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What changed in BIOMERICA INC's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of BIOMERICA INC's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+210 added−221 removedSource: 10-K (2025-08-29) vs 10-K (2024-08-28)

Top changes in BIOMERICA INC's 2025 10-K

210 paragraphs added · 221 removed · 153 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

65 edited+19 added−21 removed26 unchanged
Biggest changeWe believe the claims in these issued inFoods ® IBS patents and claims in our pending patents that protect the use of the inFoods ® technology to diagnose and treat various other diseases, provide us with broad protections from other companies making or selling competing products in this highly disruptive new field of medicine.
Biggest changeIn addition to our inFoods IBS related issued patents, we have also been issued inFoods ® technology patents pertaining to the following diseases in the following jurisdictions: ● Attention Deficit Disorder (“ADD”) and Attention Deficit Hyperactivity Disorder (“ADHD”): Australia, European Patent Office (EP), Unitary Patent Office (UP) for certain EU countries, Mexico ● Crohn’s Disease: Mexico, EP, United Kingdom (UK), UP ● GERD Disease: Australia, EP, UP, UK ● Migraine Disease: Japan, EP ● Osteoarthritis Disease: Mexico, Japan ● Psoriasis Disease: AU, EP, UK, UP ● Psychological depression: US, EP, Japan, Mexico, UK, UP ● Ulcerative Colitis: EP, Japan, UK, UP ● IT based food monitoring and elimination technology: Japan We believe the claims in these issued inFoods ® IBS patents and claims in our pending patents that protect the use of the inFoods ® technology to diagnose and treat various other diseases, provide us with broad protections from other companies making or selling competing products in this highly disruptive new field of medicine.
Our over-the-counter (home use) and professional use (physicians’ office, clinics, etc.) rapid diagnostic test products help manage existing medical conditions and may save lives through early detection and diagnosis of specific diseases. Traditionally, such tests required the expertise of medical technologists and sophisticated equipment, with results often not available for days.
Our home use (over-the-counter) and professional use (physicians’ office, clinics, etc.) rapid diagnostic test products help manage existing medical conditions and may save lives through early detection and diagnosis of specific diseases. Traditionally, such tests required the expertise of medical technologists and sophisticated equipment, with results often not available for days.
Class III devices are devices that generally must receive clearance prior to marketing by the FDA pursuant to a pre-market approval to ensure their safety and effectiveness. Generally, Class III devices are limited to life-sustaining, life-supporting, or implantable devices. However, this classification can also apply to novel technology or new intended uses or applications for existing devices.
Class III devices are devices that generally must receive clearance by the FDA pursuant to a pre-market approval prior to marketing to ensure their safety and effectiveness. Generally, Class III devices are limited to life-sustaining, life-supporting, or implantable devices. However, this classification can also apply to novel technology or new intended uses or applications for existing devices.
She also has strong relationships with key strategic entities in Europe, Eastern Europe, Latin America, Canada, and the United States and we expect that she will continue to help Biomerica add new distributors for existing products and add new product-lines for future distribution by us.
She also has strong relationships with key strategic entities in Europe, Eastern Europe, Latin America, Canada, and the United States and we expect that she will continue to help us add new distributors for existing products and add new product-lines for future distribution by us.
We are working closely with our Notified Body to update our technical documentation to comply with these more stringent IVDR requirements. 7 Per IVDR 2017/746 Amendment Regulation (EU) 2022/112, and published proposal 2024/0021 (COD), devices with a CE certificate that was issued in accordance with IVDD may be placed on the market or put into service until December 31, 2027, providing a formal application to the notified body has been made by May 26, 2025.
We are working closely with our Notified Body to update our technical documentation to comply with these more stringent IVDR requirements. 5 Per IVDR 2017/746 Amendment Regulation (EU) 2022/112, and published proposal 2024/0021 (COD), devices with a CE certificate that was issued in accordance with IVDD may be placed on the market or put into service until December 31, 2027, providing a formal application to the notified body has been made by May 26, 2025.
These regulations govern the introduction of new in vitro diagnostic medical devices and medical devices, the observance of certain standards with respect to the manufacture and labeling of medical devices, the maintenance of certain records, the reporting of potential product problems, and other matters.
These regulations govern the introduction of new in vitro diagnostic medical devices and other medical devices, the observance of certain standards with respect to the manufacture and labeling of medical devices, the maintenance of certain records, the reporting of potential product problems, and other related matters.
Additionally, we are actively exploring strategic opportunities to enhance shareholder value. OPERATIONS AND GLOBAL PRESENCE Biomerica is headquartered in Irvine, California, where it centralizes administration, finance, regulatory compliance, product development, sales, marketing, customer service, and primary manufacturing operations. To enhance global competitiveness, the Company maintains manufacturing and assembly operations in Mexicali, Mexico, aiming to reduce production costs.
We are actively exploring strategic opportunities to enhance and create shareholder value. OPERATIONS AND GLOBAL PRESENCE Biomerica is headquartered in Irvine, California, where it centralizes administration, finance, regulatory compliance, product development, sales, marketing, customer service, and primary manufacturing operations. To enhance global competitiveness, the Company maintains manufacturing and assembly operations in Mexicali, Mexico, aiming to reduce production costs.
We rely on affiliated and unaffiliated distributors, advertising in medical and trade journals, exhibitions at trade shows, direct mailings, and an internal sales staff to market our diagnostic products. We target two main markets: (a) clinical laboratories and (b) point-of-care testing (physicians’ offices and over-the-counter drug stores).
We rely on distributors, advertising in medical and trade journals, exhibitions at trade shows, direct mailings, and an internal sales staff to market our diagnostic products. We target two main markets: (a) clinical laboratories and (b) point-of-care testing (physicians’ offices and over-the-counter drug stores).
We believe that we are currently in material compliance with all relevant QSR and MDR requirements. In addition, our facility is required to have a California Medical Device Manufacturing License. The license is not transferable and must be renewed biannually. Our current license is valid until November 19, 2024.
We believe that we are currently in material compliance with all relevant QSR and MDR requirements. In addition, our facility is required to have a California Medical Device Manufacturing License. The license is not transferable and must be renewed biannually. Our current license is valid until November 19, 2026.
Our products are primarily either Class I or Class II medical devices. 6 Pursuant to FDA requirements, we have registered our manufacturing facility with the FDA as a medical device manufacturer and listed the medical devices we manufacture. We are also subject to inspection on a routine basis for compliance with FDA regulations.
Our products are primarily either Class I or Class II medical devices. 4 Pursuant to FDA requirements, we have registered our manufacturing facility with the FDA as a medical device manufacturer and listed the medical devices we manufacture. We are also subject to inspection on a routine basis for compliance with FDA regulations.
However, these measures may not entirely prevent unauthorized use or disclosure of our technology. 8 In the past, we have licensed and may continue to license certain proprietary rights, such as trademarks, patents, trade secrets, or copyrighted material, to third parties.
However, these measures may not entirely prevent unauthorized use or disclosure of our technology. 6 In the past, we have licensed and may continue to license certain proprietary rights, such as trademarks, patents, trade secrets, or copyrighted material, to third parties.
Our goal is to provide high quality medical diagnostic products that generally meet or exceed customer requirements and comply with all applicable regulatory requirements: FDA 21 CFR Part 820 Quality Management System, ISO 13485:2016, Medical Devices Quality Management Systems – Requirements for Regulatory Purposes, In Vitro Diagnostic Medical Devices Directive 98/79/EC & and Medical Device Regulation 2017/745, Guidelines related to Medical Devices Directive/Regulation Guidance on CE Marking, among others.
Our goal is to provide high quality medical diagnostic products that generally meet or exceed customer requirements and comply with all applicable regulatory requirements: FDA 21 CFR Part 820 Quality Management System, ISO 13485:2016, Medical Devices Quality Management Systems – Requirements for Regulatory Purposes, In Vitro Diagnostic Medical Devices Directive 98/79/EC, Medical Device Regulation (EU) 2017/745 and In Vitro Diagnostic Medical Devices Regulation (EU) 2017/746) IVDR, Guidelines related to Medical Devices Directive/Regulation Guidance on CE Marking, among others.
Biomerica also has until the following dates to update the technical documentation and processes to meet these regulatory requirements of IVDR 2017/746 providing a formal application to the notified body has been made: (1) December 31, 2027, for class D devices, formal application to notified body by May 26, 2025; (2) December 31, 2028, for class C devices, formal application to notified body by May 26, 2026; (3) December 31, 2029, for class B devices, formal application to notified body by May 26, 2027; and (4) December 31, 2029, for class A devices placed on the market in sterile condition, formal application to notified body by May 26, 2027.
We also have until the following dates to update the technical documentation and processes to meet these regulatory requirements of IVDR 2017/746 providing a formal application to the notified body has been made: (1) December 31, 2027, for class D devices, formal application to notified body by May 26, 2025; (2) December 31, 2028, for class C devices, formal application to notified body by May 26, 2026; (3) December 31, 2029, for class B devices, formal application to notified body by May 26, 2027; and (4) December 31, 2029, for class A devices placed on the market in sterile condition, formal application to notified body by May 26, 2027.
Additional patent applications pertaining to the inFoods ® IBS product are in prosecution and review at the USPTO and with the patent issuance authorities in other countries. 9 We are also developing and have filed patents with claims that cover products that target other diseases utilizing the inFoods ® technology platform.
Additional patent applications pertaining to the inFoods ® IBS product are in prosecution and review at the USPTO and with the patent issuance authorities in other countries. 7 We are also developing and have filed patents with claims that cover products that target other diseases utilizing the inFoods ® technology platform.
We anticipate that we will license or purchase the rights to other products or technologies in the future. We also engage in contract research and development and contract manufacturing for third party companies. The technologies that relate to this contract R&D and manufacturing are protected by patents and other intellectual property.
We anticipate that we will license or purchase the rights to other products or technologies in the future. We also engage in contract research and development and contract manufacturing for third party companies. The technologies that relate to this contract research and development and manufacturing are protected by patents and other intellectual property.
Class I devices are those devices for which safety and effectiveness can reasonably be assured through general controls, such as device listing, adequate labeling, and adherence to the Quality System Regulation (“QSR”) as well as Medical Device Reporting (“MDR”), labeling and other regulatory requirements. Some Class I medical devices are exempt from the requirement of Pre-Market Notification or clearance.
Class I devices are those devices for which safety and effectiveness can reasonably be assured through general controls, such as device listing, adequate labeling, and adherence to the Quality Management System Regulation (“QMSR”) as well as Medical Device Reporting (“MDR”), labeling and other regulatory requirements. Some Class I medical devices are exempt from the requirement of Pre-Market Notification or clearance.
We continually engage in quality control procedures to assure the consistency and quality of our products and to comply with applicable FDA and international regulations. 4 Our manufacturing operations and facilities are regulated by the FDA Good Manufacturing Practices for medical devices. We have an internal quality department that monitors and evaluates product quality and output.
We continually engage in quality control procedures to assure the consistency and quality of our products and to comply with applicable FDA and international regulations. 2 Our manufacturing operations and facilities are regulated by the FDA Current Good Manufacturing Practices for medical devices. We have an internal quality department that monitors and evaluates product quality and output.
The last FDA announced inspection was in May 2024 and no observations were noted. We believe that all Biomerica products sold in the United States comply with the FDA and state regulations. We are an FDA regulated and ISO 13485:2016 certified In Vitro Diagnostic Medical Devices company.
The last FDA-announced inspection was in May 2024 and no observations were noted. We believe that all our products sold in the United States comply with the FDA and applicable state regulations. We are an FDA-regulated and ISO 13485:2016-certified In Vitro Diagnostic Medical Devices company.
Our efforts include confidentiality and invention assignment agreements with employees and contractors, as well as nondisclosure agreements with most fulfillment and strategic partners to restrict access to and disclosure of proprietary information.
Our efforts include confidentiality and invention assignment agreements with employees and contractors, as well as nondisclosure agreements with most fulfilment and strategic partners to restrict access to and disclosure of proprietary information.
Class II devices are those devices for which safety and effectiveness can reasonably be ensured through the use of special controls, such as performance standards, post-market surveillance and patient registries, as well as adherence to the general controls’ provisions applicable to Class I devices.
Class II devices are those devices for which safety and effectiveness can reasonably be ensured through using special controls, such as performance standards, post-market surveillance and patient registries, as well as adherence to the general controls’ provisions applicable to Class I devices.
We have dozens of patents in prosecution or review pertaining to these other diseases, including: Functional Dyspepsia, Crohn’s disease, Ulcerative Colitis, GERD, Migraine Headaches, Depression, and Osteoarthritis.
We have dozens of patents that are issued, in prosecution or review, pertaining to these other diseases, including: Functional Dyspepsia, Crohn’s disease, Ulcerative Colitis, GERD, Migraine Headaches, Depression, and Osteoarthritis.
In addition to the use of our own patents, we have acquired from third parties the rights to manufacture and sell certain products that are protected by patents or intellectual property owned by these third parties. In some cases, royalties are paid on the sales of these products.
In addition to the use of our own patents, we have been granted from third parties the rights to use, manufacture and sell certain products that are protected by patents or other intellectual property owned by these third parties. In some cases, royalties are paid on the sales of these products.
