News Column


May 14, 2014

Financial Condition

We had approximately $5,472,000 in available cash, cash equivalents, short-term and long-term investments as of March 31, 2014. The table below summarizes the changes in selected, key balance sheet items (in thousands, except for percentages): As of As of Increase March 31, December 31, (Decrease) 2014 2013 Amount % Cash, cash equivalents, short-term and long-term investments $ 5,472$ 5,255$ 217 4 % Net working capital 5,969 6,632 (663 ) (10 )% Total assets 11,116 10,961 155 1 % Stockholders' equity $ 9,392$ 9,396

$ (4 ) (0.05 )% Net cash provided by operating activities amounted to $305,000 during the three-month period ended March 31, 2014 compared to net cash provided by operating activities of $445,000 during the three-month period ended March 31, 2013. Capital investments of $45,000 during the first quarter of 2014 compared to capital investments of $9,000 during the same period in 2013. As of March 31, 2014, our outstanding bank debt balance was approximately $1,040,000. Our $500,000 line of credit is available as needed. We have utilized debt financing because we believe that in this market environment, the option to generate funds through the sale of equity securities at an acceptable level of stockholder dilution is unlikely. Together with gross margin earned from ongoing product sales, we believe that we have sufficient capital resources to meet our working capital requirements and to finance our ongoing business operations during

at least the next twelve months. Since 1999, our strategy has been focused on selling and developing products that improve animal health and productivity in the dairy and beef industries. These product opportunities are generally less expensive to develop than the human health product opportunities that we had worked on during the 1990's. We have funded most of our product development expenses principally from product sales and were profitable for each of the nine years in the period ended December 31, 2007. Our cumulative investment of approximately $19,164,000 during the 15.25 year period that began on January 1, 1999 (the year we first re-focused our business strategy on animal health) and ended on March 31, 2014 was offset, in part, by $4,130,000 in licensing revenue, technology sales and grant income. Our strategic decision to continue developing Mast OutÒ after the product rights were returned to us in 2007 caused us to increase our spending on product development expenses that were previously funded by a former partner from late 2004 to mid-2007. As a result, we incurred net losses of $469,000, $216,000, $385,000 and $410,000 during the years ended December 31, 2008, 2009, 2010 and 2011, respectively. Having largely completed the significant clinical studies for Mast OutÒ, we reduced product development expenses during 2012, as anticipated, and were profitable during 2012 and 2013. These expenses are increasing again, as we invest to complete the regulatory approval process for Mast OutÒ, resulting in a net loss of $13,000 during the first quarter of 2014. We expect a larger loss during the second quarter of 2014. After completing this investment, we expect to return to breakeven or profitable results during the second half of 2014. We may, on occasion, seek additional research grant support as a means of leveraging the funds that we are able to spend developing new products. We continue to look for new product acquisition opportunities that would have a strategic fit with the products that we currently sell. A significant investment primarily related to the manufacture of pharmaceutical-grade Nisin remains ahead to complete the Mast OutÒproduct development initiative. During the third quarter of 2013, our Board of Directors approved the investment of approximately $1,500,000 to acquire processing equipment and to modify a portion of our facility in Portland, Maine to produce pharmaceutical-grade Nisin for Mast OutÒ. We expect our facility to produce sufficient pharmaceutical-grade Nisin to complete our regulatory submission to the U.S. Food and Drug Administration'sCenter for Veterinary Medicine (FDA) and conduct test marketing of Mast OutÒin the United States. An additional benefit of this investment is that the data we expect to collect on production yields should help us better understand the cost of producing inventory. We hope this will support and facilitate the raising of capital or the enlistment of a partner to fund expanded manufacturing capacity and the commercialization of Mast OutÒ. Approximately $242,000 of this investment is expected to be capitalized and depreciated over ten years. Approximately $110,000 in expenses related to this project were incurred during the fourth quarter of 2013. Another $412,000 in related expenses were incurred during the first quarter of 2014. We expect to expense the majority of the balance of this investment as incurred during the second quarter of 2014. This specifically targeted increase in product development expenses, that we consider to be non-recurring, infrequent and unusual, is expected to result in a net loss during the first six months of 2014 and (despite a projected return to profitability during the last six months of 2014) during the year ending December 31, 2014. - 13 - ImmuCell Corporation

