Good morning and welcome to the MUCell Corporation conference call to discuss unaudited second quarter 2026 financial results. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing star then zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then 1 on your telephone keypad. To withdraw your question, please press star then 2. Please note this event is being recorded. I would now like to turn the conference over to Joe Diaz of Lithium Partners. Please go ahead.

Thank you. Good morning and welcome. As the conference call operator indicated, my name is Joe Diaz of Lithium Partners. We are the investor relations consulting firm for EmuCell. I thank all of you for joining us today to discuss the unaudited earnings for the second quarter and six months ended June 30, 2026. Listeners are reminded and cautioned that statements made by management during the course of this call include forward-looking statements, which include any statement that refers to future events or expected future results, or predictions about steps the company plans to take in the future. These statements are not guarantees of performance and are subject to risks and uncertainty that could cause actual results, outcomes or events to differ materially from those discussed today. 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 that the company filed last night, along with the company's other periodic filing with the SEC. Information discussed on today's call speaks only as of today, Friday, August 14, 2026. The company undertakes no obligation to update any information discussed on today's call. Please note that references to certain non-gas financial measures may be made during today's call. With that said, let me turn the call over to Oliver Te Boekhorst, President and CEO of EVCell Corporation for some opening remarks. Oliver.

Oliver Te Boekhorst Thanks, Joe, and good morning, everyone. It's my pleasure to welcome you to today's discussion of Immucel's results for the second quarter of 2026. Our discussion of results will be accompanied by a few slides that are also part of our updated investor presentation that you can find on our investor page, immucel.com slash investors. In late 2025, Immucel made significant changes to better position ourselves for success, including a strategic focus on the calf scours market, and investments in leadership, sales force expansion and manufacturing. Our rationale for this shift was that we compete very effectively with First Defense, our highly differentiated CAHPS-COWRS preventative product in the large growing CAHPS health market and that we believe our portfolio has considerable runway for further expansion domestically, internationally and through selected innovations. Since we introduced this focus on first defense and enhanced our yield improvement efforts, we have accelerated our growth and increased our share. Our strong commercial results reflect the benefits of restored product availability, investments in our commercial team and product portfolio, and a favorable domestic calf market. As previously discussed, we have been highly focused on ensuring reliable product supply. The team has made a lot of changes across the supply chain and we are on track to produce nearly 1 million more manufacturing units this year than we did in 2025. We are now well positioned to meet growing customer demand with our current plant while we execute a major capacity expansion program that is expected to more than triple our current capacity and improve long-term product costs. On today's call, we will discuss the factors affecting gross margin, the actions underway to improve yields, and our planned capacity investments. For a company our size, it continues to make a lot of sense to focus on our successful on-market products and solve the supply challenges that have historically constrained our growth, and we're excited to report on our progress today. I will now turn the call over to Timothy Fiori, our Chief Financial Officer, for a deeper review of our second quarter financial results. Tim?

