ImmuCell (ICCC) 10-Q 2017 Q1 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2017

001-12934

(Commission file number)

ImmuCell Corporation

(Exact name of registrant as specified in its charter)

Delaware	01-0382980
(State of Incorporation)	(I.R.S. Employer
	Identification No.)

56 Evergreen Drive, Portland, ME	04103
(Address of principal executive office)	(Zip Code)

(207) 878-2770

(Registrant's telephone number)

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. YesxNo¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of the Registrant’s common stock outstanding at May 5, 2017 was 4,848,390.

ImmuCell Corporation

TABLE OF CONTENTS

March 31, 2017

	PART I: FINANCIAL INFORMATION
ITEM 1.	Financial Statements
	Balance Sheets as of March 31, 2017 and December 31, 2016	1
	Statements of Income for the three-month periods ended March 31, 2017 and 2016	2
	Statements of Comprehensive Income for the three-month periods ended March 31, 2017 and 2016	3
	Statements of Cash Flows for the three-month periods ended March 31, 2017 and 2016	4
	Notes to Unaudited Condensed Financial Statements	5-19
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20-27
ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk	27
ITEM 4.	Controls and Procedures	27
	PART II: OTHER INFORMATION
ITEMS 1 THROUGH 6		28-33
	Signature	34

ImmuCell Corporation

PART 1. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

(Unaudited Condensed)

BALANCE SHEETS

	As of March 31, 2017			As of  December 31, 2016
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	4,252,020		$	5,150,344
Short-term investments		2,978,355			5,474,013
Inventory		2,098,934			2,126,899
Accounts receivable, net		1,011,662			992,390
Prepaid expenses and other current assets		570,898			604,482
Total current assets		10,911,869			14,348,128
PROPERTY, PLANT AND EQUIPMENT, net		14,124,778			9,846,293
DEFERRED TAX ASSETS		-			201,003
INTANGIBLE ASSETS, net		167,160			171,936
GOODWILL		95,557			95,557
OTHER ASSETS, net		34,264			34,264
TOTAL ASSETS	$	25,333,628		$	24,697,181
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses	$	1,620,291		$	1,891,763
Current portion of bank debt		142,057			133,269
Deferred revenue		-			33,856
Total current liabilities		1,762,348			2,058,888
LONG-TERM LIABILITIES:
Bank debt, net of current portion		3,123,627			2,878,805
Deferred tax liabilities		57,574			-
Interest rate swaps		21,611			37,346
Total long-term liabilities		3,202,812			2,916,151
TOTAL LIABILITIES		4,965,160			4,975,039
CONTINGENT LIABILITIES AND COMMITMENTS (See Note 15)
STOCKHOLDERS’ EQUITY:
Common stock, $0.10 par value per share, 10,000,000 and 10,000,000 shares  authorized, 5,044,838 and 5,044,838 shares issued and 4,848,390 and 4,847,390 shares outstanding, as of March 31, 2017 and December 31, 2016, respectively		504,484			504,484
Additional paid-in capital		18,576,209			18,526,383
Retained earnings		1,731,362			1,147,120
Treasury stock, at cost, 196,448 and 197,448 shares as of March 31, 2017 and December 31, 2016, respectively		(429,756	)		(431,943	)
Accumulated other comprehensive (loss)		(13,831	)		(23,902	)
Total stockholders’ equity		20,368,468			19,722,142
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	25,333,628		$	24,697,181

The accompanying notes are an integral part of these unaudited condensed financial statements.

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ImmuCell Corporation

(Unaudited Condensed)

STATEMENTS OF INCOME

	For the Three-Month Periods Ended March 31,
	2017		2016
Product sales	$	3,543,930	$	2,986,359
Costs of goods sold		1,391,997		1,228,799
Gross margin		2,151,933		1,757,560
Sales and marketing expenses		514,475		418,998
Administrative expenses		379,633		337,155
Product development expenses		339,616		302,443
Operating expenses		1,233,724		1,058,596
NET OPERATING INCOME		918,209		698,964
Other expenses, net		30,242		23,387
INCOME BEFORE INCOME TAXES		887,967		675,577
Income tax expense		303,725		223,129
NET INCOME	$	584,242	$	452,448
Weighted average common shares outstanding:
Basic		4,847,557		3,833,056
Diluted		4,940,293		3,944,350
NET INCOME PER SHARE:
Basic	$	0.12	$	0.12
Diluted	$	0.12	$	0.11

The accompanying notes are an integral part of these unaudited condensed financial statements.

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ImmuCell Corporation

(Unaudited Condensed)

STATEMENTS OF COMPREHENSIVE INCOME

	For the Three-Month Periods Ended March 31,
	2017			2016
Net income	$	584,242		$	452,448
Other comprehensive income (loss):
Interest rate swaps, before taxes		15,735			(101,678	)
Income tax applicable to interest rate swaps		(5,665	)		36,604
Other comprehensive income (loss), net of taxes		10,070			(65,074	)
Total comprehensive income	$	594,312		$	387,374

The accompanying notes are an integral part of these unaudited condensed financial statements.

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ImmuCell Corporation

(Unaudited Condensed)

STATEMENTS OF CASH FLOWS

	For the Three-Month Periods Ended March 31,
	2017			2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	584,242		$	452,448
Adjustments to reconcile net income to net cash  provided by (used for) operating activities:
Depreciation		213,466			162,547
Amortization		4,776			9,308
Non-cash interest expense		2,941			1,309
Deferred income taxes		252,912			222,004
Stock-based compensation		46,763			8,908
Gain on disposal of fixed assets		(3,663	)		-
Provision for uncollectible accounts, net		1,080			560
Changes in:
Accounts receivable, gross		(20,352	)		(702,315	)
Accrued interest income		13,658			(5,934	)
Inventory		27,965			2,305
Prepaid expenses and other current assets		33,584			(71,269	)
Accounts payable and accrued expenses		128,069			(167,112	)
Deferred revenue		(33,856	)		-
Net cash provided by (used for) operating activities		1,251,585			(87,241	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and equipment		(4,932,828	)		(311,480	)
Acquisition of certain business assets		-			(368,219	)
Maturities of investments		2,731,000			496,000
Purchases of investments		(249,000	)		(1,984,000	)
Proceeds from sale of fixed assets		45,000			-
Net cash used for investing activities		(2,405,828	)		(2,167,699	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from public offering, net		-			5,313,223
Proceeds from debt issuance		340,000			-
Debt principal repayments		(35,295	)		(33,414	)
Debt issuance costs		(54,036	)		(36,893	)
Proceeds from exercise of stock options		5,250			-
Net cash provided by financing activities		255,919			5,242,916
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS		(898,324	)		2,987,976
BEGINNING CASH AND CASH EQUIVALENTS		5,150,344			1,573,328
ENDING CASH AND CASH EQUIVALENTS	$	4,252,020		$	4,561,304
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
CASH PAID FOR:
Income taxes		-		$	1,125
Interest expense	$	36,556		$	38,713
NON-CASH ACTIVITIES:
Change in capital expenditures included in accounts payable and  accrued expenses	($	399,541	)	$	100,678
Net change in fair value of interest rate swaps	($	10,070	)	$	65,074
Fixed asset disposals, gross	$	431,970			-

See Note 8 for non-cash activities related to a 2016 business acquisition

The accompanying notes are an integral part of these unaudited condensed financial statements.

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ImmuCell Corporation

Notes to Unaudited Condensed Financial Statements

1. BUSINESS OPERATIONS

ImmuCell Corporation (the “Company”, “we”, “us”, “our”) is an animal health company whose purpose is to create scientifically-proven and practical products that improve animal health and productivity in the dairy and beef industries. The Company was originally incorporated in Maine in 1982 and reincorporated in Delaware in 1987, in conjunction with its initial public offering of common stock. We market products that provide immediate immunity to newborn dairy and beef cattle. We are developing product line extensions of our existing products and are in the late stages of developing a novel product that addresses mastitis, the most significant cause of economic loss to the dairy industry. These products help reduce the need to use traditional antibiotics in food producing animals. The Company is subject to certain risks associated with its stage of development including dependence on key individuals, competition from other larger companies, the successful sale of existing products and the development and acquisition of additional commercially viable products with appropriate regulatory approvals, where applicable. These and other risks to our Company are further detailed underPart II- “Other Information”,Item 1A- “Risk Factors”.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of Presentation

We have prepared the accompanying unaudited condensed financial statements reflecting all adjustments that are, in our opinion, necessary in order to ensure that the financial statements are not misleading. We follow accounting standards set by the Financial Accounting Standards Board (FASB). The FASB sets generally accepted accounting principles (GAAP) that we follow to ensure we consistently report our financial condition, results of operations, earnings per share and cash flows. References to GAAP in these footnotes are to the FASBAccounting Standards Codification™ (Codification). Accordingly, we believe that although the disclosures are adequate to ensure that the information presented is not misleading, these unaudited condensed financial statements should be read in conjunction with the financial statements for the year ended December 31, 2016 and the notes thereto, contained in our Annual Report on Form 10-K as filed with the Securities and Exchange Commission (SEC).

(b) Cash, Cash Equivalents and Short-Term Investments

We consider all highly liquid investment instruments that mature within three months of their purchase dates to be cash equivalents. Cash equivalents are principally invested in securities backed by the U.S. government. Certain cash balances in excess of Federal Deposit Insurance Corporation (FDIC) limits of $250,000 per financial institution per depositor are maintained in money market accounts at financial institutions that are secured, in part, by the Securities Investor Protection Corporation. Amounts in excess of these FDIC limits per bank that are not invested in securities backed by the U.S. government aggregated $3,751,720 and $4,650,044 as of March 31, 2017 and December 31, 2016, respectively. We account for investments in marketable securities in accordance with Codification Topic 320,Investments – Debt and Equity Securities. Short-term investments are classified as held to maturity and are comprised principally of certificates of deposit that mature in more than three months from their purchase dates and not more than twelve months from the balance sheet date. Short-term investments are held at different financial institutions that are insured by the FDIC, within the FDIC limits per financial institution. See Note 3.

(c) Inventory

Inventory includes raw materials, work-in-process and finished goods and is recorded at the lower of cost, on the first-in, first-out method, or net realizable value (determined as the estimated selling price in the normal course of business, less reasonably predictable costs of completion, disposal and transportation). Work-in-process and finished goods inventories include materials, labor and manufacturing overhead. See Note 4.

(d) Accounts Receivable

Accounts receivable are carried at the original invoice amount less an estimate made for doubtful collection and product returns. Management determines the allowance for doubtful accounts on a monthly basis by identifying troubled accounts and by using historical experience applied to an aging of accounts. Accounts receivable are written off when deemed uncollectible. Recoveries of accounts receivable previously written off are recorded as income when received. Accounts receivable are considered to be past due if any portion of the receivable balance is outstanding for more than 30 days. Interest is charged on past due accounts receivable. See Note 5

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ImmuCell Corporation

Notes to Unaudited Condensed Financial Statements (continued)

(e) Property, Plant and Equipment

We depreciate property, plant and equipment on the straight-line method by charges to operations in amounts estimated to expense the cost of the assets from the date they are first put into service to the end of the estimated useful lives of the assets. The facility we are constructing to produce the active ingredient, Nisin, forMast Out^® will be depreciated over its useful life beginning when that facility is placed into service, which could be before the Food and Drug Administration (FDA) approval of the product is achieved. This facility is not yet placed in service. We are evaluating the estimated useful lives of the assets associated with this facility. Significant repairs to fixed assets that benefit more than a current period are capitalized and depreciated over their useful lives. See Note 7.

(f) Intangible Assets and Goodwill

We amortize intangible assets on the straight-line method by charges to operations in amounts estimated to expense the cost of the assets from the date they are first put into service to the end of the estimated useful lives of the assets. We have recorded intangible assets related to customer relationships, non-compete agreements, and developed technology, each with defined useful lives. We have classified as goodwill the amounts paid in excess of fair value of the net assets (including tax attributes) acquired in purchase transactions.

We assess the impairment of intangible assets and goodwill that have indefinite lives at the reporting unit level on an annual basis (as of December 31^st) and whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. In evaluating goodwill for impairment, we have the option to first assess the qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. The more likely than not threshold is defined as having a likelihood of more than 50 percent. If, after assessing the totality of events or circumstances, we determine that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, we would then perform step one of the two-step impairment test; otherwise, no further impairment test would be required. In contrast, we can opt to bypass the qualitative assessment for any reporting unit in any period and proceed directly to step one of the two-step impairment test. Doing so does not preclude us from performing the qualitative assessment in any subsequent period. Factors that could indicate that an impairment may exist include significant under-performance relative to plan or long-term projections, significant changes in business strategy and significant negative industry or economic trends. Although we believe intangible assets and goodwill are appropriately stated in the accompanying financial statements, changes in strategy or market conditions could significantly impact these judgements and require an adjustment to the recorded balance. No goodwill impairments were recorded during the three-month period ended March 31, 2017 or the year ended December 31, 2016. See Notes 2(h), 8 and 9 for additional disclosures.

(g) Fair Value Measurements

In determining fair value measurements, we follow the provisions of Codification Topic 820,Fair Value Measurements and Disclosures. Codification Topic 820 defines fair value, establishes a framework for measuring fair value under GAAP and enhances disclosures about fair value measurements. The topic provides a consistent definition of fair value which focuses on an exit price, which is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The topic also prioritizes, within the measurement of fair value, the use of market-based information over entity-specific information and establishes a three-level hierarchy for fair value measurements based on the nature of inputs used in the valuation of an asset or liability as of the measurement date. At March 31, 2017 and December 31, 2016, the carrying amounts of cash and cash equivalents, accounts receivable, inventory, other assets, accounts payable and accrued liabilities approximate fair value because of their short-term nature. The amount outstanding under our bank debt facilities is measured at carrying value in our accompanying balance sheets. Our bank debt facilities are valued using Level 2 inputs. The estimated fair value of our bank debt facilities approximates their carrying value. The three-level hierarchy is as follows:

Level 1	-	Pricing inputs are quoted prices available in active markets for identical assets or liabilities as of the measurement date.
Level 2	-	Pricing inputs are quoted prices for similar assets or liabilities, or inputs that are observable, either directly or indirectly, for substantially the full term through corroboration with observable market data.
Level 3	-	Pricing inputs are unobservable for the assets or liabilities, that is, inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability.

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ImmuCell Corporation

Notes to Unaudited Condensed Financial Statements (continued)

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an asset’s or liability’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgement, and considers factors specific to the investment.

Our held to maturity securities are comprised of investments in bank certificates of deposit. The value of these securities is disclosed in Note 3. We also hold money market mutual funds in a brokerage account, which are classified as cash equivalents and measured at fair value. The fair value of these investments is based on their closing published net asset value.