We are completing the design phase for a two-story addition to our facility to provide us with approximately 7,100 additional square feet for cold storage, production and warehouse space for our operations. The preliminary budget for the construction and related production equipment is approximately $1,500,000. We expect to complete this construction project and begin utilizing the new space during the fourth quarter of 2014. These investments are an integral part of our strategy to: 1) increase production capacity for our current products, 2) maintain compliance with current Good Manufacturing Practice (cGMP) regulations in all of our operations and 3) better integrate the production of pharmaceutical-grade Nisin for Mast OutÒ into our operations. We are making a sustained investment in increasing our current production capacity and maintaining compliance with cGMP regulations. Compliance with cGMP regulations is required for the production of Mast OutÒ and Wipe Out®Dairy Wipes, and we elected to enforce these quality standards across all of our product lines. As we make other process improvements, we are investing in personnel, equipment and facility modifications to increase the efficiency and quality of our operations. During the first quarter of 2013, the U.S. Food and Drug Administration conducted a routine inspection of our facilities and operations. The report from this inspection was very favorable, and we responded to the few, minor observations that were noted. As of April 1, 2014, we had remaining available authorization from our Board of Directors to spend up to approximately $370,000 on routine capital expenditures. The figures described in this paragraph do not include the investment in two additional projects (described in the preceding two paragraphs) aggregating approximately $3,000,000. Results of Operations Product Sales

Product sales for the three-month period ended March 31, 2014 increased by 13%, or $235,000, to $2,082,000 from $1,847,000 during the same period in 2013. During the second half of 2013, production was slowed in order to upgrade certain pieces of critical manufacturing equipment. We ended the first quarter of 2014 with approximately $155,000 worth of orders that were placed by customers that we could not ship before April 1, 2014. If we had been able to fulfill all the orders placed during the first quarter of 2014, sales would have grown by 21% during the quarter as compared to the first quarter of 2013. We are now rebuilding inventory back to historical levels with production back at full and increased capacity. Domestic product sales increased by 11.5%, or $176,000, during the three-month period ended March 31, 2014, and international sales increased by 19%, or $59,000, in comparison to the first quarter of 2013. Our lead product, First DefenseÒ, continues to benefit from wide acceptance by dairy and beef producers as an effective tool to prevent bovine enteritis (scours) in newborn calves. We are expecting to see continued growth in product sales throughout 2014.First DefenseÒ and the related product line extensions aggregated 89% and 94% of our total product sales during the three-month periods ended March 31, 2014 and 2013, respectively. Sales of First DefenseÒ increased by 7% during the three-month period ended March 31, 2014, in comparison to 2013. As of March 31, 2014, we had a backlog of orders worth approximately $155,000. Had we been able to ship all of these orders received but held pending regulatory lot releases prior to April 1, 2014, sales of First Defense®would have increased by 16% during the first quarter of 2014 as compared to the first quarter of 2013. We have realized consistently positive sales growth of First DefenseÒ for the last seven consecutive quarters and, with the exception of the second quarter of 2012, for thirteen of the last fourteen quarters, as demonstrated in the following table: - 14 - ImmuCell Corporation [[Image Removed]] We believe that this long-term growth in sales of First DefenseÒmay reflect, at least in part, the success of our strategic decision initiated in 2010 to invest in additional sales and marketing efforts. Our sales and marketing team currently consists of one director and three regional sales and marketing managers. Our office manager and facilities manager support our sales efforts by performing all order entry, inside sales and shipping duties. We launched a new communications campaign at the end of 2010 that continues to emphasize how the unique ability of First DefenseÒto provide Immediate ImmunityTM generates a dependable return on investment for dairy and beef producers. Preventing newborn calves from becoming sick helps them to reach their genetic potential. As we continue to introduce First DefenseÒto new customers, our product sales are benefiting from the relatively strong price of milk and beef, which increases the value of calves and cows. Competition for resources that dairy producers allocate to their calf enterprises has been increased by the many new products that have been introduced to the calf market. The animal health distribution segment has been aggressively consolidating over the last few years. Larger distributors have been acquiring smaller distributors. Our sales are normally seasonal, with higher sales expected during the first quarter. Warm and dry weather reduces the producer's perception of the need for First DefenseÒ. Heat stress on calves caused by extremely hot summer weather can increase the incidence of scours. The severe heat and drought conditions during the summer of 2012 in many key agricultural regions in North America caused a significant increase in the cost of feed that has offset some improvement in milk prices. The combination of mild weather during the spring 2012 beef calving season and the increasing cost of feed created a very challenging environment in which to sell a disease prevention product. The harsher winter weather in late 2013 and early 2014 and an improving milk price may have benefited our sales. Although beef herd numbers are down currently because of the continuing effects of the 2012 drought conditions in many parts of North America, the value of newborn calves has increased as producers re-build their herd levels. Such an upswing increases a producer's likelihood to invest in First DefenseÒfor their calf crop. We are selling product applications of our First Defense TechnologyTM, which is a unique whey protein concentrate that is processed utilizing our proprietary milk protein purification methods, for the nutritional and feed supplement markets without the claims of our product that is licensed by the U.S. Department of Agriculture (USDA). Through our First Defense TechnologyTM, we are selling concentrated whey proteins in different formats. During the first quarter of 2011, we initiated sales of First Defense TechnologyTM in a bulk powder format (no capsule), which is delivered with a scoop and mixed with colostrum for feeding to calves. During the fourth quarter of 2011, Milk Products, LLC of Chilton, Wisconsin launched commercial sales of their product, Ultra StartÒ150 Plus, a colostrum replacer with First Defense TechnologyTM Inside. During the first quarter of 2012, we initiated a limited launch of a tube delivery format of our First Defense TechnologyTM in a gel solution. - 15 - ImmuCell Corporation

