Good morning. This is Anthony from Chorus Call and I will be assisting with our conference call this morning. To get things started, let me ask Joe Diaz to open up the call.

Good morning and welcome to all. As the operator indicated, this is Joe Diaz. I am with Lytham Partners. We are the Investor Relations consulting firm for ImmuCell. I thank all of you for joining us today to discuss the unaudited financial results for the second quarter ended June 30, 2022. I’d like to preface this discussion today with a caution regarding forward-looking statements. Listeners are reminded that statements made by management during the course of this call include forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those discussed today. Additional information regarding these risks and uncertainties is available under the cautionary note regarding forward-looking statements better known as the Safe Harbor statement provided with last night’s press release and with our quarterly report on Form 10-Q for the 3-month period ended June 30, 2022, along with the company’s other periodic filings with the SEC. With that said, let me turn the call over to Michael Brigham, President and CEO of ImmuCell Corporation, after which we will open the call for your questions. Michael?

Thanks, Joe and good morning everyone. You do have a summary of the second quarter and year-to-date financial results from last night’s press release and the details from the Form 10-Q we also filed last night. Since that information is available to you, I will not take your time here to review all the line item detail, but I would like to touch on some of the highlights. As you may know, on July 7, we issued a press release covering our preliminary top line sales results. We have been making these optional announcements to give investors a very timely look at product sales, which I believe is the most critical measure of our operations and financial performance early in the reporting period. I have no changes to that previous disclosure. It is going to be a bit of a bumpy road as we exit from a long period of short supply to our emerging new state with expanded and still expanding production capacity. This transition was complicated further during the second quarter by a material disruption in the supply of needed plastic syringes used in our gel product formats. If not for this disruption, quarterly product sales would have been about flat in comparison to the second quarter of 2021. Despite the supply disruption, sales were up 14% and 27% during the 6 and 12-month periods ended June 30 respectively compared to the same periods during the prior year. EBITDA, which is an important non-GAAP financial measurement for us given the high level of non-cash depreciation expense that we carry, increased to $1.5 million during the 6-month period ended June 30, 2022 from $1.1 million during the 6-month period ended June 30, 2021. This non-GAAP financial measure should be considered in context with our statement of cash flows that…

[Operator Instructions] Our first question will come from George Melas with MKH Management. You may now go ahead.

Good morning, Michael.

Good morning, George. Hi there.

Hi. About the material disruptions in the quarter, was it just plastic syringes or were there some other factors that also disrupted production and sales?

No. Really, George, just that we need these tubes and we’re having some progress with that fix, and I think we’re going to continue to have progress. That’s why I mentioned I think we’ve got – we’re working on this in the third quarter. So we just need a lot of tubes. Our business is really shifting from the bolus to the tube, and we had a failure in contractor supply that we’re going to fix, but did hit the second quarter.

Okay. And how may – may I ask how many supplies you have of the syringe tubes?

Yes. It’s more than one, but it’s one primary. And obviously, we need to shift the weight.

Okay. And is that supply your domestic, or are they European or international?

Yes. We have got to access some mix. So, just I think what we are seeing is the domestic supplies is just – has not been reliable for some time now, and it finally it crashed and peaked here in the second quarter.

Okay. Was it a failure of the product, or was it that you just could not get enough of it?

Yes. Strictly supply. The product we receive is usable. We are just not getting enough of it. It’s a factor of getting less and also needing more.

Okay. And how do you expect to solve this problem?

Just buy more from more people.

Okay.

Yes. It’s just not complicated, it’s just – it’s the same tube, no changes. We just need more of them, and we need…

And you don’t require any kind of FDA clearance to do that?

This would be USDA, and it is a regulated product, but we can manage that. The USDA understands multiple vendors.

Okay. And so how do your customers – how do the farmers sort of deal with the disruption like this? Do they stop using your product? And do they shift to a competing product for a period of time, or do they not use it at all and hope for the best? What’s the alternative from a user perspective?

Alright. Well, it puts a lot of burden on our sales team. They manage this very closely. And there is product available in distribution, and some of that product can buffer these shortages out of our plant. But it’s a problem of all levels. So, it’s all of the above, George. Some customers will get frustrated and leave, and we need to go get them back. Others will be able to find products through distribution. And we are just trying to get the rest out as soon as possible, produce it, ship it and get it to the farm. So, it’s really a huge stressor on manufacturing to push it through and sales do the best they can to allocate and prioritize and keep it moving.

Okay. And I was just trying to understand the inventory information you provided in the Q because inventory has increased, and finished goods inventory increased at the end of the quarter. And I mean it’s not a big number, right? But it’s almost $0.5 million in sales, so it’s meaningful. But what does that mean that finished goods inventory increase?

Well, largely, the timing difference. We only ship – the gel product is refrigerated, and we don’t want it in a hot warehouse, hot truck over a weekend. So, we only ship Mondays and Tuesdays. So, there is always going to be a bit of product that is called a backlog, but because it didn’t go out, but it is on our books because it’s available and then we will ship the next Monday, so mostly timing difference. So, that’s why we have just got to keep getting ahead, so we are not counting released to shipping within a week.

Okay. But does that number suggest that you are actually sort of making progress to solve the issue because there seem to be a fair amount of finished goods inventory that you can ship – that you were able to ship the first week of July?

Yes. No, we are definitely making progress. It just isn’t – the project is not going to be complete until we are further ahead and more in finished goods. It’s just – we are too close, I referred to sort of a breakeven or just in time kind of where we are right now is we are watching each release almost by the hour, but certainly by the day. And we just – we need to build up our inventory and then build out distributors’ inventory and just have a more logical flow. So, it’s this transition. I said bumpy road. It’s a little bumpy road transition from short supply to sufficient supply through our shelves, through our cooler right through distribution, right throughout to the firm.

Okay. Great. Alright. Good luck.

Thanks.

[Operator Instructions] It appears there are no further questions. This concludes our question-and-answer session. I would like to turn the conference back over to Joe Diaz for any closing remarks.

Thank you, Anthony, and thank all of you for participating on today’s call. We will look forward to talking with you again to review the results for the third quarter of 2022, sometime in the early part of November. Have a great weekend, and stay safe. Have a good day.

The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.