We assess the levels of the investments at each measurement date, and transfers between levels are recognized on the actual date of the event or change in circumstances that caused the transfer in accordance with our accounting policy regarding the recognition of transfers between levels of the fair value hierarchy. During the three-month period ended March 31, 2017 and the year ended December 31, 2016, there were no transfers between levels. As of March 31, 2017 and December 31, 2016, our Level 1 assets measured at fair value by quoted prices in active markets consisted of bank savings accounts and money market funds. As of March 31, 2017 and December 31, 2016, our bank certificates of deposit were classified as Level 2 and were measured by significant other observable inputs. As of March 31, 2017 and December 31, 2016, our interest rate swaps were classified as Level 2 and were measured by observable market data in combination with expected cash flows for each instrument. There were no assets or liabilities measured at fair value on a nonrecurring basis as of March 31, 2017 or December 31, 2016.

	As of March 31, 2017
	Level 1		Level 2		Level 3		Total
Assets:
Cash and money market accounts	$	4,252,020		-		-	$	4,252,020
Bank certificates of deposit		-	$	2,978,355		-	$	2,978,355
Liabilities:
Interest rate swaps		-	$	21,611		-	$	21,611

	As of December 31, 2016
	Level 1		Level 2		Level 3		Total
Assets:
Cash and money market accounts	$	5,150,344		-		-	$	5,150,344
Bank certificates of deposit		-	$	5,474,013		-	$	5,474,013
Liabilities:
Interest rate swaps		-	$	37,346		-	$	37,346

(h) Valuation of Long-Lived Assets

We periodically evaluate our long-lived assets, consisting principally of fixed assets and amortizable intangible assets, for potential impairment. In accordance with the applicable accounting guidance for the treatment of long-lived assets, we review the carrying value of our long-lived assets or asset group that is held and used, including intangible assets subject to amortization, for impairment whenever events and circumstances indicate that the carrying value of the assets may not be recoverable. Under the held and used approach, the asset or asset group to be tested for impairment should represent the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities. We evaluate our long-lived assets whenever events or circumstances suggest that the carrying amount of an asset or group of assets may not be recoverable from the estimated undiscounted future cash flows. No impairment was recognized during the three-month period ended March 31, 2017 or the year ended December 31, 2016.

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ImmuCell Corporation

Notes to Unaudited Condensed Financial Statements (continued)

(i) Concentration of Risk

Concentration of credit risk with respect to accounts receivable is principally limited to certain customers to whom we make substantial sales. To reduce risk, we routinely assess the financial strength of our customers and, as a consequence, believe that our accounts receivable credit risk exposure is limited. We maintain an allowance for potential credit losses, but historically we have not experienced significant credit losses related to an individual customer or groups of customers in any particular industry or geographic area. Sales to significant customers that amounted to 10% or more of total product sales are detailed in the following table:

	Three-Month Period Ended March 31,
	2017			2016
Patterson Companies, Inc.		40	%		37	%
AmerisourceBergen Corporation		26	%		21	%
Robert J. Matthews Company		*			10	%

Accounts receivable due from significant customers amounted to the percentages of total trade accounts receivable as detailed in the following table:

	As of March 31, 2017			As of December 31, 2016
Patterson Companies, Inc.		28	%		31	%
AmerisourceBergen Corporation		27	%		33	%
ANIMART LLC(1)		12	%		*

⁽¹⁾ Assumes that the acquisition of Animal Medic by ANIMART LLC (which closed during the third quarter of 2016) had occurred as of the beginning of the periods being reported.

* Amount is less than 10%.

We believe that supplies and raw materials for the production of our products are available from more than one vendor or farm. Our policy is to maintain more than one source of supply for the components used in our products. However, there is a risk that we could have difficulty in efficiently acquiring essential supplies.

(j) Interest Rate Swap Agreements

All derivatives are recognized on the balance sheet at their fair value. We entered into interest rate swap agreements in 2010 and 2015. On the dates the agreements were entered into, we designated the derivatives as hedges of the variability of cash flows to be paid related to our long-term debt. The agreements have been determined to be highly effective in hedging the variability of identified cash flows, so changes in the fair market value of the interest rate swap agreements are recorded as comprehensive income (loss), until earnings are affected by the variability of cash flows (e.g., when periodic settlements on a variable-rate asset or liability are recorded in earnings). We formally documented the relationship between the interest rate swap agreements and the related hedged items. We also formally assess, both at the interest rate swap agreements’ inception and on an ongoing basis, whether the agreements are highly effective in offsetting changes in cash flow of hedged items. See Note 11.

(k) Revenue Recognition

We sell products that provide immediate immunity to newborn dairy and beef cattle. We recognize revenue when four criteria are met. These include i) persuasive evidence that an arrangement exists, ii) delivery has occurred or services have been rendered, iii) the seller’s price is fixed and determinable and iv) collectability is reasonably assured. We recognize revenue at the time of shipment (including to distributors) for substantially all products, as title and risk of loss pass to the customer on delivery to the common carrier after concluding that collectability is reasonably assured. We do not bill for or collect sales tax because our sales are generally made to distributors and thus our sales to them are not subject to sales tax. We generally have experienced an immaterial amount of product returns.

(l) Expense Recognition

Advertising costs are expensed when incurred, which is generally during the month in which the advertisement is published. Advertising expenses amounted to $29,057 and $10,492 during the three-month periods ended March 31, 2017 and 2016, respectively. All product development expenses are expensed as incurred, as are all related patent costs. We capitalize costs to produce inventory during the production cycle, and these costs are charged to costs of goods sold when the inventory is sold to a customer.

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ImmuCell Corporation

Notes to Unaudited Condensed Financial Statements (continued)

(m) Income Taxes

We account for income taxes in accordance with Codification Topic 740,Income Taxes, which requires that we recognize a current tax liability or asset for current taxes payable or refundable and a deferred tax liability or asset for the estimated future tax effects of temporary differences and carryforwards to the extent they are realizable. We believe it is more likely than not that the deferred tax assets will be realized through future taxable income and future tax effects of temporary differences between book income and taxable income. Accordingly, we have not established a valuation allowance for the deferred tax assets. Codification Topic 740-10 clarifies the accounting for income taxes by prescribing a minimum recognition threshold that a tax position must meet before being recognized in the financial statements. In the ordinary course of business, there are transactions and calculations where the ultimate tax outcome is uncertain. In addition, we are subject to periodic audits and examinations by the Internal Revenue Service and other taxing authorities. Our tax returns for the years 2013 through 2016 are subject to audit. We have evaluated the positions taken on our filed tax returns. We have concluded that no uncertain tax positions exist as of March 31, 2017 or December 31, 2016. Although we believe that our estimates are reasonable, actual results could differ from these estimates. See Note 14.

(n) Stock-Based Compensation

We account for stock-based compensation in accordance with Codification Topic 718,Compensation-Stock Compensation, which generally requires us to recognize non-cash compensation expense for stock-based payments using the fair-value-based method. The fair value of each stock option grant has been estimated on the date of grant using the Black-Scholes option pricing model. Accordingly, we recorded compensation expense pertaining to stock-based compensation of $46,763 and $8,908 during the three-month periods ended March 31, 2017 and 2016, respectively, which resulted in a decrease to income before income taxes of less than $0.01 per share during each of the periods reported.

(o) Net Income Per Common Share

Net income per common share has been computed in accordance with Codification Topic 260-10,Earnings Per Share. The basic net income per share has been computed by dividing net income by the weighted average number of common shares outstanding during the period. The diluted net income per share has been computed by dividing net income by the weighted average number of shares outstanding during the period plus all outstanding stock options with an exercise price that is less than the average market price of the common stock during the period less the number of shares that could have been repurchased at this average market price with the proceeds from the hypothetical stock option exercises. The weighted average and diluted number of shares outstanding consisted of the following:

	Three-Month Periods Ended March 31,
	2017		2016
Weighted average number of shares outstanding		4,847,557		3,833,056
Effect of dilutive stock options		92,736		111,294
Diluted number of shares outstanding		4,940,293		3,944,350
Outstanding stock options not included in the calculation because the effect would be anti-dilutive		184,000		14,000

(p) Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Although we regularly assess these estimates, actual amounts could differ from those estimates. Changes in estimates are recorded during the period in which they become known. Significant estimates include our inventory valuation, goodwill, accrued expenses, costs of goods sold accounts, and useful lives of intangible assets.

(q) New Accounting Pronouncements

In May 2014, the FASB issued Accounting Standards Update (ASU) No. 2014-09,Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. ASU 2014-09 will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. ASU 2014-09 was initially to become effective for the Company on January 1, 2017. Early application was not permitted. In July 2015, the FASB approved a one-year deferral in the effective date to January 1, 2018, with the option of applying the standard on the original effective date. ASU 2014-09 permits the use of either the full or modified retrospective method. We intend to utilize the modified retrospective method and have made a preliminary evaluation of the effect that ASU 2014-09 would have on our financial statements and related disclosures and do not expect ASU 2014-09 to have a material impact on our financial statements.

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ImmuCell Corporation

Notes to Unaudited Condensed Financial Statements (continued)

In August 2014, the FASB issued ASU No. 2014-15,“Presentation of Financial Statements-Going Concern”,which provides guidance regarding management’s responsibility to assess whether substantial doubt exists regarding the ability to continue as a going concern and to provide related footnote disclosures. In connection with preparing financial statements for each annual and interim reporting period, management should evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the date that the financial statements are issued. This ASU is effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. We implemented this guidance during 2016. The adoption of this guidance did not have a material impact on our financial statements.

In July 2015, the FASB issued ASU No. 2015-11,Inventory, which simplifies the existing guidance which requires entities to subsequently measure inventory at the lower of cost or market value. Under ASU No. 2015-11, an entity should measure inventory valued using a first-in, first-out or average cost method at the lower of cost or net realizable value, which is defined as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. This update is effective for public business entities during fiscal years beginning after December 15, 2016 with early adoption permitted. We adopted ASU 2015-11 during the third quarter of 2016, and it did not have a material impact on our financial statements.

In November 2015, the FASB issued ASU No. 2015-17,Income Taxes, which simplifies the existing guidance which requires an entity to separate deferred income tax liabilities and assets into current and noncurrent amounts in a classified statement of financial position. Under ASU No. 2015-17, an entity should classify all deferred tax liabilities and assets as one noncurrent deferred tax liability or asset (net) within the statement of financial position. The amendments apply to all entities that present a classified statement of financial position and are effective for the public business entities for annual periods beginning after December 15, 2016, including interim periods therein. Earlier application was permitted. During the first quarter of 2016, we adopted ASU No. 2015-17 early and reclassified $19,588 of current deferred tax liabilities to long-term, which amount was netted against our long-term deferred tax asset, as of December 31, 2015. ASU No. 2015-17 did not have a material impact on our financial statements.

In February 2016, the FASB issued ASU No. 2016-02,Leases, which requires lessees to put most leases on their balance sheet but recognize expenses on their income statements in a manner similar to today’s accounting. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods therein. Early adoption is permitted. Based on our current lease agreements, we are not subject to material lease obligations, and we do not expect ASU 2016-02 to have a material impact on our financial statements.

In March 2016, the FASB issued ASU No. 2016-09,Compensation-Stock Compensation, which simplifies several aspects of the accounting for share-based payment transactions, including income tax consequences, recognition of stock compensation award forfeitures, classification of awards as either equity or liabilities, the calculation of diluted shares outstanding and classification on the statement of cash flows. The most significant change resulting from these amendments is recording all the tax effects related to share-based payments at settlement through the income statement. Under existing guidance, tax benefits in excess of compensation costs (“windfalls”) are recorded in equity. Similarly, tax deficiencies below compensation costs (“shortfalls”) are recorded in equity to the extent of previous windfalls, while shortfalls in excess of this are recorded to the income statement. Furthermore, the new guidance is expected to increase the dilutive effect of share-based payment awards as a result of no longer assuming that tax benefits are used to purchase our common stock under the treasury method. The amendments also provide an alternative to estimating stock award forfeitures and instead recording at the time of forfeiture. This update is effective for public business entities during fiscal years beginning after December 15, 2016 with early adoption permitted. We adopted ASU 2016-09 during 2016, and it did not have a material impact on our financial statements.

- 10 -

ImmuCell Corporation

Notes to Unaudited Condensed Financial Statements (continued)

3. CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS

Cash, cash equivalents and short-term investments (at amortized cost plus accrued interest) consisted of the following:

	As of March 31, 2017		As of December 31, 2016		(Decrease)
Cash and cash equivalents	$	4,252,020	$	5,150,344	$	(898,324	)
Short-term investments		2,978,355		5,474,013		(2,495,658	)
Total	$	7,230,375	$	10,624,357	$	(3,393,982	)

Held to maturity securities (certificates of deposit) are carried at amortized cost. The cost of securities sold is determined based on the specific identification method. Realized gains and losses, and declines in value judged to be other than temporary, are included in investment income. As of March 31, 2017 and December 31, 2016, the fair value of held to maturity securities consisted of the following:

	As of March 31, 2017			As of December 31, 2016
Amortized cost	$	2,968,000		$	5,450,000
Accrued interest		10,355			24,013
Gross unrealized gains		590			2,073
Gross unrealized losses		(27	)		(59	)
Estimated fair value	$	2,978,918		$	5,476,027

4. INVENTORY

Inventory consisted of the following:

	As of March 31, 2017		As of December 31, 2016		(Decrease) Increase
Raw materials	$	313,648	$	318,443	($	4,795	)
Work-in-process		1,208,713		968,810		239,903
Finished goods		576,573		839,646		(263,073	)
Total	$	2,098,934	$	2,126,899	($	27,965	)

5. ACCOUNTS RECEIVABLE

Accounts receivable consisted of the following:

	As of March 31, 2017			As of December 31, 2016			Increase (Decrease)
Trade accounts receivable, gross	$	1,034,068		$	1,013,716		$	20,352
Allowance for bad debt and product returns		(22,406	)		(21,326	)		(1,080	)
Trade accounts receivable, net	$	1,011,662		$	992,390		$	19,272

- 11 -

ImmuCell Corporation

Notes to Unaudited Condensed Financial Statements (continued)

6. PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid expenses and other current assets consisted of the following:

	As of March 31, 2017		As of December 31, 2016		Increase (Decrease)
Prepaid expenses	$	186,291	$	126,523	$	59,768
Other receivables		76,232		144,848		(68,616	)
Security deposits(1)		308,375		333,111		(24,736	)
Total	$	570,898	$	604,482	($	33,584	)

⁽¹⁾This balance as of December 31, 2016 included an option payment of $20,500 towards land (which we did not exercise) that was subsequently applied to the purchase of a warehouse facility during the first quarter of 2017.

7. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consisted of the following:

	Estimated Useful Lives (in years)	As of March 31, 2017			As of December 31, 2016			(Decrease) Increase
Laboratory and manufacturing equipment	5-10	$	5,360,730		$	5,562,938		($	202,208	)
Building and improvements	10-33		5,373,019			5,037,512			335,507
Office furniture and equipment	5-10		655,022			653,462			1,560
Construction in progress(1)			7,481,083			3,694,509			3,786,574
Land			526,998			347,114			179,884
Property, plant and equipment, gross			19,396,852			15,295,535			4,101,317
Accumulated depreciation			(5,272,074	)		(5,449,242	)		177,168
Property, plant and equipment, net		$	14,124,778		$	9,846,293		$	4,278,485

⁽¹⁾Construction in progress consisted principally of costs incurred in connection with the building and equipping of our Nisin production plant forMast Out^®.

8. BUSINESS ACQUISITION

On January 4, 2016, we acquired certain business assets and processes from DAY 1™ Technology, LLC of Minnesota. The acquired rights and know-how are primarily related to formulating our bovine antibodies into a gel solution for an oral delivery option to newborn calves via a syringe (or tube). This product format offers customers an alternative delivery option to the bolus (the standard delivery format of the bivalentFirst Defense^®product since first approval by the U.S. Department of Agriculture (USDA) and product launch in 1991) and could allow more market penetration. The formulation was developed for us and has been sold as a feed product without disease claims since 2012. This purchase also includes certain other related private-label products. The total purchase price was approximately $532,000. Approximately $368,000 of this amount was paid as of the closing date. A technology transfer payment of $97,000 was made during the third quarter of 2016. There are also royalty payments owed based on a percentage of sales made through December 31, 2018. There is no limit to the royalty amount. As of January 4, 2016, we estimated the aggregate royalties to be paid would be approximately $67,000, which was recorded in accounts payable and accrued expenses on the accompanying balance sheet. This amount was estimated to be approximately $30,000 as of December 31, 2016 and March 31, 2017, which was included in accrued expenses. We made payments of $8,200 for the year ended December 31, 2016. The estimated fair values of the assets purchased in this transaction included inventory of $113,000, machinery and equipment of $132,000, a developed technology intangible of $191,000 (which includes an immaterial amount of value associated with customer relationships and a non-compete agreement, and was valued using the relief from royalty method) and goodwill of $96,000. The intangible assets and goodwill are deductible for tax return purposes. The goodwill arising from the acquisition consists largely of the estimated value of anticipated growth opportunities arising from synergies and efficiencies. The measurement period for the transaction was closed as of June 30, 2016, and we continue to assess any impairment of these assets acquired in accordance with our policies. The impact of the acquisition on our pro forma prior year operations is not material. As of December 31, 2016, we vacated the rented facility in Minnesota that had been used to produce the gel solution format of our product and certain other related private-label products. This resulted in the termination of employment of four employees, as these production functions were consolidated into our Portland facility, which enables us to better utilize existing infrastructure and larger scale equipment to improve operating efficiencies.

- 12 -

ImmuCell Corporation

Notes to Unaudited Condensed Financial Statements (continued)

9. INTANGIBLE ASSETS

The intangible assets described in Note 8 are being amortized to cost of goods sold over their useful lives, which are estimated to be 10 years. Intangible amortization expense was $4,776 during the three-month period ended March 31, 2017. The net value of these intangibles was $167,160 as of March 31, 2017. A summary of intangible amortization expense estimated for the periods subsequent to March 31, 2017 is as follows:

Period	Amount
Nine months ending December 31, 2017	$	14,328
Year ending December 31, 2018	$	19,104
Year ending December 31, 2019	$	19,104
Year ending December 31, 2020	$	19,104
Year ending December 31, 2021	$	19,104
After December 31, 2021	$	76,416
Total	$	167,160

Intangible assets as of March 31, 2017 consisted of the following:

	Gross Carrying Value		Accumulated Amortization			Net Book Value
Developed technology	$	184,100	($	23,013	)	$	161,087
Customer relationships		1,300		(162	)		1,138
Non-compete agreements		5,640		(705	)		4,935
Total	$	191,040	($	23,880	)	$	167,160

Intangible assets as of December 31, 2016 consisted of the following:

	Gross Carrying Value		Accumulated Amortization			Net Book Value
Developed technology	$	184,100	($	18,410	)	$	165,690
Customer relationships		1,300		(130	)		1,170
Non-compete agreements		5,640		(564	)		5,076
Total	$	191,040	($	19,104	)	$	171,936

10. ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consisted of the following:

	As of March 31, 2017		As of December 31, 2016		(Decrease) Increase
Accounts payable – capital	$	850,321	$	1,249,862	($	399,541	)
Accounts payable – trade		316,506		257,397		59,109
Accrued payroll		230,251		200,477		29,774
Accrued professional fees		58,250		82,500		(24,250	)
Accrued other		164,963		101,527		63,436
Total	$	1,620,291	$	1,891,763	($	271,472	)

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ImmuCell Corporation

Notes to Unaudited Condensed Financial Statements (continued)

11. BANK DEBT

During the first quarter of 2016, we entered into bank debt agreements covering certain additional credit facilities with TD Bank N.A. aggregating up to approximately $4.5 million. As a result of loan amendments entered into with TD Bank N.A. on March 1, 2017, these credit facilities now aggregate up to approximately $6.5 million, subject to certain restrictions set forth in the agreements. These amendments were accounted for as modifications, and the related debt issuance costs are being amortized over the new terms. The first instrument is comprised of a construction loan of up to $2.5 million and not to exceed 80% of the cost of equipment installed in the to-be-constructed commercial-scale Nisin production facility forMast Out^®. Effective March 1, 2017, this loan amount was increased by $1.44 million to $3.94 million. As amended, interest only will be payable at a variable rate equal to the one-month LIBOR plus a margin of 2.25% through July 2018, at which time the loan converts to a seven-year term loan facility at the same variable interest rate with monthly principal and interest payments due based on a seven-year amortization schedule. The second instrument is comprised of a construction loan of up to $2.0 million and not to exceed 80% (75% prior to the March 1, 2017 amendment) of the appraised value of the to-be-constructed commercial-scale Nisin production facility in Portland, Maine. Effective March 1, 2017, this loan amount was increased by $560,000 to $2.56 million. As amended, interest only will be payable at a variable rate equal to the one-month LIBOR plus a margin of 2.25% through January 2018, at which time the loan converts to a nine-year term loan facility at the same variable interest rate with monthly principal and interest payments due based on a twenty-year amortization schedule with a balloon principal payment of approximately $1.654 million due in January 2027. These credit facilities are secured by substantially all of our assets and are subject to certain financial covenants. There were no amounts outstanding under these facilities as of March 31, 2017.

We have in place two credit facilities with TD Bank N.A. not to exceed 80% of the appraised value of our corporate headquarters and production and research facility in Portland. Proceeds from a $1.0 million mortgage note were received during the third quarter of 2010. Based on a fifteen-year amortization schedule, a balloon principal payment of $451,885 will be due during the third quarter of 2020. Proceeds from a $2.5 million mortgage note were received during the third quarter of 2015. Based on a twenty-year amortization schedule, a balloon principal payment of approximately $1.55 million will be due during the third quarter of 2025. Additionally, proceeds from a $340,000 mortgage note, which is secured by the 4,114 square foot warehouse and storage facility we acquired adjacent to our Nisin production plant, were received during the first quarter of 2017. This note bears interest at a variable rate equal to the one-month LIBOR plus a margin of 2.25% (which was equal to 3.23% as of March 31, 2017) with monthly principal and interest payments due for ten years based on a twenty-year amortization table. These three notes are secured by substantially all of our assets and are subject to certain financial covenants. Principal payments (net of debt issuance costs) due under debt outstanding as of March 31, 2017 are reflected in the following table by the year that payments are due:

Period	$1,000,000 Mortgage Note		$2,500,000 Mortgage Note			$340,000 Mortgage Note(1)		Debt Issuance Costs			Total
Nine-month period ending December 31, 2017	$	46,104	$	61,965		$	9,192	($	11,614	)	$	105,647
Year ending December 31, 2018		64,876		86,097			12,607		(15,485	)		148,095
Year ending December 31, 2019		68,908		89,997			13,019		(15,485	)		156,439
Year ending December 31, 2020		493,696		94,005			13,446		(14,851	)		586,296
Year ending December 31, 2021		-		98,538			13,886		(13,837	)		98,587
After December 31, 2021		-		1,951,228			277,850		(58,458	)		2,170,620
Total	$	673,584	$	2,381,830	��	$	340,000	($	129,730	)	$	3,265,684

⁽¹⁾This note bears interest at a variable rate equal to the one-month LIBOR plus a margin of 2.25%. Figures in this table are estimated using an interest rate of approximately 3.2%. The actual interest rate and principal payments will be different.

We hedged our interest rate exposure on the $1.0 million and the $2.5 million mortgage notes with interest rate swap agreements that effectively converted floating interest rates based on the one-month LIBOR plus a margin of 3.25% and 2.25% to the fixed rates of 6.04% and 4.38%, respectively. As of March 31, 2017, the variable rates on these two mortgage notes were 4.13% and 3.23%, respectively. All derivatives are recognized on the balance sheet at their fair value. At the time of the closings and thereafter, the agreements were determined to be highly effective in hedging the variability of the identified cash flows and have been designated as cash flow hedges of the variability in the hedged interest payments. Changes in the fair value of the interest rate swap agreements are recorded in other comprehensive income (loss), net of taxes. The original notional amounts of the interest rate swap agreements of $1,000,000 and $2,500,000 amortize in accordance with the amortization of the mortgage notes. The notional amount of the interest rate swaps was $3,055,414 as of March 31, 2017. The fair values of the interest rate swaps have been determined using observable market-based inputs or unobservable inputs that are corroborated by market data. Accordingly, the interest rate swaps are classified as level 2 within the fair value hierarchy provided in Codification Topic 820,Fair Value Measurements and Disclosures.

- 14 -

ImmuCell Corporation

Notes to Unaudited Condensed Financial Statements (continued)

	Three-Month Periods Ended March 31,					Years Ended December 31,
	2017		2016			2016		2015
Payments required by interest rate swaps	$	11,676	$	15,200		$	58,346	$	32,515
Other comprehensive income (loss), net of taxes	$	10,070	($	65,074	)	$	26,354	($	26,925	)

In connection with the credit facilities entered into during the third quarters of 2010 and 2015 and the first quarters of 2016 and 2017, we incurred debt issue costs of $26,489, $34,125, $46,734 and $54,036, respectively, which costs are being recorded as a component of other expenses over the terms of the credit facilities.

The $500,000 line of credit with TD Bank N.A. was first entered into during the third quarter of 2010 and has been renewed approximately annually since then and is available as needed and has been extended through May 31, 2018. The line of credit, which is subject to certain financial covenants, was unused as of March 31, 2017 and December 31, 2016. Interest on any borrowings against the line of credit would be variable at the higher of 4.25% per annum or the one-month LIBOR plus 3.5% per annum.

12. STOCKHOLDERS’ EQUITY

On October 28, 2015, we filed a registration statement on Form S-3 with the Securities and Exchange Commission (SEC) for the potential issuance of up to $10,000,000 in equity (subject to certain limitations). This registration statement became effective on November 10, 2015. Under this form of registration statement, we were limited to raising gross proceeds of no more than one-third of the market capitalization of our common stock (as determined by the high price within the preceding 60 days leading up to a sale of securities) held by non-affiliates (non-insiders) of the Company within a twelve-month period. This limit was approximately $5,958,000, based on the closing price of $8.08 per share as of January 6, 2016. On February 3, 2016, we sold 1,123,810 shares of common stock at a price to the public of $5.25 per share in an underwritten public offering, raising gross proceeds of approximately $5,900,000, resulting in net proceeds to the Company of approximately $5,313,000 after deducting underwriting discounts and offering expenses incurred in connection with the equity financing. On October 21, 2016, we closed on a private placement of 659,880 shares of common stock to nineteen institutional and accredited investors at $5.25 per share, raising gross proceeds of approximately $3,464,000, resulting in net proceeds to the Company of approximately $3,161,000 after deducting placement agent fees and other estimated expenses incurred in connection with the equity financing.

At the June 15, 2016 Annual Meeting of Stockholders, our stockholders voted to approve an amendment to the Company’s Certificate of Incorporation to increase the number of shares of common stock authorized for issuance from 8,000,000 to 10,000,000.

In June 2000, our stockholders approved the 2000 Stock Option and Incentive Plan (the “2000 Plan”) pursuant to the provisions of the Internal Revenue Code of 1986, under which employees and certain service providers may be granted options to purchase shares of the Company’s common stock at i) no less than fair market value on the date of grant in the case of incentive stock options and ii) no less than 85% of fair market value on the date of grant in the case of non-qualified stock options. Vesting requirements are determined by the Compensation and Stock Option Committee of the Board of Directors on a case by case basis. Originally, 250,000 shares of common stock were reserved for issuance under the 2000 Plan. The stockholders of the Company approved an increase in this number to 500,000 shares in June 2001. All options granted under the 2000 Plan expire no later than ten years from the date of grant. The 2000 Plan expired in February 2010, after which date no further options could be granted under the 2000 Plan. However, outstanding options under the 2000 Plan may be exercised in accordance with their terms.

In June 2010, our stockholders approved the 2010 Stock Option and Incentive Plan (the “2010 Plan”) pursuant to the provisions of the Internal Revenue Code of 1986, under which employees and certain service providers may be granted options to purchase shares of the Company’s common stock at i) no less than fair market value on the date of grant in the case of incentive stock options and ii) no less than 85% of fair market value on the date of grant in the case of non-qualified stock options. At that time, 300,000 shares of common stock were reserved for issuance under the 2010 Plan and subsequently no additional shares have been reserved for the 2010 Plan. Vesting requirements are determined by the Compensation and Stock Option Committee of the Board of Directors on a case by case basis. All options granted under the 2010 Plan expire no later than ten years from the date of grant.

- 15 -

ImmuCell Corporation

Notes to Unaudited Condensed Financial Statements (continued)

Activity under the stock option plans described above was as follows:

	2000 Plan			2010 Plan			Weighted Average Exercise Price		Aggregate Intrinsic Value(1)
Outstanding at December 31, 2015		131,500			106,500		$	3.57	$	945,000
Grants		-			46,000		$	6.98
Terminations		(5,000	)		(12,000	)	$	6.16
Exercises		-			(16,000	)	$	5.59
Outstanding at December 31, 2016		126,500			124,500		$	3.89	$	517,000
Grants		-			124,000		$	5.84
Terminations		(5,000	)		(1,000	)	$	4.90
Exercises		(1,000	)		-		$	5.25
Outstanding at March 31, 2017		120,500			247,500		$	4.53	$	369,000
Vested at March 31, 2017		120,500			41,500		$	2.64	$	468,000
Vested and expected to vest at March 31, 2017		120,500			247,500		$	4.53	$	369,000
Reserved for future grants		-			32,500

⁽¹⁾Intrinsic value is the difference between the fair market value as of the date indicated and as of the date of the option grant.