MARKETS AND METHODS OF DISTRIBUTION Biomerica has approximately 80 current customers for its diagnostic business, of which approximately 38 are foreign distributors, 12 are domestic distributors and the balance are primarily domestic hospital and clinical laboratories, medical research institutions, medical schools, pharmaceutical companies, chain drugstores, wholesalers, physicians’ offices, and e-commerce customers.
MARKETS AND METHODS OF DISTRIBUTION Biomerica has approximately 76 current customers for its diagnostic business, of which approximately 34 are foreign distributors, 4 are domestic distributors and the balance are primarily domestic hospital and clinical laboratories, medical research institutions, medical schools, pharmaceutical companies, chain drugstores, wholesalers, physicians’ offices, and e-commerce customers.
Several of these patents pertaining to the inFoods ® IBS technology have been issued and many more are in active review and prosecution. In August 2018, we received our first patent pertaining to the inFoods ® technology platform from the Korean Intellectual Property Office, covering IBS.
Several of these patents pertaining to the inFoods ® IBS technology have been issued and many more are in active review and prosecution. In August 2018, we received our first patent pertaining to the inFoods ® technology platform from the Korean Intellectual Property Office, covering IBS. Since then, we have been granted a total of 15 patents.
This includes the QSR, which requires that we manufacture our products and maintain our documents in a prescribed manner with respect to issues such as design controls, manufacturing, testing, and validation activities.
This includes the Quality System Regulation (“QSR”), which requires that we manufacture our products and maintain our documents in a prescribed manner with respect to issues such as design controls, manufacturing, testing, and validation activities.
These patent applications include claims that address the diagnosis and treatment of several disease states including IBS, functional dyspepsia, Crohn’s disease, ulcerative colitis, gastroesophageal reflux disease, osteoarthritis, psoriasis, migraine headaches, and depression. These applications include the use of this technology in both humans and animals. The first inFoods ® patents filed by us pertained to IBS.
These patent applications include claims that address the diagnosis and treatment of several disease states including IBS, functional dyspepsia, Crohn’s disease, ulcerative colitis, gastroesophageal reflux disease, osteoarthritis, psoriasis, migraine headaches, and depression. The first inFoods ® patents filed by us pertained to IBS.
Biomerica involves its employees in a continuous improvement process to increase productivity, improve quality and maintain the suitability, adequacy, and effectiveness of our quality management system. The EU In Vitro Diagnostic Medical Device Regulation (“IVDR”) 2017/746 was effective on May 26, 2022.
We involve our employees in a continuous improvement process to increase productivity, improve quality and maintain the suitability, adequacy, and effectiveness of our quality management system. The EU In Vitro Diagnostic Medical Device Regulation (“IVDR”EU) 2017/746 was effective on May 26, 2022.
The designing, development, manufacturing, marketing, post-market surveillance, distribution, advertising, and labeling of Biomerica’s immunoassay in vitro diagnostic (“IVD”) medical device products are subject to regulation in the United States by the Center for Devices and Radiological Health of the FDA and state agencies.
Exports of most medical devices are also subject to certain FDA regulatory controls. The designing, development, manufacturing, marketing, post-market surveillance, distribution, advertising, and labeling of our immunoassay in vitro diagnostic (“IVD”) medical device products are subject to regulation in the United States by the Center for Devices and Radiological Health of the FDA and state agencies.
TECHNOLOGICAL ADVANCEMENTS AND PRODUCT DEVELOPMENT Technological advances in medical diagnostics have enabled the performance of diagnostic tests not only in clinical laboratories but also at home and in point-of-care settings, such as physicians’ offices.
TECHNOLOGICAL ADVANCEMENTS AND PRODUCT DEVELOPMENT Technological advances in medical diagnostics have enabled diagnostic tests to be performed not only in clinical laboratories but also at home and at the point-of-care in physicians’ offices.
In these situations, this intellectual property is typically licensed to us under a limited license agreement enabling us to perform the services being contracted. We have recently launched the inFoods ® IBS product.
In these situations, this intellectual property is typically licensed to us under a limited license agreement enabling us to perform the services being contracted.
INTERNATIONAL BUSINESS The following table sets forth the dollar volume of revenue attributable to sales to domestic customers and foreign customers during our last two fiscal years: For the Year Ended May 31, 2024 2023 Asia $ 1,881,000 35 % $ 2,021,000 38 % Europe 1,438,000 27 % 1,798,000 34 % North America 1,285,000 24 % 1,470,000 28 % Middle East 800,000 15 % 39,000 1 % South America 11,000 0 % 11,000 0 % Total $ 5,415,000 100 % $ 5,339,000 100 % Our international operations face distinct risks that differ from those encountered in the United States.
INTERNATIONAL BUSINESS The following table sets forth the dollar volume of revenue attributable to sales to domestic customers and foreign customers during our last two fiscal years: For the Year Ended May 31, 2025 2024 Asia $ 1,718,000 32 % $ 1,881,000 35 % Europe 1,297,000 24 % 1,438,000 27 % North America 1,658,000 31 % 1,285,000 24 % Middle East 630,000 13 % 800,000 14 % South America 8,000 0 % 11,000 0 % Total $ 5,311,000 100 % $ 5,415,000 100 % Our international operations face distinct risks that differ from those encountered in the United States.
Our net sales were approximately $5,415,000 for fiscal 2024, compared to $5,339,000 for fiscal 2023. For the fiscal years ended May 31, 2024, and 2023, the Company had one distributor each year that accounted for 33% and 35% of our net sales, respectively. 5 Total gross receivables as of May 31, 2024, and 2023 were approximately $966,000 and $751,000, respectively.
For the fiscal years ended May 31, 2025, and 2024, the Company had one distributor each year that accounted for 31% and 33% of our net sales, respectively. 3 Total gross receivables were approximately $757,000 and $966,000 as of May 31, 2025 and 2024, respectively.
While we have not been notified of any such claims by third parties, we cannot guarantee that such claims will not be made in the future. BRANDS AND TRADEMARKS We occasionally register our tradenames with the USPTO. Of note, we registered the tradename “InFoods” on December 24, 2016. Our unregistered tradenames are “EZ Detect,” “EZ-H.P.,” and “EZ-PSA”.
While we have not been notified of any such claims by third parties, we cannot guarantee that such claims will not be made in the future. BRANDS AND TRADEMARKS We occasionally register our tradenames with the United States Patent and Trademark Office (“USPTO”). Of note, we registered the tradename “InFoods” on December 24, 2016.
Patents have also been issued in the countries of Australia (two patents), Canada, Japan (two patents), Korea (two patents), Mexico, Panama, Peru, and Singapore, covering our inFoods ® IBS technology.
The USPTO has issued the Company two patents with broad claims that protect our inFoods ® technology in testing and treating patients with IBS. Patents have also been issued in the countries of Australia, Canada, Japan (two patents), Korea (two patents), Mexico, Panama, Peru, and Singapore, covering our inFoods ® IBS technology.
Our business model for this product includes the potential out-licensing of the product and related patents to a large international life sciences or technology company that could commercialize it or support us in its commercialization. Additionally, we may explore out-licensing opportunities for the patents or intellectual property associated with other products, including our H. pylori product.
With the launch of inFoods ® IBS, our business model for this product includes the potential out-licensing of the product and related patents to a large international life sciences or technology company that could commercialize it or support us in its commercialization.
In Europe, the directives of the European Union (“EU’) require that a device have a CE Mark in order to be sold in EU countries. We comply with In Vitro Diagnostic Medical Devices Directive (“IVDD”) 98/79/EC and Medical Devices Regulation 2017/745 (“MDR”). We also comply with ISO 13485:2016 Medical Devices Quality Management Systems – Requirements for Regulatory Purposes.
In Europe, the directives of the European Union (“EU”) require that a device has a CE Mark in order to be sold in EU countries. We comply with In Vitro Diagnostic Medical Devices Directive (“IVDD”) 98/79/EC, Medical Devices Regulation (EU) 2017/745 MDR and In Vitro Diagnostic Medical Devices Regulation (EU) 2017/746) (“IVDR”).
The competitive landscape for diagnostic products is shaped by several factors, including product uniqueness, technology, quality, performance, pricing, and service. Our competitive edge is grounded in the distinctiveness of our offerings, the high quality of our products, and their rapid test results. Our strong patent portfolio further bolsters our market position despite our limited marketing capabilities.
Our competitive edge is grounded in the distinctiveness of our offerings, the high quality of our products, and their rapid test results. Our strong patent portfolio further bolsters our market position despite our limited marketing capabilities.
Department of Agriculture (“USDA”), and Consumer Product Safety Commission, as well as European Government agencies. Our activities are also regulated by various agencies of the states and localities in which our products are sold.
These agencies include the FDA, Environmental Protection Agency, Federal Trade Commission, Occupational Safety and Health Administration, U.S. Department of Agriculture (“USDA”), and Consumer Product Safety Commission, as well as certain European Government agencies. Our activities are also regulated by various agencies of the states and localities in which our products are sold.
Effective copyright, trademark, and trade secret protection may not be available in such jurisdictions. PATENTS AND INFOODS TECHNOLOGY We have filed over 100 international and Patent Corporation Treaty patents (“PCT”) and have multiple provisional and non-provisional patents currently filed with the USPTO. Substantially all of our patents that are pending or registered pertain to the inFoods ® technology platform.
PATENTS AND INFOODS TECHNOLOGY We have filed dozens of international and Patent Corporation Treaty patents (“PCT”) and have multiple provisional and non-provisional patents currently filed with the USPTO. Substantially 15 of our patents that are pending or registered pertain to the inFoods ® technology platform.
At present, outside of the EU, the international regulatory review process varies from country to country. We work with our distributors and sales representatives in the foreign countries in which we market our products to ensure that we comply with the regulatory laws of those countries.
We work with our distributors and sales representatives in the foreign countries in which we market our products to ensure that we comply with the regulatory laws of those countries. We believe that our international sales to date have been in compliance with the laws of all foreign countries in which we have made sales.
GOVERNMENT REGULATION OF OUR DIAGNOSTIC BUSINESS Our primary business consists of selling products that are generally legally defined as medical devices and in vitro diagnostic medical devices.
GOVERNMENT REGULATION OF OUR DIAGNOSTIC BUSINESS Our primary business consists of selling products that are generally legally defined as medical devices and in vitro diagnostic medical devices. As a result, we are a medical devices and in vitro diagnostic medical devices manufacturer, and as such, we are subject to the regulations issued and enforced by of numerous governmental entities.
A key objective for us has been the development and marketing of rapid diagnostic tests that are accurate, utilize easily obtained patient specimens, and can be performed without the need for complex instrumentation.
One of our key objectives has been to develop and market rapid diagnostic tests that are accurate, utilize easily obtained patient specimens, and are simple to perform without the need for complex instrumentation.
These services include technical support, regulatory guidance, marketing and public relations, financial advisory, and contract product development and manufacturing. To safeguard the Company, we implement confidentiality agreements, intellectual property ownership clauses, and indemnification provisions with these external parties. Despite these measures, we cannot guarantee complete protection against third-party claims or potential intellectual property theft. 10
To safeguard the Company, we implement confidentiality agreements, intellectual property ownership clauses, and indemnification provisions with these external parties. Despite these measures, we cannot guarantee complete protection against third-party claims or potential intellectual property theft. CORPORATE HISTORY Biomerica, Inc. is a Delaware corporation.
These license agreements typically require royalties and other payments. We have a royalty agreement in which we obtained rights to manufacture and market an ACTH test (used to detect chronic metabolic conditions). Royalty expenses of approximately $10,000 and $13,000, respectively, are included in cost of sales for this agreement for the fiscal years ended May 31, 2024 and 2023.
These license agreements typically require royalties and other payments. We have a royalty agreement in which we obtained rights to manufacture and market an Adrenocorticotropic Hormone test (“ACTH test”) (used to detect chronic metabolic conditions).
Sales of products manufactured under this agreement are not material to total sales for the fiscal years ended May 31, 2024 and 2023, respectively. We may license other products or technology in the future as it is deemed necessary or opportunistic for conducting business.
We may license other products or technology in the future as it is deemed necessary or opportunistic for conducting business.
In contrast, for the fiscal year ended May 31, 2023, the Company did not experience significant vendor concentration in raw material purchases. COMPETITION We offer several proprietary products with notable competitive advantages, including our EZ Detect colon disease home test, the Aware Breast Self-Exam product, our inFoods ® IBS product, and hp+detect ™ for H. pylori detection.
COMPETITION We offer several proprietary products with notable competitive advantages, including our EZ Detect colon disease home test, Aware Breast Self-Exam product, inFoods ® IBS product, and hp+detect ™ for H. pylori detection. These products stand out due to their unique features and benefits compared to competing tests in the market. Our competitors vary greatly in size.
A trademark for “Aware” was issued and assigned in 2001, renewed in 2011 and 2021. On January 11, 2020, the USPTO renewed our “FORTEL” trademark for another ten years. The laws of some foreign countries do not protect our proprietary rights to the same extent as do the laws of the United States.
Our unregistered tradenames are “EZ Detect,” “EZ-H.P.,” and “EZ-PSA”. A trademark for “Aware” was issued and assigned in 2001, renewed in 2011 and 2021. On January 11, 2020, the USPTO renewed our “FORTEL” trademark for another ten years.
