - Earnings per share. The Statement requires dual
presentation of basic and diluted profit per share of common stock on the
consolidated statements of operations. Basic profit per share of common stock
is determined by dividing net profit by the weighted average number of shares of
common stock outstanding during the period. Diluted profit per share reflects
the potential dilution that would occur if existing stock options were
exercised. The Statement does not effect the weighted average basis of
reporting the net loss per share.
(5) Segment and Significant Customer Information
The Company principally operates in the business segment described in
Note 1 to its Annual Report on Form 10-K for the year ended December 31, 1998.
The Company's primary customers for the majority of its 1999 product sales (69%
for the three month period and 79% for the six month period ended June 30, 1999)
are in the United States dairy and beef industries. Sales to foreign customers,
who are principally in the dairy industry, aggregated 29% and 20% of product
sales for the three and six month periods ended June 30, 1999, respectively.
Government grant income amounted to approximately 5% ($54,000) and 4% ($38,000)
of total revenues in the three month periods ended June 30, 1999 and 1998,
respectively, and approximately 4% ($91,000) and 3% ($63,000) of total revenues
in the six month periods ended June 30, 1999 and 1998, respectively.
In 1998, the Company adopted Statement of Financial Accounting
Standards No. 131. The prior year's segment information has been restated to
present the Company's two reportable segments: (1) Animal Health Products and
(2) Research and Development ("R&D"). The accounting policies of the segments
are the same as those described in Note 2 to the Company's Annual Report on Form
10-K for the year ended December 31, 1998. The Company evaluates the
performance of its segments and allocates resources to them based on
contribution before allocation of corporate overhead charges. The table below
presents information about reported segments for the three and six month periods
ended June 30, 1999 and 1998:
<TABLE>
<CAPTION>
Three Months Ended June 30, 1999:
(in thousands)
Animal Health
Products R&D Other Total
--------------------------------------------------------------
<S> <C> <C> <C> <C>
Product Sales $ 976 -- $ 13 $ 989
Grant Income -- $ 54 -- 54
--------------------------------------------------------
Total Revenues 976 54 13 1,043
Product Costs 461 -- 6 467
Research and Development
Expenses -- 185 -- 185
Sales and Marketing
Expenses 196 -- -- 196
Other Expenses -- -- 116 116
--------------------------------------------------------
Net Profit (Loss) $ 319 $(131) $ (109) $ 79
========================================================
</TABLE
</TABLE>
<TABLE>
<CAPTION>
Three Months Ended June 30, 1998:
(in thousands)
Animal Health
Products R&D Other Total
--------------------------------------------------------------
<S> <C> <C> <C> <C>
Product Sales $ 806 -- $ 12 $ 818
Grant Income -- $ 38 -- 38
----------------------------------------------------------
Total Revenues 806 38 12 856
Product Costs 391 -- 7 398
Research and Development
Expenses -- 215 -- 215
Sales and Marketing
Expenses 175 -- -- 175
Other Expenses -- -- 148 148
---------------------------------------------------------
Net Profit (Loss) $ 240 $ (177) $ (143) $ (80)
=========================================================
</TABLE
</TABLE>
<TABLE>
<CAPTION>
IMMUCELL CORPORATION
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
Six Months Ended June 30, 1999:
(in thousands)
Animal Health
Products R&D Other Total
--------------------------------------------------------------
<S> <C> <C> <C> <C>
Product Sales $ 2,327 -- $ 29 $ 2,356
Grant Income -- $ 91 -- 91
----------------------------------------------------------
Total Revenues 2,327 91 29 2,447
Product Costs 1,042 -- 10 1,052
Research and Development
Expenses -- 418 -- 418
Sales and Marketing
Expenses 425 -- -- 425
Other Expenses -- -- 219 219
----------------------------------------------------------
Net Profit (Loss) $ 860 $ (327) $ (200) $ 333
==========================================================
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended June 30, 1998:
(in thousands)
Animal Health
Products R&D Other Total
--------------------------------------------------------------
<S> <C> <C> <C> <C>
Product Sales $ 2,098 -- $ 31 $ 2,129
Grant Income -- $ 63 -- 63
----------------------------------------------------------
Total Revenues 2,098 63 31 2,192
Product Costs 937 -- 14 951
Research and Development
Expenses -- 412 -- 412
Sales and Marketing Expenses 418 -- -- 418
Other Expenses -- -- 272 272
----------------------------------------------------------
Net Profit (Loss) $ 743 $(349) $ (255) $ 139
==========================================================
</TABLE>
PART I. FINANCIAL INFORMATION (Continued)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS FOR THE THREE AND SIX MONTH PERIODS ENDED JUNE 30, 1999
Total revenues equalled $1,043,000 and $2,447,000 for the three and six month
periods ended June 30, 1999, respectively, as compared to $856,000 and
$2,191,000 in the comparable periods in 1998. The grant income was recognized
under a federally sponsored research grant in support of the Company's passive
antibody development programs.