We sell topical wipes that are pre-moistened with a Nisin-based formulation in two product formats. Since 1999, we have been selling Wipe OutÒDairy Wipes (our second leading source of product sales) for use in preparing the teat area of a cow for milking. Sales of Wipe OutÒDairy Wipes decreased by 13% during the three-month period ended March 31, 2014 in comparison to the same period during 2013. We are competing aggressively on selling price to earn new business against less expensive products and alternative teat sanitizing methods. We believe that sales growth potential for Wipe OutÒDairy Wipes is limited because most of our sales of this product tend to be to smaller dairies that are under continued financial pressures. Such pressures are forcing many small dairy producers out of business. While our product is a high quality tool, there are less expensive ways to sanitize a cow's udder prior to milking, and many producers opt for a less expensive solution. During the first quarter of 2013, we initiated sales of Nisin-based wipes for pets in a 120-count canister (Preva™ wipes) to Bayer HealthCare Animal Health of St. Joseph, Missouri for commercial sales to pet owners. A 219% increase in sales of this product during the first quarter of 2014 in comparison to the first quarter of 2013, turned the drop in sales of Wipe OutÒDairy Wipes into a 37% increase in sales of the topical

wipe product line as a whole. Sales of our California Mastitis Test (CMT) (our third leading source of product sales) increased by 11% during the three-month period ended March 31, 2014 in comparison to the same period during 2013. We also make and sell bulk reagents for Isolate™(formerly known as Crypto-Scan®), which is a drinking water test that is sold by our distributor in Europe. Sales of IsolateTM increased to 4% of sales during the three-month period ended March 31, 2014 in comparison to no such sales during the same period in 2013. This increase was the result of the timing of an order that was moved from the fourth quarter of 2013 to the first quarter of 2014. Gross Margin We generally have held our product selling prices without increase during the seven-year period ended December 31, 2007. During the first quarter of 2008, we implemented a modest increase to the selling price of First Defense®. We have implemented no significant price increases since then, believing that we could benefit more from higher unit sales than through a higher average selling price per unit. This strategy recognizes that while selling a premium-priced product, we must be very efficient with our manufacturing costs to maintain a healthy gross margin. Changes in the gross margin on product sales are summarized in the following table for the respective periods (in thousands, except for percentages): For the Three-Month Periods Ended Increase March 31, (Decrease) 2014 2013 Amount % Gross margin $ 1,150$ 1,054$ 96 9 % Percent of product sales 55 % 57 % (2 )% (3 )% For the Twelve-Month Periods Ended Increase March 31, (Decrease) 2014 2013 Amount % Gross margin $ 3,157$ 3,095$ 62 2 % Percent of product sales 51 % 56 % (6 )% (10 )% The gross margin as a percentage of product sales was 51% and 57% during the years ended December 31, 2013 and 2012, respectively. The Company expects margins to be maintained in line with current levels throughout 2014. Our objective is to maintain the full-year gross margin percentage over 50%. However, the gross margin was 44% during the six-month period ended December 31, 2013. We reduced production output during the last six months of 2013 in order to upgrade certain pieces of critical process equipment, which resulted in an increase in cost of goods sold during that period. These investments were completed during the fourth quarter of 2013. A number of other factors contribute to the variability in our costs, resulting in some fluctuations in gross margin percentages from quarter to quarter. The gross margin on First DefenseÒis affected by biological yields from our raw material, which do vary over time. Like most U.S. manufacturers, we have been experiencing increases in the cost of raw materials that we purchase. The costs for production of First DefenseÒand Wipe OutÒDairy Wipes have increased due to increased labor costs and other expenses associated with our efforts to sustain compliance with cGMP regulations in our production processes. We have been able to minimize the impact of these cost increases by implementing yield improvements. Product mix also affects gross margin in that we earn a higher gross margin on First DefenseÒand a lower gross margin on Wipe OutÒDairy Wipes. Our inventory balance was reduced by 27%, or $442,000, to $1,207,000 as of December 31, 2013 from $1,649,000 as of December 31, 2012. Our inventory balance was reduced by 23%, or $366,000, to $1,207,000 at December 31, 2013 from $1,573,000 as of June 30, 2013. This level of investment as of December 31, 2012 and June 30, 2013 helped us prevent a backlog of orders, while we slowed inventory production to replace and repair certain pieces of critical process equipment during the second half of 2013. It is our production and customer service objective to ship orders within one day of receipt. We have been operating generally in accordance with this objective since the third quarter of 2009. However, from February to early May of 2014, we experienced a few, short delays in shipping customer orders of First DefenseÒ, as we re-build our inventory on-hand to the desired levels. As of March 31, 2014, our inventory balance was $947,000. Given current production and sales projections, we do not expect to ask our customers to endure such shipment delays again after early May 2014. - 16 - ImmuCell Corporation