Thank you, Oliver. I'll start with a short recap of product sales results, which are unchanged from our July 9th press release. All the numbers I'll speak to are approximate and rounded. Product sales for the second quarter of 2026 came in at $7.2 million, an increase of 11.5% compared to the second quarter of 2025. Our growth in the second quarter is particularly significant given the challenging comparison with the second quarter of 2025, when we resolved a backorder situation and benefited from significant restocking orders by distributors. Domestic sales for the second quarter grew 27.7% compared to the second quarter of 2025 to $6.2 million, while international sales for the second quarter declined 38.9% to about $1 million in the same period. Sales to Canada accounted for the majority of the decline, which is related to the 2025 backorder clearing. Product sales for the six-month period ended June 30, 2026 came in at $17.5 million, an increase of 20.9% compared to the six-month period ended June 30, 2025. Oliver will speak to sales out of distribution, which are both strong and trending in the right direction. Gross margin as a percentage of product sales was 33.9% in the second quarter of 2026 compared to 43.7% in the second quarter of 2025. This year-over-year decline in the second quarter primarily reflected the shift of costs formally associated with retain into cost of goods sold and lower output in one of our manufacturing sub-processes. Sequentially, gross margin declined 11.1 percentage points from the first quarter, reflecting 7.5 points from lower manufacturing output, 2.1 points from approximately $150,000 of scrap caused by a purchased material, and 1.9 points from the retain cost shift. The lower second quarter output reflected anticipated sales volumes and planned process changes intended to improve future yields. Despite these pressures, we were able to meet demand and expand finished goods inventory. Reported operating expenses were reduced by the previously announced $2 million settlement with our former retained contract manufacturer, which is presented on the income statement as other operating income. Sales, marketing, and administrative expenses increased to $2.4 million in the second quarter of 2026 compared to $1.4 million during the second quarter of 2025. This was driven by investments in leadership and expanded commercial activities, both as previously announced. Product development expenses declined from approximately $800,000 in the second quarter of 2025 to approximately $120,000 in the second quarter of 2026, driven by reductions in spending on retained product development and the previously mentioned shift of former retained-related expenses to cost of goods sold. Excluding the settlement, operating expenses were $5.2 million in the six months ended June 30, 2026, compared with $4.5 million in the six months ended June 30, 2025. To wrap up our income statement discussion, our net income was 1.8 million or 20 cents per share during the second quarter of 2026 compared to $500,000 or six cents per share during the second quarter of 2025. For the first six months of 2026, net income was 3.8 million compared to $1.9 million during the same period last year. Both the second quarter and six-month 2026 results include the $2 million settlement Thank you for joining us. For the first six months of 2026, adjusted EBITDA was $5.4 million compared with $3.7 million during the same period last year. Both 2026 figures include the aforementioned $2 million legal settlement. To wrap up with financials, let me highlight a few key balance sheet items. Our balance sheet as of June 30, 2026 continues to be in a strong position. John Zinckgraf, Bobbi Jo Brockmann, Paul Olivier Te Boekhorst AMCEL recently announced a $3.5 million investment in freeze-drying capacity to build scalable manufacturing capabilities and ensure continued reliable supply of first offense. We expect to complete this initial phase of the expansion in the first half of 2027. Today, we are announcing our intent to invest approximately $4.5 million in our liquids processing capacity. This phase is expected to be completed by the end of 2027. Both of these investments leverage existing equipment and facilities that have been built for the discontinued retained product. We expect this capacity expansion will more than triple our current capacity and improve product costs long term. Currently, we intend to finance the majority of this expansion with cash on hand and cash from operations. We may supplement this investment with our line of credit facility as needed. With that, I will turn the call back to Oliver. Oliver?

