ImmuCell Corp (ICCC) 2024 Q3 法說會逐字稿

Good morning and welcome to ImmuCell Corporation reports third quarter September 30, 2024, unaudited financial results conference call. (Operator Instructions) Please note, this event is being recorded.

早安，歡迎收聽 ImmuCell 公司於 2024 年 9 月 30 日發布的第三季報告，未經審計的財務業績電話會議。（操作員說明）請注意，正在記錄此事件。

I would now like to turn the conference call over to Joe Diaz of Lytham Partners. Please go ahead.

我現在想將電話會議轉給 Lytham Partners 的喬·迪亞茲 (Joe Diaz)。請繼續。

Thank you, Wyatt, and good morning and welcome to everybody on today's call. As the conference call operator indicated, my name is Joe Diaz with Lytham Partners. We're the Investor Relations consulting firm for ImmuCell. I thank all of you for joining us today to discuss the unaudited financial results for the quarter ended September 30, 2024.

謝謝懷亞特，早安，歡迎參加今天電話會議的各位。正如電話會議接線員所說，我的名字是 Lytham Partners 的喬·迪亞茲 (Joe Diaz)。我們是 ImmuCell 的投資者關係顧問公司。我感謝大家今天加入我們討論截至 2024 年 9 月 30 日的季度未經審計的財務業績。

Listeners are reminded and cautioned that statements made by management during the course of this call include forward-looking statements, which include any statements that refer to future events or expected future results or predictions about the steps the company plans to take in the future. These statements are not guarantees of performance and are subject to risks and uncertainties that could cause actual results, outcomes, or events to differ materially from those discussed today.

提醒聽眾並注意，管理層在本次電話會議期間發表的聲明包括前瞻性聲明，其中包括任何涉及未來事件或預期未來結果或對公司計劃未來採取步驟的預測的聲明。這些陳述不是對績效的保證，並且存在風險和不確定性，可能導致實際結果、成果或事件與今天討論的內容有重大差異。

Additional information regarding forward-looking statements and the risks and uncertainties that could impact future results, outcomes or events is available under the cautionary note regarding forward-looking statements or the Safe Harbor statement provided with the press release and the Form 10-K that the company filed last night, along with the company's other periodic filings with the SEC. Information discussed on today's call speaks only as of today, Thursday, November 14, 2024. The company undertakes no obligation to update any information discussed on today's call.

有關前瞻性陳述以及可能影響未來結果、結果或事件的風險和不確定性的更多信息，請參閱有關前瞻性陳述的警告說明或新聞稿和 10-K 表格中提供的安全港聲明。昨晚提交了該文件，以及該公司向美國證券交易委員會提交的其他定期文件。今天的電話會議討論的資訊僅截至今天（2024 年 11 月 14 日星期四）。該公司沒有義務更新今天電話會議中討論的任何資訊。

Please note that references to certain non-GAAP financial measures may be made during today's call. The company included definitions of these terms as well as reconciliations of these figures to the most comparable GAAP financial measures in last night's press release in order to better assist you in understanding its financial performance.

請注意，今天的電話會議可能會提及某些非公認會計準則財務指標。該公司在昨晚的新聞稿中包含了這些術語的定義以及這些數據與最具可比性的公認會計準則財務指標的調節，以更好地幫助您了解其財務表現。

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?

話雖如此，讓我將電話轉給 ImmuCell 公司總裁兼執行長 Michael Brigham，之後我們將開始電話會議，回答大家的問題。麥可？

All right. Thanks, Joe, and good morning, everyone. I'm excited. And I say that for a few reasons. First, I say that because someone told me that my voice does not always demonstrate that. Please judge me by my words and our disclosures. I'm excited to have a really difficult period largely behind us. Best evidence of that is that we have not had another contamination in our production process since the first half of April of 2024.

好的。謝謝喬，大家早安。我很興奮。我這麼說有幾個原因。首先，我這麼說是因為有人告訴我，我的聲音並不總是表明這一點。請根據我的言論和我們的披露來判斷我。我很高興我們已經度過了一段非常困難的時期。最好的證據是，自 2024 年 4 月上半月以來，我們的生產過程中沒有再出現污染。

We have a great opportunity to increase 2024 sales over both 2023 and 2022. We can see the potential of achieving FDA approval of Re-Tain around the corner after all these years of investment, and we are here to find out what the market thinks of our new novel product.

我們有很好的機會將 2024 年的銷售額提高到 2023 年和 2022 年的基礎上。經過這些年的投資，我們可以看到 Re-Tain 即將獲得 FDA 批准的潛力，我們來這裡是為了了解市場對我們新產品的看法。

We are fortunate to be experiencing strong customer demand for the First Defense product line, but the significant investments in facilities, equipment and staffing necessary to double our production capacity have been challenging. Despite delays in the installation of certain equipment, we completed these capacity-expanding investments around the end of 2022.

