What changed in this filing

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Item 1. Business

2024-08-28 compared with 2023-08-25 · 247 added, 329 removed, 211 unchanged (73% of the section changed)

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are a global biomedical technology company that develops, patents, manufactures and markets advanced diagnostic and therapeutic products.

used at the point-of-care (in home and in physicians’ offices) and in hospital/clinical laboratories for detection and/or treatment

of medical conditions and diseases.

Our products are designed to enhance the health and well-being of people, while reducing total healthcare

primary focus is the research, development, commercialization and in certain cases regulatory approval, of patented, diagnostic-guided

therapy (“DGT”) products to treat gastrointestinal diseases, such as irritable bowel syndrome (“IBS”), and other

inflammatory diseases.

These products are directed at chronic inflammatory illnesses that are widespread and common, and as such address

very large markets.

Our InFoods® IBS product uses a simple blood sample and is designed to identify patient-specific foods that,

when removed from the diet, may alleviate IBS symptoms such as pain, bloating, diarrhea and constipation.

Instead of broad and difficult

to manage dietary restrictions, the InFoods® IBS product works by identifying specific foods that may be an abnormally high immune

response in the patient.

A food identified as positive, which is causing the abnormal immune response in the patient, can

be simply removed from the diet to help alleviate IBS symptoms.

fiscal 2022, we completed an endpoint determination clinical trial on our InFoods® IBS product.

This trial was conducted

at Mayo Clinics in Florida and Arizona, Beth Israel Deaconess Medical Center Inc., a Harvard Medical School Teaching Hospital, University

of Texas Health Science Center at Houston, Houston Methodist, the University of Michigan and other institutions.

This trial monitored

IBS patients over an 8-week treatment period to determine the efficacy of our InFoods® IBS product to improve the patients’

IBS symptoms or endpoints.

The top-line trial results were reported in February 2022.

Multiple endpoints demonstrated statistically significant

improvements, indicating that the elimination of specific foods may meaningfully reduce the symptoms of IBS in each patient subtype (including

patients with IBS-Constipation, IBS-Diarrhea & IBS-Mixed).

The greatest clinical improvements, including but not limited to abdominal

pain and bloating, were seen in patients diagnosed with IBS-Mixed and IBS-Constipation, in the top line data.

The purpose of the endpoint

study was to validate the efficacy of the product, and to determine the primary symptom endpoint, or endpoints to be used in a final

pivotal trial that will be conducted to attain the validation data needed to apply for U.S.

Food and Drug Administration (“FDA”)

clearance for the product.

We are continuing to review and refine the complete dataset and have selected the final endpoint

that we would intend to use in a final pivotal trial.

We are starting to develop the protocol for submission to the FDA, and once

approved the trial will be run thereafter.

The trial is expected to include the large medical institution participants that conducted

the endpoint clinical trial, in addition to other new institutions and a Clinical Research Organization.

the successful completion and positive results from the Company’s InFoods ® IBS clinical trial, we saw

significant interest from Gastroenterology (“GI”) physicians who would like to provide the InFoods ® IBS product

to their patients.

Therefore, while we continue the work of advancing this product toward FDA clearance, during our fourth quarter of

fiscal 2023, we launched the InFoods ® IBS product through a CAP-Certified high-complexity Clinical Laboratory Improvement Amendments (“CLIA”) laboratory facility and

began offering the product as a laboratory developed test (“LDT”) to GI physicians.

The first physician group to offer InFoods ®

IBS to their IBS patients is Gastro Health at their flagship location in Miami, Florida.

Gastro Health is a leading GI physician

group with over 390 physicians operating in over 150 offices in seven states.

IBS product is currently offered on a “cash-pay” basis (without insurance reimbursement) to IBS patients.

we have begun the process of speaking to reimbursement consultants who can help us seek and attain reimbursement through government pay

(i.e., Medicare and Medicaid), and from private insurers.

are also beginning the work of validating one new disease (such as ulcerative colitis or migraines), where there is evidence that

certain foods can trigger or contribute to the symptoms found in patients suffering from those illnesses.

Each InFoods ® test

is developed specifically for patients suffering from the disease being targeted.

For instance, the panel of foods that would be

tested for patients with migraines will be different from the known problematic foods that we test for in IBS.

We have already

performed much of the initial research and development work necessary to determine what foods are commonly problematic for each of

eight different diseases.