Thanks, Tim. As I mentioned in my initial remarks, ImmuCell made the decision to focus on our scar-preventative products, First Defense, in late 2025. In the first half of this year, we achieved $17.5 million in product revenue, a 20.9% increase compared to the first half of 2025. TriShield, which is our flagship product that offers the most advanced protection against neonatal diarrhea, had strong 25.1% growth for the first half of the year, and as Tim explained, The U.S. performed particularly well with 32.5% growth in the first half of 2026 compared to 2025. We're also excited to report that our functional feed line contributed about 20% of that growth. Some of the other metrics we review to measure commercial performance include volume growth at the distributor level and our market share. We access data that shows how much our distributor's out-the-door revenue and volumes from our products This gives us a good idea of what our products are doing at a producer level. Our distributors saw 21% and 28% volume growth in the first and second quarter of 2026, respectively, compared to the same quarters last year, or 24% for the first half of 2026 compared to the first half of 2025. We increased our market share as well, defined as First Defense's share of animals treated with a biological scourge preventative in the U.S., and we increased that market share from approximately 15% in December 2025 to approximately 19% at the end of June 2026. Our price point is approximately twice that of our competitors and that means our share of spending by producers rose from approximately 29% to 38% in the same period. We're very proud of our product efficacy but this market share gain is also the direct result of investments we made to expand our commercial team. Thank you for joining us today. Scours remains a leading cause of death in pre-weaning calves and results in up to $1 billion of annual economic losses in the U.S. More than half of calves still do not receive any biological scars preventative. So we have to show up, ask the right questions, and present the health and economic benefits of our solutions in ways that are appropriate for each specific production environment. Historically, ImmuCell's growth has been constrained by manufacturing capacity, so ensuring reliable supply remains a strategic priority. From January through July, our team completed an extensive planning process encompassing process design, equipment and facility requirements, cost estimates, and implementation planning. That work supports our decision to move forward with an approximately $8 million investment in freeze-drying and colostrum processing capacity using the facilities and equipment associated with the former retain program. The resulting plan combines new equipment with our established expertise in preserving, concentrating, and purifying colostrum-derived antibodies. This is not just adding another production line. The project is designed to modernize our manufacturing approach, shorten processing times, expand capacity, and improve long-term product economics. The new processes are expected to reduce total processing time from two to three months today to less than one month in the future and more than triple our current capacity. We've signed contracts with equipment suppliers and expect to begin engineering and construction activities shortly. Currently, as Tim mentioned, we intend to finance the majority of the expansion with cash on hand with the two million settlement contributing nicely to our available cash. In the meantime, Improving yields from our existing plant remains a primary focus. In the first quarter, we achieved record production of more than 450,000 units per month, and in the second quarter, our output averaged approximately 350,000 units per month, with most of that reduction occurring in the month of June. Part of the lower output was planned. The second quarter is seasonally our lowest revenue quarter, and our improved planning showed that we could meet demand without running production too far ahead. We also made planned process changes and paused certain activities for quality investments and maintenance work intended to improve future yields. As Tim explained, lower manufacturing output reduced gross margin by approximately seven percentage points compared to the first quarter. Importantly, we still met customer demand and increased finished goods inventory during the quarter. As Tim also noted, we incurred approximately $150,000 of scrap related to a relatively minor purchased material. Our quality controls identified the issue early, stopped the manufacturing process, and limited the impact. So we remain focused on improving yields, strengthening our process discipline, and reliably supporting continued demand growth. I mentioned in our last call that yield improvement is challenging and comes from doing a lot of different things really well every single day, and I cannot thank the team enough for their efforts. There is still a lot of work to do to stay ahead of demand for the remainder of 2026. We have to stay focused on managing contamination risk, we have to keep providing great service to our colostrum suppliers, and we have to manage yield improvement while we execute major capacity expansion in our colostrum plant. The process we are making on yields, together with our two-phase expansion program, gives us greater confidence in our ability to meet customer demand and establish a sustainable, scalable, and reliable supply. Tactically, with greater confidence in our ability to meet customer demand, we are now prioritizing product cost improvements and strengthening Colostrum's sourcing capabilities to support scalable growth. Competition for high-quality Colostrum is increasing, and we are responding with new payment programs, enhanced technical services, and expanded farm recruitment efforts. Colostrum represents approximately half of our product costs, so growing our collections and improving the yields we generate from Colostrum are very important drivers of our business. We have discussed in previous calls that we believe strongly in international opportunity for our products. Our newly hired international business development executive is helping us transition from a reactive approach to a more proactive and strategic approach. We're actively assessing market opportunities and weighing them against regulatory and go-to-market investments. The results from our international strategy will take some time to come to fruition. In the meantime, our three new salespeople in the U.S. are getting up to speed and delivering results ahead of plan, as Tim discussed earlier on this call. Finally, I will repeat what I have communicated on each call. Our top priority at EmuCell is solid execution across the organization, from sales to farm management to vaccine manufacturing and colostrum processing, including all the support functions that make future profitable growth possible. It is a pleasure to work with the team as we execute our focus strategy to deliver the day while we secure the future. And with that said, we will be happy to take your questions, so let's have the operator open up the lines.

Thank you. We will now begin the question and answer session. To ask a question, you may press star then 1 on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed, and you would like to withdraw your question, please press star then two. At this time we will pause momentarily to assemble our roster.

Once again it is star then one to ask a question. and we have a question from Tom Fox, a private investor.

Please go ahead. Good morning. Thank you for taking my question. I did get a chance to read the Form 10-Q. I do see on there that you guys are continuing investigation studies into retain. Could you provide any more update on that? Has Michigan State maybe talked to you guys about potential timelines as to when that would be done? Any further insight into how that's all going would be helpful. Thank you.

Thank you for your question. Yes, we have asked Michigan State to work with us to investigate, if you will, an additional use case for the Retain product. And that study is ongoing. Discussions about the interim results are ongoing and it will not be completed until I would say end of September, maybe even beginning of October. And so at that point when we have the full results, we will be sharing those with the investors.

Okay, that all sounds good.

Thank you.

Once again, if you have a question, please press star then one.

The next question comes from Frank Gasker, a private investor. Please go ahead.

Yes, thanks for taking my call. Great to see the improvements in revenue and your focus on margins. You actually went in enough detail to satisfy my question on the margins. In your 10Q, I saw that the two primary customers' percent went down, and I'm seeing that as evidence of the results in your increased salespeople. Could you elaborate on that? Is that a fair enough assumption?

That's a great question. Let me just... Start off by describing our commercial structure. We essentially sell everything through distribution. Then we have a commercial team that is focused on winning new customers who then will order their products through our distribution partners. As we are expanding into new segments or new geographic areas, There could be momentary shifts from which distributors are the ones that are providing support to those customers, but it's more a question of a little bit of timing and just where those new customers happen to be located and which distributors those new customers prefer to use than a purposeful change on our end. I hope that makes sense.