我們很幸運地遇到了客戶對 First Defense 產品線的強勁需求，但使我們的產能翻倍所需的設施、設備和人員方面的大量投資一直充滿挑戰。儘管某些設備的安裝出現延誤，我們還是在 2022 年底左右完成了這些產能擴張投資。

Around the same time as we began to operate at this higher output level, we began experiencing production contamination events that became more frequent during 2023 and continued into April of 2024. We have investigated these events thoroughly. We are optimizing raw material mix to maintain acceptable bile burden levels while also maximizing yields.

大約在我們開始以這種更高的產量水準運作的同時，我們開始經歷生產污染事件，這些事件在 2023 年變得更加頻繁，並持續到 2024 年 4 月。我們已經徹底調查了這些事件。我們正在優化原材料組合，以維持可接受的膽汁負擔水平，同時最大限度地提高產量。

We also believe that some of the contamination was caused by equipment and processes that were not adequately optimized to run at a higher level of production output. These new remediation steps implemented during April of 2024 in response to the most recent contamination events appear to be very successful so far because, as I said, we have run without contamination since then into the present.

我們也認為，部分污染是由於設備和製程未充分優化而無法以更高的產量水準運作所造成的。2024 年 4 月針對最近的污染事件實施的這些新的補救措施到目前為止似乎非常成功，因為正如我所說，從那時起到現在，我們一直沒有受到污染。

We do not see one smoking gun as the root cause to the contamination and yield losses. We think the solution is more about optimizing and controlling critical process parameters and multiple production inputs and process steps. The remediation steps of the contamination events required several adjustments, all within our USDA-approved outline of production. Further, I would like to confirm that throughout these contamination events, all product that was sold to market had passed final USDA release testing requirements.

我們並不認為有任何確鑿證據是造成污染和產量損失的根本原因。我們認為解決方案更多的是優化和控制關鍵製程參數以及多個生產輸入和製程步驟。污染事件的補救步驟需要進行多次調整，所有調整均在美國農業部批准的生產大綱範圍內。此外，我想確認，在這些污染事件中，所有銷售到市場的產品都通過了美國農業部的最終發布測試要求。

When I look back, I see something that is now very understandable after successfully running the same process for over 30 years: sudden growth is hard. We work with a high bile burden source material, that being farm milk. We needed to better control the quality at the source of this growth. We are doing that now.

當我回顧過去時，在成功運行相同流程 30 多年後，我發現現在非常容易理解：突然成長很難。我們使用高膽汁負擔的原料，即農場牛奶。我們需要更好地控製成長源頭的品質。我們現在正在這樣做。

Similar challenges were incurred in our downstream processing as we pushed our well-established process and equipment harder. We believe that the operational improvements implemented are allowing us to run more effectively at a higher output level going forward. To be successful, we must avoid future significant contamination events and equipment breakdowns and operate with good production yields.

當我們更加努力地推動我們完善的製程和設備時，我們的下游加工也遇到了類似的挑戰。我們相信，實施的營運改善將使我們能夠在更高的產出水準上更有效地運作。為了取得成功，我們必須避免未來發生重大污染事件和設備故障，並以良好的產量運作。

So turning to the P&L results. Product sales increased by 11%, 51%, and 46% during the 3-, 9- and 12-month periods ended September 30, 2024, respectively, in comparison to the same periods ended September 30, 2023. This helped us reduce the order backlog to $6.8 million as of October 30. This is exciting, but this top line success has not been matched with adequate gross margin to the bottom line. Like most other companies in this economy, we are facing challenging inflationary pressures on the cost of labor and components. This impacts just about everything we buy.

所以轉向損益表結果。與截至2023年9月30日的同期相比，截至2024年9月30日的3個月、9個月和12個月期間，產品銷售額分別成長11%、51%和46%。截至 10 月 30 日，這有助於我們將積壓訂單減少至 680 萬美元。這是令人興奮的，但這種營收成功並沒有與足夠的毛利率相符。與這個經濟體中的大多數其他公司一樣，我們面臨著勞動力和零件成本的嚴峻通膨壓力。這幾乎影響到我們購買的所有東西。

In addition, the other cause of the gross margin deterioration in the production yield losses that we have incurred during -- excuse me, I just wanted to say this impacts just about everything we buy. In addition, the other cause of the gross margin deterioration is the production yield losses that we have incurred during the recent periods.

此外，毛利率惡化的另一個原因是我們在此期間發生的產量損失，對不起，我只是想說這幾乎影響了我們購買的所有產品。此外，毛利率惡化的另一個原因是我們近期發生的產量損失。

That being said, our gross margin as a percentage of product sales did improve from 23% to 26% during the comparable three-month periods from 21% to 27% during the comparable nine-month periods and from 22% to 27% during the comparable 12-month periods, but this is still well short of our 35% to 40% target. We do believe that by both remediating the contamination events and optimizing the operation of the new equipment installed to increase production output, we can improve process yields beginning during the fourth quarter of '24 and into '25.