During the three-month period ended March 31, 2017, one employee who is also a director exercised stock options covering 1,000 shares for cash, resulting in total proceeds of $5,250. During the year ended December 31, 2016, one employee and one director exercised stock options covering the aggregate of 16,000 shares, of which 6,000 were exercised for cash, resulting in total proceeds of $31,900, and 10,000 of these options were exercised by the surrender of 7,334 shares of common stock with a fair market value of $57,425 at the time of exercise and $75 in cash. At March 31, 2017, 368,000 shares of common stock were reserved for future issuance under all outstanding stock options described above, and an additional 32,500 shares of common stock were reserved for the potential issuance of stock option grants in the future under the 2010 Plan.

The weighted average remaining life of the options outstanding under the 2000 Plan and the 2010 Plan as of March 31, 2017 was approximately 6 years and 1 month. The weighted average remaining life of the options exercisable under these plans as of March 31, 2017 was approximately 2 years and 2 months. The exercise prices of the options outstanding as of March 31, 2017 ranged from $1.70 to $8.21 per share. The 124,000 stock options granted during the three-month period ended March 31, 2017 had exercise prices between $5.78 and $5.84 per share. The 46,000 stock options granted during 2016 had exercise prices between $6.27 and $8.21 per share. The aggregate intrinsic value of options exercised during 2017 and 2016 approximated $350 and $32,000, respectively. The weighted-average grant date fair values of options granted during 2017 and 2016 were $3.47 and $4.16 per share, respectively. As of March 31, 2017, total unrecognized stock-based compensation related to non-vested stock options aggregated $587,817, which will be recognized over a weighted average period of two years and eleven months. The fair value of each stock option grant has been estimated on the date of grant using the Black-Scholes option pricing model, for the purpose discussed in Note 2(n), with the following weighted-average assumptions for the three-month period ended March 31, 2017 and for the year ended December 31, 2016:

	Three-Month Period Ended March 31,			Year Ended December 31,
	2017			2016
Risk-free interest rate		1.9	%		1.2	%
Dividend yield		0	%		0	%
Expected volatility		62	%		63	%
Expected life		6.5 years			6.5 years

The risk-free interest rate is based on U.S. Treasury yields for a maturity approximating the expected option term, while the other assumptions are derived from averages of our historical data.

- 16 -

ImmuCell Corporation

Notes to Unaudited Condensed Financial Statements (continued)

Common Stock Rights Plan

In September 1995, our Board of Directors adopted a Common Stock Rights Plan (the “Rights Plan”) and declared a dividend of one common share purchase right (a “Right”) for each of the then outstanding shares of the common stock of the Company. Each Right entitles the registered holder to purchase from the Company one share of common stock at an initial purchase price of $70.00 per share, subject to adjustment. The description and terms of the Rights are set forth in a Rights Agreement between the Company and American Stock Transfer & Trust Co., as Rights Agent.

The Rights (as amended) become exercisable and transferable apart from the common stock upon the earlier of i) 10 days following a public announcement that a person or group (Acquiring Person) has, without the prior consent of the Continuing Directors (as such term is defined in the Rights Agreement), acquired beneficial ownership of 20% or more of the outstanding common stock or ii) 10 days following commencement of a tender offer or exchange offer the consummation of which would result in ownership by a person or group of 20% or more of the outstanding common stock (the earlier of such dates being called the Distribution Date).

Upon the Distribution Date, the holder of each Right not owned by the Acquiring Person would be entitled to purchase common stock at a discount to the initial purchase price of $70.00 per share, effectively equal to one half of the market price of a share of common stock on the date the Acquiring Person becomes an Acquiring Person. If, after the Distribution Date, the Company should consolidate or merge with any other entity and the Company were not the surviving company, or, if the Company were the surviving company, all or part of the Company’s common stock were changed or exchanged into the securities of any other entity, or if more than 50% of the Company’s assets or earning power were sold, each Right would entitle its holder to purchase, at the Rights’ then-current purchase price, a number of shares of the acquiring company’s common stock having a market value at that time equal to twice the Right’s exercise price.

At any time after a person or group becomes an Acquiring Person and prior to the acquisition by such person or group of 50% or more of the outstanding common stock, the Board of Directors of the Company may exchange the Rights (other than Rights owned by such person or group which have become void), in whole or in part, at an exchange ratio of one share of common stock per Right (subject to adjustment). At any time prior to 14 days following the date that any person or group becomes an Acquiring Person (subject to extension by the Board of Directors), the Board of Directors of the Company may redeem the then outstanding Rights in whole, but not in part, at a price of $0.005 per Right, subject to adjustment.

On June 8, 2005, our Board of Directors voted to authorize an amendment of the Rights Agreement to extend the Final Expiration Date by an additional three years, to September 19, 2008. As of June 30, 2005, we entered into an amendment to the Rights Agreement with the Rights Agent reflecting such extension. On June 6, 2008 our Board of Directors voted to authorize an amendment of the Rights Agreement to extend the Final Expiration Date by an additional three years, to September 19, 2011 and to increase the ownership threshold for determining “Acquiring Person” status from 15% to 18%. As of June 30, 2008, we entered into an amendment to the Rights Agreement with the Rights Agent reflecting such extension and threshold increase. On August 5, 2011, our Board of Directors voted to authorize amendments of the Rights Agreement to extend the Final Expiration Date by an additional three years to September 19, 2014 and to increase the ownership threshold for determining “Acquiring Person” status from 18% to 20%. As of August 9, 2011, we entered into an amendment to the Rights Agreement with the Rights Agent reflecting such extension and threshold increase. On June 10, 2014, our Board of Directors voted to authorize an amendment to the Rights Agreement to extend the final expiration date by an additional three years to September 19, 2017. As of June 16, 2014, we entered into an amendment to the Rights Agreement with the Rights Agent reflecting such extension. During the second quarter of 2015, we amended our Common Stock Rights Plan by removing a provision that prevented a new group of directors elected following the emergence of an Acquiring Person (an owner of more than 20% of our stock) from controlling the Rights Plan by maintaining exclusive authority over the Rights Plan with pre-existing directors. We did this because such provisions have come to be viewed with disfavor by Delaware courts. No other changes have been made to the terms of the Rights or the Rights Agreement.

13. OTHER EXPENSES, NET

Other expenses, net, consisted of the following:

	Three-Month Periods Ended March 31,
	2017			2016
Interest expense	$	39,902		$	36,907
Interest income		(5,957	)		(13,335	)
Other gains		(3,703	)		(185	)
Other expenses, net	$	30,242		$	23,387

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ImmuCell Corporation

Notes to Unaudited Condensed Financial Statements (continued)

14. INCOME TAXES

Our income tax expense aggregated $303,725 and $223,129 (amounting to 34% and 33% of our income before income taxes, respectively) during the three-month periods ended March 31, 2017 and 2016, respectively. As of March 31, 2017, we had federal general business tax credit carryforwards of approximately $98,000 that expire in 2032 through 2036 (if not utilized before then) and state tax credit carryforwards of approximately $136,000 that expire in 2023 through 2036 (if not utilized before then). The $965,000 licensing payment that we made during the fourth quarter of 2004 was treated as an intangible asset and is being amortized over 15 years, for tax return purposes only. Approximately $1,112,000 of our investment in a small-scale facility to produce the Drug Substance (our Active Pharmaceutical Ingredient, Nisin) forMast Out^®was expensed as incurred for our books. Included in this amount is approximately $820,000 that was capitalized and is being depreciated over statutory periods for tax return purposes only.

The provision for income taxes is determined using the asset and liability approach of accounting for income taxes. Under this approach, deferred taxes represent the estimated future tax effects of temporary differences between book and tax treatment of assets and liabilities and carryforwards to the extent they are realizable. We record a valuation allowance to reduce our deferred tax assets to the amount that is more likely than not to be realized. While we consider future taxable income and ongoing prudent and feasible tax planning strategies in assessing the need for a valuation allowance, in the event we were to determine that we would be able to realize our deferred tax assets in the future in excess of the net recorded amount, a reduction of the valuation allowance would increase income in the period such determination was made. Likewise, should we determine that we would not be able to realize all or part of our net deferred tax asset in the future, a reduction to the deferred tax asset would be charged to income in the period such determination was made.

Net operating loss carryforwards, credits, and other tax attributes are subject to review and possible adjustment by the Internal Revenue Service. Section 382 of the Internal Revenue Code contains provisions that could place annual limitations on the future utilization of net operating loss carryforwards and credits in the event of a change in ownership of the Company, as defined.

The Company files income tax returns in the U.S. federal jurisdiction and several state jurisdictions. With few exceptions, the Company is no longer subject to income tax examinations by tax authorities for years before 2013. We currently have no tax examinations in progress. We also have not paid additional taxes, interest or penalties as a result of tax examinations nor do we have any unrecognized tax benefits for any of the periods in the accompanying financial statements.

15. CONTINGENT LIABILITIES AND COMMITMENTS

Our bylaws, as amended, in effect provide that the Company will indemnify its officers and directors to the maximum extent permitted by Delaware law. In addition, we make similar indemnity undertakings to each director through a separate indemnification agreement with that director. The maximum payment that we may be required to make under such provisions is theoretically unlimited and is impossible to determine. We maintain directors’ and officers’ liability insurance, which may provide reimbursement to the Company for payments made to, or on behalf of, officers and directors pursuant to the indemnification provisions. Our indemnification obligations were grandfathered under the provisions of Codification Topic 460, Guarantees. Accordingly, we have recorded no liability for such obligations as of March 31, 2017. Since our incorporation, we have had no occasion to make any indemnification payment to any of our officers or directors for any reason.

The development, manufacturing and marketing of animal health care products entails an inherent risk that liability claims will be asserted against us during the normal course of business. We are aware of no such claims against us as of the date of this filing. We feel that we have reasonable levels of liability insurance to support our operations.

We enter into agreements with third parties in the ordinary course of business under which we are obligated to indemnify such third parties from and against various risks and losses. The precise terms of such indemnities vary with the nature of the agreement. In many cases, we limit the maximum amount of our indemnification obligations, but in some cases those obligations may be theoretically unlimited. We have not incurred material expenses in discharging any of these indemnification obligations, and based on our analysis of the nature of the risks involved, we believe that the fair value of the liabilities potentially arising under these agreements is minimal. Accordingly, we have recorded no liabilities for such obligations as of March 31, 2017.

We are committed to purchasing certain key parts (syringes) and services (formulation, filling and packaging of Drug Product) pertaining toMast Out^® exclusively from two contractors. If we do not commercialize the product by the end of 2019, we would be liable for a $100,000 termination fee under one of such agreements.

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ImmuCell Corporation

Notes to Unaudited Condensed Financial Statements (continued)

During the second quarter of 2009, we entered into an exclusive license with the Baylor College of Medicine covering the underlying rotavirus vaccine technology used to generate the specific antibodies for our product line extension (First Defense^® Tri-Shield^™) that is under development. This perpetual license (if not terminated for cause) is subject to a milestone payment of $150,000 upon regulatory approval and a royalty equal to 4% of sales above current sales of our bivalent product plus a growth assumption.

During the third quarter of 2016, we initiated construction of our Nisin production facility forMast Out^®. The estimated total cost of the Nisin facility is approximately $20,000,000. As of March 31, 2017, we had incurred approximately $7,315,000 of capital expenditures related to this project, of which $6,468,000 had been paid as of the end of the quarter. The majority of the remainder of this investment is expected to be paid during the six-month period ending September 30, 2017. As of March 31, 2017, we had committed $11,245,000 of the remaining $13,532,000 expected to be paid on this project. Approximately $6,831,000 of these capital expenditures is committed under a guaranteed maximum price contract with our construction management firm, net of payments made. This contract includes provisions that could reduce the amount of the commitment generally by the amount not expended or committed by the construction manager at the time of an unexpected and unlikely early termination. We expect to fund the remaining costs in excess of our current cash and investments with borrowings under the credit facilities described in Note 11. In addition to the commitments related toMast Out^® discussed above, we had committed $529,000 to the production of inventory and $67,000 to other obligations, as of March 31, 2017.

16. SEGMENT INFORMATION

We principally operate in the business segment described in Note 1. Pursuant to Codification Topic 280,Segment Reporting, we operate in one reportable business segment, that being the development, acquisition, manufacture and sale of products that improve the health and productivity of cows for the dairy and beef industries. Almost all of our internally funded product development expenses are in support of such products. The significant accounting policies of this segment are described in Note 2. Our single operating segment is defined as the component of our business for which financial information is available and evaluated regularly by our chief operating decision-maker in deciding how to allocate resources and in assessing performance. Our chief operating decision-maker is our President and CEO.

Sales of theFirst Defense^® product line aggregated 92% of our total product sales during the three-month periods ended March 31, 2017 and 2016. Our primary customers for the majority of our product sales (77% and 89% for the three-month periods ended March 31, 2017 and 2016, respectively) are in the U.S. dairy and beef industries. Product sales to international customers, who are also in the dairy and beef industries, aggregated 18% and 9% of our total product sales for the three-month periods ended March 31, 2017 and 2016, respectively.

17. RELATED PARTY TRANSACTIONS

Dr. David S. Tomsche (Chair of our Board of Directors) is a controlling owner of Leedstone Inc. (formerly Stearns Veterinary Outlet, Inc.), a domestic distributor of ImmuCell products (First Defense^®,Wipe Out^®Dairy Wipes, andCMT) and of J-t Enterprises of Melrose, Inc., an exporter. His affiliated companies purchased $196,708 and $158,387 of products from ImmuCell during the three-month periods ended March 31, 2017 and 2016, respectively, on terms consistent with those offered to other distributors of similar status. We made marketing-related payments of $1,177 and $975 to these affiliate companies during the three-month periods ended March 31, 2017 and 2016, respectively, that were expensed as incurred. Our accounts receivable (subject to standard and customary payment terms) due from these affiliated companies aggregated $33,828 and $3,221 as of March 31, 2017 and December 31, 2016, respectively.

18. EMPLOYEE BENEFITS

We have a 401(k) savings plan (the Plan) in which all employees completing one month of service with the Company are eligible to participate. Participants may contribute up to the maximum amount allowed by the Internal Revenue Service. Since August 2012, we have matched 100% of the first 3% of each employee’s salary that is contributed to the Plan and 50% of the next 2% of each employee’s salary that is contributed to the Plan. Under this matching plan, we paid $18,709 and $17,326 into the plan for the three-month periods ended March 31, 2017 and 2016, respectively.