This innovative product is designed to treat gastrointestinal conditions such as irritable bowel syndrome (“IBS”) and other inflammatory diseases, targeting chronic inflammatory conditions prevalent in large markets. The inFoods® IBS product, which we have already launched, uses a simple blood test to identify patient-specific foods that, when eliminated, may alleviate IBS symptoms such as pain, bloating, diarrhea, cramping, and constipation.
This innovative technology is designed to aid in the management of gastrointestinal conditions such as irritable bowel syndrome (“IBS”) and other inflammatory diseases. The DGT product targets chronic inflammatory illnesses that are widespread and prevalent in large markets. We have launched inFoods® IBS product, which leverages this pateneted technology.
BACKLOG As of May 31, 2024, and 2023, Biomerica’s backlog of unshipped orders was approximately $755,000 and $655,000, respectively. As of May 31, 2024, the majority of this backlog consisted of orders intended for a distributor in Asia. RAW MATERIALS Biomerica utilizes a range of principal raw materials including chemicals, serums, reagents, and packaging supplies.
As of May 31, 2025, the majority of this backlog consisted of orders intended for shipment to Asia. RAW MATERIALS Biomerica utilizes a range of principal raw materials including chemicals, serums, reagents, and packaging supplies. The majority of these materials are sourced from multiple suppliers, ensuring we are not reliant on any single source.
Further patent applications related to the inFoods® IBS product are pending or under review in the United States and other countries. We are also developing and have filed patents for additional products targeting other diseases using the inFoods® technology platform. These diseases include Functional Dyspepsia, Crohn’s Disease, Ulcerative Colitis, Gastroesophageal Reflux Disease (“GERD”), Migraine Headaches, Depression, and Osteoarthritis.
Beyond IBS, we are pursuing additional applications for the inFoods® technology for other disease states, including Functional Dyspepsia, Crohn’s Disease, Ulcerative Colitis, Gastroesophageal Reflux Disease (“GERD”), Migraine Headaches, Depression, and Osteoarthritis.
These products stand out due to their unique features and benefits compared to competing tests in the market. Our competitors vary greatly in size. Many are divisions or subsidiaries of well-established medical and pharmaceutical companies which are much larger than Biomerica and expend substantially greater amounts than we do for research and development, manufacturing, advertising, and marketing.
Many are divisions or subsidiaries of well-established medical and pharmaceutical companies which are much larger than Biomerica and expend substantially greater amounts than we do for research and development, manufacturing, advertising, and marketing. The competitive landscape for diagnostic products is shaped by several factors, including product uniqueness, technology, quality, performance, pricing, and service.
Our additional R&D efforts have led to the 510(k) clearance of our proprietary H. pylori test, hp+detect ™ , which is designed to provide highly accurate sensitivity and specificity for detecting H. pylori and monitoring treatment.
Our research and development efforts have also led to the FDA 510(k) clearance of hp+detect™, a proprietary diagnostic test for detecting Helicobacter pylori (H. pylori) and monitoring treatment. H. pylori is a leading cause of peptic ulcers and a significant risk factor for gastric cancer.
The hp+detect™ test provides physicians and medical centers with a reliable tool for diagnosing H. pylori infections and monitoring the effectiveness and safety of treatments. The diagnostic test is marketed directly to laboratories, where patient samples are analyzed.
This bacterium is recognized as the strongest known risk factor for gastric cancer, which remains one of the leading causes of cancer-related deaths globally. The hp+detect™ test is marketed directly to laboratories and is intended to provide physicians and medical centers with a reliable tool for diagnosing H. pylori infections and monitoring treatment effectiveness.
Our inventory includes antibodies, antigens, bottles, boxes, chemicals, and reagents essential for manufacturing our test kits, along with products in various stages of completion. During the fiscal year ended May 31, 2024, purchases from one vendor accounted for 16% of our raw material procurement, primarily related to Plates.
For the fiscal year ended May 31, 2025, purchases from one vendor accounted for approximately 12% of our total raw material procurement, primarily related to commodity plastic products. For the fiscal year ended May 31, 2024, purchases from one vendor accounted for approximately 16% of our total raw material procurement, also primarily related to commodity plastic products.
The Company has two wholly owned subsidiaries, Biomerica de Mexico, which is used for assembly/manufacturing, and BioEurope GmbH, which acts as a distributor of Biomerica products in certain markets. We are a global biomedical technology company that develops, patents, manufactures and markets advanced diagnostic and therapeutic products.
The Company operates through two wholly owned subsidiaries: Biomerica de Mexico, which serves as an assembly and manufacturing facility, and BioEurope GmbH, which functions as a distributor of the Company’s products in international markets. 8
The majority of these materials are sourced from multiple suppliers, ensuring we are not reliant on any single source. However, for certain critical materials such as antibodies, where suppliers are limited, there exists a risk of potential supply challenges or increased costs in the future.
However, for certain critical materials such as antibodies, where suppliers are limited, there exists a risk of potential supply challenges or increased costs in the future. Our inventory includes antibodies, antigens, bottles, boxes, chemicals, and reagents essential for manufacturing our test kits, along with products in various stages of completion.
Most of our products are Conformite Europeenne (“CE”) marked and/or registered with regulatory agencies in various countries for diagnostic use, with several also cleared for sale in the United States by the FDA. IMPACT OF COVID-19 ON REVENUES In response to the global COVID-19 pandemic, we began developing, marketing, and selling COVID-19 diagnostic tests in March 2020.
Our extensive range of medical diagnostic products is sold worldwide, primarily in two markets: clinical laboratories and point-of-care settings. Most of our products are Conformite Europeenne (“CE”) marked and/or registered with regulatory agencies in various countries for diagnostic use, with several also cleared by the U.S. Food and Drug Administration (“FDA”) for sale in the United States.
These products are both internally developed and obtained through licensing agreements. Our experienced and highly trained technical personnel, including Ph.D. holders and other scientists, are dedicated to developing new products and managing technology transfer activities. Many of our technical staff have extensive industry experience from previous employment at large diagnostic manufacturing companies.
RESEARCH AND DEVELOPMENT We invest resources in the research and development of new products designed to diagnose and, in some cases, treat several major medical diseases. These products are either internally developed or licensed from others. Our experienced and highly trained technical personnel, including Ph.D. holders and other scientists, are dedicated to developing new products and managing technology transfer activities.
We also rely on our Scientific Advisory Board, comprised of leading medical doctors and clinicians, to guide our clinical studies and product development efforts. KEY PRODUCT LAUNCHES A key outcome of our recent research and development efforts is our patented diagnostic-guided therapy (“DGT”) product, developed on the inFoods® technology platform.
While commercialization activities for hp+detect™ are at an early stage, we continue to position the product as a reliable diagnostic option for laboratories and physicians. KEY PRODUCT LAUNCHES A key outcome from our research and development efforts is our patented diagnostic-guided therapy (“DGT”) product, developed on the inFoods® technology platform.
The following is a breakdown of employees by departments: May 31, 2024 2023 Administrative 6 5 Research & Development 7 9 Sales & Marketing 13 7 Production & Operations 38 41 Total 64 62 We do engage in a range of external experts, including Ph.D.’s, M.D.’s, and other industry specialists, as well as medical institutions, to support various aspects of our operations.
We engage a range of external experts. including Ph.D.’s, M.D.’s, and other industry specialists, as well as medical institutions, to support various aspects of our operations. These services include technical support, regulatory guidance, marketing and public relations, financial advisory, and contract product development and manufacturing.
EMPLOYEES As of May 31, 2024 and 2023, we employed a total of 64 and 62 employees, respectively, in the United States, Mexico, UK and Germany, of which 63 and 62 were full-time employees, respectively. Various employees listed in the production department also perform research and development duties as a routine function of their job.
Additionally, we may explore out-licensing opportunities for the patents or intellectual property associated with other products, including our H. pylori product. EMPLOYEES As of May 31, 2025 and 2024, we employed a total of 54 and 64 employees, respectively, in the United States, Mexico, UK and Germany, of which 53 and 63 were full-time employees, respectively.
Unlike broad dietary restrictions, the inFoods® IBS product pinpoints a patient’s heightened immunoreactivity to specific foods known to frequently trigger IBS symptoms, providing targeted relief. We have launched our inFoods® product across numerous gastroenterology (“GI”) physician groups in various states and regions, including collaboration with one of the largest GI groups in the U.S.
By removing the foods identified as problematic, patients can achieve relief from IBS symptoms. We have introduced our inFoods® product to gastroenterology (“GI”) physician groups in multiple states and regions, including collaboration with one of the largest GI groups in the U.S. The initial phase was focused on gathering real world feedback, optimizing physician engagement, and validating operational processes.
As of May 31, 2024, and 2023, the Company had four and one distributor, respectively, that accounted for a total of 64% and 36% of gross accounts receivable. Of the 64% as of May 31, 2024, 37% was owed by a distributor in Asia.
As of those dates, four distributors accounted for approximately 69% and 64% of gross accounts receivable, respectively. Of the 69% concentration as of May 31, 2025, 27% was attributable to a distributor located in North America. BACKLOG As of May 31, 2025, and 2024, Biomerica’s backlog of unshipped orders was approximately $1,324,000 and $755,000, respectively.
Our diagnostic test kits are utilized in the analysis of blood, urine, nasal, or fecal samples for the diagnosis of various diseases, food intolerances, and other medical conditions. These kits also measure levels of specific hormones, antibodies, antigens, and other substances, which may exist in the human body at extremely low concentrations.
They can also be used to measure or detect the presence and levels of specific bacteria, hormones, antibodies, antigens and other substances, which may exist in the human body in extremely small concentrations. Our products are designed to enhance the health and well-being of people, while reducing total healthcare cost.
We believe that properly developed and utilized rapid point-of-care tests can match the accuracy of laboratory tests, delivering reliable results in minutes with minimal or no instrumentation. RESEARCH AND DEVELOPMENT We invest considerable resources in the research and development of new products designed to diagnose and, in some cases, treat several major medical diseases.
We believe our rapid point-of-care tests, when properly used, can be as accurate as laboratory tests. Our products require limited to no instrumentation, deliver reliable results in minutes, and can be performed with confidence at home or in a physician’s office.
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ITEM 1. BUSINESS BUSINESS OVERVIEW THE COMPANY Biomerica, Inc. (“Biomerica,” the “Company,” “we,” “us,” or “our”) was incorporated in Delaware in September 1971 as Nuclear Medical Systems, Inc., and later changed its name to Biomerica, Inc.
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ITEM 1. BUSINESS BUSINESS OVERVIEW THE COMPANY We are a global biomedical technology company that develops, patents, manufactures and markets advanced diagnostic and therapeutic products. Our diagnostic test kits are used to analyze blood, urine, nasal, or fecal material from patients in the diagnosis of various diseases, food intolerances, and other medical complications.
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Our products are designed to enhance health and well-being while reducing overall healthcare costs. Our extensive range of medical diagnostic products is sold worldwide, primarily in two markets: clinical laboratories and point-of-care settings, including physicians’ offices and over-the-counter sales at major retailers such as Walmart, CVS Pharmacy, and Amazon.
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Our technical staff, many of whom, have extensive experience from previous employment at large diagnostic manufacturing companies, bring a wealth of industry knowledge. Additionally, we rely on our Scientific Advisory Board, comprised of leading medical doctors and clinicians, to guide our clinical studies and product development efforts.
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These tests contributed significantly to our revenues during fiscal years 2021 and 2022. However, demand sharply declined in fiscal 2023, leading to no sales of COVID-19-related products in fiscal 2024. As a result, our COVID-19 product sales have caused significant fluctuations in our revenues over the past four years.
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For the fiscal years ended May 31, 2025 and 2024, consolidated research and development expenses totaled approximately $1,023,000 and $1,491,000, respectively. The decrease reflects our transition from intensive product development to the commercialization phase of inFoods® IBS and hp+detect™, as well as our broader efforts to manage costs and preserve cash.
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In contrast, our non-COVID-19 products, have accounted for approximately 100% and 96% of our revenues during the fiscal years ended May 31, 2024, and 2023, respectively, and have remained our core focus.
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We have filed patents globally to protect the use of inFoods® diagnostic technology for these indications, with patents issued in the United States and multiple foreign jurisdictions, and others in review or prosecution.
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Feedback from GI specialty physicians has been positive, and we are actively expanding our network by onboarding additional physician practices. Our dedicated sales team is focused on deepening relationships within the GI segment and targeting opportunities to introduce inFoods® to other medical specialties, including integrated health practices and concierge physicians.
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The inFoods® IBS product utilizes a simple blood test to identify patient-specific foods that, when eliminated from the diet, may help reduce IBS symptoms such as pain, bloating, diarrhea, cramping, and constipation. Unlike broad and difficult to manage dietary restrictions, the inFoods® IBS product pinpoints a patient’s heightened immunoreactivity to specific foods known to frequently trigger IBS symptoms.
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We are also evaluating distribution, partnership, and licensing opportunities with U.S. and multinational companies to accelerate the commercialization and growth of inFoods® products both domestically and internationally. 3 Beyond our inFoods ® product line, our additional efforts have led to a significant milestone by receiving FDA clearance in December 2023 for hp+detect ™ , a new diagnostic test for detecting Helicobacter pylori (H. pylori) bacteria in the gastrointestinal tract.