話雖如此，我們的毛利率佔產品銷售額的百分比確實在可比三個月期間從23% 提高到了26%，在可比九個月期間從21% 提高到了27%，在可比九個月期間從22% 提高了27%。我們確實相信，透過補救污染事件和優化安裝的新設備的運作以提高產量，我們可以提高從 24 年第四季開始到 25 年的製程產量。

With these strong sales, we were able to improve earnings before interest, taxes, depreciation and amortization, or EBITDA, from negative $95,000 during the three-month period ended September 30, 2023, to positive EBITDA of $119,000 during the three-month period ended September 30, 2024. And we did reduce negative EBITDA of $2.3 million during the nine-month period ended September 30, 2023, to negative $221,000 during the nine-month period ended September 30, 2024.

憑藉這些強勁的銷售，我們能夠將息稅折舊攤銷前利潤(EBITDA) 從截至2023 年9 月30 日的三個月期間的負95,000 美元提高到截至2023 年9 月30 日止的三個月期間的正EBITDA 119,000 美元2024 年 9 月 30 日。我們確實將截至 2023 年 9 月 30 日的九個月期間的負 EBITDA 減少了 230 萬美元，截至 2024 年 9 月 30 日的九個月期間，負 EBITDA 減少至負 221,000 美元。

We have decided that some stockholder dilution is necessary in order to improve our cash position. To that end, our at-the-market offering has contributed meaningfully to our capital needs during 2024. It has helped us improve our cash position from just $979,000 as of December 31, '23, to approximately $3.8 million as of September 30, 2024, as we stabilized our production systems at a higher output level.

我們決定，為了改善我們的現金狀況，有必要進行一些股東稀釋。為此，我們的市場產品為我們 2024 年的資本需求做出了有意義的貢獻。隨著我們將生產系統穩定在較高的產出水平，它幫助我們將現金狀況從截至 2023 年 12 月 31 日的 979,000 美元提高到截至 2024 年 9 月 30 日的約 380 萬美元。

Concurrently, we are reducing product development expenses as we await approval of Re-Tain by the FDA. After an investment of about 25 years and approximately $50 million in the development of this technology, we are committed to seeing this product through to regulatory approval and the initiation of our previously disclosed limited distribution control launch strategy.

同時，我們正在減少產品開發費用，等待 FDA 批准 Re-Tain。經過大約 25 年和大約 5000 萬美元的投資來開發這項技術，我們致力於讓該產品獲得監管部門的批准，並啟動我們先前披露的有限分銷控制推出策略。

At the same time, we were also in the very early stages of exploring potential strategic partnerships that could offset some of our product development expenses and enhance a mass-market launch of Re-Tain. So we will remain focused on the commercial opportunity we have with First Defense as we work through what we see as the final stages of the regulatory approval process in our effort to bring Re-Tain to market.

同時，我們也處於探索潛在策略合作夥伴關係的早期階段，這些合作夥伴關係可以抵消我們的部分產品開發費用並促進 Re-Tain 的大眾市場推出。因此，在我們努力完成監管審批流程的最後階段，努力將 Re-Tain 推向市場時，我們將繼續專注於 First Defense 所擁有的商業機會。

In May, the FDA issued a CMC Technical Section and complete letter in response to our third submission of the CMC Technical Section for Re-Tain. Pursuant to the incomplete letter, the FDA has provided some minor questions about our submission requiring [for] submission, which is typically subject to a six-month review. However, the FDA has indicated that this resubmission potentially could be handled through a shortened review period because the open ends are not complex.

5 月，FDA 發布了 CMC 技術部分和完整的信件，以回應我們第三次提交的 Re-Tain CMC 技術部分。根據這封不完整的信函，FDA 就我們提交的資料提出了一些小問題，要求提交，通常需要經過六個月的審查。然而，FDA 表示，由於開放式問題並不複雜，因此可能可以透過縮短審查期來處理此重新提交。

Most critical to the time line, however, is that the FDA has also required that we not resubmit the CMC Technical Section until inspectional observations at the facilities of our drug product contract manufacturer are resolved. Given the unique facts and circumstances, we are working with the FDA and our drug product contract manufacturer to obtain an expedited review. This is part of the process, and we are continuing to move forward.

然而，對時間線最關鍵的是 FDA 也要求我們在我們藥品合約製造商設施的檢查觀察結果得到解決之前不得重新提交 CMC 技術部分。鑑於獨特的事實和情況，我們正在與 FDA 和我們的藥品合約製造商合作，以獲得快速審查。這是這個過程的一部分，我們正在繼續前進。

Regardless, we remain poised and excited to revolutionize the way that subclinical mastitis is treated in today's dairy market with a novel alternative to traditional antibiotics without FDA-required milk discard and meat withhold label restrictions.

無論如何，我們仍然準備並興奮地透過傳統抗生素的新型替代品徹底改變當今乳製品市場上亞臨床乳腺炎的治療方式，而無需 FDA 要求的牛奶丟棄和肉類扣留標籤限制。

So that's the big picture. With regards to the other financial results, the press release provides the unaudited P&L results and some unaudited summary balance sheet data. Further, our Form 10-Q provides all the unaudited financial details and management's discussion and analysis. I will not take your time on this call to review all that in detail.