19. SUBSEQUENT EVENTS

We have evaluated subsequent events through the time of filing on May 11, 2017, the date we have issued this Quarterly Report on Form 10-Q. As of such date, except as described below, there were no material, reportable subsequent events. During the second quarter of 2017, our $500,000 line of credit with TD Bank N.A. was extended through May 31, 2018.

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ImmuCell Corporation

ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed financial statements and the related notes and other financial information included in this Quarterly Report on Form 10-Q. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties. You should reviewPart II, Item 1A“Risk Factors” of this Quarterly Report for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

Liquidity and Capital Resources

Wehave funded mostofour product developmentexpensesprincipally fromour grossmarginon productsales.Asanticipated,weincurred anet loss during the year ended December 31,2014 due to anunusually large investmentin apilotplantforMastOut^Ò. After completing this investment, we didreturn to profitability, asplanned, during the six-month periodended December 31, 2014andhavecontinued this profitability for eleven consecutive quarters.Thetablebelowsummarizes thechangesin selected, keyaccounts (inthousands,exceptfor percentages):

	As of March 31,			As of December 31,			(Decrease) Increase
	2017			2016			Amount			%
Cash, cash equivalents and short-term  investments	$	7,230	(1)	$	10,624	(1)	$	(3,394	)		(32	%)
Net working capital	$	9,150		$	12,289		$	(3,140	)		(26	%)
Total assets	$	25,334		$	24,697		$	636			3	%
Stockholders’ equity	$	20,368		$	19,722		$	646			3	%
Common shares outstanding		4,848			4,847			1			-	%

⁽¹⁾The cash balance does not include approximately $343,000 being held temporarily in escrow against certain construction performance requirements related to our production facility forMast Out^Ò. We expect approximately 90% of this amount to be released from escrow by September 30, 2017.

Netcashprovided byoperating activities amounted to$1,252,000during thethree-month period ended March 31, 2017 in contrastto net cash(used for) operatingactivitiesof($87,000)during the three-month period ended March 31, 2016. Capital investmentstotaled$4.9 millionduring the three-month period ended March 31, 2017compared to capital investments of $311,000(which amount did not include approximately $368,000 related to a business acquisition)duringthethree-month period ended March 31, 2016. As we progress our investment in the Nisin production facility, described below, we expect these investments of cash to increase.

During thethird quarters of 2010and 2015,weagreed to termsofcertain creditfacilities withTDBank, N.A.,whicharesecured bysubstantially all ofour assets,including our building, which was independently appraised at $4.2 millionin connection with the 2015financing. During the first quarter of 2017, we acquired a 4,114 square foot building that is adjacent to our Nisin production plant for additional warehousing and storage space. We financed the purchase price of $465,500, in part, with a mortgage loan in the amount of $340,000 bearing interest at a variable rate equal to the one-month LIBOR plus a margin of 2.25% with monthly principal and interest payments due for ten years based on a twenty-year amortization schedule.AsofMarch 31, 2017,our outstanding bank debtbalance was approximately $3.3 million. These creditfacilities are subjectto certain financial covenants. Based on our unaudited results, we are in compliance with all applicable covenants as of March 31, 2017.

Duringthe first quarter of 2016, we entered into two bank debt agreementscoveringcertainadditional creditfacilities withTDBank N.A.aggregatingup toapproximately$4.5million.During the first quarter of 2017, we amended these agreements to increase the total amount of debt available up to approximately $6.5 million and to make certain other modifications.As of May 11, 2017, we had not drawn proceeds under either of these credit facilities. Wehave a $500,000line of creditthat is available as needed through May 31, 2018 and subject to extension by the bank after that date.There was no balance outstanding under this line of credit as of May 11, 2017.These creditfacilitiesare subjectto certain financial covenants and are secured by substantially all of our assets. Based on our unaudited results, we are in compliance with all applicable covenants as of March 31, 2017. At this point, we anticipate that we may draw funds under these loans beginning around the end of the second quarter of 2017.

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ImmuCell Corporation

During the first and fourth quarters of 2016, we issued an aggregate of approximately 1.8 million shares of common stock, raising net proceeds of approximately $8.5 million in two separate transactions.

During the third quarter of 2016, we initiated construction of our Nisin production facility forMast Out^Ò.Theestimated total cost of the Nisin facilityis approximately $20 million. Expenditures on this project are heavily weighted to the six-month period ending September 30, 2017. We are substantially complete with construction of the building shell and have made significant progress on the interior of the building. We are on schedule to begin equipment installation during the third quarter of 2017. We expect to fund the remaining costs of this investment (estimated to be approximately $13.5 million) that are in excess of our current cash and investments (which was equal to approximately $7.2 million as of March 31, 2017) withborrowings under the available credit facilities (aggregating up to $7.0 million) described above. These costs are being capitalized on our balance sheet as construction in progress. Depreciation of these costs is expected to begin when the facility is placed into service, which could be before FDA approval of the product is achieved. The following table details the expected amount and timing of this investment:

Period	Amount
Paid through December 31, 2016	$	2,080,000	(1)
Paid during the three-month period ended March 31, 2017		4,388,000	(2)
Estimate to be paid after March 31, 2017		13,532,000	(3)
Estimated total cost of investment	$	20,000,000	(4)

⁽¹⁾ This amount does not include approximately $1,250,000 that was capitalized as of December 31, 2016 but not paid until the first quarter of 2017.

⁽²⁾ This amount includes approximately $1,250,000 that was capitalized as of December 31, 2016 but paid during the first quarter of 2017. This amount does not include approximately $847,000 that was capitalized as of March 31, 2017 but not paid until the second quarter of 2017.

⁽³⁾ This amount includes approximately $847,000 that was capitalized as of March 31, 2017 but paid during the second quarter of 2017.

⁽⁴⁾ This budget estimate does not include approximately $278,000 that was invested in land for the facility, which was acquired during the fourth quarter of 2015.

Our capital expenditure investments from January 1, 2014 through March 31, 2017 have been larger than our historical norm. As ofApril 1, 2017,wehad additional authorization from our Board ofDirectors to spend up to approximately $130,000through December 31, 2017for newmanufacturing equipment and other routine and necessarycapital expenditures, which is in addition to the investments pertaining to the Nisin production plant, described above. We believe that our cash and investments, together with gross margin to be earned from ongoing product sales and available bank debt, are sufficient to meet our working capital and capital expenditure requirements and to finance our ongoing business operations during at least the next twelve months.

During the third quarter of 2016, the City of Portland approved a Tax Increment Financing (TIF) credit enhancement package that reduces our real estate taxes on the Nisin production facility forMast Out^® that we are constructing by 65% over the eleven-year period ending June 30, 2028 and by 30% during the year ending June 30, 2029, at which time the rebate expires. The TIF is still subject to standard approvals by the State’s Department of Economic and Community Development. The aggregate financial benefit was originally estimated to be approximately $400,000 based on the then current $3 million building cost estimate calculated during 2015 before the detailed design work and construction bidding was complete. Significant process-directed requirements to the building have since increased the estimated construction costs to approximately $11 million. We believe the cost per square foot as currently estimated for a facility of this purpose and production capacity is competitive and that the increase is largely the result of the preliminary engineering estimate from 2015 for a building shell being for much less of a structure that would not have satisfied our regulatory and Nisin production capacity needs. The value of the tax savings would increase in proportion to the increase in the cost of the building as assessed for city real estate tax purposes. The actual savings will be based on the assessed value of the building after construction is complete, which is likely to be less than its cost of construction.

During the early part of 2015, we invested $644,000 to complete a 7,100 square foot addition to our Portland facility, providing cold storage, production and warehouse space required to increase our manufacturing capacity. Construction of the facility addition was initiated attheend ofthe third quarter of 2014.The total cost of this project was $1,914,000. We completed an investment to increase our liquid processing capacity by 50%during the fourth quarter of 2015andaninvestment to increase our freeze-drying capacityby 100% at the end ofthefirst quarter of2016. During 2015, we invested $1,379,000 in these production capacity increases and $430,000 in other capital expenditures. During 2016, we invested $1,161,000 to complete these production capacity increases and $345,000 in other capital expenditures. During the three-month period ended March 31, 2017, we invested approximately $20,000 in routine and necessary capital expenditures, which does not include payments pertaining to the Nisin production plant, described above.

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ImmuCell Corporation

Results ofOperations

Product Sales

We achieved a record level of product sales during the first quarter of 2017, surpassing the previous high level set during the first quarter of 2015. Total product salesduring the three-month period ended March 31, 2017increased by19%, or $558,000,to $3,544,000 from $2,986,000duringthe same period in 2016.During thethree-month period ended March 31, 2017,domestic productsalesincreasedby3%, or$89,000, and international salesincreasedby168%, or $469,000,in comparison tothe same period in2016. Total product sales during the twelve-month period ended March 31, 2017 decreased by less than 1%, or $12,000, to $10,102,000 from $10,114,000 during the same period ended March 31, 2016 with domestic sales decreasing by 4%, or $353,000 and international sales increasing by 25%, or $341,000, in comparison to the same period ended March 31, 2016.Market conditions in the dairy and beef industries, including milk pricing and prices for calves, weakened during 2016 in comparison to 2015. Milk prices have made modest improvements going into 2017.

Our lead product,First Defense^Ò, continues to benefit fromwide acceptancebydairy and beef producers as aneffective toolto prevent bovineenteritis (scours) in newborn calves. Sales oftheFirst Defense^Òproduct line aggregated92% ofour total product sales during thethree-month periods ended March 31, 2017 and 2016.Sales of theFirst Defense^Òproduct line during the three-month period ended March 31, 2017 increased by 18% in comparison to the same period in 2016. During the three-month period ended March 31, 2017, domestic sales oftheFirst Defense^Òproduct lineincreasedby5%,and international salesincreasedby133%,in comparisonto the same period in 2016.Sales of theFirst Defense^Òproduct line during the twelve-month period ended March 31, 2017 increased by just over 1% in comparison to the same period ended March 31, 2016 with domestic sales decreasing by 4% and international sales increasing by 40% in comparison to the same period ended March 31, 2016.We have realized positive sales growth oftheFirstDefense^Òproduct line fortwenty-twoofthe lasttwenty-six quarters,incomparison to the same quarters ofthe prioryears. Wehave significantly increased our supply of colostrum andcompletedtheinvestments necessary to increase our liquid processing capacityby50%during the fourth quarter of 2015and our freeze drying capacityby100%during the first quarter of 2016to meet the growing salesdemand forFirst Defense^Ò. The prolonged period of order backlog (which began early in 2015 and extended through the middle of 2016) disrupted normal shipping patterns. During this period when demand outpaced our production capacity, we were forced to allocate product to customers, and more product was allocated to domestic distributors. With our production capacity expanded, international demand now has been fully met.

Webelieve that thelong-term growthin sales oftheFirst Defense^Òproductline mayreflect, atleast in part,the success of ourstrategic decision initiated in 2010to investinadditional salesand marketing efforts. We believe that our increased investment in sales andmarketing personnel andefforts ishelping us introduceFirst Defense^Òto new customers, despite significant market volatility affecting bothmilk pricesand feed costs. Our sales and marketing team currentlyconsists ofone vice president, five regional managers and one inside sales and marketing employee. Welaunched a newcommunications campaign at the end of 2010that continues to emphasize howthe unique ability ofFirst Defense^ÒtoprovideImmediate ImmunityTMgenerates a dependableand competitivereturn on investmentfor dairy and beef producers.Preventing newborn calves from becoming sick helpsthem to reach theirgenetic potential.

Competition for resources that dairy producersallocate to their calf enterprises has beenincreased by themany new productsthat have beenintroduced to the calf market. Our sales arenormally seasonal, with higher sales expectedduring the first quarter.Warmanddryweather reduces theproducer’s perception ofthe need for adisease preventative productlikeFirst Defense^Ò.However,heat stressoncalves causedby extremelyhot summer weather canincrease the incidence ofscours, just as harsher winter weather benefits our sales. Theanimal health distribution segment has beenaggressively consolidatingover the last fewyears with larger distributors acquiringsmaller distributors.

We areselling new productapplications ofFirstDefense^Òunderthe descriptionFirst DefenseTechnology^Ò,which is a uniquewhey proteinconcentrate that is processedutilizing our proprietarycolostrum (first milk) protein purificationmethods, for the nutritional andfeed supplement markets without theclaims of ourUSDA-licensedproduct.ThroughourFirst DefenseTechnology^Ò,we are sellingconcentrated whey proteinsin different formats. During thefirst quarter of2011,weinitiated sales ofFirstDefense Technology^Òin abulk powderformat (no capsule),which is deliveredwith a scoopand mixed with colostrumfor feeding to calves. We are working to achieve USDA claims for this product format during 2018.Duringthe fourth quarter of 2011,Milk Products, LLC ofChilton, Wisconsinlaunched commercial sales oftheir product,Ultra Start^Ò150Plus and certain similar private labelproducts, which are colostrum replacerswithFirst Defense Technology^Ò Inside.During the first quarter of 2012,weinitiated alimited launchof atube deliveryformatof ourFirst Defense Technology^Òin agel solution. We are working to achieve USDA claims for this product format during the fourth quarter of 2017.

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ImmuCell Corporation

During the first quarter of 2008, we implemented a modest increase to the selling price ofFirst Defense^Ò. We did not implement another price increase until the third quarter of 2014. During 2015, we implemented an increase of approximately 10% to the selling price of the gel tube format ofFirst Defense Technology^Ò. During the middle of 2016, we implemented a price increase of approximately 5% forFirst Defense^Òand have not increased the selling price again since then. This strategy of limiting our price increases recognizes that while selling a premium-priced product, we must be very efficient with our manufacturing costs to maintain a healthy gross margin.

