ImmuCell Corporation (Nasdaq: ICCC)
(“ImmuCell” or the “Company”), a growing animal health company that
develops, manufactures and markets scientifically-proven and
practical products that improve the health and productivity of
dairy and beef cattle, today announced that it has received
$938,000 in support from the federal government under the Paycheck
Protection Program.
Working with its partners at Gorham Savings Bank, the Company
applied for and received this funding under the Keeping American
Workers Paid and Employed Act, which was included in the $2.2
trillion CARES Act that was approved by Congress on March 25, 2020.
The funding helps the Company maintain operations and meet payroll
during this unprecedented time of global economic challenge related
to the COVID-19 pandemic.
This funding accrues interest at a rate of 1% per annum, and the
Company’s obligation to repay the principal amount of the funding
will be forgiven provided that the Company uses the funding
proceeds only for eligible payroll costs, eligible utility
expenses, eligible rent payments and interest on mortgage debt
borrowed prior to February 15, 2020, in each case incurred and paid
during the eight-week period from April 13, 2020 through June 8,
2020 (which period may be extended at some future date). At least
75% of such forgiven amounts must be used for eligible payroll
costs. If any portion of this funding were not to be applied to
eligible expenses during the applicable eight-week period, the
Company expects to repay such excess amount without any prepayment
penalty by approximately October 13, 2020. By current estimated
calculations, this repayment obligation may be approximately
$150,000, due to projected payroll costs during the applicable
eight-week period potentially being less than the 2019 levels used
to determine the amount of available funding and the possible
exclusion of interest expense on the Company’s mortgage debt
because it was refinanced after February 15, 2020. The forgiveness
also may be reduced proportionately to the extent that the Company
were to reduce payroll during the applicable eight-week period
below allowable limits or below full-time equivalent employment
levels as compared to prior historical levels. The Company has
no intent to make any such reductions and therefore does not expect
to repay principal for this reason. Such forgiveness of
indebtedness, in accordance with the CARES Act, does not give rise
to taxable income to recipients like the Company.
With this funding in place, the Company is moving ahead with
plans to fill three open positions currently in its manufacturing
and facilities departments, as soon as the best candidates are
qualified and chosen. Subject to adequate funding, the Company may
create and fill approximately twelve to fifteen new positions over
the next two years or so, as it executes its anticipated growth
plan.
“This is a very powerful economic stimulus from our federal
government to support our employees and our Company in these
extreme times,” commented Michael F. Brigham, President and CEO.
“This program helps us look longer-term down the road and keep
operating and paying our employees currently and proceeding with
our planned expansion and product development initiatives, knowing
that better times are ahead but just not knowing when that will
be.”
The Company is very concerned about the medium-term impact that
the COVID-19 pandemic is having on the dairy and beef industries
and on its customers. Milk prices, which had reached new positive
levels during 2019 and into the first quarter of 2020, have crashed
recently. Milk is being dumped at farms due to decreased demand
from restaurants, schools and consumers around the world. Like all
industries, many dairy producers are encountering difficulties
accessing the labor they need to run their operations due to the
COVID-19 pandemic. The COVID-19 pandemic has negatively impacted
all commodities including milk and beef prices to producers. The
Company is uncertain about what impact this may have on its
customers’ order patterns, if any, and for how long.
As disclosed in a subsequent event footnote and as a risk factor
included in the Company’s Annual Report on Form 10-K for the year
ended December 31, 2019, the Company could experience product
shortages, backlogs and production slowdowns due to difficulties
accessing needed supplies and labor and other restrictions
affecting its ability to consistently deliver its products to
market.
The Company will continue to make the health and safety of all
of its employees the top priority as it navigates this uncharted
territory over the coming weeks and months, while respecting its
role as a nonpublic-facing essential agriculture service in keeping
with government directives and prudent practices being advocated by
health care professionals. Presently, production is continuing but
not at the rate experienced during the first quarter. This
production slowdown is anticipated to have a negative effect on the
Company’s revenues and operating results for the second quarter of
2020. However, at this point, the Company is unable to estimate the
magnitude of that impact. It is possible that further
slowdowns or interruptions could have consequences that the Company
does not presently recognize, resulting in other COVID-19 related
negative impacts on its business.