這就是大局。關於其他財務業績，新聞稿提供了未經審計的損益表結果和一些未經審計的資產負債表摘要資料。此外，我們的 10-Q 表格提供了所有未經審計的財務細節以及管理層的討論和分析。我不會在這次電話會議上花時間詳細審查所有這些內容。

But just lastly, I encourage you to review our corporate presentation slide deck. I do believe it provides a very good summary of our business and objectives as well as our current financial results. A November update was just posted to our website last night. See the Investors section of our website and click on Corporate Presentation or contact us for a copy.

但最後，我鼓勵您查看我們的公司簡報幻燈片。我確實相信它很好地總結了我們的業務和目標以及我們當前的財務表現。昨晚，我們的網站剛發布了 11 月的更新。請參閱我們網站的投資者部分，然後點擊公司演示或聯絡我們以取得副本。

With that said, I'd be very happy to take your questions. Let's have the operator open up the lines, please.

話雖如此，我很樂意回答你的問題。請讓接線員打開線路。

(Operator Instructions).

（操作員說明）。

Joe Diaz, .

喬·迪亞茲,。

Michael, this is Joe Diaz. I did have a question while the queue start filling up. With regards to self -- First Defense, the business has been strong. What do you attribute that to?

邁克爾，這是喬·迪亞茲。當隊列開始填滿時，我確實有一個問題。就自我而言——First Defense，業務一直很強勁。您認為這歸因於什麼？

The product works. I mean efficacy rules. I mean we just have great customer demand for this product. We're competing very effectively against alternative technologies, primarily vaccines, vaccines that are either given to the mother to try, and I'll say, somewhat unsuccessfully improve her production of antibodies in the feed is given to the newborn.

該產品有效。我的意思是功效法則。我的意思是，我們的客戶對該產品的需求很大。我們正在與替代技術進行非常有效的競爭，主要是疫苗，這些疫苗要么給母親嘗試，我想說，在某種程度上不成功地提高了新生兒飼料中抗體的產生。

We compete extremely effectively against the vaccine that is given directly to the newborn calf with its naive immune system and I would say limited ability to respond to that vaccine. So just great work by a sales team with a product that is pretty well known for its efficacy and providing that value to the customer to keep those newborns healthy. But thanks, Joe. Good question.

我們與直接給予新生牛犢的幼稚免疫系統的疫苗進行極其有效的競爭，我想說的是，對該疫苗的反應能力有限。因此，銷售團隊的工作非常出色，其產品以其功效而聞名，並為客戶提供了這種價值，以保持新生兒的健康。但謝謝，喬。好問題。

Leveraging off of that, how do you see the backlog working out here over the next three to four quarters?

以此為基礎，您如何看待未來三到四個季度的積壓工作？

Well, I would say this, Joe, if the customer demand weren't so strong, it would have worked itself down quite a bit more by now. So I always say backlog is a problem, but it's a good problem, especially compared to the alternative of having product on the shelf with expiry dating issues.

好吧，我想說的是，喬，如果客戶需求不是那麼強烈，那麼現在它的表現就會下降很多。所以我總是說積壓是一個問題，但這是一個好問題，特別是與將產品放在貨架上但有過期日期問題的替代方案相比。

But -- so the more direct answer to your question is we will just have to see because it obviously depends on the volume of incoming orders. But with this new production level that we -- the output level we've reached, we're making progress on that every day. And it's a matter of months, certainly not a year. But we're getting into peak season here. So it's a little extra challenge to clear the backlog right now because this first quarter here, December-ish into March, April is the highest demand for us. So we'll just keep working at it, and you'll see quarterly how we work that down to 0.

但是 - 所以對你的問題更直接的答案是我們只需要看看，因為這顯然取決於收到的訂單量。但隨著我們達到的新生產水平——我們已經達到的產量水平，我們每天都在取得進展。這只是幾個月的事，當然不是一年的事。但我們這裡正進入旺季。因此，現在清理積壓訂單是一個額外的挑戰，因為第一季度，從 12 月到 3 月、4 月是我們的最高需求。因此，我們將繼續努力，每個季度您都會看到我們如何將其降至 0。

All right. Thank you. I will get out of the queue. Wyatt?

好的。謝謝。我會退出隊列。懷亞特？

George Melas, MKH Management.

喬治·梅拉斯，MKH 管理公司。

Thank you. Good morning Joe and Mike. My question about the gross margin, and I appreciate all the detail you put in the Q to try to help us understand it. If I go back to certainly May '21, early '22, when you had similar revenue levels, there was two quarters, December '21, March '22, revenue was $5.4 million and $6.0 million, which is exactly what you had in the last few quarters.