Sales of products other thanFirst Defense^Ò aggregated 8% of our total product sales during the three-month periods ended March 31, 2017 and 2016.Since 1999,wehave been sellingWipe Out^ÒDairyWipes for use in preparing theteat area of acowfor milking.Duringthefirst quarter of 2013,weinitiated sales ofNisin-based wipes for petsin a120-count canister(Preva™ wipes) to Bayer HealthCare Animal HealthofSt. Joseph,Missouri for commercial sales to petowners. Sales of our Nisin-based topical wipes(our second leading source of productsales prior to 2017)aggregated approximately $350,000 during the year ended December 31, 2016, a 2% increase over 2015. Sales of these topical wipes aggregated approximately $97,000 during the three-month period ended March 31, 2017, a 4% increase from the same period in 2016. The topical wipes product line contributed very little to our profits and required a significant portion of our production and storage capacity. Because we believe that the sales growth potential for this product line is limited, we discontinued the production and sale of this product line during the first quarter of 2017. In connection therewith, we wrote off $38,000 of fixed assets and recognized $45,000 from the sale of certain other fixed assets and product rights, resulting in a net gain of $7,000.Sales of several other private label products that we acquired in connection with our January 2016 acquisition of certain gel formulation technology (our third leading source of animal health product sales) aggregated 2% of our total product sales during the three-month period ended March 31, 2017 in comparison to 4% during the same period in 2016. During the fourth quarter of 2016, we shut down the manufacturing site in Minnesota that had been used to produce these products and moved these operations to our Portland, Maine facility. We expect to realize reduced labor and overhead expenses and benefit from certain other operating efficiencies as a result of this consolidation. In connection therewith, we wrote off $34,000 of fixed assets and recognized $7,000 from the sale of certain other fixed assets, resulting in a net loss of $27,000.Sales ofourCalifornia Mastitis Test (CMT)(ourfourthleading source ofanimal health productsales)aggregated less than 1% of our total product sales during the three-month periods ended March 31, 2017 and 2016. Wemake and sell bulkreagents for Isolate™ (formerly knownasCrypto-Scan^Ò), which is adrinking water test thatis soldbyour distributor in Europe.Sales of this product aggregated 3% of our total product sales during the three-month period ended March 31, 2017. No sales of these bulk reagents were recorded during 2016.

Gross Margin

Changesinthe gross marginon productsales are summarizedin the following table for the respective periods(in thousands, exceptfor percentages):

	Three-Month Periods Ended March 31,						Increase
	2017			2016			Amount			%
Gross margin	$	2,152		$	1,758		$	394			22	%
Percent of Product sales		61	%		59	%		2	%		3	%

	Twelve-Month Periods Ended March 31,						(Decrease)
	2017			2016			Amount			%
Gross margin	$	5,815		$	6,158		$	(342	)		(6	%)
Percent of Product sales		58	%		61	%		(3	%)		(5	%)

The gross margin as a percentage of product sales was 61% and 59% during the three-month periods ended March 31, 2017 and 2016, respectively, and 58% and 61% during the twelve-month periods ended March 31, 2017 and 2016, respectively.Thegross marginas apercentage of productsales was57%and61%during theyears endedDecember 31, 2016and2015,respectively.This comparesto gross margin percentages of 59%and 51%during theyears endedDecember 31, 2014and 2013,respectively. Our current objectiveis to maintain thegross margin percentage over 55%,andwehave achieved this annual objectivesince 2014. A number offactors account for the variability in our costs,resultingin somefluctuationsin grossmargin percentages from quartertoquarter. Thegross margin onFirst Defense^Òisaffected bybiological yields from our rawmaterial, which do vary overtime.Likemost U.S. manufacturers,wehave beenexperiencing increasesin the cost of rawmaterials thatwepurchase.Thecosts for production ofFirst Defense^ÒandWipe Out^ÒDairyWipes have increased due to increased laborcosts and otherexpenses associated with our efforts to sustain compliance withcurrent Good Manufacturing Practice (cGMP)regulations in our productionprocesses. Wehave been ableto minimize the impact ofthese costincreases by implementingyield improvements. Product mix also affects grossmargininthatwe earn ahigher gross marginonFirst Defense^Ò.

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ImmuCell Corporation

Sales andMarketing Expenses

Sales and marketing expenses increasedby approximately23%, or$95,000, to $514,000 during the three-month period ended March 31, 2017in comparison to $419,000 during the same period in 2016, amountingto 15% and 14% of productsales during the three-month periods ended March 31, 2017 and 2016, respectively. Wecontinue to leverage theeffortsof oursmall salesforce by usinganimal health distributors.Theseexpenses have increased due principally to astrategic decisionto invest more to supportFirst Defense^Òsales. Our current budgetaryobjective in 2017is to invest upto 18% of productsales in salesand marketing expenseson anannual basis.

Administrative Expenses

Administrative expensesincreased by approximately13%, or $42,000,to $380,000 during thethree-month period ended March 31, 2017, in comparisonto $337,000 duringthe same period in2016. Westrive to beefficient with these expenseswhile fundingcosts associatedwith complyingwith the Sarbanes-Oxley Act of 2002and other costs associated with being apublicly-held company. Priorto 2014,we hadlimited our investmentininvestor relations spending. Beginningin the secondquarter of 2014,weinitiated aninvestment in amore actively managed investor relations program while continuing to providefull disclosure ofthe status ofour business andfinancial conditionin three quarterly reportsand one annual report eachyear, aswell asinCurrent Reports on Form8-K when legallyrequired ordeemed appropriate by management. Additional information aboutusis availablein our annual ProxyStatement. All ofthese reports arefiled with the SEC and areavailable on-line or uponrequest to theCompany.

Product DevelopmentExpenses

Product development expensesincreased by12%, or $37,000,to$340,000during the three-month period ended March 31, 2017, in comparisonto $302,000duringthe same period in2016.Product development expenses aggregated10% of productsales duringthe first quarters of2017and 2016. The majority ofour productdevelopment spendingis focused onthe development ofMast Out^®.During the17.25-yearperiodthat began on January 1, 2000(the yearwe began thedevelopment ofMast Out^Ò)and ended onMarch 31, 2017,weinvested the aggregate of approximately $12,624,000in the developmentofMast Out^Ò. Thisestimated allocationtoMastOut^Òreflects only directexpenditures and includesno allocation of productdevelopment oradministrative overhead expenses. Approximately $2,891,000 ofthis investment was offsetby productlicensing revenues and grant income related toMastOut^Ò, most of which was earned from 2001 to 2007.

During 2000,we acquired anexclusive license from Nutrition 21,Inc. (formerly AppliedMicrobiology Inc. or AMBI)to develop and market Nisin-based productsfor animal health applications, which allowed usto initiate the development ofMastOut^Ò.In 2004,we paidNutrition 21approximately$965,000to buy out this royaltyand milestone-based license to Nisin, therebyacquiring control ofthe animalhealth applications ofNisin. Nisin,is anantibacterial peptideknown to beeffective against most Gram-positive andsome Gram-negative bacteria. In ourpivotal effectiveness study, statistically significantMast Out^Òcure rates were associated with astatistically significantreduction in milk somatic cellcount, whichis animportant measure ofmilk quality. Nisinis awellcharacterized substance, having been usedin foodpreservation applications for over 50years. Food-gradeNisin, however, cannot be usedin pharmaceutical applicationsbecause of its lowpurity. OurNisintechnologyincludes processing and purification methods to achieve pharmaceutical-grade purity.

In 2004,weentered into aproduct development and marketing agreement with Pfizer Animal Health(now known as Zoetis)coveringMastOut^Ò. Zoetis elected to terminate the agreementin 2007.We believe that this decisionwas not based on anyunanticipated efficacy or regulatory issues.Rather,webelieve the decisionwas primarily drivenby amarketing concern relatingto their fear that themilk from treatedcows could interfere with the manufacture ofcertain cultureddairyproducts. Duetothe zeromilk discard feature,there is arisk that Nisin fromthe milkof cowstreated withMast Out^Òcould interfere with the manufacture ofcertain (but notall) commercial cultured dairyproducts, such as some kinds ofcheese andyogurt, if a processtank contains a high enoughpercentage ofmilk fromtreated cows. Theimpact ofthis potential interference ranges from adelayin themanufacturing process,which does happen at timesfor other reasons, to the lesslikely stopping of acheese starter culture. Milk from cows thathave beentreated withMastOut^Òthat is sold exclusivelyfor fluid milk products presentsno suchrisk. Weworked with scientists andmastitis expertsto conduct aformal riskassessment to quantify the impact thatmilk fromtreated cows mayhaveoncultured dairyproducts.Thisstudy concluded that the dilution ofmilk fromtreated cowsthrough comingling with milk from untreated cowsduring normalmilk haulingand storage practices reduces the risk ofinterference with commercialdairycultures to anegligible levelwhenMast Out^Òis usedinaccordancewith the product label. Wedo not believe that apremium-priced productsuchasMast Out^Òwill beused as part of awhole herd (“blitz”) treatment protocol,which reduces therisk ofcheese interference. We donot see this as asignificantproblem asmodern“precision dairying” practices supportreducing the indiscriminate use ofdrug treatments.

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ImmuCell Corporation

Commercial introduction ofMastOut^Òin the United Statesis subjectto approval ofour New Animal Drug Application (NADA) bythe Food and Drug Administration (FDA), whichapprovalcannot beassured.Foreign regulatory approvalswould berequired for sales inkeymarkets outside of the UnitedStates, which would involve some similar and somedifferent requirements.The NADAis comprised offive principal Technical Sections and one administrative submission that are subjectto the FDA’s phasedreview.Bystatute, eachTechnical Section submission is generally subjectto asix-month review cycleby theFDA.Each TechnicalSection can bereviewed andapprovedseparately.Uponreview and assessmentbythe FDA thatall requirements for aTechnical Section have beenmet, the FDA mayissue a TechnicalSection Complete Letter. The current status of ourworkonthese submissions to theFDAis asfollows:

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 withStreptococcus 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 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 grantedMast Out^® a zero milk discard period and a zero meat withhold period during and after treatment. Before we can obtain this Technical Section Complete Letter, we must transfer our analytical method that measures Nisin residues in milk to a government laboratory. Completion of the HFS Technical Section is currently anticipated during the first quarter of 2018.

5) Chemistry, Manufacturing and Controls (CMC): Obtaining FDA approval of the CMC Technical Section defines the critical path to FDA approval and to initial commercial sales. During the third quarter of 2014, we completed an investment in facility modifications and processing equipment necessary to produce the Drug Substance (the Active Pharmaceutical Ingredient, which is our pharmaceutical-grade Nisin) at small-scale. This small-scale facility has been used to i) expand our process knowledge and controls, ii) establish operating ranges for critical process parameters, iii) optimize process yields and iv) verify the cost of production. We believe these efforts will reduce risk as we invest in the commercial-scale production facility.

ImplementingNisinproductionat commercial scaleis themost critical action in front ofus on our pathto regulatory approval.Our initial planwas to haveNisinproducedfor us under aDevelopment and Manufacturing Agreement with Lonza Sales, Ltd. ofBasel, Switzerland, in orderto avoid the investment in amanufacturing facility.Bythe end of 2011,wedetermined that therequired minimum volumeswere toolarge to permit efficient, continuous productionand that the cost of goods underthis contractwould notbecommercially feasible. Thiscontract was terminated duringthe fourth quarter of 2014by mutual consent. We presentedthis productdevelopment opportunity to avarietyof largeand small animalhealth companies.While such a corporatepartnership could have allowed us to avoid the large investmentin acommercial-scale productionfacility, the partner would have taken alarge share of thegross margin fromall futureMast Out^®sales. We areencouragedby the regulatory andmarketing feedback from prospectivepartners, followingtheir due diligence, thatour novel mastitis treatment can achieve FDA approvaland have asignificant, positive impact on the dairyindustry. During the fourth quarter of 2015, weacquired land nearby to our existing Portland facilityforthe construction ofour ownfacility for the commercial-scale productionofNisin. During the third quarter of 2016, we broke ground for this facility, and construction is now well underway and progressing on schedule and within budget. We plan to complete construction by the fourth quarter of 2017 and installation and qualification of equipment by the first quarter of 2018.To gain regulatory approval of this product, validation batches must be produced at commercial scale, and a detailed CMC Technical Section prepared and submitted to the FDA. We expect that two, six-month reviews of the CMC Technical Section by the FDA will be required. Additionally, successful FDA site inspections must be achieved.

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ImmuCell Corporation

After preparing materials responsiveto other administrative requirements, theadministrative NADA submissionwill beassembled for reviewby theFDA.Thisfinal administrative submissionis subjectto astatutory sixty-day review period. Adherence to this timeline sets us up for anticipated regulatory approval in 2019.

We areparty to along-term, exclusive supplyagreement withNordson Corporation (formerlyPlas-PakInc.)ofNorwich, Connecticut coveringtheproprietarysyringe thatwas developedspecifically for treating cowswithMastOut^Ò. These syringes were usedfor all pivotal studies ofMastOut^Ò. During thefourth quarter of2015,this contract was extendedthrough January 1, 2021. A further extension is being negotiated and alternative vendors are being pursued.

Since 2010,wehave been partyto a long-term, exclusive ContractManufacture Agreement with NorbrookLaboratories Limited of Newry,Northern Ireland, an FDA-approvedDrug Product (sterile-filled and packaged syringes) manufacturer, covering theformulation andsterile-fillingofthe DrugSubstance into DrugProduct forMastOut^Ò. Norbrook providedthese services for clinical material usedin all pivotalstudiesofMastOut^Ò. During thefourth quarter of 2015,weentered into arevised agreement with Norbrookcovering thefinal development and commercial-scale launch ofMast Out^Òafter FDA approval.

Thebalance ofourproduct developmentefforts have been primarilyfocused onother improvements,extensions oradditions to ourFirst Defense^Òproductline, including the potential to prevent scours in calves causedbypathogens other than thosewithin thecurrentFirst Defense^Òdisease claims (E. coliK99 and coronavirus) such asrotavirus. Inconnection with that effort, during the second quarter of 2009 we entered into an exclusive license with the Baylor College of Medicine covering the underlying rotavirus vaccine technology used to generate the specific antibodies. This perpetual license (if not terminated for cause) is subject to milestone and royalty payments. This would be the first passive antibody product on the market with USDA-approved disease claims providing immediate immunity against each of the three leading causes of calf scours:E. coli, coronavirus and rotavirus. Results from pilot studies completed during the first quarter of 2009 justified continued product development. We initiated a second pivotal effectiveness study at Cornell University College of Veterinary Medicine during the second quarter of 2014 and announced positive effectiveness results from this pivotal study during the first quarter of 2015. During the third quarter of 2015, we obtained concurrence from the USDA that we have been granted disease claims against rotavirus for our product. We are now working to complete the other laboratory and manufacturing objectives required for product license approval. This could position us to achieve product licensure and market launch of this product,First Defense^Ò Tri-Shield™, with the expanded claims during the second half of 2017. We intend to continue selling the bivalent formats ofFirst Defense^® as options for customers after the launch ofFirst Defense^Ò Tri-Shield™. We are currently working to establish USDA claims for our bivalent gel tube (expected during the fourth quarter of 2017) and bulk powder (expected during 2018) formulations ofFirst Defense Technology^Ò. At the same time, we are working to expand our product development pipeline of bacteriocins that can be used as alternatives to traditional antibiotics. During the second quarter of 2015, we entered into a three-year exclusive option agreement to license new bacteriocin technology from the University of Massachusetts Amherst. This technology focuses on bacteriocins having activity against Gram-negative infections for use in combating mastitis in dairy cattle. Subject to the availability of needed financial and other resources, we intend to begin new development projects that are aligned with our core competencies and market focus. We also remain interested in acquiring, on suitable terms, other new products and technologies that fit with our sales focus on the dairy and beef industries.