Product Development Expenses

Product development expenses increased by 123%, or $328,000, to $594,000 during the three-month period ended March 31, 2014, as compared to $266,000 during the same period in 2013. Product development expenses aggregated 29% and 14% of product sales during the first quarters of 2014 and 2013, respectively. The majority of our product development budget from 2000 through the present has been focused on the development of Mast OutÒ. The balance of our efforts has been primarily focused on other improvements, extensions or additions to our First DefenseÒproduct line, including initiatives to prevent scours in calves caused by pathogens other than those within the current First DefenseÒdisease claims (E. coli K99 and coronavirus) such as rotavirus. During the first quarter of 2014, approximately 69%, or $412,000, of the $594,000 that we invested in product development expenses was related to the modifications we are making to our manufacturing facility to fulfill Nisin manufacturing requirements for Mast OutÒ. We also remain interested in acquiring other new products and technologies that fit with our sales focus on the dairy and beef industries. Our lead product development initiative is Mast Out®, a Nisin-based intramammary treatment of subclinical mastitis in lactating dairy cows. During 2000, we acquired an exclusive license from Nutrition 21, Inc. (formerly Applied Microbiology Inc. or AMBI) to develop and market Nisin-based products for animal health applications, which allowed us to initiate the development of Mast OutÒ. In 2004, we paid Nutrition 21 approximately $965,000 to buy out this royalty and milestone-based license to Nisin, thereby acquiring control of the animal health applications of Nisin. Nisin, the same active ingredient contained in Wipe OutÒDairy Wipes, is an antibacterial peptide known to have activity against most gram positive and some gram negative bacteria. In our pivotal effectiveness study, statistically significant Mast OutÒcure rates were associated with a statistically significant reduction in milk somatic cell count, which is an important measure of milk quality. Nisin is a well characterized substance, having been used in food preservation applications for over 50 years. Food-grade Nisin, however, cannot be used in pharmaceutical applications because of its low purity. Our Nisin technology includes methods to achieve pharmaceutical-grade purity. During the 14.25 year period that began on January 1, 2000 (the year we began the development of Mast OutÒ) and ended on March 31, 2014, we invested the aggregate of approximately $10,006,000 in the development of Mast OutÒ. This estimated allocation to Mast OutÒreflects only direct expenditures and includes no allocation of product development or administrative overhead expenses. Approximately $2,891,000 of this investment was offset by product licensing revenues and grant income related to Mast OutÒ. In 2004, we entered into a product development and marketing agreement with Zoetis (formerly Pfizer Animal Health) covering Mast OutÒ. Under that agreement (as amended and supplemented and later terminated), we received $2,375,000 in payments. Zoetis elected to terminate the agreement in 2007. Soon thereafter, Zoetis returned to us all rights, data, information, files, regulatory filings, materials and stocks of Nisin and Nisin producing cultures relating to the development of Mast OutÒ. We believe that the decision of Zoetis to terminate the agreement was not based on any unanticipated efficacy or regulatory issues. Rather, we believe the decision was primarily driven by a marketing concern relating to their fear that the milk from treated cows could interfere with the manufacture of certain cultured dairy products. Milk from cows treated with intramammary mastitis treatment products on the market today must be discarded for a specified period of time during and after treatment. We believe that all milk from cows treated with Mast OutÒ will be saleable in the United States. This is a significant competitive advantage for our product. Due to this zero milk discard feature, there is a risk that Nisin from milk of cows treated with Mast OutÒcould interfere with the manufacture of certain (but not all) commercial cultured dairy products, such as some kinds of cheese and yogurt, if a process tank contains milk from a high enough percentage of treated cows. This risk of interference ranges from the less likely stopping of a cheese starter culture to a delay in the manufacturing process, which does happen at times for other reasons. We worked with scientists and mastitis experts to conduct a formal risk assessment to quantify the impact that milk from treated cows may have on cultured dairy products. This study concluded that the dilution of milk from treated cows through comingling with milk from untreated cows during normal milk hauling and storage practices reduces the risk of interference with commercial dairy cultures to a negligible level when Mast OutÒis used in accordance with the product label. Monitoring of several important variables relevant to the manufacture of cheese would be advisable if Mast OutÒwere to be used as part of a whole herd ("blitz") treatment protocol. We do not see this as a significant problem as modern "precision dairying" practices support reducing the indiscriminate use of drug treatments. Milk from cows that have been treated with Mast OutÒthat is sold exclusively for fluid milk products presents no such risk. - 17 - ImmuCell Corporation