Thank you very much.

and the only thing I would add is that we've seen quite attractive customer acquisition results this quarter and we put that in our investor deck on the website so you can see the data but it's been a very good couple of quarters actually of winning new customers.

Okay, thank you very much.

Thank you.

Once again, if you have a question, please press star then 1.

Gentlemen, while we wait for additional questions, I've got a couple of questions here that I think you might want to respond to. Oliver, can you describe your current distribution ordering dynamics? Is everything essentially set the way you want to see it? Any particular issues out there? Can you comment on that?

Yeah, thanks, Joe. I'll actually take that one. So we've talked a lot over the past year about distributor ordering dynamics and also backlog fulfillment ordering dynamics where we would have compares that had fulfillment in them in the prior year. And I do, you know, we have consistently said we expected to lap that at the end of this quarter, this past quarter, at the end of Q2 2026, and our view is still that that is what has happened. So Thank you. The next question comes from John Rudnick with a private investor. Please go ahead.

I'm not sure. Has RETAIN been discussed? I was interested if you've collected the data and set up a package for possible licensing.

Thank you for your question. So we are in fact awaiting the results of the investigational study by Michigan State, which we expect to be completed September, October timeframe before we make any further decisions on our retained product.

Okay. Thank you.

Thank you.

The next question comes from George Melas with MKH Management. Please go ahead.

Great. Thanks for taking my question, and thanks for the explanation on the gross margin and also on the expansion. Can you give us a little bit more information on the seasonality of the business between dairy and beef? And I was looking at sales through distribution, and it seems like when you sell in the beef season, those two distributors seem to be a smaller share of of the sales. So is there a different channel partly on the beef side?

Thank you. That's a great question. So my summary response would be that, yes, there are different distributors that have strengths in dairy versus beef, although many are, as you can imagine, more geographically focused in their strengths, but different distributors Thank you very much. that really works on new customer acquisition, which can be a fairly lengthy sales cycle for products like functional feed, somewhat shorter for other products. And then we add to our commercial team based on where we see the greatest opportunity for short-term sales gain. So that has been our approach. We aren't actively managing the volume that goes through one distributor versus another. focus solely on winning new customers. So the result then of the concentration of those two big distributors within our overall revenue are really just kind of the results of the ordering pattern at a producer level more than anything else. To your seasonality question, there is seasonality. Dairy industry tends to use our product all year long at similar levels. whereas beef industry has more of a calving season where a lot of calves are born in the same period of time which is why we have peak seasons and Q4 and Q1 of the year.

Okay, understood.

And then just a follow-up question on, I think you gave us some numbers on sell-through, on sell-through growth. which was up 24% over the year in the first half. Is that from the two large distributors or is that for the entire, for all your distribution? And is that something you've been able to track for a long time or is that some new data that you have?

So the 24% growth is volume growth out the door by all our distributors. So it covers the entire market, and these are national data that we purchase and have access to, and that we've had access to certainly for, I don't know how long, I've only been here since November, but certainly for years we've had access to this data to show us kind of what's going on at the producer level, which is ultimately how we measure our success.

Great, thank you very much.

Thank you.

And next, we have a follow-up from Frank Gasker, private investor. Please go ahead.

Yes, thank you again. On your margin, your explanation for the decrease, the retained shift aspect, that's recurring and continuous. Is that fair?

Yeah, that's fair. Keep in mind that when I talked about it earlier, one time was sequential. So what happened is in Q2, even if it's the same dollars of shift, it's against a smaller amount of revenue, so you get a larger percentage impact. But also the dollars were slightly higher in Q2 than Q1. And there's slight variability. It's the same recurring costs associated with the building, essentially.

But those can vary a bit. I mean, is this the extent of that category or understanding it has a continuous impact and the dollar amount, is that pretty much established and fixed? Understanding the percent will change with volume.

Yeah, the dollar, so really I can be completely transparent about this. This is... Thank you. Thank you.

Thank you. This concludes our question and answer session. I would like to turn the conference back over to Oliver Te Boekhorst for any closing remarks.

Thank you for your questions. Before I turn it over to Joe, I would just like to thank the EmuCell team once again for their hard work and for delivering another quarter of strong commercial growth. Joe?

Thank you, Oliver. We thank all of you on the call today for participating. We look forward to talking with you again to review the results for the quarter ending September 30, 2026 during the week of November 9, 2026. Have a great day.

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