Product sales increased by $171,000 (21%) to $989,000 during the three month
period ended June 30, 1999, in comparison to the same period in the prior year.
Product sales increased by $227,000 (11%) to $2,356,000 during the six month
period ended June 30, 1999, in comparison to the same period in the prior year.
Sales of First Defense( and the Kamar( HeatmountTM Detector aggregated 95% of
total product sales during each of the six month periods ended June 30, 1999 and
1998. Sales of these two products increased by 10% during the six month period
ended June 30, 1999, as compared to the same period of the prior year. In July
1998, the Company entered into a four year extension to the term of its product
license from Kamar, Inc. for the Kamar Heatmount Detector from December 31, 1999
through December 31, 2003, subject to the right of either party to give 12
months' notice of early termination.
Gross margin as a percentage of product sales was 53% and 51% during the three
month periods ended June 30, 1999 and 1998, respectively. The gross margin
increased by $101,000 (24%) during the three month period ended June 30, 1999 as
compared to the respective period in 1998. Gross margin as a percentage of
product sales was 55% during each of the six month periods ended June 30, 1999
and 1998. The gross margin increased by $126,000 (11%) during the six month
period ended June 30, 1999 as compared to the respective period in 1998.
IMMUCELL CORPORATION
PART I. FINANCIAL INFORMATION (Continued)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Research and development expenses decreased by $31,000 (14%) to $185,000 during
the three month period ended June 30, 1999 and increased by $6,000 (1%) to
$418,000 during the six month period ended June 30, 1999, as compared to the
respective periods in 1998. Research and development expenses aggregated 18%
and 25% of total revenues during the three month periods ended June 30, 1999 and
1998, respectively, and 17% and 19% of total revenues during the six month
periods ended June 30, 1999 and 1998, respectively. Research and development
expenses exceeded grant income by $131,000 (which amount equals 13% of product
sales) during the three month period ended June 30, 1999 and by $177,000 (which
amount equals 22% of product sales) during the comparable period in 1998.
Research and development expenses exceeded grant income by $327,000 (which
amount equals 14% of product sales) during the six month period ended June 30,
1999 and by $349,000 (which amount equals 16% of product sales) during the
comparable period in 1998. In 1999, increased internal resources have been
invested in the development of new animal health products that fit the Company's
objective of commercializing its proprietary technologies and helping dairy and
beef producers and their veterinarians manage disease and reproduction in their
herds. In 1998, these expenses were incurred primarily to develop specific
antibodies to be used to prevent and/or treat gastrointestinal infections in
humans. Additionally, funds have been invested in the development of a product
to detect infectious pathogens in water and in the development of a process to
manufacture lactoferrin, a nutritional milk protein derived from cheese whey.
Management believes that the expenses incurred resulting from the
investment in the research and development of new products is necessary to
foster growth for the Company in the future. Beginning in 1998, the Company
determined to increase development of new animal health products and to decrease
its internally funded research and development investment in products targeted
towards the human health care markets. Because funding requirements for these
animal health programs are less than the requirements for the human health
programs, the Company anticipates that it will be able to record a profit for
the year ended December 31, 1999, as compared to 1998 when the profit of
$139,000 during the first six months of the year was reduced to a net loss of
$103,000 for the year ended December 31, 1998.