Net Operating Income

Ournet operating income during thethree-month period ended March 31, 2017 of$918,000was $219,000 more than our net operating income of $699,000 during the same periodin 2016. We have now recorded positive net operating income for eleven consecutive quarters.

Other expenses, net

Interest expense(including amortization of debt issuance costs of approximately $3,000 and $1,000 during the three-month periods ended March 31, 2017 and 2016, respectively)increased by approximately8%, or $3,000,to$40,000 during thethree-month period ended March 31, 2017,in comparison to $37,000 during the same periodin 2016.Interest incomedecreasedby approximately55%, or $7,000,to $6,000during thethree-month period ended March 31, 2017,in comparison to $13,000duringthe same period in2016. Less interest income was earned during the 2017 period because we had less cash and investments on hand at March 31, 2017 than at March 31, 2016 and because these funds were held in more liquid investments (that earn a lower rate of interest) during the current period in order to fund our capital expenditure requirements.Other expenses, net, aggregated $30,000and $23,000 during the three-month periods ended March 31, 2017 and 2016, respectively.

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ImmuCell Corporation

IncomeBefore Income Taxes andNet Income

Our income beforeincome taxes of $888,000during thethree-month period ended March 31, 2017 was $212,000 greater than our income beforeincome taxes of $676,000duringthe same period in2016. This increase is largely attributable to a $394,000 increase in gross margin, which was reduced by a $175,000 increase in operating expenses. Werecorded income tax expense of34%and33% oftheincome beforeincome taxes during thethree-month periods ended March 31, 2017 and 2016,respectively. Our netincome of $584,000, or $0.12 perdiluted share, during thethree-month period ended March 31, 2017compares to net income of $452,000, or$0.11 per dilutedshare, during thethree-month period ended March 31, 2016.

Critical Accounting Policies

Thefinancial statements arepresented onthe basis ofaccounting principles that are generally acceptedin theUnited States.Allprofessional accounting standards thatwere effective and applicableto us asofMarch 31, 2017 have beentaken into considerationin preparing thefinancial statements. The preparation offinancial statements requires thatwemake estimates andjudgments that affectthe reportedamounts ofassets, liabilities, revenuesandexpenses, andrelated disclosure ofcontingent assets andliabilities.On an on-going basis,weevaluate our estimates, including those related to revenue recognition, income taxes, contingencies and theuseful lives and carrying valuesofintangible and long lived assets. We baseour estimates onhistorical experience and onvarious otherassumptions thatwebelieve arereasonable under the circumstances,theresults ofwhich form the basisfor making judgments about thecarrying values of assetsand liabilities that arenot readily apparent fromother sources. Actual results may differ fromthese estimates underdifferent assumptions orconditions. Wehave chosentohighlight certainpolicies thatweconsidercritical to the operations ofour business andunderstanding our financial statements.

We sell products that provide immediate immunity to newborn dairy and beef cattle. Werecognize revenuewhenfour criteria aremet. Theseinclude i) persuasive evidence that anarrangement exists, ii) deliveryhas occurred orservices have been rendered,iii) the seller’s priceis fixed and determinable andiv)collectability is reasonably assured. We recognize revenue at the time of shipment (including to distributors) for substantially all products, as title and risk of loss pass to the customer on delivery to the common carrier after concluding that collectability is reasonably assured. We do not bill for or collect sales tax because our sales are generally made to distributors and thus our sales to them are not subject to sales tax.We generally have experienced an immaterial amount of product returns.

Inventory includes raw materials, work-in-process and finished goods and is recorded at the lower of cost, on the first-in, first-out method, or net realizable value (determined as the estimated selling price in the normal course of business, less reasonably predictable costs of completion, disposal and transportation). Work-in-process and finished goods inventories include materials, labor and manufacturing overhead.

ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As of March 31, 2017, there have been no significant changes in market risk exposures that materially affected the quantitative and qualitative disclosures as described in Item 7A to our Annual Report on Form 10-K for the year ended December 31, 2016.

ITEM 4 - CONTROLS AND PROCEDURES

Disclosure Controls and Procedures.Our management, with the participation of the individual who serves as our principal executive and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2017. Based on this evaluation, that officer concluded that our disclosure controls and procedures were effective as of that date. Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and (ii) accumulated and communicated to our management, including our principal executive and principal financial officer, as appropriate to allow timely decisions regarding required disclosures.

Changes in Internal Controls over Financial Reporting.The individual who serves as our principal executive and principal financial officer periodically evaluates any change in internal control over financial reporting which has occurred during the prior fiscal quarter. Management has concluded that there was no change in our internal control over financial reporting that occurred during the quarter ended March 31, 2017 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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ImmuCell Corporation

PART II. OTHER INFORMATION

ITEM 1 - LEGAL PROCEEDINGS

In the ordinary course of business, we may become subject to periodic lawsuits, investigations and claims. Although we cannot predict with certainty the ultimate resolution of any such lawsuits, investigations and claims against us, we do not believe that any pending or threatened legal proceedings to which we are or could become a party will have a material adverse effect on our business, results of operations, or financial condition.

ITEM 1A - RISK FACTORS

Safe Harbor Statement

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of theSecurities 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: projections of future financial performance; 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; future market share of and revenue generated by current products and products still in development; future sources of financial support for our product development, manufacturing and marketing efforts; 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 future adequacy of our working capital and the availability and cost of third party financing; timing and future costs of a facility to produce the Drug Substance (active pharmaceutical ingredient) forMast Out^®; the timing and outcome of pending or anticipated applications for regulatory approvals; future regulatory requirements relating to our products; future expense ratios and margins; future compliance with bank debt covenants; costs associated with sustaining compliance with cGMP regulations in our current operations and attaining such compliance for the facility to produce the Drug Substance forMast Out^®; factors that may affect the dairy and beef industries and future demand for our products; the cost-effectiveness of additional sales and marketing expenditures and resources; the accuracy of our understanding of our distributors’ ordering patterns; anticipated changes in our manufacturing capabilities and efficiencies; anticipated competitive and 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” 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, competition within our anticipated product markets, customer acceptance of our new and existing products, alignment between our manufacturing resources and product demand, the uncertainties associated with product development and Drug Substance manufacturing, actual as compared to expected or estimated costs of expanding our manufacturing facilities, our potential reliance upon third parties for financial support, products and services, changes in laws and regulations, decision making by regulatory authorities, possible dilutive impacts on existing stockholders from any equity financing transactions in which we may engage, currency values and fluctuations and other risks detailed from time to time in filings we make with the Securities and Exchange Commission, 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 are based on our current expectations, but actual results may differ materially due to various factors, including the risk factors summarized below and uncertainties otherwise referred to in this Quarterly Report.

Projection of netincome: Generally speaking, our financial performance can differsignificantly frommanagement projections, due to numerous factorsthat aredifficult to predict orthat arebeyond our control.Weaker than expected sales ofFirst Defense^® could lead to less profits or an operating loss.Large investmentsin productdevelopment (or costoverruns) canresultina net loss. We have been profitable since the second half of 2014 and expect this trend to continue.

Reliance onsales ofFirst Defense^®: We areheavily reliant onthe market acceptanceofFirst Defense^® to generateproductsales and fund our operations. Our business would not have been profitableduring thenineconsecutive years in the periodended December 31, 2007, orduring theyears ended December 31, 2012, 2013, 2015 and 2016, or during the three-month period ended March 31, 2017without thegross margin thatweearned on sales ofFirst Defense^®, which accounted for93% ofourtotalproductsales duringthe years ended December 31, 2016 and 2015and 92% of our total product sales during the three-month period ended March 31, 2017.

Productrisks generally: Thesale ofour productsis subjectto financial, efficacy, regulatory, competitiveand other market risks. Elevated standards to achieve and maintain regulatory compliancerequired tosellour products continue to evolve.Thereis no assurance thatwe willcontinue to achieve market acceptance at aprofitable pricelevel orthatwe cancontinue to manufacture our products at a low enough costtoresult in asufficient gross margin to justifytheir continued manufacture and sale.

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ImmuCell Corporation

Productliability: Themanufacture and sale of our productsentails arisk of productliability. Our exposure toproductliability is mitigatedtosome extentby thefact thatour products areprincipally directedtowards the animalhealth market. Wehave maintainedproductliability insurance inanamount whichwebelieveisreasonable in relation to our potential exposure in this area. Wehave no history ofclaims ofthis nature beingmade.

Regulatoryrequirements forFirst Defense^®:First Defense^®is sold in theUnited States subjectto aproduct licensefrom theCenter for Veterinary Biologics, USDA, which was first obtainedin 1991. Thepotency ofserial lots is directlytraceable to the original serial used to obtainthe productperformance claims (the “ReferenceStandard”). Due to the uniquenature of theFirst Defense^Òlabelclaims, host animal re-testing is not required aslong as periodiclaboratory analyses continue to supportthe stability ofstored Reference Standard.To date,these analyses havedemonstrated strongstability. However, if the USDAwere notto approve requalificationofthe Reference Standard,additional clinical studies couldberequired to meet regulatoryrequirements and allowfor continued sales of the product.We expect to be subject to similar regulatory risks for our anticipated rotavirus claim, and similar regulatoryoversight risksexist in territories outside ofthe UnitedStates wherewesell our products.

RegulatoryrequirementsforWipeOut^®Dairy Wipes: Whilethe FDAregulates themanufacture and sale ofWipe Out^®DairyWipes, this typeof productis permitted to besoldwithout NADA approval,in accordancewith the FDA’sCompliance PolicyGuide 7125.30 (“Teat Dipsand UdderWashes for DairyCows and Goats”). Themanufacture ofWipeOut^®DairyWipes is subjecttoPart 211 ofthe cGMPregulations.Asaresult, our operations are subjectto inspectionbythe FDA. During the secondquarter of 2007,the FDAinspected our facilities and operations andissued aWarning Letter to us, citing deficiencies in specific areas ofthe cGMPregulations.Wefiled aninitial responsetothe FDAduringthe secondquarterof 2007,andwe respondedto arequest for additional information during thesecond quarter of 2008.Duringthefirst quarter of 2013,the FDA againinspectedour facilities andoperations. Thereport from this inspectionwas favorable, andwerespondedto thefew,minor observations that were noted. During the third quarter of 2016, the FDA inspected our facilities and operations again. The report from this inspection noted five observations. We submitted our responses to the observations that were noted, and subsequently were informed that the FDA had closed its inspection. During the first quarter of 2017, we discontinued the manufacture and sale of this product, which reduces our exposure to an adverse action by the FDA in this respect to a minimal level.

Regulatoryrequirements forMastOut^Ò:Thecommercial introduction ofMast Out^ÒintheUnited States will require us to obtainFDA approvalfor this product.Completing thedevelopment ofMastOut^Òthrough tothesubmissionofthe administrative NADAtothe FDAinvolves risk.While three Technical Sections have been approved and the Human Food Safety Technical Section is near completion, the development process timeline has been extensive (17 years) and has involved multiple commercial production strategies. As such, the Chemistry, Manufacturing and Controls Technical Section has not yet been submitted for the Nisin Drug Substance or the Drug Product. To reduce the risk associated with this process, we have met with the FDA on multiple occasions to align on filing strategy and requirements.Wehave disclosed atimelineofevents that couldlead to approvalduring 2019. We areexposed to additional regulatorycompliance risks throughthe subcontractors that wechoose toworkwith to produceMastOut^Ò,whoalso need to satisfycertain regulatory requirementsin orderto provideus with the productsand servicesweneed. International regulatory approvalswould berequired forsales outside of theUnited States.European regulatoryauthorities arenot expected to approve aproductwith a zeromilk discard claim, which would remove asignificant competitive advantage ofMast Out^Òinthatterritory. However, the assigned milk discardperiodmay beshorter forMast Out^Òthan it is for otherproducts onthe market in Europe.

Concentration ofsales: Approximately99% and 97%ofour productsales were made to customers in the dairy and beefindustries throughoutthe world during the years ended December 31, 2016 and 2015, respectively. Approximately 96% and 99% of our product sales were made to customers in the dairy and beef industries throughout the world during the first quarters of 2017 and 2016, respectively. Approximately 85% and83%ofour productsales were made to customers in the U.S. dairy and beefindustries duringthe years ended December 31, 2016 and 2015, respectively. Approximately 77% and 89% of our product sales were made to customers in the U.S. dairy and beef industries during the first quarters of 2017 and 2016, respectively.Alarge portion ofour productsales (60%and62%duringthe years ended December 31, 2016 and 2015, respectively, and 66% and 58% during the first quarters of 2017 and 2016, respectively) was madetotwo largedistributors.A large portion ofour tradeaccounts receivable (64%and52% as ofDecember 31, 2016 and2015,respectively, and 55% as of March 31, 2017) was due from these two distributors.Wehave a goodhistory with these distributors, but the concentration of salesand accounts receivablewith asmall number ofcustomers doespresent a risktous, including risks related to such customers experiencing financial difficulties oraltering the basis onwhich they dobusiness with us.

Economics of the dairy andbeef industries:

● The January count ofall cattle and calves in the United Stateshad steadilydeclined from 97,000,000 as of January 1, 2007 to 88,500,000 as of January 1, 2014. Then this figure increased to 89,100,000 as of January 1, 2015 and to 91,900,000 as of January 1, 2016 and to 93,600,000 as of January 1, 2017, which is 1.8% higher than at January 1, 2016.  

● From 1998through 2016,the size (annual average) of the U.S. dairyherd ranged from approximatelythe lowof9,011,000(2004) to the high of 9,332,000(2016). The 2016level exceeded the previous high during thisnineteen-year period of 9,317,000in 2015.