謝謝。早上好，喬和麥克。我關於毛利率的問題，我感謝您在問題中提供的所有詳細信息，以幫助我們理解它。如果我回到21 年5 月、22 年初，當你們有類似的收入水準時，有兩個季度，即21 年12 月和22 年3 月，收入分別為540 萬美元和600 萬美元，這正是你們在過去幾個季度。

The cost of goods sold was significantly lower. I think probably it was $2.9 million, and now it's on average, the last few quarters, $4.3 million. So the delta is like $1.4 million of added costs. And I think we talked a little bit about inflation. We talked about yield issues. But is there a way you can help us understand a little bit better the increasing the cost of goods sold?

銷售商品的成本顯著降低。我認為可能是 290 萬美元，現在過去幾季的平均是 430 萬美元。因此，增量相當於 140 萬美元的額外成本。我想我們討論了一些關於通貨膨脹的問題。我們討論了產量問題。但有什麼方法可以幫助我們更理解銷售商品成本的增加嗎？

And do you have more batches going through the process with lower yields? But I guess on the cost of goods sold, you probably can have pretty good granularity about every aspect of that cost. So maybe help us understand that, if you could.

您是否有更多批次的產品正在進行，但產量卻較低？但我想，就銷售商品的成本而言，您可能可以對該成本的各個方面有相當好的粒度。如果可以的話，也許可以幫助我們理解這一點。

Yes. Certainly, an important question, George. I think you almost asked it and in part at least answered it, but I'll repeat. And thank you, I do use the Q to try and get into some of this detail because I think -- I know it's important. I know you and others are curious. I know we are curious and concerned. It's critical. We spent the better part of basically '23 so laser-focused on contamination. That was just such a critical event. It'd be nice to report to you, oh, we fixed the contamination, and we're right back to our old gross margin. Well, I can't.

是的。當然，這是一個重要的問題，喬治。我想你幾乎問了這個問題，並且至少部分回答了它，但我會重複一遍。謝謝，我確實使用 Q 來嘗試了解一些細節，因為我認為 - 我知道這很重要。我知道你和其他人都很好奇。我知道我們很好奇，也很擔心。這很關鍵。23 年的大部分時間我們都專注於污染問題。這就是一個非常關鍵的事件。很高興向您報告，哦，我們解決了污染問題，我們很快就回到了原來的毛利率。好吧，我不能。

But I do think you talked on the -- touched on the key factors or variables. Yeah, I think if I remember, you were comparing sort of '23, '24 to '21, '22, yes, that is -- those are two different periods for a lot of reasons. But again, the first one in contamination, those costs are just written off as we go. When we were losing those batches, that was -- there was, I guess, expensive write-offs of scrapped inventory that certainly weren't in our gross margin budget.

但我確實認為您談到了關鍵因素或變數。是的，我想如果我記得的話，你是在比較“23”、“24”和“21”、“22”，是的，那就是——出於很多原因，這是兩個不同的時期。但同樣，在污染的第一個方面，這些成本在我們進行過程中就被註銷了。當我們失去這些批次時，我猜，對報廢庫存進行了昂貴的沖銷，而這肯定不在我們的毛利率預算中。

But you also touched on yield, and I think that's right. Coming out of this period of contamination, it would be nice if we could just say we jumped right into the higher output level and have the same yields, but we don't. So there's a lot of work we're doing on yield. It's a very tricky biological process. Little things make a big difference.

但你也談到了產量，我認為這是對的。走出這段污染時期，如果我們可以說我們直接進入了更高的產出水平並具有相同的產量，那就太好了，但我們沒有。因此，我們在產量方面做了很多工作。這是一個非常棘手的生物過程。小事情會帶來很大的不同。

I feel like we are addressing a lot of factors that are going to positively impact the yield going forward. But that's the key -- I think that's the number 1 key goal or initiative going forward is -- you said yes, you're right, more and more cheese batches. That's probably a good metric for measuring our production. More and more cheese batches at less and less yield is not going to work, but we're working on that.

我覺得我們正在解決許多將對未來產量產生正面影響的因素。但這是關鍵——我認為這是未來的首要目標或舉措——你說是的，你是對的，越來越多的起司批次。這可能是衡量我們產量的一個很好的指標。越來越多的起司批次和越來越少的產量是行不通的，但我們正在努力解決這個問題。

So I think -- I don't know, I wouldn't rank them. I would just say contamination is a huge factor, yield's a huge factor. And I think I would throw out a third that I think is very relevant, and I do that, this disclosure, into this Q, and I believe the prior Q as well.

所以我想——我不知道，我不會對它們進行排名。我只想說污染是重要因素，產量也是重要因素。我想我會拋出第三個我認為非常相關的問題，我這樣做，這個披露，進入這個問題，我也相信之前的問題。

Product line format mix, when I bragged there a bit about efficacy and growth and customer demand and customer support for the product, our original bivalent format in a bolus is still in the market, and some customers love it. But a lot of our growth is coming from the trivalent, the newer format, the Tri-Shield. And that product simply is more expensive to make.