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GI physician feedback has been generally positive, and we are continuing to expand our presence in the GI segment while exploring opportunities to bring the inFoods® technology to other medical specialties. The outcome of our clinical study was published in the June 2025 issue of Gastroenteroloy.
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H. pylori is a widespread infection, affecting an estimated 35% of the U.S. population and 45% of the population in Europe’s five largest countries. This bacterium is recognized as the strongest known risk factor for gastric cancer, which is the third most common cause of cancer-related deaths globally.
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We are also assessing distribution, partnership, and licensing opportunities with large U.S. distributors to support broader availability and sale/marketing.
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We are actively promoting hp+detect™ to large end-customer labs to support its launch and distribution, aiming to enhance patient care through timely and accurate detection of H. pylori infections.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe Company maintains a manufacturing plant in Mexico which presents risks to the Company including risks associated with doing business outside the United States. We operate a significant manufacturing facility in Mexico through our subsidiary, Biomerica de Mexico. This international presence introduces a range of risks, including exposure to local economic and political conditions.
Biggest changeWe operate a significant manufacturing facility in Mexico through our subsidiary, Biomerica de Mexico. This international presence introduces a range of risks, including exposure to local economic and political conditions. Factors such as social unrest, potential terrorism, export and import restrictions, and fluctuations in currency exchange rates could impact our operations.
There is also no guarantee that our new products, including our inFoods ® IBS products and hp+detect ™ , will be well accepted into the marketplace. Our operations will be adversely affected if our operating results do not correspondingly increase with our increased expenditures or if our technology, product, and market development efforts are unsuccessful or delayed.
There is also no guarantee that our new products, including our inFoods ® IBS product and hp+detect ™ , will be well accepted into the marketplace. Our operations will be adversely affected if our operating results do not correspondingly increase with our increased expenditures or if our technology, product, and market development efforts are unsuccessful or delayed.
Any adverse changes in our relationships with key distributors, or issues related to their financial condition, performance, or purchasing patterns, could have a significant impact on our sales and overall financial results. The loss of a key distributor, or the failure of our direct distribution efforts, could further exacerbate these challenges and adversely affect our business.
Any adverse changes in our relationships with key distributors, or adverse issues related to their financial condition, performance, or purchasing patterns, could have a significant impact on our sales and overall financial results. The loss of a key distributor, or the failure of our direct distribution efforts, could further exacerbate these challenges and adversely affect our business.
Although we currently generate revenue, our company is operating at a loss due to significant investments in research and development and commercialization of newly developed products and from a slow launch in revenues from our new products. To sustain and advance our business strategy, we must continue to raise additional funds to meet our capital and operating needs.
Although we currently generate revenue, our company is operating at a loss due to significant commercialization of newly developed products and from a slow launch in revenues from our new products and some investments in research and development and. To sustain and advance our business strategy, we must continue to raise additional funds to meet our capital and operating needs.
Additionally, the loss of any key personnel, particularly in research and development, could significantly harm our business, hinder our prospects, and obstruct the achievement of our research, operational, or strategic objectives. In response to the need to reduce ongoing operating costs, we have recently implemented a substantial reduction in our workforce.
Additionally, the loss of any key personnel, particularly in research and development, could significantly harm our business, hinder our prospects, and obstruct the achievement of our research, operational, or strategic objectives. In response to the need to reduce ongoing operating costs, we have implemented a substantial reduction in our workforce.
Our contractors, suppliers, and licensors may not be required or financially able to indemnify us in the event that a claim of infringement is asserted against us, or they may be required to indemnify us only up to a maximum amount, above which we would be responsible for any further costs or damages. 15 Some of the products that we manufacture, sell, or use may be covered by claims in issued patents held by other persons or entities, and as such, upon notice from such persons or entity, we may be required to pay a license fee or may be required to cease all manufacture, sale or use of such products, which could negatively impact our financial results or operations.
Our contractors, suppliers, and licensors may not be required or financially able to indemnify us in the event that a claim of infringement is asserted against us, or they may be required to indemnify us only up to a maximum amount, above which we would be responsible for any further costs or damages. 13 Some of the products that we manufacture, sell, or use may be covered by claims in issued patents held by other persons or entities, and as such, upon notice from such persons or entity, we may be required to pay a license fee or may be required to cease all manufacture, sale or use of such products, which could negatively impact our financial results or operations.
Any failures or disruptions in the services provided by these third-party vendors could result in excessive costs or significant disruptions to our business operations. 18 Specifically, any disruptions, delays, or deficiencies caused by our enterprise resource planning system or other outsourced systems could negatively impact our ability to process orders, ship products, provide services and customer support, send invoices, track payments, fulfill contractual obligations, and maintain overall business operations.
Any failures or disruptions in the services provided by these third-party vendors could result in excessive costs or significant disruptions to our business operations. 16 Specifically, any disruptions, delays, or deficiencies caused by our enterprise resource planning system or other outsourced systems could negatively impact our ability to process orders, ship products, provide services and customer support, send invoices, track payments, fulfill contractual obligations, and maintain overall business operations.
Our diagnostic tests face competition from similar products produced by numerous multinational and regional competitors who are heavily investing in competing technologies. Additionally, some of our distributors have developed, or may develop, their own products to compete directly with ours. 14 Many of our competitors have substantial competitive advantages over us, including significantly greater financial, technical, and research resources.
Our diagnostic tests face competition from similar products produced by numerous multinational and regional competitors who are heavily investing in competing technologies. Additionally, some of our distributors have developed, or may develop, their own products to compete directly with ours. 12 Many of our competitors have substantial competitive advantages over us, including significantly greater financial, technical, and research resources.
Any substantial underinsured loss resulting from such a claim or defect would have a material adverse effect on our operating results and financial conditions and the damage to our reputation or product lines in the industry could have a material adverse effect on our business. 17 We are exposed to business risks which, if not covered by insurance, could have an adverse effect on our results of operations.
Any substantial underinsured loss resulting from such a claim or defect would have a material adverse effect on our operating results and financial conditions and the damage to our reputation or product lines in the industry could have a material adverse effect on our business. 15 We are exposed to business risks which, if not covered by insurance, could have an adverse effect on our results of operations.
We rely on distributor organizations and sales agents to market and sell our products abroad, which exposes us to various foreign risks, including: ● Compliance Challenges: We must adhere to diverse and evolving registration requirements, which can be controlled by distributors, complicating transitions and limiting our ability to benefit from product registrations. ● Regulatory Risks: We must comply with complex foreign and U.S. laws and regulations, such as import/export limitations, the Foreign Corrupt Practices Act, and local laws in each market. ● Tariffs and Trade Barriers: As we expand into new countries and regions, we face changing tariffs and trade barriers, particularly in China, where tariff policies are in flux. ● Currency Exchange Fluctuations: Our international sales are subject to currency risks, as changes in the values of foreign currencies relative to the U.S. dollar can make our products more expensive and negatively impact sales. ● Payment and Pricing Challenges: We encounter longer payment cycles, generally lower average selling prices, and greater difficulty in collecting accounts receivable. ● Legal Enforceability: We may lack the ability to enforce receivables collections contracts in foreign legal systems. ● Intellectual Property Risks: There is often reduced protection for, and enforcement of, intellectual property rights in foreign markets. ● Political and Economic Instability: We are exposed to political and economic instability in regions where we currently sell or plan to expand our product sales. ● Tax Consequences: We face complex and potentially adverse tax implications in different jurisdictions. ● Product Diversion: Products sold internationally at lower prices may be diverted back to the United States, affecting our domestic sales. 13 Most of our international sales are negotiated and paid in U.S. dollars.
We rely on distributor organizations and sales agents to market and sell our products abroad, which exposes us to various foreign risks, including: ● Compliance Challenges: We must adhere to diverse and evolving registration requirements, which can be controlled by distributors, complicating transitions and limiting our ability to benefit from product registrations. ● Regulatory Risks: We must comply with complex foreign and U.S. laws and regulations, such as import/export limitations, the Foreign Corrupt Practices Act, and local laws in each market. ● Tariffs and Trade Barriers: As we expand into new countries and regions, we face changing tariffs and trade barriers, particularly in China which accounts for a large percentage of our sales, and where tariff policies are troublesome. ● Currency Exchange Fluctuations: Our international sales are subject to currency risks, as changes in the values of foreign currencies relative to the U.S. dollar can make our products more expensive and negatively impact sales. ● Payment and Pricing Challenges: We encounter longer payment cycles, generally lower average selling prices, and greater difficulty in collecting accounts receivable. ● Legal Enforceability: We may lack the ability to enforce receivables collections contracts in foreign legal systems. ● Intellectual Property Risks: There is often reduced protection for, and enforcement of, intellectual property rights in foreign markets. ● Political and Economic Instability: We are exposed to political and economic instability in regions where we currently sell or plan to expand our product sales. ● Tax Consequences: We face complex and potentially adverse tax implications in different jurisdictions. ● Product Diversion: Products sold internationally at lower prices may be diverted back to the United States, affecting our domestic sales. 11 Most of our international sales are negotiated and paid in U.S. dollars.
If our Vendors do not successfully carry out their contractual duties or obligations or meet expected deadlines, if they need to be replaced, or if the quality or accuracy of the clinical data they obtain is compromised due to their failure to adhere to our clinical protocols, regulatory requirements or for other reasons, our clinical trials may be extended, delayed or terminated, and we may not be able to obtain regulatory approval for or successfully commercialize our product candidates.
If our Clinical Research Partners do not successfully carry out their contractual duties or obligations or meet expected deadlines, if they need to be replaced, or if the quality or accuracy of the clinical data they obtain is compromised due to their failure to adhere to our clinical protocols, regulatory requirements or for other reasons, our clinical trials may be extended, delayed or terminated, and we may not be able to obtain regulatory approval for or successfully commercialize our product candidates.
Our financial statements as of May 31, 2024, have been prepared under the assumption that we will continue as a going concern for the next twelve months from the date of issuance.
Our financial statements as of May 31, 2025, have been prepared under the assumption that we will continue as a going concern for the next twelve months from the date of issuance.
RISKS RELATED TO OUR BUSINESS We have a history of operating losses. We have a history of operating losses, and there is no guarantee that we will achieve profitability in the future. Our ability to generate net profits and maintain positive cash flows is uncertain.
We have a history of operating losses, and there is no guarantee that we will achieve profitability in the future. Our ability to generate net profits and maintain positive cash flows is uncertain.
To the extent the costs and procedures associated with meeting new or changing requirements are substantial, our business, results of operations and financial condition could be adversely affected. 16 Our total revenue could be affected by third-party reimbursement policies and potential cost constraints. The end-users of our products are primarily physicians, labs, and other healthcare providers.
To the extent the costs and procedures associated with meeting new or changing requirements are substantial, our business, results of operations and financial condition could be adversely affected. 14 Our total revenue could be affected by third-party reimbursement policies and potential cost constraints. The end-users of our products are physicians, labs, other healthcare providers and direct consumers.
Moreover, despite network security and backup measures, some of our servers and those of our vendors may still be susceptible to physical or electronic break-ins, computer viruses, and similar disruptive issues. Cybersecurity risks are escalating and pose significant threats to our operations.
Moreover, despite network security and backup measures, some of our servers and those of our Clinical Research Partners may still be susceptible to physical or electronic break-ins, computer viruses, and similar disruptive issues. Cybersecurity risks are escalating and pose significant threats to our operations.
This supplement was intended to facilitate the sale of up to $5,500,000 in common stock through ATM offerings, as defined in Rule 415 under the Securities Act.
This supplement was intended to facilitate the sale of up to $5,500,000 in common stock through an At The Market (ATM) offerings, as defined in Rule 415 under the Securities Act.
Despite our and our vendors’ implementation of security measures, information technology systems remain vulnerable to damage from various sources, including computer viruses, unauthorized access, telecommunications or network failures, malicious human acts, terrorism, and natural disasters.
Despite our and our Clinical Research Partners’ implementation of security measures, information technology systems remain vulnerable to damage from various sources, including computer viruses, unauthorized access, telecommunications or network failures, malicious human acts, terrorism, and natural disasters.
In the future, if we, our Vendors or our clinical sites fail to comply with applicable GCPs, the clinical data generated in our clinical trials may be deemed unreliable and the FDA may require us to perform additional clinical trials before approving our marketing applications.
In the future, if we, our Clinical Research Partnersor our clinical sites fail to comply with applicable GCPs, the clinical data generated in our clinical trials may be deemed unreliable and the FDA may require us to perform additional clinical trials before approving our marketing applications.