The commercial introduction of Mast OutÒin the United States is subject to approval of our New Animal Drug Application (NADA) by the FDA, which approval cannot be assured. Foreign regulatory approvals would be required for sales in key markets outside of the United States and would involve some similar and some different requirements. The NADA is comprised of five principal Technical Sections that are subject to the FDA's phased review. By statute, each Technical Section submission is generally subject to a six-month review cycle by the FDA. Each Technical Section can be reviewed and approved separately. Upon review and assessment by the FDA that all requirements for a Technical Section have been met, the FDA may issue a Technical Section Complete Letter. The current status of our work on these Technical Sections is as follows:

1) Environmental Impact: During the third quarter of 2008, we received the Environmental Impact Technical Section Complete Letter from the FDA.

2) Target Animal Safety: During the second quarter of 2012, we received the Target Animal Safety Technical Section Complete Letter from the FDA.

3) Effectiveness: During the third quarter of 2012, we received the Effectiveness Technical Section Complete Letter from the FDA. The draft product label carries claims for the treatment of subclinical mastitis associated with Streptococcus agalactiae, Streptococcus dysgalactiae, Streptococcus uberis, and coagulase-negative staphylococci in lactating dairy cattle. 4) Human Food Safety (HFS): The HFS Technical Section submission was made during the fourth quarter of 2010. This Technical Section determines whether a milk discard period or meat withhold period during and after treatment with Mast OutÒwill be required. This Technical Section includes several subsections such as: a) toxicology, b) total metabolism, c) effects of drug residues in food on human intestinal microbiology, d) effects on bacteria of human health concern (antimicrobial resistance) and e) pivotal residue chemistry. During the second quarter of 2011, we announced that the FDA had accepted the subsections described above and granted Mast OutÒa zero milk discard period and a zero meat withhold period. Before we can obtain this Technical Section Complete Letter, we must adapt our analytical method that measures Nisin residues in milk around the assigned tolerance limit and transfer that method to a FDA laboratory. We first submitted the validated analytical method to the FDA during the fourth quarter of 2012. We have submitted additional data, which we believe to be responsive to the FDA's review comments, during the third quarter of 2013 and the first quarter of 2014. The FDA has informed us that our method transfer to the FDA laboratory would be delayed until the first half of 2014 due to scheduling constraints at those facilities. Accordingly, our expectation for a Technical Section Complete Letter for the HFS Technical Section has now been pushed back to 2015. 5) Chemistry, Manufacturing and Controls (CMC): Obtaining FDA approval of the CMC Technical Section defines the critical path to approval of our NADA by the FDA and to initial commercial sales. We are party to agreements with three manufacturers to produce inventory for us utilizing our proprietary technologies and processes. First, a long-term, exclusive supply agreement with Plas-Pak Inc. of Norwich, Connecticut covers the proprietary syringe that was developed specifically for treating cows with Mast OutÒ. These syringes were used for all pivotal studies of Mast OutÒ. Second, we could have the pharmaceutical-grade Nisin produced for us under a Development and Manufacturing Agreement with Lonza Sales, Ltd. of Basel, Switzerland, which provides for the exclusive manufacture of the pharmaceutical-grade Nisin. The Lonza site in Europe is FDA-approved, compliant with cGMP regulations and subject to future FDA approval and inspection. Third, an exclusive Contract Manufacture Agreement with Norbrook Laboratories Limited of Newry, Northern Ireland, an FDA-approved drug product manufacturer, covers the formulation of the pharmaceutical-grade Nisin into drug product, the sterile-fill of syringes and the final packaging. Norbrook provided these services for clinical material used in all pivotal studies of Mast OutÒ. During the fourth quarter of 2012, we withdrew our first submission to the FDA of the CMC Technical Section because of changes we have made to our regulatory filing and manufacturing strategies. - 18 - ImmuCell Corporation The selection of and (if applicable) the financing for the pharmaceutical-grade Nisin production facility is a critical decision. We considered four options: 1) having this work done by a qualified contract manufacturer, such as Lonza, 2) building a new facility, 3) leasing and modifying an existing facility or 4) transferring our technology to a partner's facility. Our initial plan was to have the pharmaceutical-grade Nisin produced for us under contract in