產品線格式組合，當我在那裡吹噓一些關於產品的功效和增長以及客戶需求和客戶支援時，我們最初的二價丸劑格式仍然在市場上，並且一些客戶喜歡它。但我們的成長很大一部分來自三價、更新的格式，即 Tri-Shield。而且該產品的製造成本更高。

You go -- we go back to cheese batches. It essentially takes one cheese batch to make a bivalent bolus capsule product. It takes two cheese batches for every dose of Tri-Shield to get that third antibody into the tube. So I'm kind of go on top of mind here after spending a lot of time with this issue every day and certainly in preparing the Q, but contamination, yield and product mix are the challenges we need to fix to get that gross margin back to that 35% to that 40% level?

你走——我們回到奶酪批次。製造二價丸劑膠囊產品基本上需要一批起司。每劑 Tri-Shield 需要兩批乳酪才能將第三種抗體放入試管中。因此，在每天花費大量時間處理這個問題以及準備問題之後，我在這裡首先考慮的是污染、產量和產品組合是我們需要解決的挑戰，以恢復毛利率到 35% 到 40% 的水平？

So that means that potentially if you compare to a period of time roughly two years ago or two, three years ago, when you had similar revenue levels, now you have more batches. So that is one of the factors in the high cost?

因此，這意味著，如果你與大約兩年前或兩三年前的一段時間進行比較，當時你有類似的收入水平，那麼現在你有更多的批次。那麼這也是成本高的因素之一嗎？

Yeah, more batches, but also -- more batches total to increase the output, but more batches per dose to get the Tri-Shield, 2:1. So that's definitely a factor. Yeah, I think -- I mean we even had some 50% margin back in the days when we had a bolus or capsule business of about $10 million in sales. That's -- it's the same company, but it's a different business when we started doubling that over to $20 million-plus adding in the Tri-Shield.

是的，更多批次，而且 - 總共更多批次以增加產量，但每劑量更多批次以獲得 Tri-Shield，2:1。所以這絕對是一個因素。是的，我想——我的意思是，當我們的丸劑或膠囊業務銷售額約為 1000 萬美元時，我們的利潤率甚至達到了 50% 左右。那就是——雖然是同一家公司，但當我們開始將 Tri-Shield 的投入增加一倍，達到 2000 萬美元以上時，這是一項不同的業務。

It's a very different look. It's a very different look for the staff, for the equipment, for the facilities. And we've got to work it in -- as I said in the Q, I don't expect to get back to 50%. It's a different business. But we're growing the sales and growing the gross margin dollar even at that lower 35%, 40% level target?

這是一個非常不同的外觀。對於員工、設備和設施來說，這是一個非常不同的面貌。我們必須努力解決這個問題——正如我在問題中所說，我預計不會回到 50%。這是一個不同的行業。但即使在 35%、40% 的較低水準目標下，我們的銷售額和毛利率也在成長？

Yeah. Quick question on the P&L. Some of the costs were down, especially product development, but you explained that sales and marketing was down a little bit as well. Is there a way to explain that?

是的。關於損益表的快速問題。一些成本下降了，特別是產品開發，但你解釋說銷售和行銷也下降了一點。有沒有辦法解釋一下？

It's a big ask. We're asking the sales team to do two things: grow sales and save money. So it's a balance. But the team is consistent as far as head count, so no increase, no decrease. We've managed programs that we'd like to spend and fund the ones we have to spend. Because when you're in that cash crunch, when you're in that contamination period, we look at all levers to reduce cost. So yes, it's that simple.

這是一個很大的問題。我們要求銷售團隊做兩件事：增加銷售和節省金錢。所以這是一個平衡。但團隊的人數是一致的，所以沒有增加，也沒有減少。我們管理了我們想要支出的項目，並為我們必須支出的項目提供了資金。因為當您處於現金緊縮時期，當您處於污染期時，我們會考慮所有手段來降低成本。是的，就是這麼簡單。

We -- there are some selling expenses that our VP of Sales, Bobbi Brockmann, has done a great job of managing and controlling and reducing, at the same time, not cutting anything critical to fuel that growth. So good expense management by the sales team. And yeah, the product development is kind of very different now. All the inventory we want -- need for this control launch has been produced.

我們的銷售副總裁鮑比·布羅克曼（Bobbi Brockmann）在管理、控制和減少一些銷售費用方面做得很好，同時，沒有削減任何對推動成長至關重要的東西。銷售團隊的費用管理非常好。是的，現在的產品開發已經非常不同了。我們想要的所有庫存——這次控制發射所需的庫存都已經生產出來了。

We simply don't need to produce more inventory so we can reduce costs, but we can't have chosen not to eliminate those costs because we want to stand ready for an FDA inspection in a plant that we call aggressive idle. So it's ready to be brought back into service. It's not mothballed, but it's not actively producing inventory, and that is simply to save some money.