We have found that some diseases show approximately 20 foods that are commonly problematic for patients,

while other diseases show over 70 foods for which patients commonly show an abnormal immune response.

Once the panel of problematic

foods is identified for a specific disease, the panel must then be tested to confirm which of the problematic food are

causing an abnormal and harmful immune response.

any new disease we target will follow a similar development pathway as InFoods ® IBS in simultaneously seeking FDA

clearance of the product while also launching the product as an LDT.

are also continuing to evaluate partnership/licensing opportunities, as they arise, with U.S.

and multinational companies that could

help us commercialize, or accelerate revenue growth of, the InFoods ® products in the United States and overseas.

existing medical diagnostic products are sold worldwide primarily in two markets:

1) clinical laboratories and 2) point-of-care (physicians’

offices and over-the-counter drugstores like Walmart and Walgreens).

The diagnostic test kits are used to analyze blood, urine, nasal

or fecal specimens from patients in the diagnosis of various diseases, food intolerances and other medical complications, by measuring

or detecting the existence and/or level of specific bacteria, hormones, antibodies, antigens, or other substances, which may exist in

a patient’s body, stools, or blood, often in extremely small concentrations.

fiscal 2022, we finalized development of our H.

Pylori diagnostic test that indicates if a patient is infected with the H.

Pylori bacteria.

Pylori infection is extremely common, and if left untreated, can lead to ulcers and possibly stomach cancers.

During our fourth quarter

of fiscal 2022, we applied for FDA clearance of this product though a 510(k) premarket submission.

We have been in communication with

the FDA answering certain follow-up questions and providing additional data as requested.

We are working with the FDA to perform one

additional set of in-lab tests that the FDA has requested prior to making their final determination on clearance of the product.

Provided we receive FDA clearance, we will begin marketing the product in the U.S.

We have already begun discussions with international distributors for

this product and expect to see revenues through these international channels during 2024.

have recently added new employees in our sales and marketing department in order to increase sales of existing products.

In fiscal 2023,

we also hired a Chief Commercial Officer (“CCO”) with broad experience launching new products at large diagnostic companies.

Our CCO is focused on the commercial launch of the InFoods ® IBS product to the GI physician groups in the U.S.

to the global 2019 SARS-CoV-2 novel coronavirus (“COVID-19”) pandemic, in March 2020, we began developing, marketing, and

selling COVID-19 diagnostic tests.

In fiscal 2022, we generated revenues from the international sale of our COVID-19 antigen tests.

to falling demand for such tests, the Company generated 4% of our sales during fiscal year 2023, as compared to 75% of our revenue during

fiscal year 2022.

Due to the dramatic increase in fiscal 2022 revenues, and subsequent decrease in fiscal 2023 revenues from this COVID-related

product, we saw significant volatility in our revenues and our earnings during those two fiscal years.

By the end of fiscal year 2023,

and during our fourth quarter, none of our revenues came from the sale of COVID-related tests.

non-COVID-19 products that accounted for approximately 96% and 25% of our revenues during the fiscal years ended May 31, 2023, and 2022,

respectively, are primarily focused on gastrointestinal diseases, food intolerances, and certain esoteric tests.

These diagnostic test

products utilize immunoassay technology.

Most of our products are CE marked and/or sold for diagnostic use where they are registered

by each country’s regulatory agency.

In addition, some products are cleared for sale in the United States by the FDA.

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.

Our products are designed to enhance health

and well-being while reducing overall healthcare costs.

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.

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.

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.

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.

TECHNOLOGICAL ADVANCEMENTS AND PRODUCT

Technological

advances in medical diagnostics have made it possible to perform diagnostic tests within the home and the physician’s office (the

point-of-care), rather than in the clinical laboratory.

One of our objectives also has been to develop and market rapid diagnostic tests

that are accurate, utilize easily obtained patient specimens, and are simple to perform without instrumentation.

Our over-the-counter

(home use) and professional use (doctor’s office, clinics, etc.) rapid diagnostic test products help to manage existing medical

conditions and may save lives through early detection and diagnosis of specific diseases.

Typically, tests of this kind require the services

of medical technologists and sophisticated instrumentation.

Further, results are often not available until at least the following day.

We believe rapid point-of-care tests can be as accurate as laboratory tests when developed and used properly, may require limited to

no instrumentation, can give reliable results in minutes, and can be performed with confidence in the home or the physician’s office.

expend considerable funds in research and development of certain new products that diagnose and, in certain cases, are designed to be

used as a therapy for several major medical diseases.