order to avoid the investment in a manufacturing facility. By the end of 2011, we determined that the large minimum production volumes and high cost imposed by the selected contract manufacturer might make the product commercially unsustainable. For this reason, we engaged an engineering firm to estimate the cost of controlling the production of the pharmaceutical-grade Nisin ourselves in a plant that we either built or leased. Because we do not have the estimated amount of approximately $13,000,000 to pay for this investment (without some combination of new debt, equity or partner funding) and because of the risk that the actual cost could be higher than we estimated, we investigated potential partnering arrangements. We presented this product opportunity to a variety of large and small animal health companies. During the second quarter of 2013, we received a $250,000 exclusive option payment from a prospective partner who later decided not to execute a license for the development and marketing of Mast Out®. We were informed by the prospective partner that it had determined that, in its opinion, it could not cost effectively commercialize the product. We are encouraged by the feedback from prospective partners, following their due diligence, that our novel mastitis treatment can achieve FDA approval and have a significant, positive impact on the dairy industry. We continue to believe in the potential value of making this novel treatment option available to dairy producers in order to reduce their reliance on penicillin and cephalosporin-based products. During the third quarter of 2013, we suspended our active pursuit of a partner for Mast Out®for the present time while continuing our pursuit of FDA approval by completing the HFS Technical Section and the CMC Technical Section on our own. While recognizing the commercial and near-term financial advantages which could have been realized via a partnering agreement with a larger company, we believe that, among the currently available options, the greatest long-term value for our stockholders could be achieved by retaining full product ownership through an independent strategy at this stage. We believe that the evolution of our thinking relating to these strategic alternatives demonstrates the flexibility and creativity required to solve this challenge. We will continue to evaluate the four potential options, described above, as we actively pursue the alternative strategy discussed below. During the third quarter of 2013, our Board of Directors approved the investment of approximately $1,500,000 to acquire processing equipment and make modifications to our existing manufacturing facility necessary to produce pharmaceutical-grade Nisin for Mast OutÒ. The primary goals of this strategy are to: 1) establish the equivalence of the pharmaceutical-grade Nisin produced in this plant to the pharmaceutical-grade Nisin that was used in all completed clinical studies, 2) produce the validation batches required to complete the CMC Technical Section, 3) confirm process yields and the related cost of production and 4) produce inventory for test marketing and limited initial sales after approval. In short, we aim to secure regulatory approval of the product and demonstrate its commercial viability. We believe this approach will enhance our position in any further financing or partnering discussions, should we elect to pursue either of these paths. This anticipated investment and the resulting short-term loss is the vehicle by which we expect to optimize the long-term value of this asset for our stockholders. We intend to take all appropriate steps to pursue a successful commercialization of Mast Out®. This strategy allows us to advance the regulatory approval process while controlling our decision of whether and when to invest in larger scale production on our own, or with a partner. Our goal is to make the first submission of the CMC Technical Section to the FDA at the end of 2014 or in early 2015. It is very common for the CMC Technical Section to require two, six-month review periods by the FDA. After obtaining the final Technical Section Complete Letter and after preparing materials responsive to other administrative requirements, the administrative NADA submission will be assembled for review by the FDA. This final administrative submission is subject to a statutory sixty-day review period. Given this, we believe we could be in a position to achieve the NADA approval and test market the product by the end of 2015. However, it is possible that the achievement of this important milestone could be delayed into 2016. At some point, a further investment to increase our production capacity of pharmaceutical-grade Nisin would be required to meet anticipated market demand. Our options include doing the work on our own (with externally generated financing) or through an alliance with others, the out-licensing of the product or the sale of the product rights. Sales and Marketing Expenses