Key factors include: ● Regulatory Clearances: Delays or issues with obtaining regulatory approvals in the U.S., Europe, and other markets. ● Regulatory Compliance: Challenges in meeting compliance requirements in various jurisdictions. ● Competition: Introduction of superior or lower-priced products by competitors could impact our market share. ● Reimbursement Changes: Alterations in reimbursement systems or amounts could affect product usage decisions. ● Economic Conditions: Economic downturns, changes in healthcare spending, reduced consumer demand, inflation, and currency fluctuations. ● Legal and Regulatory Changes: New or amended laws and regulations affecting our business operations. ● Market Penetration: Lower than expected adoption of new or recently introduced products. ● Distributor Dynamics: Variability in distributor inventory levels, buying patterns, and overall performance. ● Government Mandates: Risks from shelter-in-place orders, lockdowns, or other crisis-related directives. ● Health Crises: Potential resurgence of COVID-19 or new health threats. ● Healthcare Market Changes: Consolidation in our customer base or shifts in the healthcare market landscape. 11 Fluctuations in our operating results, for any reason, could cause operating losses as a result of significant fixed expenses.
Key factors include: ● Regulatory Clearances: Delays or issues with obtaining regulatory approvals in the U.S., Europe, and other markets. ● Regulatory Compliance: Challenges in meeting compliance requirements in various jurisdictions. ● Competition: Introduction of superior or lower-priced products by competitors could impact our market share. ● Reimbursement Changes: Alterations in reimbursement systems or amounts could affect product usage decisions. ● Economic Conditions: Economic downturns, changes in healthcare spending, reduced consumer demand, inflation, and currency fluctuations. ● Legal and Regulatory Changes: New or amended laws and regulations affecting our business operations. ● Market Penetration: Lower than expected adoption of new or recently introduced products. ● Distributor Dynamics: Variability in distributor inventory levels, buying patterns, and overall performance. ● Government Mandates: Risks from shelter-in-place orders, lockdowns, or other crisis-related directives. ● Tariffs: Potential of order holds or sales delays or reductions due to Tariffs ● Healthcare Market Changes: Consolidation in our customer base or shifts in the healthcare market landscape. 9 Fluctuations in our operating results, for any reason, could cause operating losses as a result of significant fixed expenses.
We face risks relating to our international sales, including economic, political, and regulatory challenges, which could impact our financial performance, disrupt our business operations, and hinder our growth strategy. Our products are primarily sold internationally, with significant sales to distributors in Asia and Europe.
We face risks relating to our international sales, including economic, political, and regulatory challenges, which could impact our financial performance, disrupt our business operations, and hinder our growth strategy. A significant amount of our products are sold internationally, with substantial sales to distributors in Asia and Europe.
We, our Vendors, and our clinical sites are required to comply with current Good Clinical Practices (“GCPs”), regulations, and guidelines issued by the FDA and by similar governmental authorities in other countries where we are conducting clinical trials.
We, and our Clinical Research Partners, are required to comply with current Good Clinical Practices (“GCPs”), regulations, and guidelines issued by the FDA and by similar governmental authorities in other countries where we are conducting clinical trials.
We have an ongoing obligation to monitor the activities conducted by our Vendors and at our clinical sites to confirm compliance with these requirements.
We have an ongoing obligation to monitor the activities conducted by our Clinical Research Partners and at our clinical sites to confirm compliance with these requirements.
We rely on third-party contract research organizations (“CROs”), universities or/clinical sites (“Vendors”), to coordinate, monitor and conduct of our clinical trials and to manage, analyze, and interpret data for our clinical programs.
We rely on third-party contract research organizations (“CROs”), universities or/clinical sites collectively, (“Clinical Research Partners”), to coordinate, monitor and conduct of our clinical trials and to manage, analyze, and interpret data for our clinical programs.
Despite rigorous safety protocols, the possibility of accidental contamination or injury cannot be entirely eliminated. In the event of an accident, we could face significant liability for harm or damages, potentially exceeding our financial resources. Compliance with environmental regulations also entails substantial costs.
Our research and production processes involve the use of hazardous materials, which presents inherent risks. Despite rigorous safety protocols, the possibility of accidental contamination or injury cannot be entirely eliminated. In the event of an accident, we could face significant liability for harm or damages, potentially exceeding our financial resources. Compliance with environmental regulations also entails substantial costs.
We rely on a limited number of key distributors that account for a substantial majority of our total revenue. The loss of any key distributor or an unsuccessful effort by us to directly distribute our products could lead to reduced sales. Our net sales were approximately $5,415,000 for fiscal 2024, compared to $5,339,000 for fiscal 2023.
We rely on a limited number of key distributors that account for a substantial majority of our total revenue. The loss of any key distributor or an unsuccessful effort by us to directly distribute our products could lead to reduced sales.
Although we have Federal income tax net operating loss carryforwards of approximately $24,384,000 and California state income tax net operating loss carryforwards of approximately $22,014,000, as of May 31, 2024, use of these loss carryforwards will depend on future income in relationship to expirations dates of these carryforwards.
Although we have Federal income tax net operating loss carryforwards of approximately $28,378,000 and California state income tax net operating loss carryforwards of approximately $26,921,000, as of May 31, 2025, use of these loss carryforwards will depend on future income in relationship to expirations dates of these carryforwards.
Use of our products would be adversely impacted if physicians and other healthcare providers do not receive adequate reimbursement for the cost of our products by their patients’ third-party payers both in the United States and in foreign markets. Our total revenue could also be adversely affected by changes or trends in reimbursement policies of governmental or private healthcare payers.
The growth needed in the sales of our products would be adversely impacted if physicians and other healthcare providers do not receive adequate reimbursement for the cost of our products by their patients’ third-party payers both in the United States and in foreign markets.
These factors could lead to unforeseen costs and disruptions, materially impacting our business, financial results, and operational stability. 12 We use hazardous materials in our research and production that may result in unexpected and substantial claims against us relating to handling, storage, or disposal. Our research and production processes involve the use of hazardous materials, which presents inherent risks.
Additionally, there is a risk of labor shortages, which could affect our manufacturing capabilities. These factors could lead to unforeseen costs and disruptions, materially impacting our business, financial results, and operational stability. 10 We use hazardous materials in our research and production that may result in unexpected and substantial claims against us relating to handling, storage, or disposal.
Future sales by the Company of a substantial number of shares of our common stock in the public market, or the perception that such sales may occur, could adversely affect the then prevailing market price of our common stock and could make it more difficult for us to raise funds in the future through a public offering of our securities.
Future sales by the Company of a substantial number of shares of our common stock in the public market to raise needed capital, or the perception that such sales may occur, could adversely affect the then prevailing market price of our common stock and could make it more difficult for us to raise funds in the future through a public offering of our securities. 17 On September 28, 2023, we filed a “shelf” registration statement on Form S-3 with the SEC, allowing the Company to issue up to $20,000,000 in common shares.
A significant portion of our revenues comes from sales to our distribution partner in China. Political tensions between the U.S. and China could disrupt or reduce our sales in the Chinese market, posing a substantial risk to our business. Our results of operations and financial conditions may be adversely affected by the financial soundness of our customers, distributors, and suppliers.
A significant portion of our revenues comes from sales to our distribution partner in China. Political tensions between the U.S. and China could disrupt or reduce our sales in the Chinese market, posing a substantial risk to our business. Tariffs and trade dynamics may affect order timing.
For the fiscal years ended May 31, 2024, and 2023, the Company had one distributor each year that accounted for 33% and 35% of our net sales, respectively. Total gross receivables as of May 31, 2024, and 2023 were approximately $966,000 and $751,000, respectively.
Our net sales were approximately $5,311,000 for fiscal year ended May 31, 2025, compared to $5,415,000 for fiscal year eneded May 31, 2024. For the fiscal years ended May 31, 2025 and 2024, the Company had one distributor each year that accounted for 31% and 33% of our net sales, respectively.
We believe that the overall escalating cost of medical products and services has led to, and will continue to lead to, increased pressures on the healthcare industry, both foreign and domestic, to reduce the cost of products and services.
Our total revenue could also be adversely affected by changes or trends in reimbursement policies of governmental or private healthcare payers. We believe that the overall escalating cost of medical products and services has led to, and will continue to lead to, increased pressures on the healthcare industry, both foreign and domestic, to reduce the cost of products and services.
As of May 31, 2024, and 2023, the Company had four and one distributor, respectively, that accounted for a total of 64% and 36% of gross accounts receivable. Of the 64% as of May 31, 2024, 37% was owed by a distributor in Asia.
Total gross receivables as of May 31, 2025, and 2024 were approximately $757,000 and $966,000, respectively. As of May 31, 2025 and 2024, the Company had four distributors, respectively, that accounted for a total of 69% and 64% of gross accounts receivable, respectively. Of the 69% as of May 31, 2025, 27% was owed by a distributor in North America.
ITEM 1A. RISK FACTORS The risks described below are not the only ones we face. Additional risks and uncertainties we are not presently aware of or that we currently believe are immaterial may also impair our business operations. Our business could be harmed by any of these risks and uncertainties.
The risks and uncertainties summarized above and described below are not intended to be exhaustive and are not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business operations.
Additionally, the market price of the Common Stock may decline further and stockholders may lose some or all of their investment. Our ability to use our net operating loss carry forwards in the future may be subject to limitation.
Our ability to use our net operating loss carry forwards in the future may be subject to limitation.
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The trading price of our common stock could decline due to any of these risks, and you may lose all or part of your investment. In assessing these risks, you should also refer to the other information contained or incorporated by reference into this annual report on Form 10-K, including our consolidated financial statements and related notes.
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ITEM 1A. RISK FACTORS Investing in our securities involves a high degree of risk.
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Factors such as social unrest, potential terrorism, export and import restrictions, and fluctuations in currency exchange rates could impact our operations. Additionally, there is a risk of labor shortages, which could affect our manufacturing capabilities.
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You should carefully consider the risks and uncertainties described below, together with the other information in this Annual Report, including our consolidated financial statements and the related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” before deciding whether to invest in our securities.
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On July 21, 2020, we filed with the SEC a “shelf” registration statement on Form S-3. The registration statement registers common shares that may be issued by the Company in a maximum aggregate amount of up to $90,000,000.
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The occurrence of one or more of the events or circumstances described in these risk factors, alone or in combination with other events or circumstances, may have a material adverse effect on our business, reputation, revenue, financial condition, results of operations, and future prospects, in which event the market price of our Common Stock could decline, and you could lose part or all of your investment.
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Shares of our common stock may be sold from time to time under this registration statement for up to three years from the filing date.
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This Annual Report also contains forward-looking statements that involve risks and uncertainties, refer to “Cautionary Note Regarding Forward-Looking Statements.” Our actual results could differ materially and adversely from our anticipated results as a result of a number of factors, including the risks described below. RISKS RELATED TO OUR BUSINESS We have a history of operating losses.
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On January 22, 2021, we filed a prospectus supplement for the sale of up to $15,000,000 of shares of our common stock in an at-the-market (“ATM”) offering under the shelf registration statement, of which approximately $5,290,000 were sold under the ATM.
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Also, evolving EU IVDR requirements may increase compliance costs and extend certification timelines, which could limit our ability to sell certain IVDD products in the EU. The Company maintains a manufacturing plant in Mexico which presents risks to the Company including risks associated with doing business outside the United States.
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In March 2023, we terminated the ATM offering and sold 3,333,333 shares of our common stock in a firm commitment public offering under the shelf registration statement.
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In certain markets, tariff changes and related trade uncertainties contributed to extended lead times and rescheduled shipments, which affected the timing of revenue recognition for certain international orders. Our results of operations and financial conditions may be adversely affected by the financial soundness of our customers, distributors, and suppliers.
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Shares sold in the underwritten public offering were sold at a gross sales price of $2.40 per share, resulting in net proceeds from the offering, after deducting issuance fees and expenses, of approximately $7,300,000.
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Finally, we are in the process of applying for Government payer reimbursement for our inFoods IBS® product in the US market. If we are unsuccessful in attaining reimbursement for this product, we will likely fall well short of our future revenue projections.
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At fiscal year-end 2023, the Company did not have an open ATM offering in place. 19 On September 28, 2023, we filed a “shelf” registration statement on Form S-3 with the SEC, allowing the Company to issue up to $20,000,000 in common shares.
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In order to attain needed capital to operate the Company, we may need to issue preferred stock, warrants, convertible debt or other financial instruments that could have liquidation priority, requirements for interest or dividend payments, or other rights and that could be detrimental to existing shareholders’ return on their investment in the Company.
Removed
The Company is not currently in compliance with the continued listing requirements for The Nasdaq Stock Market. If the Company does not regain compliance and continue to meet the continued listing requirements, our Common Stock may be delisted, which could affect the market price and liquidity for the Company’s Common Stock and reduce the Company’s ability to raise additional capital.
Removed
The Company received a letter from the Listing Qualifications Staff of the Nasdaq Stock Market, LLC (“Nasdaq”) on or about May 7, 2024, that the Company is not in compliance with the requirement to maintain a minimum bid price of $1.00 per share for 30 consecutive trading days for continued listing on Nasdaq, as set forth in Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Price Requirement”).
Removed
Since the receipt of this notice from Nasdaq, the Company’s stock has not closed with a bid traded above $1.00 per common share. 20 The Notice indicated the Company has 180 calendar days, or until November 4, 2024 (the “Compliance Period”), to regain compliance with the Rule.
Removed
If at any time during the Compliance Period the closing bid price of the Company’s common stock is at least $1.00 for a minimum of ten consecutive business days, then the Company will regain compliance. If the Company fails to regain compliance during the Compliance Period, Nasdaq may grant the Company additional time to regain compliance (the “Additional Compliance Period”).