These products are both internally developed and licensed from others.

experienced and highly trained technical personnel (including Ph.D.’s and other scientists) to develop new products and evaluate

and implement technology technical transfer activities.

Our technical staff, many of whom have been previously employed at large diagnostic

manufacturing companies, has extensive industry experience.

We also rely on our Scientific Advisory Board of leading medical doctors

and clinicians to assist in guiding our clinical studies and product development.

maintains its headquarters in Irvine, California, where it houses administration, finance, regulatory compliance, product development,

sales and marketing, customer services and its primary manufacturing operations.

Biomerica maintains manufacturing and assembly operations

in Mexicali, Mexico, in order to reduce the cost of manufacturing and compete more effectively worldwide.

Biomerica also has a legal

entity in Europe, BioEurope GmbH, for the purpose of selling certain products internationally.

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.

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.

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.

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

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 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.

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

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 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.

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

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 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.

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.

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

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.

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.

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.

INITIATIVES AND COST MANAGEMENT

to slower-than-expected launches 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

These measures include a workforce reduction of nearly 15% and a significant reduction in expenses.

Additionally, we are actively exploring strategic opportunities

to enhance shareholder value.

OPERATIONS AND GLOBAL PRESENCE

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.

Additionally, Biomerica operates BioEurope GmbH in Europe,

facilitating the international sales of specific products.

information about Biomerica is available on our website at www.biomerica.com.

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them to the SEC and are also available online at the SEC’s website at www.sec.gov .

of our diagnostic test kits are manufactured and/or assembled at our facilities in Irvine, California and in Mexicali, Mexico.

diagnostic test kits are manufactured and/or assembled at our facilities in Irvine, California and in Mexicali, Mexico.

We established

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AND DEVELOPMENT

our focus on development of our InFoods ® IBS product, we also focused a portion of our Research and Development (“R&D”)

resources on continued validation of our H.

Pylori diagnostic test.

Our research and development spending driven by our focus on these

tests and outside clinical studies intended to demonstrate the feasibility of FDA clearance for such tests.

We also utilize technical

personnel, with Ph.D.

and other degrees and extensive experience in development and production of health diagnostic

tests, to conduct other development activities and improve existing products, as well as explore potential new technologies that we may

wish to develop and commercialize.

Research and development expenses include the costs of materials, supplies, personnel, consultants,

facilities, outside clinical trial sites and equipment as well as outside contract services.

Consolidated research and development expenses

incurred by Biomerica for the years ended May 31, 2023 and 2022, aggregated to approximately $1,584,000, and $1,812,000, respectively.

As Biomerica moves forward with development, validation and commercialization of additional key products that address diseases with large

market opportunities, research and development expenses are expected to be consistent during upcoming quarters.

the fourth quarter of fiscal 2022, we also submitted our proprietary H.

Pylori test to the FDA for clearance through a 510(k) submission.

The clinical studies for our H.

Pylori were conducted at the University of Southern California, a European University, and several other

Biomerica’s test is designed to provide highly accurate sensitivity and specificity for H.

Pylori testing and for

monitoring of treatment.

We are in the process of finalizing one additional set of in-house validation tests that the FDA has requested

us to complete before they review the submission and decide on the allowance on this product.

have developed a unique diagnostic-guided therapy which we call the InFoods ® technology, that is designed to allow physicians

to identify patient-specific foods (e.g.

pork, milk, onions, sugar, chickpeas, etc.), that when removed from the patient’s diet,

may alleviate or improve their symptoms of IBS and other diseases.

We have filed patents throughout the world pertaining to the use of

our InFoods ® diagnostic technology to detect abnormal immune responses in patients suffering from various diseases.

of these patents have recently been issued with many more in the review and prosecution phase.

The United States Patent and Trademark

Office (“USPTO”) has issued the Company two patents with broad claims that protect this InFoods ® IBS product.

Patents have also been issued in the countries of Australia, Japan, Korea, Mexico, and Singapore.

Additional patent applications pertaining

to the InFoods ® IBS product have been filed in the United States and in other countries.

We are also developing and have

filed patents for products that target other diseases utilizing the InFoods ® technology platform which include:

Dyspepsia, Crohn’s disease, Ulcerative Colitis, Gastroesophageal Reflux disease (“GERD”), Migraine Headaches, Depression,

and Osteoarthritis.