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ImmuCell Corporation

● While the numberof cowsin theU.S. herd and the production ofmilk per cow directlyinfluence the supply ofmilk, demand for milkisalso influenced by veryvolatile international demand for milk products. TheClass IIImilk price (an industry benchmark thatreflects thevalueof productused to make cheese) is animportant indicator becauseitdefines our customers’ revenuelevel. Thisannual average milk pricelevel (measuredin dollars perhundred pounds ofmilk) for 2014 of $22.34(peaking at $24.60in September 2014)was the highest level since thesepriceswerefirst reportedin 1980. Thisstrong pricelevel declinedto the average of $15.80during 2015 and further declined to $14.87 during 2016.However, the average during the three-month period ended March 31, 2017 was $16.49. Therecent annual fluctuationsinthis milk pricelevel aredemonstrated in thefollowingtable:

Average Class III Milk Price for the Year Ended December 31,		Increase (Decrease)
2012	2013
$17.44	$17.99	3%

2013	2014
$17.99	$22.34	24%

2014	2015
$22.34	$15.80	(29%)

2015	2016
$15.80	$14.87	(6%)

● Theactual level ofmilk pricesmay be less importantthan its level relative to feed costs. Onemeasure ofthisrelationship is knownas themilk-to-feed priceratio,which represents the amount offeed thatone pound ofmilk canbuy. Theannual average for this ratio of 1.52in 2012was thelowest recordedsince this ratiowasfirst reportedin1985. Thehighest annual averagethis ratio has reachedsince 1985was 3.64in 1987.Since this ratio reached 3.24in2005,it has not exceeded 3.0. Theannual averageof 2.54for 2014was the highest this ratiohas beensince it was2.81in 2007. Thisratio dropped to anannual average of 2.12during 2015 and increased to 2.24 during 2016.During the first three months of 2017, this average was 2.56.Thefollowing table demonstrates the annual volatility and the lowvalues of thisratio recently:

Average Milk-To-Feed Price Ratio for the Year Ended December 31,		Increase (Decrease)
2012	2013
1.52	1.75	15%

2013	2014
1.75	2.54	45%

2014	2015
2.54	2.12	(16%)

2015	2016
2.12	2.24	6%

● Anincrease in feed costs also has anegative impact onthe beefindustry. Widespreadsevere drought conditionsinkey U.S.agricultural regions during 2012drove feed costs higher andthe inventory of allcattle and calves lower. Thepositive trendinthese market indices during 2013and 2014resulted inanincrease in thevalue ofmilk cows. The 2014annual average pricefor amilkcowincreasedby 32%to $1,835in comparison to 2013.Previously, thisannual average pricesince 1970wasonlyhigher when it reached $1,840in 2007and $1,953in 2008. Thisannual averagepricefor 2015increased by 9%to $1,993in comparison to2014, but this average price declined by 11% to $1,768 during 2016. The average as of January 2017 was $1,620. Theindustry datareferred to above is compiledfromUSDAdatabases. The value of newborn bull calves had risen to the unusually high level of approximately $300 to $400 during 2015 but has declined to very little presently, depending on region. Given our focus on the dairy and beefindustries, thevolatile market conditions andthe resulting financial insecuritiesofour primaryend users are risksto our abilityto maintain and growsales at aprofitable level. Thesefactors also heighten thechallenge of sellingpremium-priced animalhealth products(such asFirst Defense^ÒTri-Shield™andMastOut^Ò) into the dairymarket.

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ImmuCell Corporation

Product developmentrisks: The development of new productsis subjectto financial, scientific, regulatory,andmarket risks.Our current business growth strategy relies heavilyonthe development ofMastOut^Ò, which requires (andwillcontinue to require)asubstantial investment. Our efforts will be subjectto inspection and approval bythe FDA.Thereis no assurance whether orwhenwe will obtainall of the data necessaryto supportregulatory approvalfor this product.

Risks associated withMast Out^Òfundingstrategy:Theconstruction ofand thefinancing for the commercial-scale Nisin production plantisthe most critical actionin front ofusonour pathto U.S. regulatory approvalforMast Out^Ò.We believe our current cash and investments, together with the available debt facility of up to approximately $6.5 million and our $500,000 line of credit, will beadequate financing to complete the project but will not provide us with a large amount of surplus cash.Due to the risks describedherein,we couldexperience costoverruns ordelays. We will not know whether we will receive the necessary regulatory approvals to manufacture and sellMast Out^Ò, or whether the product will achieve market acceptance and profitability, until after we have completed construction of the production facility described elsewhere in this report, at the presently estimated cost of $20 million. Absent sufficient sales of this new product at a profitable gross margin, we would be required to fund all debt service costs from sales ofFirst Defense^Òwhich would reduce our expected profitability and adversely affect our liquidity going forward.

Uncertainty of marketsize and productsales estimates: Estimating thesizeofthe market forMast Out^® is subjectto numerous uncertainties. Some of theuncertainties surrounding our productinclude market acceptance, thedevelopment ofthe subclinical mastitis treatmentmarket, theeffect of a premium selling price onmarket penetration,competition from existing products sold by substantially larger competitors,cost of manufactureandintegration ofmilk from treatedcows with susceptible cheesestarter cultures.

Competition from others:Manyofour competitors aresignificantly larger and more diversifiedinthe relevant markets thanwe areand have substantially greater financial, marketing, manufacturingandhuman resourcesand more extensive productdevelopment capabilities thanwe do,including greater abilityto withstand adverse economic ormarket conditions anddeclining revenuesand/or profitability.Boehringer Ingelheim, Elanco, Merck (a recent entry into this market space) and Zoetis among othercompanies, sellproductsthat compete directlywithFirst Defense^®in preventing scoursinnewborn calves. Theproduct sold byElanco (which has a similar selling price to our product) experienced alack of supplyinthe market during late 2014and into the middle of 2015but returned to the market in the latter part of 2015 and is regaining sales it had lost during this period. Theproduct sold byZoetis does carry arotavirus claim (whichwe donotyethave), but itdoesnot have anE. coliclaim (which we do have), and it sells for approximately half the price ofour product. Themarket for the treatment ofmastitisin dairy cowsis highly competitive, andpresently is dominatedby largecompanies such asBoehringer Ingelheim, Merck and Zoetis. Thereis noassurance thatMastOut^Òwill compete successfullyinthis market.Wemay not beaware ofother companies that competewith us orintend to compete with usinthe future.

Access toraw materials and contract manufacturing services:Ourpolicyisto maintain more thanone source of supplyfor the components usedto manufacture and test our products thatwe obtain fromthird parties. However, there is a riskthatwe couldhave difficulty in efficiently acquiringessential supplies.We have significantly increased the number of farms from which we purchase colostrum. Theloss offarmsfromwhichwebuy rawmaterial forFirst Defense^Òcould make it difficult for us toproduceenoughinventory. The specificantibodies thatwe purify from colostrumforFirst Defense^Òarenot readily available from othersources. We aredependent onour manufacturing facility and operationsinPortland, Maine for the production ofFirst Defense^Òandwillbedependent onthefacilitywe areconstructing in Portlandfor the production ofMast Out^Òwhenthat productbegins commercial sales. Weare dependent on Nordson Corporation (formerly Plas-Pak Inc.)for thesupplyofthe syringes used for our gel tube format ofFirst Defense Technology^Òand expect to be dependent on this company for the supply of the syringes forMast Out^Ò. The supply contract covering theMast Out^Òsyringes would need to be extended past January 1, 2021. A contract extension is being negotiated and alternative vendors are being pursued. We expect to be dependentona contract withNorbrookforthesterile-filling andfinal packagingofour DrugSubstance into Drug Product.In the event that we do not achieve FDA approval ofMast Out^Òby December 17, 2019, there is a risk that this contract could be terminated. Consistent with provisions in this contract, we are evaluating alternative sources for these services for potential use post-approval.Giventherequirement that such a facilitybeinspected and approved by theFDA, it could be costlyand time-consuming tofindand qualifyanadequate alternative source for theseservices. Anysignificant damageto orother disruption intheservices atany ofthesethird party or company-ownedfacilities (including due to regulatory non-compliance) could adversely affectthe production of inventory andresult in significant addedexpenses andloss offuture sales.

Smallsize; dependence on key personnel: We are asmall companywith 45employees (including5part-time employees).Assuch,we rely oncertain keyemployees to supportdifferent operational functions, with limited redundancyin capacity. Theloss of anyofthesekeyemployees could adverselyaffect ouroperations until aqualified replacementis hiredand trained. Our competitive positionwill be highly influenced byour abilityto attract andretain keyscientific,manufacturing,managerial and sales andmarketing personnel, to develop proprietarytechnologies andproducts, to obtainUSDA or FDA approval for new products, to maintain regulatory compliance with current productsand to continue to profitably sell our current products. Wecurrently compete onthe basisof productperformance, priceand distribution capability. Wecontinue to monitor our networkofindependent distributors to maintain our competitive position.

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ImmuCell Corporation

Failure to protectintellectual property: Insome cases,wehave chosen(and may choosein the future) not to seekpatent protectionfor certain products orprocesses. Instead,wehave sought (andmay seekin the future) to maintain theconfidentiality ofany relevantproprietary technology throughoperational safeguards and contractual agreements. Reliance upon tradesecret, rather than patent, protectionmay cause usto bevulnerable to competitorswhosuccessfully replicate our manufacturing techniques andprocesses. Additionally, there can beno assurance that othersmay not independently developsimilar tradesecrets or technology or obtainaccess to our unpatented tradesecrets or proprietarytechnology. Other companiesmayhave filed patent applications andmay have beenissued patents involving products ortechnologies potentially useful to us or necessaryfor usto commercialize our products orachieve our business goals. There can beno assurance thatwewill be ableto obtainlicenses to such patents on terms that are acceptable. Thereis also arisk thatcompetitorscould challenge theclaimsin patentsthat have been issuedto us.

Certain provisions might discourage, delay or prevent a changein control of our Company or changesin our management:Provisionsof ourcertificate of incorporation,our bylaws, our Common StockRights Plan orDelaware lawmay discourage, delay orprevent amerger, acquisition orother changeincontrol that stockholdersmay considerfavorable, including transactions in which stockholders might otherwisereceive a premiumfor their shares ofour commonstock. These provisions may alsopreventorfrustrate attemptsby ourstockholders to replace orremove our management. Theseprovisions include:

● limitations onthe removal ofdirectors; advance notice requirements for stockholder proposals and nominations;

● the abilityofour Board ofDirectors to alter or repealour bylaws;

● the abilityofour Board ofDirectors to refuse to redeem rightsissued underour Common Stock RightsPlan orotherwise to limit orsuspend its operationthat would worktodilute the stockownership of apotential hostile acquirer, likely preventingacquisitions thathave not been approved byour Board ofDirectors; and

● Section 203 ofthe Delaware General CorporationLaw, whichprohibits apublicly-held Delaware corporation fromengagingin abusiness combinationwith aninterested stockholder(generally defined as a personwhich together with its affiliates owns, orwithin thelast three years hasowned, 15% ofour voting stock, for a period ofthree years after the date ofthe transaction in which the person became aninterested stockholder) unless thebusiness combinationisapprovedin aprescribed manner.

Theexistenceofthe foregoing provisions andanti-takeover measures could depress thetrading price ofour commonstock orlimit the pricethat investorsmight bewilling to payin thefuture for shares of ourcommon stock. Theycould also deterpotential acquirers of ourCompany, thereby reducing thelikelihood ofobtaining a premiumfor our common stockin anacquisition.

Cost burdens of ourreporting obligations as apublic company:Operating apublic company involvessubstantial costs to complywith reporting obligations under federal securities laws andthe provisions ofthe Sarbanes-OxleyActof 2002.

Exposureto risks associated with the financial downturnand globaleconomic crisis: TheU.S. economyhascomeout of arecession, which was caused principallyby thehousing, credit andfinancial crises that beganaround 2008.However, such recent positive indications could prove temporaryand further downturn could occur. The creditmarkets continue to be veryturbulentanduncertain.Someobservers believe that the housing market remainsproblematic for the overall U.S. economy, theUnited States has taken on toomuch national debtand the equitymarkets areovervalued. Interest rates are trending higher, and a significant portion of our bank debt currently bears interest at variable rates. Thisextraordinaryperiod ofinstabilityin the U.S.economy andthe financial markets has beentroubling for nearlyall Americans.The European economy remains sluggish andprecarious. Certainemerging markets also showsignsofslower growth or,in some areas,downturnsineconomic performance.While we do price our products in U.S. dollars for all export markets, the strength of the dollar against weakening foreign currencies could reduce product demand in international markets.Acombination of theconditions, trends and concerns summarized abovecould have acorresponding negative effect onour business andoperations, including thedemand for our productsin theU.S. market andour abilityto penetrate international markets.

Bovinediseases: Thepotential for epidemics of bovine diseasessuchas Footand MouthDisease, Bovine Tuberculosis, Brucellosis andBovine Spongiform Encephalopathy (BSE)presents a risktous and our customers. Documented casesof BSEin theUnited States have led toanoverall tightening ofregulations pertaining to ingredientsofanimal origin, especially bovine.First Defense^Òisconsidered aveterinary medicine ratherthan afeed ingredient, anditis manufactured from bovine milk(colostrum), which is not considered a BSErisk material. Future regulatoryaction to increase protection ofthe human food supply couldaffectFirst Defense^Ò,although presentlywedonot anticipate that thiswillbethe case.

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ImmuCell Corporation

Biologicalterrorism: The threat ofbiological terrorismis arisk to boththe economic health ofour customers and ourabilityto economically acquireand collect goodquality rawmaterial fromour contract farms. Any actofwidespread bioterrorism against the dairy industrycould adversely affectour operations.

Stock marketvaluation: Our common stock trades on The NasdaqStock Market (NasdaqCM:ICCC). Our averagedaily tradingvolume (althoughit hasincreased recently)is lowerthan thevolume for most other companiesandthe bid/askstock price spread can belarger,whichcould resultininvestors facing difficulty selling theirstock for proceedsthat they may expect ordesire. There arecompanies in the animalhealth sectorwith market capitalization values thatgreatly exceedour current market capitalization of approximately $26,424,000 as of May 5, 2017.Some ofthese companies have little orno productsales. We currently have annual productsales ofalmost$10,000,000. Beforegross margin from thesale ofnew productsis achieved,our market capitalization may beheavily dependenton theperceived potential for growth fromourproducts underdevelopment.

No expectationto payany dividends or repurchasestock for theforeseeable future: We donot anticipate paying anydividends to, orrepurchasing stock from, our stockholders forthe foreseeable future. Instead,weexpect to use cashto fundproductdevelopment costsandinvestments in our facility and productionequipment andtoreduce debt.Stockholdersmust beprepared torely on sales oftheir commonstock after price appreciationto earn aninvestment return, which maynever occur. Anydetermination topaydividends in thefuturewill bemade atthe discretionofour Board ofDirectors and will depend onour financial condition, resultsofoperations, contractual restrictions, restrictions imposedby applicablelaws, current and anticipated needs for liquidity and other factors ourBoard ofDirectors deems relevant.

ITEM2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None

ITEM 3 - DEFAULTS UPON SENIOR SECURITIES

None

ITEM 4 - MINE SAFETY DISCLOSURES

None

ITEM 5 - OTHER INFORMATION

None

ITEM 6- EXHIBITS

Exhibit 31	Certifications required by Rule 13a-14(a).
Exhibit 32	Certification pursuant to Section 1350, as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002.
101.INS	XBRL Instance Document.
101.SCH	XBRL Taxonomy Extension Schema Document.
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB	XBRL Taxonomy Extension Label Linkbase Document.
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.

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SIGNATURE

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

ImmuCell Corporation

Registrant

Date: May 11, 2017	By:	/s/ Michael F. Brigham
		Michael F. Brigham
		President, Chief Executive Officer and Principal Financial Officer

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