我們根本不需要生產更多庫存，這樣我們就可以降低成本，但我們不能選擇不消除這些成本，因為我們希望為我們稱之為積極閒置的工廠做好準備接受 FDA 檢查。因此它已準備好重新投入使用。它沒有封存，但也沒有積極生產庫存，這只是為了節省一些錢。

Okay. Great. And then a question -- you also discussed, and I appreciate that very much, the increase in the debt. But then you have section where you talk about a possibility of having a spray product that would actually reduce -- that I think that it's lower cost, it's slightly different product, and it would be a way to absorb the WIP. Can you talk about that just a little bit more?

好的。偉大的。然後是一個問題——你也討論了債務的增加，我對此非常讚賞。但是，你有一節討論了一種噴霧產品的可能性，這種產品實際上會減少——我認為它的成本更低，它是稍微不同的產品，而且這將是吸收WIP 的一種方式。能再多談一下嗎？

Yeah. It's a really interesting upside for us. We haven't realized it yet. It's in development. We have processed some material. We like the look of it, the initial batches. And going into '25, we're going to get that to market and see if that is a less expensive but different format way to use up some of that WIP that you're talking about.

是的。這對我們來說是一個非常有趣的優勢。我們還沒有意識到這一點。它正在開發中。我們已經處理了一些材料。我們喜歡它的外觀，第一批。進入 25 年，我們將把它推向市場，看看這是否是一種更便宜但不同格式的方式來使用你所說的一些 WIP。

I mean the inventory of hyper-immunized raw colostrum, frozen raw colostrum. So it simply is different. We spend a lot of time, and thereby money, to get a lot of antibodies into a capsule or two. This is a pretty different approach with the same overall objective of our antibodies are very effective at preventing newborn calf disease. So rather than focus on concentration, this is going to be more of a bulk product.

我指的是超免疫生初乳、冷凍生初乳的庫存。所以它只是不同的。我們花了大量的時間和金錢，將大量的抗體裝入一兩個膠囊中。這是一種完全不同的方法，但總體目標相同，我們的抗體在預防新生犢牛疾病方面非常有效。因此，這將不再是專注於集中度，而是更多地是一種散裝產品。

It would be more for a different customer, a large calf ranch, say, that's mixing bags of feed rather than a capsule of First Defense or two of First Defense. So I'm kind of excited about it, but it's unproven. But we're trying to be creative and just find new customers and new sources of revenue.

對於不同的客戶（例如大型犢牛牧場）來說，這更適合混合袋裝飼料，而不是一粒或兩粒 First Defense 膠囊。所以我對此感到有點興奮，但這尚未得到證實。但我們正在努力發揮創造力，尋找新客戶和新收入來源。

I see. So it's a spray that you spray on the feed rather than give it separately to --

我懂了。因此，這是一種噴灑在飼料上的噴霧劑，而不是單獨給予--

Well, no, George, the spray refers to the production process. So you got your liquid colostrum. You either run it through the cheese and all the filtration process for the concentrate, those antibodies, to a small dose, and then we lyophilize it. That's freeze-drying it. This new -- potentially new format would be skipping all those process steps, taking the raw colostrum and spray-drying it. And so it's a powder that will be added to a batch of milk to be fed to calves.

嗯，不，喬治，噴霧指的是生產過程。這樣您就得到了液體初乳。您可以將其通過乳酪和所有濃縮物的過濾過程，這些抗體，以小劑量，然後我們將其冷凍乾燥。這就是冷凍乾燥。這種新的—潛在的新格式將跳過所有這些過程步驟，採用原始初乳並將其噴霧乾燥。因此，它是一種粉末，將添加到一批牛奶中餵給小牛。

So the spray refers to the -- one of the key production steps. The application would look like a capsule, only it takes a lot more capsules because we haven't concentrated down to that 4 gram level for the current First Defense capsule. It'd be the -- a bulk feed powder.

因此，噴塗是指關鍵的生產步驟之一。該應用程式看起來像一個膠囊，只是它需要更多的膠囊，因為我們還沒有將目前的 First Defense 膠囊集中到 4 克的水平。它是一種散裝飼料粉。

Got it. Okay. Interesting. And then on Re-Tain, any possible update on your contract manufacturer and then getting through that inspection process?

知道了。好的。有趣的。然後在 Re-Tain 上，您的合約製造商有任何可能的更新，然後完成檢查過程嗎？

Yeah. The best update is that I don't have an update. And what I mean by that is it hasn't been delayed and it hasn't been accelerated. We are confident that they are working very diligently towards resolving these answers and we'll have their -- they've made progress submissions along the way. But the final-final is still on schedule for December, and that's been consistent that -- as I said, hasn't moved forward, hasn't pushed back.

是的。最好的更新是我沒有更新。我的意思是它沒有被推遲，也沒有被加速。我們相信，他們正在非常努力地解決這些答案，我們將得到他們的答案——他們一路上提交了進度報告。但最後的決賽仍按計劃在 12 月舉行，而且一直如此——正如我所說，沒有向前推進，也沒有推遲。

The issue is what does the FDA do with that submission. Because as soon as that submission is cleared, we can get through what I said was the non-complex response on our side on the -- what's called the CMC or the manufacturing Technical Section.