Our first patent to be allowed for a disease/illness other than IBS was allowed in Japan in August 2021.

covers the use of our InFoods ® technology to diagnose and treat persons suffering from depression.

employ a team of highly qualified technical personnel, including Ph.D.

holders and experts with extensive experience in the

development and production of diagnostic tests, to support our research and development (“R&D”) initiatives.

Our team is actively

engaged in enhancing existing products and driving ongoing innovation.

R&D expenses encompass materials, supplies, personnel,

consultants, facilities, outside clinical trial sites, equipment, and contract services.

For the fiscal years ended May 31, 2024,

and 2023, consolidated R&D expenses totaled approximately $1,491,000 and $1,584,000, respectively.

We anticipate that R&D

expenses will decrease significantly in the upcoming quarters as we are in the commercialization phase of inFoods ®

and hp+detect ™ and in an effort to preserve cash.

cornerstone of our R&D efforts is the development of our proprietary

diagnostic-guided therapy, known as the inFoods® technology.

This platform enables physicians to identify patient-specific foods (e.g.,

pork, milk, onions, sugar, chickpeas) that, when eliminated from the patient’s diet, may alleviate or improve symptoms of IBS and other conditions.

We have filed patents globally related to the use of inFoods® diagnostic technology for

detecting abnormal immune responses in patients with various diseases.

Many of these patents have been recently issued, while others are

in the review and prosecution phase.

The United States Patent and Trademark Office (“USPTO”) has granted us two patents with broad claims

protecting the inFoods® IBS product.

Additionally, patents have been issued in Australia, Japan, Korea, Mexico, and Singapore.

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.

In addition to our issued U.S.

we now hold 3 6 foreign patents that have either been issued or for which we have received

a notice of allowance, covering over 50 countries.

These patents protect the use of inFoods® technology for IBS and several other

Notably, our first patent allowed for a disease other than IBS was granted in Japan in August 2021, covering the use of inFoods®

technology for diagnosing and treating depression.

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.

AND METHODS OF DISTRIBUTION

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She possesses broad

international business experience, with communication skills in German, English, Spanish, French, and Portuguese, and scientific and technical

understanding of gastrointestinal diagnostic products.

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.

international business experience, with communication skills in German, English, Spanish, French, and Portuguese, and scientific and

technical understanding of gastrointestinal diagnostic products.

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.

rely on affiliated and unaffiliated distributors, advertising in medical and trade journals, exhibitions at trade shows, direct mailings,

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testing (physicians’ offices and over-the-counter drug stores).

to global and economic disruptions caused by the global COVID-19 pandemic, the ongoing war in Ukraine, and tensions between the

country of China and the United States, the Company’s operations have been negatively impacted.

The Company has faced

disruptions in certain of the following areas, and may face further challenges from supply chain disruptions, cost inflation, loss

of contracts and/or customers, closure of the facilities of the Company’s suppliers, partners and customers, travel, shipping

and logistical disruptions, government responses of all types, international business risks in countries where the Company makes

and/or sells its products, loss of human capital or personnel at the Company, its partners and its customers, interruptions of

production, customer credit risk, and general economic calamities.

The pandemic, war, and geopolitical related disruptions have

materially negatively impacted the Company’s operations and financial performance and may continue to have significant

material negative impacts on the Company depending on possible disruptions from future outbreaks or issues.

net sales were approximately $5,415,000 for fiscal 2024, compared to $5,339,000 for fiscal 2023.

the fiscal years ended May 31, 2023 and 2022, the Company had one distributor and two distributors, respectively, which accounted for

a total of 35% and 65% of total net sales, respectively.

Of this, for the fiscal years ended May 31, 2023 and 2022, the largest of the

distributors mentioned above accounted for 35% and 55%, respectively, of net sales.

gross receivables on May 31, 2023 and 2022 were approximately $751,000 and $927,000, respectively.

As of May 31, 2023 and 2022, the Company

had one distributor which accounted for 36% and 50%, respectively, of gross accounts receivable.

Of the 36% as of May 31, 2023, 100%

was owed by a distributor in Asia.

May 31, 2023 and 2022, Biomerica had a backlog of unshipped orders of approximately $655,000 and $754,000, respectively.

On May 31, 2023,

this consisted primarily of orders to a distributor in Asia.

principal raw materials utilized by Biomerica consist of various chemicals, serums, reagents, and packaging supplies.