Sales and marketing expenses increased by approximately 29%, or $64,000, to $285,000 during the first quarter of 2014 in comparison to $221,000 during the first quarter of 2013, increasing to 14% of product sales in 2014 from 12% in 2013. We continue to leverage the efforts of our small, but growing, sales force by using veterinary distributors. These expenses have been increasing since our 2010 strategic decision to invest more to support First DefenseÒsales. This investment may have created, at least in part, our recent increase in product sales. Historically, we have invested approximately up to 20% of product sales in sales and marketing expenses on an annual basis, but this percentage tends to be lower during the first quarter when our seasonal sales are the highest. We are planning to increase our investment in sales and marketing expenses further during the second half of 2014. Initially, this could increase this expense ratio to between 20% to 25%. The objective of this strategy is to create an increase in product sales so that this expense ratio is reduced back below

20% in 2015. - 19 - ImmuCell Corporation Administrative Expenses Administrative expenses increased by approximately 8%, or $19,000, to $258,000 during three-month period ended March 31, 2014 as compared to $239,000 during the three-month period ended March 31, 2013. We strive to be efficient with these expenses while funding costs associated with complying with the Sarbanes-Oxley Act of 2002 and other costs associated with being a publicly-held company. We provide a full disclosure of the status of our business and financial condition in three quarterly reports and one annual report each year, as well as in Current Reports on Form 8-K when legally required or deemed appropriate by management. Additional information about us is available in our annual Proxy Statement. All of these reports are filed with the Securities and Exchange Commission and are available on-line or upon request to the Company. Historically, we had limited our investment in investor relations spending. Effective April 1, 2014, our Board of Directors authorized an investment in a more actively managed investor relations program to broadly introduce the Company to the national investment community. Other (Expenses) Income, net During the first quarter of 2013, we received a payment of approximately $62,000, as an eligible member of the mutual insurance company that provided products liability insurance to us when it was acquired by another insurance company through a sponsored demutualization transaction that was effective as of January 1, 2013. Interest income was $4,000 during the first quarter of 2014, in comparison to $3,000 during the first quarter of 2013. Interest expense decreased by approximately 13%, or $2,000, to $15,000 during the first quarter of 2014, in comparison to $17,000 during the first quarter of 2013.

Income Before Income Taxes and Net (Loss) Income

Our income before income taxes of $1,000 during the three-month period ended March 31, 2014 compares to income before income taxes of $371,000 during the three-month period ended March 31, 2013. Income before income taxes includes $113,000 and $98,000 of non-cash depreciation and amortization expenses during the three-month periods ended March 31, 2014 and 2013, respectively. Our income tax rate for the three-month period ended March 31, 2014 is an unusually high percentage figure because the income before income taxes is a very small number and our tax expense is driven, in part, by a timing difference whereby the investment in our Mast OutÒproduction facility is being expensed for our books but is being capitalized for tax return purposes. We recorded income tax expense equal to 45% of our income before income taxes during the three-month period ended March 31, 2013. Our Net (Loss) was ($13,000), or less than ($0.01) per share, during the three-month period ended March 31, 2014, in contrast to Net Income of $204,000, or $0.07 per diluted share, during the three-month period ended March 31, 2013. The 2014 results include $412,000 in non-recurring, infrequent and unusual product development expenses related to our investment in processing equipment and modifications to our facility to produce pharmaceutical-grade Nisin.

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Source: Edgar Glimpses

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