Removed
To qualify for the Additional Compliance Period, the Company will be required to meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for The Nasdaq Capital Market, with the exception of the bid price requirement, and will need to provide written notice of its intention to cure the deficiency during the Additional Compliance Period.
Removed
If the Company does not meet these requirements or it appears to Nasdaq that the Company will not be able to cure the deficiency during the Additional Compliance Period, then Nasdaq will provide notice to the Company that its common stock will be subject to delisting.
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When a company receives such delisting notice, the company can request a hearing before a Nasdaq hearings panel (the “Panel”).
Removed
If the Common Stock closes at or below $0.10 for ten consecutive days during the Compliance Period or any additional compliance period, the Company could receive a Staff Delisting Determination during the Compliance Period or any additional compliance period or, if the Company receives such Staff Delisting Determination, Nasdaq may not grant the Company’s request for a hearing, or if Nasdaq grants the Company’s request for a hearing, the Panel may not grant the Company’s request for continued listing of the Common Stock on The Nasdaq Capital Market pending the Company’s compliance with all applicable listing criteria, including the Minimum Bid Price Requirement, or the Company may be unable to timely satisfy the terms of any extension that may be granted by the Panel.
Removed
The Company will continue to monitor the closing bid price of its Class A Common Stock and seek to regain compliance with all applicable Nasdaq requirements within the allotted compliance periods and may, if appropriate, consider available options, including implementation of a reverse stock split, to regain compliance with the Minimum Bid Price Requirement or the Low Priced Stocks Rule, as applicable.
Removed
The Company may fail to regain compliance with the Minimum Bid Price requirement during the Compliance Period or maintain compliance with the other Nasdaq listing requirements.
Removed
Any non-compliance may be costly, divert management’s time and attention, and could have a material adverse effect on the Company’s business, reputation, financing, and results of operation A delisting could substantially decrease trading in the Common Stock, adversely affect the market liquidity of the Common Stock as a result of the loss of market efficiencies associated with Nasdaq and the loss of federal pre-emption of state securities laws, materially adversely affect its ability to obtain financing on acceptable terms, if at all, and may result in the potential loss of confidence by investors, suppliers, customers and employees and fewer business development opportunities.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeCYBERSECURITY We have implemented and maintain an information security program designed to identify, assess, and manage material risks from cybersecurity threats to our critical computer networks, third party hosted services, communications systems, hardware and software, and our critical data including intellectual property, clinical trial participant and patient-related data, and confidential information that is proprietary, strategic or competitive in nature, or collectively, Information Systems and Data. 21 Our cybersecurity threat risk management processes include the following, among others: ● We have strategically integrated cybersecurity risk management into our broader risk management framework to promote a company-wide culture of cybersecurity risk management particularly since we utilize a third-party IT managed services vendor.
Biggest changeCYBERSECURITY We have implemented and maintain an information security program designed to identify, assess, and manage material risks from cybersecurity threats to our critical computer networks, third party hosted services, communications systems, hardware and software, and our critical data including intellectual property, clinical trial participant and patient-related data, and confidential information that is proprietary, strategic or competitive in nature, or collectively, Information Systems and Data. 18 Our cybersecurity threat risk management processes include the following, among others: ● We have strategically integrated cybersecurity risk management into our broader risk management framework to promote a company-wide culture of cybersecurity risk management particularly since we utilize a third-party IT managed services vendor.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWhen the Company extended its lease in April 2021, it was also granted an additional five- year lease extension option. The current rent is approximately $27,000 per month and will increase on September 1, 2024, to $28,000 per month. The security deposit is approximately $22,000.
Biggest changeWhen the Company extended its lease in April 2021, it was also granted an additional five- year lease extension option. The current rent is approximately $28,000 per month and will increase on September 1, 2025, to $28,500 per month. The security deposit is approximately $22,000.
ITEM 2. PROPERTIES The Company leases its facilities. On May 31, 2024, the Company had approximately 22,000 square feet of floor space at its corporate headquarters at 17571 Von Karman Avenue in Irvine, California, 92614 which it has been leasing since 2009.
ITEM 2. PROPERTIES The Company leases its facilities. On May 31, 2025, the Company had approximately 22,000 square feet of floor space at its corporate headquarters at 17571 Von Karman Avenue in Irvine, California, 92614 which it has been leasing since 2009.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeNonetheless, based on current information, management believes these matters will not have a material adverse effect on the Company’s consolidated financial position, results of operations, or cash flows.
Biggest changeNonetheless, based on current information, management believes these matters will not have a material adverse effect on the Company’s consolidated financial position, results of operations, or cash flows. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 19 PART II
ITEM 3. LEGAL PROCEEDINGS From time to time, the Company is involved in legal proceedings, claims, and litigation arising in the ordinary course of business, which may impact its financial results. As of May 31, 2024, there were no pending legal proceedings.
ITEM 3. LEGAL PROCEEDINGS From time to time, the Company is involved in legal proceedings, claims, and litigation arising in the ordinary course of business, which may impact its financial results. As of May 31, 2025, there were no pending legal proceedings.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES The Company’s common stock is listed for trading on the Nasdaq Capital Market stock exchange under the symbol BMRA. As of August 28, 2024, the number of holders of record of Biomerica’s common stock was approximately 850, excluding stock held in street name.
Biggest changeITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is listed for trading on the Nasdaq Capital Market stock exchange under the symbol BMRA.
The Company has not paid any cash dividends on its common stock in the past and does not plan to pay any cash dividends on its common stock in the foreseeable future. The Company intends, for the foreseeable future, to retain any earnings to finance the continued operation and expansion of the Company’s business.
Dividends The Company has not paid any cash dividends on its common stock in the past and does not plan to pay any cash dividends on its common stock in the foreseeable future. The Company intends, for the foreseeable future, to retain any earnings to finance the continued operation and expansion of the Company’s business.
We did not purchase any of our shares of common stock or other securities during our fiscal year ended May 31, 2024.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers We did not purchase any of our shares of common stock or other securities during our fiscal year ended May 31, 2025.
Removed
The table below provides information relating to our equity compensation plans as of May 31, 2024: Securities Plan Category Number of Securities to be Issued Upon Exercise of Outstanding Options Compensation Plans Weighted-Average Exercise Price of Outstanding Options Securities Remaining Available for Future Issuance Under Compensation Plans Equity Compensation Plans Approved by Securities Holders 3,479,616 $ 2.53 89,801
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Holders As of August 29, 2025, the number of holders of record of Biomerica’s common stock was approximately 858, excluding stock held in street name.
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Performance Graph We are a smaller reporting company, as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item. Recent Sales of Unregistered Securities None.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

45 edited+28 added−27 removed24 unchanged
Biggest changeThe Company’s ability to continue as a going concern over the next twelve months is influenced by several factors, including: ● Our need and ability to generate additional revenue from international opportunities and our new product launches; ● Our need to access the capital and debt markets to meet current obligations and fund operations; ● Our capacity to manage operating expenses and maintain gross margins as we grow; and ● Our ability to retain key employees and maintain critical operations with a substantially reduced workforce.
Biggest changeLIQUIDITY, CAPITAL RESOURCES AND GOING CONCERN The following are the principal sources of liquidity: Year Ended May 31, 2025 2024 Cash and cash equivalents $ 2,399,000 $ 4,170,000 Working capital including cash and cash equivalents $ 3,135,000 $ 5,527,000 The Company’s ability to continue as a going concern over the next twelve months is influenced by several factors, including: ● Our need and ability to generate additional revenue from international opportunities and our new product launches; ● Our need to access the capital and debt markets to meet current obligations and fund operations; ● Our capacity to manage operating expenses and maintain gross margins as we grow; and ● Our ability to retain key employees and maintain critical operations with a substantially reduced workforce; and ● Certain SEC regulations that limit the amount of capital the Company can raise through issuance of its equity.
Our over-the-counter (home use) and professional use (physicians’ office, clinics, etc.) rapid diagnostic test products help manage existing medical conditions and may save lives through early detection and diagnosis of specific diseases. Traditionally, such tests required the expertise of medical technologists and sophisticated equipment, with results often not available for days.
Our home use (over-the-counter) and professional use (physicians’ office, clinics, etc.) rapid diagnostic test products help manage existing medical conditions and may save lives through early detection and diagnosis of specific diseases. Traditionally, such tests required the expertise of medical technologists and sophisticated equipment, with results often not available for days.
As part of our efforts to reduce costs, we have initiated significant cost-cutting measures to extend our cash runway and work towards increasing revenues to cover overhead costs. These measures include a workforce reduction of nearly 15% and a substantial reduction in other operating expenses.
As part of our efforts to reduce costs, we have initiated significant cost-cutting measures to extend our cash runway and work towards increasing revenues to cover overhead costs. These measures include a workforce reduction of nearly 16% and a substantial reduction in other operating expenses.
Management has analyzed the Company’s cash flow requirements through August 2025 and beyond. Based on this analysis, we believe our current cash and cash equivalents are insufficient to meet our operating cash requirements and strategic growth objectives for the next twelve months.
Management has analyzed the Company’s cash flow requirements through August 2026 and beyond. Based on this analysis, we believe our current cash and cash equivalents are insufficient to meet our operating cash requirements and strategic growth objectives for the next twelve months.
We have launched the inFoods ® IBS product, which leverages this patented technology. The inFoods® IBS product utilizes a simple blood test to identify patient-specific foods that, when eliminated from the diet, may alleviate IBS symptoms such as pain, bloating, diarrhea, cramping, and constipation.
We have launched inFoods® IBS product, which leverages this patented technology. The inFoods® IBS product utilizes a simple blood test to identify patient-specific foods that, when eliminated from the diet, may help reduce IBS symptoms such as pain, bloating, diarrhea, cramping, and constipation.
As of August 28, 2024, the date on which this Annual Report on Form 10-K for the fiscal year ended May 31, 2024, is filed with the SEC, our 2023 Registration Statement remains subject to the offering limits set forth in General Instruction I.B.6 of Form S-3 because our public float is less than $75 million.
As of August 29, 2025, the date on which this Annual Report on Form 10-K for the fiscal year ended May 31, 2025, is filed with the SEC, our 2023 Registration Statement remains subject to the offering limits set forth in General Instruction I.B.6 of Form S-3 because our public float is less than $75 million.
Services for some contract work are invoiced and recognized as the project progresses. 28 SHARE-BASED COMPENSATION The Company follows the guidance of ASC 718, Share-based Compensation (“ASC 718”), which requires the use of the fair-value based method to determine compensation for all arrangements under which employees and others receive shares of stock or equity instruments (options).
Services for some contract works are invoiced and recognized as the project progresses. 25 SHARE-BASED COMPENSATION The Company follows the guidance of ASC 718, Share-based Compensation (“ASC 718”), which requires the use of the fair-value based method to determine compensation for all arrangements under which employees and others receive shares of stock or equity instruments (options).
We invest considerable resources in the research and development of new products designed to diagnose and, in some cases, treat several major medical diseases. These products are both internally developed and obtained licensed from others. Our experienced and highly trained technical personnel, including Ph.D. holders and other scientists, are dedicated to developing new products and managing technology transfer activities.
We invest resources in the research and development of new products designed to diagnose and, in some cases, treat several major medical diseases. These products are either internally developed or licensed from others. Our experienced and highly trained technical personnel, including Ph.D. holders and other scientists, are dedicated to developing new products and managing technology transfer activities.
In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-07, “Improvements to Reportable Segment Disclosures.” The ASU includes enhanced disclosure requirements, primarily related to significant segment expenses that are regularly provided to and used by the chief operating decision maker (“CODM”). The amendments are to be applied retrospectively to all prior periods presented in the financial statements.
In November 2023, the FASB issued ASU 2023-07, “Improvements to Reportable Segment Disclosures.” The ASU includes enhanced disclosure requirements, primarily related to significant segment expenses that are regularly provided to and used by the chief operating decision maker (“CODM”). The amendments are to be applied retrospectively to all prior periods presented in the financial statements.
A key outcome of our recent research and development efforts is our patented diagnostic-guided therapy (“DGT”) product, developed on the inFoods ® technology platform. This innovative product is designed to treat gastrointestinal conditions such as irritable bowel syndrome (“IBS”) and other inflammatory diseases, targeting chronic inflammatory illnesses that are widespread and prevalent in large markets.
A key outcome from our research and development efforts is our patented diagnostic-guided therapy (“DGT”) product, developed on the inFoods® technology platform. This innovative technology is designed to aid in the management of gastrointestinal conditions such as irritable bowel syndrome (“IBS”) and other inflammatory diseases. The DGT product targets chronic inflammatory illnesses that are widespread and prevalent in large markets.
We believe that rapid point-of-care tests, when properly developed and used, can be as accurate as laboratory tests. They require limited to no instrumentation, deliver reliable results in minutes, and can be performed with confidence in the home or physician’s office.
We believe our rapid point-of-care tests, when properly used, can be as accurate as laboratory tests. Our products require limited to no instrumentation, deliver reliable results in minutes, and can be performed with confidence at home or in a physician’s office.
The ASU includes enhanced disclosure requirements, primarily related to the rate reconciliation and income taxes paid information. The amendments are to be applied prospectively in the financial statements. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. We are currently evaluating the effect of adopting this pronouncement on our financial statements and disclosures.