Almost all of our

raw materials are available from several sources, and we are not dependent upon any single source of supply or a few suppliers.

due to the limited number of suppliers of some materials, especially those such as antibodies, there is always the possibility that we

may encounter difficulty in the future obtaining key raw materials for its manufacturing processes or that such materials may be exceedingly

For the fiscal year ended May 31, 2023, the Company did not have any significant concentration of vendor spend for raw materials.

For the fiscal year ended May 31, 2022, the Company had one vendor, which accounted for 84% of our purchases of raw materials largely

related to COVID-19 products.

inventory consists of various types of materials including antibodies, antigens, bottles, boxes, various chemicals, and reagents utilized

in the manufacture of our test kits as well as products in various stages of completion.

sourcing and receiving of raw materials were negatively impacted during the global COVID-19 pandemic.

While most of these disruptions

have since been resolved, it is unclear to what extent raw material availability will be impacted in the foreseeable future, and how

that will impact our production and sales.

to the global and domestic supply chain disruptions, and overall inflationary pressures in the economy, we have experienced material

increases in the cost of our raw materials and in our operating and labor costs.

While we have attempted to respond by increasing the

selling price of our own products, the gross margins on our products sold have been negatively impacted.

have certain proprietary products, such as our EZ Detect colon disease home test, the Aware Breast Self Exam product and our InFoods ®

These products have certain and significant competitive advantages compared to tests offered by competitors.

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.

gross receivables as of May 31, 2024, and 2023 were approximately $966,000 and $751,000, respectively.

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.

64% as of May 31, 2024, 37% was owed by a distributor in Asia.

of May 31, 2024, and 2023, Biomerica’s backlog of unshipped orders was approximately $755,000 and $655,000, respectively.

May 31, 2024, the majority of this backlog consisted of orders intended for a distributor in Asia.

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.

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.

inventory includes antibodies, antigens, bottles, boxes, chemicals, and reagents essential for manufacturing our test kits, along with

products in various stages of completion.

the fiscal year ended May 31, 2024, purchases from one vendor accounted for 16% of our raw material procurement, primarily related to

In contrast, for the fiscal year ended May 31, 2023, the Company did not experience significant vendor concentration in raw material

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.

These products stand

out due to their unique features and benefits compared to competing tests in the market.

competitors vary greatly in size.

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and marketing.

primary competitive factors affecting the sale of diagnostic products are uniqueness, technology, quality of product, performance, price,

service, and marketing.

We believe we compete primarily on the basis of the uniqueness of our products, the quality of our products,

the speed of our test results, our patent position, our pricing and our prompt shipment of orders.

We offer a broad range of products

but have had limited marketing capability.

However, recently we have expanded our sales and marketing capability, through

marketing and strategic cooperation with larger companies and distributors and by hiring new employees with marketing and sales expertise.

We have also hired a social media manager who focuses on social media campaigns that are directed at increasing awareness of our products

and driving sales of these products.

In addition, during fiscal 2023, we hired an experienced Chief Commercial Officer, who is focused

on growing sales of our InFoods ® IBS product that is now being offered as an LDT through a certified CLIA lab.

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.

REGULATION OF OUR DIAGNOSTIC BUSINESS

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The FDA enforces these requirements by inspection and post-market surveillance.

The last FDA announced inspection was in November 2019 and no observations were noted.

We believe that all Biomerica products sold in

the United States comply with the FDA and state regulations.

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.

are an FDA regulated and ISO 13485:2016 certified In Vitro Diagnostic Medical Devices company.

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diagnostic products that generally meet or exceed customer requirements and comply with all applicable regulatory requirements:

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.

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.

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.

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

EU In Vitro Diagnostic Medical Device Regulation (“IVDR”) 2017/746 was effective on May 26, 2022.

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are working closely with our Notified Body to update our technical documentation to comply with these more stringent IVDR requirements.

IVDR 2017/746 Amendment 2021/0323 (COD), devices with a CE certificate that was issued in accordance with IVDD may be placed on the market

or put into service until May 26, 2025.

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.

Renewal of CE Certificate for IVDD Quality System was granted to Biomerica.

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2022, which remains effective until May 26, 2025.

We have until May 26, 2025, to update the technical documentation and processes to

meet these regulatory requirements of IVDR 2017/746.

IVDR 2017/746 Amendment 2021/0323 (COD), devices without a CE certificate that was issued in accordance with IVDD, for which a declaration

of conformity was drawn up prior to May 26, 2022, per IVDD and for which the conformity assessment procedure pursuant to IVDR requires

the involvement of a Notified Body, may be placed on the market, or put into service until the following dates.

