IMMUCELL CORP /DE/ Debt Disclosure

9. BANK DEBT

 

Loans #1 and #2: During the first quarter of 2020, we closed on a debt financing with Maine Community Bank (formerly known as Gorham Savings Bank) (MCB) aggregating $8,600,000, which was comprised of a $5,100,000 mortgage note (Loan #1) that bears interest at a fixed rate of 3.50% per annum (with a 10-year term and 25-year amortization schedule and a balloon principal payment of $3,145,888 due during the first quarter of 2030) and a $3,500,000 note (Loan #2) that bears interest at a fixed rate of 3.50% per annum (with a 7- year term and amortization schedule). The proceeds from the 2020 debt refinancing were used to repay all bank debt outstanding at the time of closing and to provide some additional working capital. During the first quarter of 2022, we closed on an additional $2,000,000 in mortgage debt, which bears interest at the fixed rate of 3.58% per annum. This was accomplished through an amendment of the original mortgage note (Loan #1) that increased the then outstanding principal balance from $4,233,957 to $6,233,957 bearing interest at the blended fixed rate of 3.53% per annum. This increased the balloon payment from $3,145,888 to $3,687,751 and extended the due date of the balloon payment from the first quarter of 2030 to the first quarter of 2032.

 

Loan #3: During the second quarter of 2020, we received a loan from the Maine Technology Institute (MTI) in the aggregate principal amount of $500,000. The first 2.25 years of this loan were interest-free with no interest accrual or required principal payments. Beginning during the fourth quarter of 2022, Loan #3 became subject to quarterly principal and interest payments at a fixed rate of 5% per annum over the final five years of the loan, through the third quarter of 2027 if not repaid before then.

 

Loan #4: During the fourth quarter of 2020, we closed on a $1,500,000 note with MCB that bears interest at a fixed rate of 3.50% per annum (with a 7-year term and amortization schedule). Proceeds of $624,167 were used to prepay a portion of the outstanding principal on our mortgage note (Loan #1), which reduced the outstanding balance to 80% of the most recent appraised value of the property securing the debt, which allowed MCB to release the $1,400,000 that had been held in escrow. The remaining proceeds were available for general working capital purposes.

 

Loan #5: On June 30, 2021, we executed definitive agreements covering a second loan from the MTI in the aggregate principal amount of $400,000, proceeds from which were received in July of 2021. The first two years of this loan were interest-free with no interest accrual or required principal payments. Principal and interest payments at a fixed rate of 5% per annum are due quarterly over the final 5.5 years of the loan, beginning during the third quarter of 2023 and continuing through the fourth quarter of 2028 if not repaid before then.

 

Loan #6: During the third quarter of 2023, we closed on a $2,000,000 term loan bearing interest at a fixed rate of 7% per annum from MCB. The Finance Authority of Maine (FAME) provided $1,000,000 of loan insurance to MCB. This loan was repayable under a 7-year amortization schedule with a balloon payment of $1,285,029 due during the third quarter of 2026. This loan was refinanced during the year ended December 31, 2025, utilizing the proceeds from Loan #8 discussed below.

 

Loan #7: Also during the third quarter of 2023, we closed on a $1,000,000 term loan bearing interest at a fixed rate of 8% per annum from FAME. The loan was repayable under a 7-year amortization schedule with a balloon payment of $649,267 due during the third quarter of 2026. This loan was refinanced during the year ended December 31, 2025, utilizing the proceeds from Loan #8 discussed below.

 

Loan #8: During the year ended December 31, 2025, we refinanced some of our bank debt. The principal amount of $1,525,852 outstanding as of the closing date under Loan #6 and the principal amount of $768,209 outstanding as of the closing date under Loan #7 were both refinanced into one MCB loan with a principal amount of $2,327,119 bearing interest at a fixed rate of 6.5% per annum, a reduction from both Loan #6 and Loan #7. This refinancing also removed the balloon principal payments that were due in July of 2026 under both Loans #6 and #7. Principal and interest payments under the new loan of $45,637 per month are due over a five-year term ending during the third quarter of 2030.

 

Loans #1, #2, #4, and #8 are secured by liens on substantially all of our assets and are subject to certain restrictions and financial covenants. As of December 31, 2025, we were required to meet a minimum debt service covenant (DSC) of 1.35 for the year and annually thereafter. We are in compliance with these covenants as of December 31, 2025. Loans #3 and #5 are unsecured and subordinated to our indebtedness to MCB. Failure to make timely payments of principal and interest, or otherwise to comply with the terms of the agreements of Loans #3 and #5, would entitle the MTI to accelerate the maturity of such debt and demand repayment in full. These loans may be prepaid without penalty at any time.

 

Principal payments due under bank loans outstanding as of December 31, 2025 are reflected in the following table by the year that payments are due:

 

		2026				2027				2028				2029				2030				Thereafter				Total
Loans #1-#8		$	1,622,434			$	1,242,437			$	821,163			$	782,667			$	642,988			$	4,035,111			$	9,146,800
Debt issuance cost(1)			(9,585	)			(6,969	)			(5,062	)			(5,063	)			(4,442	)			(4,321	)			(35,442	)
Debt discount cost(1)			(2,664	)			(2,664	)			(2,663	)			(2,663	)			(1,597	)			—				(12,251	)
Total		$	1,610,185			$	1,232,804			$	813,438			$	774,941			$	636,949			$	4,030,790			$	9,099,107

  

⁽¹⁾ In connection with these credit facilities, we incurred a total of both debt issuance and debt discount costs as of  December 31, 2025 and 2024, of $97,522 and $173,305, respectively. The amortization of these debt issuance costs and debt discount costs is being recorded as a component of interest expense, included in other expenses, net, and is being amortized on a straight-line basis over the underlying terms of the notes.

 

We maintain a $1,000,000 line of credit (LOC) with MCB, which was extended during the third quarter of 2025 through September 11, 2026. Interest on borrowings against the LOC is variable at the National Prime Rate per annum. There was no outstanding balance under this LOC as of December 31, 2025 or 2024.