The ASU includes enhanced disclosure requirements, primarily related to the rate reconciliation and income taxes paid information. The amendments are to be applied prospectively in the financial statements. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS You should read the following discussion and analysis in conjunction with our consolidated financial statements and the accompanying notes thereto included in Part II, Item 8 of this Report.
ITEM 7. 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 in conjunction with our consolidated financial statements and the accompanying notes thereto included elsewhere in this Annual Report on Form 10-K.
RECENT ACCOUNTING PRONOUNCEMENTS Recent ASU’s issued by the FASB and guidance issued by the SEC did not, or are not believed by the management to, have a material effect on the Company’s present or future consolidated financial statements. In June 2016, the FASB issued ASU 2016-13.
RECENT ACCOUNTING PRONOUNCEMENTS Recent ASU’s issued by the Financial Accounting Standards Board (“FASB”) and guidance issued by the SEC did not, or are not believed by the management to, have a material effect on the Company’s present or future consolidated financial statements.
For purposes of this limitation, the aggregate market value of our outstanding common stock held by non-affiliates, or public float, was $7,037,587, based on 15,639,082 non-restricted shares of our outstanding common stock held by non-affiliates and a price of $0.45 per share, which was the price at which our common stock was last sold on the Nasdaq Capital Market on July 2, 2024 (a date within 60 days of the date hereof), calculated in accordance with General Instruction I.B.6 of Form S-3.
For purposes of this limitation, the aggregate market value of our outstanding common stock held by non-affiliates, or public float, was $9,945,252, based on 2,402,235 non-restricted shares of our outstanding common stock held by non-affiliates and a price of $4.14 per share, which was the price at which our common stock was last sold on the Nasdaq Capital Market on July 24, 2025 (a date within 60 days of the date hereof), calculated in accordance with General Instruction I.B.6 of Form S-3.
On May 10, 2024, the Company filed a prospectus supplement with the SEC, as part of the registration statement filed on September 28, 2023, which was declared effective on September 29, 2023. This supplement was intended to facilitate the sale of up to $5,500,000 in common stock through ATM offerings, as defined in Rule 415 under the Securities Act.
On May 10, 2024, the Company filed a prospectus supplement to the 2023 Registration Statement with the SEC for the sale of up to $5,500,000 in common stock through ATM offerings, as defined in Rule 415 under the Securities Act.
In addition, our business is subject to additional risks and uncertainties, including, but not limited to, those described in Item 1A. “Risk Factors”. 26 Operating Activities During fiscal 2024, cash used in operating activities was approximately $5,361,000, compared to $5,474,000 for fiscal 2023.
In addition, our business is subject to additional risks and uncertainties, including, but not limited to, those described in Item 1A. “Risk Factors”. 23 Operating Activities During the fiscal year ended May 31, 2025, cash used in operating activities was approximately $3,841,000 compared to $5,361,000 for the fiscal year ended May 31, 2024.
Our inventory valuation reserves totaled $467,000 and $672,000 as of May 31, 2024 and 2023, representing approximately 16% and 25% of our inventory, respectively.
Our inventory valuation reserves totaled $471,000 and $467,000 as of May 31, 2025 and 2024, representing approximately 24% and 16% of our inventory, respectively.
This discussion and analysis contains forward-looking statements that are based on our management’s current beliefs and assumptions, which statements are subject to substantial risks and uncertainties.
This discussion and analysis contains forward-looking statements that are based on our management team’s expectations, beliefs, intentions, strategies, estimates and assumptions, which statements are subject to substantial risks and uncertainties.
Unlike broad and difficult-to-manage dietary restrictions, the inFoods® IBS product pinpoints a patient’s heightened immunoreactivity to specific foods known to frequently trigger IBS symptoms. By removing the foods identified as problematic, patients can achieve relief from their IBS symptoms.
Unlike broad and difficult to manage dietary restrictions, the inFoods® IBS product pinpoints a patient’s heightened immunoreactivity to specific foods known to frequently trigger IBS symptoms.
As part of our financing plan, on September 28, 2023, we filed a “shelf” registration statement on Form S-3 with the SEC, allowing the Company to issue up to $20,000,000 in common shares. Under this registration statement, shares of our common stock may be sold from time to time for up to three years from the filing date.
As part of our financing plan, on September 28, 2023, we filed a “shelf” registration statement on Form S-3 with the SEC, which was declared effective on September 29, 2023, allowing the Company to issue up to $20,000,000 in shares of our common stock.
RESULTS OF OPERATIONS Net Sales and Cost of Sales The following is a breakdown of revenues according to markets to which the products are sold: Year Ended May 31, Increase (Decrease) 2024 2023 $ % Clinical lab $ 3,236,000 $ 3,310,000 $ (74,000 ) -2 % Over-the-counter 1,426,000 1,169,000 257,000 22 % Contract manufacturing 741,000 610,000 131,000 21 % Physician’s office 12,000 250,000 (238,000 ) -95 % Total $ 5,415,000 $ 5,339,000 $ 76,000 1 % For fiscal 2024, our net sales were approximately $5,415,000, representing an increase of $76,000, or 1%, compared to $5,339,000 for fiscal 2023.
RESULTS OF OPERATIONS Net Sales and Cost of Sales The following is a breakdown of revenues according to markets to which the products are sold: Year Ended May 31, Increase (Decrease) 2025 2024 $ % Clinical lab $ 3,181,000 $ 3,236,000 $ (55,000 ) -2 % Over-the-counter 1,049,000 1,426,000 (377,000 ) -26 % Contract manufacturing 1,070,000 741,000 329,000 44 % Physician’s office 11,000 12,000 (1,000 ) -8 % Total $ 5,311,000 $ 5,415,000 $ (104,000 ) -2 % For the fiscal year ended May 31, 2025, our net sales were approximately $5,311,000, representing a decrease of $104,000, or 2%, compared to $5,415,000 for the fiscal year ended May 31, 2024.
During fiscal 2024, the Company purchased approximately $51,000 of property and equipment and had $64,000 in expenditures related to patents. During fiscal 2023, the Company purchased approximately $64,000 of property and equipment and had $14,000 in expenditures related to patents.
During the fiscal year ended May 31, 2025, we had $37,000 in expenditures related to patents. During the fiscal year ended May 31, 2024, we purchased approximately $51,000 of property and equipment and had $64,000 in expenditures related to patents.
ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, with early adoption permitted. We are currently evaluating the effect of adopting this pronouncement on our financial statements and disclosures. In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”.
ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, with early adoption permitted. The Company adopted ASU 2023-07 on May 31, 2025, and the adoption of this update did not have a material impact on the Company’s consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”.
Despite these increases, the overall cost reductions from the previous year underscore our commitment to strategically allocating capital and maintaining financial discipline while pursuing growth opportunities. Research and Development Our research and development expenses were approximately $1,491,000 for fiscal 2024 compared to $1,584,000 for fiscal 2023, a decrease of $93,000, or 6%.
Overall, the decrease in SG&A expenses demonstrates our continued commitment to strategically allocating capital and maintaining financial discipline while pursuing growth opportunities. Research and Development Our research and development expenses were approximately $1,023,000 for the fiscal year ended May 31, 2025, compared to $1,491,000 for the fiscal year ended May 31, 2024, a decrease of $468,000, or 31%.
Our actual results may differ materially from those expressed or implied by these forward-looking statements as a result of many factors, including those discussed in “Risk Factors” included in Part I, Item 1A of this Report.
Our actual results may differ materially from those expressed or implied by these forward-looking statements as a result of many factors, including those discussed in the sections titled “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” appearing elsewhere in this Annual Report on Form 10-K.
These were partially offset by an increase in accounts payable and accrued expenses of $246,000, and non-cash expenses of approximately $1,211,000. During fiscal 2023, cash used in operating activities was approximately $5,474,000.
These were partially offset by an increase in accounts payable and accrued expenses of $246,000, and non-cash expenses of approximately $1,211,000. Investing Activities During the fiscal year ended May 31, 2025, cash used in investing activities was approximately $37,000, as compared to $115,000 for the fiscal year ended May 31, 2024.
Due to slower-than-expected launch of the Company’s key products, inFoods ® IBS and hp+detect ™ , the Company has initiated significant cost-cutting measures to extend its cash runway and work towards increasing revenues to cover overhead costs. These measures include a workforce reduction of nearly 15%.
We are actively promoting hp+detect™ to large end-customer laboratories and positioning the product for commercial adoption. Due to the slower-than-expected launch of our key products, inFoods ® IBS and hp+detect ™ , we have initiated significant cost-cutting measures to extend our cash runway and work towards increasing revenues to cover overhead costs.
In contrast, our non-COVID-19 products, which accounted for approximately 100% and 96% of our revenues during the fiscal years ended May 31, 2024, and 2023, respectively, and have been our core focus. Technological advances in medical diagnostics have enabled diagnostic tests to be performed not only in clinical laboratories but also at home and at the point-of-care in physicians’ offices.
Technological advances in medical diagnostics have enabled diagnostic tests to be performed not only in clinical laboratories but also at home and at the point-of-care in physicians’ offices.
Operating Expenses The following is a summary of operating expenses: Year Ended May 31, 2024 2023 Increase (Decrease) Operating Expense As a % of Total Revenues Operating Expense As a % of Total Revenues $ % Selling, General and Administrative Expenses $ 5,487,000 101 % $ 6,085,000 114 % $ (598,000 ) -10 % Research and Development $ 1,491,000 28 % $ 1,584,000 30 % $ (93,000 ) -6 % 25 Selling, General and Administrative Expenses Our selling, general, and administrative expenses were approximately $5,487,000 for fiscal 2024, compared to $6,085,000 for fiscal 2023, a decrease of $598,000, or 10%.
The overall margin impact also reflected a shift in sales mix, with lower over-the-counter sales, which typically generate higher margins in the retail market. 22 Operating Expenses The following is a summary of operating expenses: Year Ended May 31, 2025 2024 Increase (Decrease) Operating Expense As a % of Total Revenues Operating Expense As a % of Total Revenues $ % Selling, General and Administrative Expenses $ 4,612,000 87 % $ 5,487,000 101 % $ (875,000 ) -16 % Research and Development $ 1,023,000 19 % $ 1,491,000 28 % $ (468,000 ) -31 % Selling, General and Administrative Expenses Our selling, general, and administrative expenses were approximately $4,612,000 for the fiscal year ended May 31, 2025, compared to $5,487,000 for the fiscal year ended May 31, 2024, a decrease of $875,000, or 16%.
Consolidated cost of sales for fiscal 2024 was approximately $4,804,000, or 89% of net sales, compared to $4,893,000, or 92% of net sales, for fiscal 2023, reflecting a slight decrease of $89,000, or 2%. The decrease was primarily driven by a $171,000 reduction due to the absence of COVID-related sales.
Consolidated cost of sales for the fiscal year ended May 31, 2025 was approximately $4,813,000, or 91% of net sales, compared to $4,804,000, or 89% of net sales, for the fiscal year ended May 31, 2024, reflecting a slight increase of $9,000, or 0.2%.
Our diagnostic test kits are used to analyze blood, urine, nasal or fecal material from patients in the diagnosis of various diseases, food intolerances and other medical complications, or to measure the level of specific hormones, antibodies, antigens or other substances, which may exist in the human body in extremely small concentrations.
OVERVIEW We are a global biomedical technology company that develops, patents, manufactures and markets advanced diagnostic and therapeutic products. Our diagnostic test kits are used to analyze blood, urine, nasal, or fecal material from patients in the diagnosis of various diseases, food intolerances, and other medical complications.
The primary factors that contributed to this were a loss of approximately $7,140,000, an increase in accounts receivable of $291,000, a decrease in inventory reserves of $174,000, and a decrease in accounts payable and accrued expenses of $80,000 and a decrease in lease liability of $297,000.
The primary factors contributing to this were a loss of approximately $4,973,000, an increase in inventory reserves of $4,000, an increase in accounts receivable of $209,000, a decrease in inventories of $882,000 and a non-cash expense of approximately $944,000.
These were partially offset by an increase in the allowance on accounts receivable of $342,000, a decrease in inventories of $534,000, and non-cash expenses of approximately $1,536,000. Investing Activities During fiscal 2024, cash used in investing activities was approximately $115,000, as compared to $78,000 for fiscal 2023.
These were partially offset by a decrease in accounts payable and accrued expenses of $467,000, and reduction in lease liabilities of $326,000. During the fiscal year ended May 31, 2024, cash used in operating activities was approximately $5,361,000, compared to $5,474,000 for the fiscal year ended May 31, 2023.
The decrease in fiscal 2024 was primarily driven by a reduction in share-based compensation expenses, which decreased by $45,000, and cost optimizations in our inFoods ® R&D projects, resulting in savings of $47,000. For a detailed discussion of our ongoing research initiatives and their potential market impacts, please refer to the ‘Research and Development’ section in Item 1.
For a detailed discussion of our ongoing research initiatives and their potential market impacts, please refer to the “Research and Development” section in Item 1. Dividend and Interest income Dividend and interest income was approximately $165,000 for the fiscal year ended May 31, 2025, compared to $431,000 for the fiscal year ended May 31, 2024.