About ImmuCell: ImmuCell Corporation's
(Nasdaq: ICCC) purpose is to create
scientifically-proven and practical products that improve the
health and productivity of dairy and beef cattle. ImmuCell
markets First Defense®, providing
Immediate Immunity™ to newborn dairy and beef
livestock, and is in the late stages of developing
Re-Tain™, a novel treatment for subclinical
mastitis, the most significant cause of economic loss to the dairy
industry. Press releases and other information about the Company
are available at: http://www.immucell.com.
Cautionary Note Regarding Forward-Looking Statements
(Safe Harbor Statement):
This Press Release 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: our
plans and strategies for our business; projections of future
financial or operational performance; the timing and outcome of
pending or anticipated applications for regulatory approvals;
factors that may affect the dairy and beef industries and future
demand for our products; the extent, nature and duration of the
COVID-19 pandemic and its consequences, and their direct and
indirect impacts on the Company’s production activities, operating
results and financial condition and on the customers and markets
the Company serves; the scope and timing of ongoing and future
product development work and commercialization of our products;
future costs of product development efforts; the estimated
prevalence rate of subclinical mastitis; the expected efficacy of
new products; estimates about the market size for our products;
future market share of and revenue generated by current products
and products still in development; our ability to increase
production output and reduce costs of goods sold associated with
our new product, Tri-Shield First
Defense®; the future adequacy of our own manufacturing
facilities or those of third parties with which we have contractual
relationships to meet demand for our products on a timely basis;
the anticipated costs of (or time to complete) planned expansions
of our manufacturing facilities and the adequacy of our funds
available for these projects; the continuing availability to us on
reasonable terms of third-party providers of critical products or
services; the robustness of our manufacturing processes and related
technical issues; estimates about our production capacity,
efficiency and yield; the future adequacy of our working capital
and the availability and cost of third-party financing; future
regulatory requirements relating to our products; future expense
ratios and margins; future compliance with bank debt covenants;
future cost of our variable interest rate exposure on most of our
bank debt; costs associated with sustaining compliance with current
Good Manufacturing Practice (cGMP) regulations in our current
operations and attaining such compliance for the facility to
produce the Nisin Drug Substance; implementation of international
trade tariffs that could reduce the export of dairy products, which
could in turn weaken the price received by our customers for their
products; our effectiveness in competing against competitors within
both our existing and our anticipated product markets; the
cost-effectiveness of additional sales and marketing expenditures
and resources; anticipated changes in our manufacturing
capabilities and efficiencies; the value of our net deferred tax
assets; projections about depreciation expense and its impact on
income for book and tax return purposes; anticipated market
conditions; and any other statements that are not historical facts.
Forward-looking statements can be identified by the use of words
such as “expects”, “may”, “anticipates”, “aims”, “intends”,
“would”, “could”, “should”, “will”, “plans”, “believes”,
“estimates”, “targets”, “projects”, “forecasts”, “seeks” and
similar words and expressions. In addition, there can be no
assurance that future developments affecting us will be those that
we anticipate. 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 our products
(including the First Defense® product line and
Re-Tain™), competition within our anticipated
product markets, customer acceptance of our new and existing
products, product performance, alignment between our manufacturing
resources and product demand, our reliance upon third parties for
financial support, products and services, changes in laws and
regulations, decision making and delays by regulatory authorities,
currency values and fluctuations and other risks detailed from time
to time in filings we make with the SEC, including our Quarterly
Reports on Form 10-Q, our Annual Reports on Form 10-K and our
Current Reports on Form 8-K. Such statements involve risks and
uncertainties and are based on our current expectations, but actual
results may differ materially due to various factors, including the
risk factors summarized above.
Contacts: |
Michael F. Brigham, President and CEO |
|
ImmuCell Corporation |
|
(207) 878-2770 |
|
|
|
Joe Diaz, Robert Blum and Joe
Dorame |
|
Lytham Partners, LLC |
|
(602) 889-9700 |
|
iccc@lythampartners.com |
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