Sales and marketing expenses increased by $21,000 (12%) during the three month
period ended June 30, 1999 compared to the same period in 1998, aggregating 20%
of product sales in the 1999 period compared to 21% in 1998. Sales and
marketing expenses increased by $8,000 (2%) during the six month period ended
June 30, 1999 compared to the same period in 1998, aggregating 18% of product
sales in the 1999 period compared to 20% in 1998. General and administrative
expenses decreased by $53,000 (34%) during the three month period ended June 30,
1999 and by $85,000 (29%) during the six month period ended June 30, 1999 in
comparison to the same periods in 1998, as the Company continues its efforts to
control these expenses while incurring all the necessary costs associated with
being a publicly held company. The December 1998 reorganization of the
Company's management team to focus on growing a profitable animal health
business resulted in much of the decrease in general and administrative
expenses.
In the third quarter of 1996, the Company established a joint venture, AgriCell
Company, LLC ("AgriCell"), with Agri-Mark, Inc. of Methuen, Massachusetts.
AgriCell has installed a commercial production facility in Middlebury, Vermont
to manufacture bovine lactoferrin, a nutritional protein derived from cheese
whey. Sales of lactoferrin have been significantly less than expected due
principally to the financial crisis in South Korea and Japan, the primary
markets for lactoferrin. This negative development resulted in a non-cash
charge of approximately $19,000 against the Company's equity interest in
AgriCell during 1999. As of June 30, 1999, the investment in joint venture
asset was valued at $78,000.
LIQUIDITY AND CAPITAL RESOURCES
Total assets increased by approximately $248,000 to $3,393,000 at June 30, 1999
from $3,145,000 at December 31, 1998. Cash and cash equivalents increased by
approximately $209,000 to $1,748,000 at June 30, 1999 from $1,539,000 at
December 31, 1998. Net working capital increased by $370,000 to $2,236,000 at
June 30, 1999 from $1,866,000 at December 31, 1998. Stockholders' equity
increased by $333,000 to $2,580,000 at June 30, 1999 from $2,248,000 at December
31, 1998.
IMMUCELL CORPORATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Continued)
The Company obtained a $710,000 Phase II Small Business Innovation Research
grant in September 1997. As of July 1, 1999, approximately $137,000 was
available under this grant to fund additional development expenses.
Approximately $15,000 of these available funds are budgeted for closing out the
TravelGAM development program, and the balance is intended to support the
DiffGAMTM clinical development program.
The Company believes that it has sufficient capital resources to meet its
working capital requirements and to finance its ongoing business operations
during the next twelve months.
YEAR 2000 ISSUE
The Year 2000 issue is the result of computer programs being written using two
digits rather than four to define the applicable year. The Company's computer
equipment and software and devices with imbedded technology that are
time-sensitive may recognize a date using "00" as the year 1900 rather than the
year 2000. This could result in a system failure or miscalculations causing
disruptions of operations, including, among other things, a temporary inability
to process transactions, send invoices, or engage in similar normal business
activities. In the event that the Company does not effectively address the Year
2000 issue, these functions could be performed manually on a short-term basis.
The Company has determined that the risks associated with exposure to third
parties that suffer problems with Year 2000 issues are not material because of
the Company's ability to source needed supplies and services from multiple
sources.
In conjunction with a consultant, the Company has reviewed the ability of its
computer equipment and software to function properly with respect to dates in
the Year 2000 and thereafter. For this purpose, the term "computer equipment
and software" includes systems that are commonly thought of as information
technology ("IT") systems, including accounting, data processing, and
telephone/PBX systems, and other miscellaneous systems, as well as systems that
are not commonly thought of as IT systems, such as alarm systems, fax machines,
processing equipment, or other miscellaneous systems. Based upon its
identification and assessment efforts to date, the Company believes that certain
of the computer equipment and software it currently uses (principally its
financial accounting system and several personal computers) will require
replacement or modification. In addition, in the ordinary course of replacing
computer equipment and software, the Company attempts to obtain replacements
that are Year 2000 compliant. The software and hardware required to address the
Year 2000 issue was identified during the fourth quarter of 1998. The Company
estimates that the total costs of efforts required to address the Year 2000
issue will not exceed $23,000. These costs, a portion of which may be
capitalized, were incurred during the first quarter of 1999. All of the new
software and hardware has been installed, and the Company is continuing to run
the old general ledger system concurrently with the new one while implementing
the new systems during the third quarter of 1999.