After giving effect to the $2,345,862 offering limit imposed by General Instruction I.B.6 of Form S-3, and after deducting the shares we sold within the preceding 12 months, as of the date of filing this Annual Report, we may sell $2,345,862 shares of our common stock at this time under the 2023 Shelf Registration Statement. 27 SUBSEQUENT EVENTS As part of our ongoing efforts to reduce costs, we have implemented significant cost-cutting measures, including a workforce reduction of nearly 15% in July 2024.
After giving effect to the $3,315,084 offering limit imposed by General Instruction I.B.6 of Form S-3, and after deducting the shares we sold within the preceding 12 months, as of the date of filing this Annual Report, we may sell $231,986 shares of our common stock at this time under the 2023 Shelf Registration Statement . 24 SUBSEQUENT EVENTS On July 21, 2025, the Company received a cash refund of approximately $1.1 million from the Internal Revenue Service (IRS) related to previously filed claims for the Employee Retention Credit (ERC), a refundable payroll tax credit under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
Early adoption is permitted. The Company adopted ASU 2016-03 on June 1, 2023, and the adoption of this update did not have a material impact on the Company’s condensed consolidated financial statements.
The Company adopted ASU 2023-07 on May 31, 2025, and the adoption of this update did not have a material impact on the Company’s consolidated financial statements. In November 2024, the FASB issued ASU 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40)”.
The hp+detect ™ test provides physicians and medical centers with a reliable tool for diagnosing H. pylori infections and monitoring the effectiveness and safety of treatments. The diagnostic test is marketed directly to laboratories, where patient samples are analyzed, and diagnoses are made.
This bacterium is recognized as the strongest known risk factor for gastric cancer, which remains one of the leading causes of cancer-related deaths globally. The hp+detect™ test is marketed directly to laboratories and is intended to provide physicians and medical centers with a reliable tool for diagnosing H. pylori infections and monitoring treatment effectiveness.
During fiscal 2024 and 2023, the Company received approximately $0 and $9,309,000, respectively, in net proceeds from the sale of common stock.
By contrast, in the fiscal year ended May 31, 2024, our financing activities primarily consisted of $81,000 in payments for deferred offering costs. During the fiscal years ended May 31, 2025 and 2024, we received approximately $2,015,000 and $0, respectively, in net proceeds from the sale of common stock.
Financing Activities Cash used in financing activities for fiscal 2024 was approximately $81,000, compared to cash provided by financing activities of $9,390,000 in fiscal 2023. In fiscal 2024, the Company did not receive any proceeds from the exercise of stock options, whereas in fiscal 2023, the Company received approximately $81,000 from such exercises.
Financing Activities Cash provided financing activities was approximately $2,111,000 for the fiscal year ended May 31, 2025, compared to cash used in financing activities of $81,000 in the fiscal year ended May 31, 2024.
Most of our products are Conformite Europeenne (“ CE”) marked and/or registered with regulatory agencies in various countries for diagnostic use, with several also cleared for sale in the United States by the FDA. Due to the global SARS-CoV-2 novel coronavirus (“COVID-19”) pandemic, we began developing, marketing, and selling COVID-19 diagnostic tests in March 2020.
Our extensive range of medical diagnostic products is sold worldwide, primarily in two markets: clinical laboratories and point-of-care settings. Most of our products are Conformite Europeenne (“CE”) marked and/or registered with regulatory agencies in various countries for diagnostic use, with several also cleared by the U.S. Food and Drug Administration (“FDA”) for sale in the United States.
Our diagnostic test kits analyze blood, urine, nasal, or fecal specimens from patients to diagnose various diseases, food intolerances, and other medical conditions. They measure or detect the presence and levels of specific bacteria, hormones, antibodies, antigens, and other substances in the body, often in extremely small concentrations.
They can also be used to measure or detect the presence and levels of specific bacteria, hormones, antibodies, antigens and other substances, which may exist in the human body in extremely small concentrations. Our products are designed to enhance the health and well-being of people, while reducing total healthcare cost.
These GI practices are beginning to prescribe inFoods® IBS to their patients. Our dedicated sales team is deepening relationships within the GI segment and strategically targeting opportunities to introduce inFoods® to other medical specialties.
GI physician feedback has been generally positive, and we are continuing to expand our network by onboarding additional physician practices. Our dedicated sales team is focused on building strong relationships within the GI segment while selectively exploring opportunities to introduce inFoods® to other medical specialties, including integrated health practices and primary-care providers.
We have launched our inFoods® product across numerous gastroenterology (“GI”) physician groups in various states and regions, including collaboration with one of the largest GI groups in the U.S. Feedback from GI specialty physicians have generally been positive, and we are actively expanding our network by onboarding additional physician practices.
By removing the foods identified as problematic, patients can achieve relief from IBS symptoms. 21 We have introduced our inFoods® product to select gastroenterology (“GI”) physician groups in multiple states and regions, including collaboration with one of the largest GI groups in the U.S. This initial phase was focused on gathering real-world feedback, optimizing physician engagement, and validating operational processes.
As part of this transaction, the Company incurred $81,000 in deferred offering costs. The amount of capital that we can raise under the ATM offering is highly dependent upon the trading volume and the trading price of our stock.
As part of this transaction, the Company incurred $81,000 in deferred offering costs during the fiscal year ended May 31, 2024.
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OVERVIEW Biomerica, Inc. and its subsidiaries (which includes wholly-owned subsidiaries, Biomerica de Mexico and BioEurope GmbH), is a global biomedical technology company that develops, patents, manufactures and markets advanced diagnostic and therapeutic products.
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These efforts are intended to lay the groundwork for broader adoption by showcasing the distinct clinical value of inFoods® across multiple healthcare channels. Concurrently, we are evaluating distribution, partnership, and licensing opportunities with U.S. companies to support a scalable, broad market launch. These potential collaborations could significantly enhance the commercialization trajectory of inFoods® products, both domestically and internationally.
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The Company’s products are designed to enhance the health and well-being of people, while reducing total healthcare costs. 23 Our extensive range of medical diagnostic products is sold worldwide, primarily in two markets: clinical laboratories and point-of-care settings, including physicians’ offices and over-the-counter sales at major retailers such as Walmart, CVS Pharmacy, and Amazon.
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We are currently in the process of applying for US government payment or reimbursement for the inFoods IBS product through the Medicare system. If the Company is successful in attaining reimbursement, we will move forward with applying for reimbursement of this product by private payer insurance companies.
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We started selling these tests in fiscal 2021, generating significant revenues during fiscal 2021 and 2022. However, we experienced a substantial drop in sales in fiscal 2023, followed by no sales of our COVID-19-related products in fiscal 2024 due to falling demand. Consequently, our COVID-19 product sales have caused significant fluctuations in our revenues over the past four years.
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If patients are able to attain and use our inFoods IBS® product at no cost, or with a small co-payment, we believe this will dramatically increase our revenues from this product.
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By leveraging their expertise and building strong partnerships, our sales team is now working to engage with key physician groups outside the GI field such as integrated health practices and primary-care general practitioners.
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As we continue pursue commercial opportunities in both U.S. and international markets, we remain attentive to evolving global economic conditions, including uncertainties related to international trade policies, tariffs, and supply chain dynamics.
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These efforts aim to broaden our market reach and enhance the overall adoption of inFoods® across various healthcare sectors and to capitalize on the distinct advantages of inFoods® for a strong foundation of meaningful growth in the future.
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Although these factors have not had a material impact on our operations to date, future changes in trade regulations, tariff structures, or logistical constraints could influence the cost, availability, or timing of materials and components used in our manufacturing processes.
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We are also continuing to evaluate distribution, partnership and licensing opportunities with U.S. and multinational companies, which have the potential to significantly aid in the commercialization and accelerated growth of inFoods® products both domestically and internationally. 24 Beyond our inFoods ® product line, our additional efforts have led to a significant milestone by receiving FDA clearance in December 2023 for hp+detect ™ , a new diagnostic test for detecting Helicobacter pylori (“H. pylori”) bacteria in the gastrointestinal tract.
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We continue to monitor these developments closely and are actively implementing contingency plans, including alternative sourcing strategies and supplier diversification, to support supply chain continuity, maintain operational efficiency, and help mitigate potential future impacts.
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H. pylori is a widespread infection, affecting an estimated 35% of the U.S. population and 45% of the population in Europe’s five largest countries. This bacterium is recognized as the strongest known risk factor for gastric cancer, which is the third most common cause of cancer-related deaths globally.
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We are also focusing on alternative manufacturing and shipping strategies of our products through our European subsidiary (BioEurope), and our Mexican subsidiary (BioMexico), to mitigate some of the risk these policies may have on our revenues and operations.
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To support the launch and distribution of hp+detect ™ , we are actively promoting the test to large end-customer labs. This strategic initiative aims to enhance patient care by enabling timely and accurate detection of H. pylori infections.
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In addition, in December 2023 we received FDA clearance for hp+detect™, a diagnostic test designed to detect Helicobacter pylori (H. pylori) bacteria in the gastrointestinal tract. H. pylori is a prevalent infection, affecting approximately 35% of the U.S. population and 45% of the population in Europe’s largest countries.
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In addition, the Company is actively exploring strategic opportunities to enhance and create shareholder value.
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These measures include a workforce reduction of nearly 15% during this fiscal year, which incurred costs such as severance, impacting typical cost trends and margins. Additionally, we raised $2,015,000 in net proceeds from the ATM offering filed in May 2024 providing additional liquidity to support our operations. We are actively exploring strategic opportunities to enhance and create shareholder value.
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When comparing fiscal 2024 net sales excluding COVID-19 test sales from fiscal 2023, there is an increase of $290,000, or 5%. This growth was primarily attributable to the $257,000 increase in OTC Product sales that were within the UAE market, reflecting stronger demand and expanded distribution channels in the region.
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Reverse Stock Split Effective April 21, 2025 (the “Effective Date”), we filed a Certificate of Amendment to our Second Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware, to effect a 1-for-8 reverse stock split (the “Reverse Stock Split”) of our Common Stock.
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Additionally, a $131,000 increase in revenues from Contract Manufacturing projects contributed positively to our overall sales performance. These increases were partially offset by a $214,000 decline in sales of COVID-19 tests as the global pandemic situation stabilized.
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Beginning with the opening of trading on the Effective Date, our common stock began trading on Nasdaq on a split-adjusted basis under the same symbol, “BMRA.” As a result of the Reverse Stock Split, every 8 shares of our common stock issued and outstanding were automatically combined and converted into 1 validly issued, fully paid and non-assessable share of common stock.
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However, this decline was partially offset by a $32,000 increase in OTC product costs and a $56,000 rise in contract manufacturing costs, reflecting higher sales in both categories during fiscal year 2024.
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In lieu of any fractional shares, stockholders who would otherwise have been entitled to receive a fractional share instead had their interests automatically rounded up to the next whole share, after aggregating all the fractional interests of a holder resulting from the Reverse Stock Split.
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The reduction in fiscal 2024 was primarily due to decreases of $822,000 in legal expenses, $399,000 in bad debt expenses, and $247,000 in share-based compensation.
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The Reverse Stock Split did not change the number of authorized shares of our common stock or preferred stock as set forth in our Certificate of Incorporation, as amended.
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These significant operating expense reductions were partially offset by strategic investments in key areas of our business, including a $535,000 expansion of our sales team, a $136,000 increase in sales commission expenses, and a $171,000 increase in outside services for sales and administration.
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All historical share and per share data for the periods presented in our consolidated financial statements, including for periods ending prior to the Effective Date, has been adjusted to reflect the 1-for-8 Reverse Stock Split on a retroactive basis as if the Reverse Stock Split occurred as of the earliest period presented.
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Dividend and Interest income Dividend and interest income for fiscal 2024 and 2023 was approximately $431,000 and $133,000, respectively. The $298,000 increase was primarily driven by higher market interest rates on our cash and cash equivalents.
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The decrease was primarily driven by reduced retail market activity, lower international over-the-counter sales due to potential tariff impacts, and volatility in clinical laboratory demand. These declines were partially offset by higher contract manufacturing billings and increased demand for our inFoods® IBS product.
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LIQUIDITY, CAPITAL RESOURCES AND GOING CONCERN The following are the principal sources of liquidity: Year Ended May 31, 2024 2023 Cash and cash equivalents $ 4,170,000 $ 9,719,000 Working capital including cash and cash equivalents $ 5,527,000 $ 10,852,000 As of May 31, 2024 and 2023, the Company had cash and cash equivalents of approximately $4,170,000 and $9,719,000, respectively.
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The increase was primarily attributable to higher contract manufacturing costs, driven by increased sales in this category, as well as higher costs associated with our inFoods® product. These increases were partially offset by a reduction in direct labor costs.
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As of May 31, 2024 and 2023, the Company had working capital of approximately $5,527,000 and $10,852,000, respectively.
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This reduction reflects our strategic financial management and was primarily attributable to a $351,000 decrease in payroll expenses following a reduction in force implemented in July 2024, a $327,000 decrease in stock compensation, a $66,000 decrease in marketing expenses for OTC products, and a $59,000 decrease in sales and marketing outside services.
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The average trading volume of our stock over the last three full calendar months is approximately 229,000 shares per day and the high and low trading price of our stock during the same period of time was $1.25 and $0.50, respectively.

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