問題是 FDA 對這份提交的文件做了什麼。因為一旦提交得到批准，我們就可以得到我所說的我們這邊的不複雜的回應——所謂的 CMC 或製造技術部分。

Hey George, hope you got some sleep last night. Sounds like you're reading the Q a little bit. Thank you for your good questions.

嘿喬治，希望你昨晚睡個好覺。聽起來你正在讀一點 Q。謝謝你提出的好問題。

You're welcome.

不客氣。

(Operator Instructions)

（操作員說明）

[Jane Lindemann, a private investor].

[Jane Lindemann，私人投資者]。

Michael, it's Bruce. Congratulations on getting all that stuff behind you.

麥可，是布魯斯。恭喜你把所有這些東西都拋在了身後。

A little bit of progress. Thank you.

一點點進步。謝謝。

We're just curious, about how many shares were sold? And are you going to continue -- do you need to continue the ATM --?

我們只是好奇，賣了多少股票？您要繼續嗎？

Yeah, that's fair. So George, for the specific or the detail, I would refer you over to the Q. I've got a subsequent event note in there, and I've got a detailed description of the specific shares and -- shares issued. But at a high level -- shoot, I wish I had my notes right in front of me.

是的，這很公平。因此，喬治，對於具體或細節，我建議您參閱問題。但從高層次來看，我希望我的筆記就在我面前。

I'm just looking for an approximate number.

我只是在尋找一個大概的數字。

Yes. I think we went from like -- it was like 1.1 million. We went from 7.7 million to 8.8 million shares outstanding?

是的。我想我們從大約 110 萬開始。我們的流通股從 770 萬股增加到 880 萬股？

Okay. Is that, do you think you'll you finish for now?

好的。是嗎，你覺得你現在可以完成嗎？

With this ATM, what we do is -- and this is across the board with all public company ATMs is the specific disclosure is historical and quarterly as to what happened, and we leave a little flexibility into what will happen as far as Board discretion. But at the cash levels that I mentioned to you, take me off the sort of the super-hyper-concern level to, Yes, we can work with this.

對於這台ATM，我們所做的是——對於所有上市公司的ATM 來說，具體的披露是歷史性的和季度性的，對於所發生的事情，我們對將要發生的事情留有一點靈活性，由董事會自行決定。但在我向你提到的現金水平上，讓我擺脫那種超級擔心的水平，是的，我們可以解決這個問題。

And then -- because the answer really -- the future really depends on what do our capital needs, what do we need to spend money on and also as far as price. So at a higher price, you could raise some money and do some big things at a lower dilution. So I'm a little vague on the future, but the Q is very specific on the year-to-date.

然後 - 因為答案確實 - 未來實際上取決於我們的資本需要什麼，我們需要在什麼上花錢以及價格。因此，以更高的價格，你可以籌集一些資金，並以較低的稀釋度做一些大事。所以我對未來有點模糊，但問題對今年迄今為止的情況非常具體。

Okay. No, I was just curious because it seemed like you got the cash balance to a decent level so that it's different to sell stock at 3.5 or 4 as opposed to higher levels.

好的。不，我只是很好奇，因為你的現金餘額似乎達到了一個不錯的水平，因此以 3.5 或 4 的價格出售股票與以更高的價格出售股票是不同的。

Exactly. That's true. And you can see that just if you compare the nine-month numbers to the subsequent event, it very significantly sort of lowered the big volume, was back in the third quarter.

確切地。這是真的。您可以看到，如果您將九個月的數字與隨後的事件進行比較，就會非常顯著地降低第三季的成交量。

All right. Well, good luck. We're looking forward to the launch.

好的。好吧，祝你好運。我們期待著它的推出。

Great. Appreciate you, Bruce and Jane, for your patient following.

偉大的。布魯斯和簡，感謝你們耐心的關注。

Long over 20 years since [Pfizer]?

距今已有20多年[輝瑞]？

Is it 20? Amazing? Time flies? Wow. Thanks for reminding me of that. Holy cow.

是20嗎？驚人的？時間過得真快？哇。謝謝你提醒我這一點。聖牛。

Okay, thank you.

好的，謝謝。

Well, thank you, Bruce. Bye.

好吧，謝謝你，布魯斯。再見。

This concludes our question-and-answer session. I would like to turn the conference back over to Joe Diaz for any closing remarks.

我們的問答環節到此結束。我想將會議轉回給喬·迪亞茲（Joe Diaz）發表閉幕詞。

Thank you, Wyatt, and thanks to all of you participating in today's call. We look forward to talking with you again to review the results for the year ending December 31, 2024, during the week of February 24, 2025. Thank you and have a great day.

謝謝懷亞特，也謝謝參加今天電話會議的所有人。我們期待在 2025 年 2 月 24 日當週再次與您交談，審查截至 2024 年 12 月 31 日的年度結果。謝謝您，祝您有美好的一天。

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

會議現已結束。感謝您參加今天的演講。您現在可以斷開連線。