FORWARD-LOOKING STATEMENTS
This Quarterly Report contains "forward-looking statements" within the meaning
of Section 27A of the Securities Act of 1933, and Section 21E of the Securities
Exchange Act of 1934. Such statements include, but are not limited to, any
statements relating to the Company's objectives concerning future profitability
and any other statements that are not historical facts. Such statements involve
risks and uncertainties, including, but not limited to, those risks and
uncertainties relating to difficulties or delays in development, testing,
regulatory approval, production and marketing of the Company's products,
competition within the Company's anticipated product markets, the uncertainties
associated with product development, and other risks detailed from time to time
in filings the Company makes with the Securities and Exchange Commission,
including its Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q.
Such statements are based on management's current expectations, but actual
results may differ materially due to various factors, including those risks and
uncertainties mentioned or referred to in this Quarterly Report.
IMMUCELL CORPORATION
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
At the Annual Meeting of Stockholders held on June 18, 1999,
the stockholders voted to elect the Board of Directors for
the next ensuing year.
Each of the eight nominees recommended by management to the
stockholders was elected to the Board. The following list by
name of director shows how the votes were cast for each director:
Michael F. Brigham (for: 1,975,008; withhold: 63,264), Anthony B. Cashen (for:
1,974,858; withhold: 63,414), Joseph H. Crabb (for: 1,975,008; withhold:
63,264), George W. Masters (for: 1,974,908; withhold: 63,364), William H.
Maxwell (for: 1,975,008; withhold: 63,264), John R. McKernan, Jr. (for:
1,974,908; withhold: 63,364), Mitchel Sayare (for: 1,974,908; withhold: 63,364)
and Stafford C. Walker (for: 1,975,008; withhold: 63,264).
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27.1 Financial Data Schedule (for electronically filed
copies only).
(b) Reports on Form 8-K
None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ImmuCell Corporation
-----------------------
Registrant
Date: August 11, 1999 By: /s/ Michael F. Brigham
-----------------------
Michael F. Brigham
Vice President,
Chief Financial Officer,
Treasurer, Secretary and Director
IMMUCELL CORPORATION
Exhibit Index
27.1 Financial Data Schedule (for electronically filed copies only).
IMMUCELL CORPORATION
Exhibit 27.1
Financial Data Schedule as of and for the period ended June 30, 1999
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Financial Data Schedule
IMMUCELL CORPORATION
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S UNAUDITED FINANCIAL STATEMENTS FOR THE QUARTERLY PERIOD ENDED JUNE 30,
1999 AS REPORTED ON FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<CASH> 1,748,035
<SECURITIES> 0
<RECEIVABLES> 414,032
<ALLOWANCES> 42,222
<INVENTORY> 415,146
<CURRENT-ASSETS> 2,604,349
<PP&E> 1,548,557
<DEPRECIATION> 839,103
<TOTAL-ASSETS> 3,392,647
<CURRENT-LIABILITIES> 367,965
<BONDS> 444,204
0
0
<COMMON> 2,580,478
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 3,392,647
<SALES> 2,355,583
<TOTAL-REVENUES> 2,446,728
<CGS> 1,052,093
<TOTAL-COSTS> 2,104,091
<OTHER-EXPENSES> (10,146)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 19,901
<INCOME-PRETAX> 332,882
<INCOME-TAX> 0
<INCOME-CONTINUING> 332,882
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 332,882
<EPS-BASIC> 0.14
<EPS-DILUTED> 0.13
</TABLE>