Biomerica also has until

the following dates to update the technical documentation and processes to meet these regulatory requirements of IVDR 2017/746:

May 26, 2025, for class D devices.

May 26, 2026, for class C devices.

May 26, 2027, for class B devices;

May 26, 2027, for class A devices placed on the market

in sterile condition.

IVDR 2017/746 Amendment Regulation (EU) 2022/112, and published proposal 2024/0021 (COD), devices without a CE certificate that was issued

in accordance with IVDD, for which a declaration of conformity was drawn up prior to May 26, 2022, per IVDD and for which the conformity

assessment procedure pursuant to IVDR requires the involvement of a Notified Body, may be placed on the market, or put into service until

the following dates.

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:

31, 2027, for class D devices, formal application to notified body by May 26, 2025;

31, 2028, for class C devices, formal application to notified body by May 26, 2026;

31, 2029, for class B devices, formal application to notified body by May 26, 2027;

31, 2029, for class A devices placed on the market in sterile condition, formal application

to notified body by May 26, 2027.

business has not been subject to significant seasonal fluctuations.

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last two fiscal years:

the Year Ended May 31,

For the Year Ended May 31,

North America

recognize that our foreign sales could be subject to some special or unusual risks, which are not present in the ordinary course of business

in the United States.

Changes in economic factors, government regulations, terrorism, tariffs, embargos, trade wars, import/export restrictions,

disruptions in shipping and distribution channels, drops in demand for our products due to regional or national shut-downs from the

COVID-19 pandemic, other disease outbreaks that cause patients’ fear or refusal to visit hospitals and healthcare providers

due to the pandemic where our products are sold and used, the erosion of economic conditions in those countries, and many other factors

all could impact sales within certain foreign countries.

In addition, these factors could also impact our ability to collect foreign

accounts receivable.

Foreign countries have licensing requirements applicable to the sale of diagnostic products, which vary substantially

from domestic requirements;

depending upon the product and the foreign country, these may be more or less restrictive than requirements

within the United States and may change without notice.

Foreign sales of our diagnostic products are made primarily through a network

of approximately 40 independent distributors in approximately 30 countries.

regard the protection of our methodologies, designs, product formulations, manufacturing processes, diagnostic procedures,

copyrights, service marks, trademarks, and trade secrets as important to our future success.

We rely on a combination of copyright,

trademark, patent, service mark and trade secret laws, and contractual restrictions to establish and protect our proprietary rights

in products and services.

We have entered into confidentiality and invention assignment agreements with our employees and

contractors, and nondisclosure agreements with most of our fulfillment partners and strategic partners to limit access to and

disclosure of proprietary information.

We cannot be certain that these contractual arrangements or the other steps taken by us to

protect our intellectual property (“IP”) will prevent misappropriation of our technology.

We have licensed in the past,

and expect that we may license in the future, certain of our proprietary rights, such as trademarks, patents, trade secrets, or

copyrighted material, to third parties.

While we attempt to ensure that the quality of our product brands is maintained by such

licensees, we cannot be certain that such licensees will not take actions that might hurt the value of our proprietary rights or

South America

international operations face distinct risks that differ from those encountered in the United States.

These risks include economic fluctuations,

regulatory changes, geopolitical instability (such as terrorism and trade disputes), tariffs, embargoes, import/export restrictions,

and potential disruptions in shipping and distribution channels.

Such factors can significantly impact our foreign sales and may complicate

our ability to collect accounts receivable in international markets during economic downturns.

country has its own licensing requirements for diagnostic products, which can differ considerably from U.S.

regulations and may change

unexpectedly.

Currently, our international sales rely on approximately 38 independent distributors across around 30 countries.

diverse factors contribute to the complexities and uncertainties associated with our international business operations.

consider the protection of our methodologies, designs, product formulations, manufacturing processes, diagnostic procedures, copyrights,

service marks, trademarks, and trade secrets essential for our future success.

To safeguard our proprietary rights in products and services,

we utilize copyright, trademark, patent, service mark, and trade secret laws, alongside contractual restrictions.

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.

However, these measures may not entirely prevent

unauthorized use or disclosure of our technology.

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.

While we strive to maintain the quality of our product brands through these license agreements, we cannot

guarantee that licensees will always act in a manner that preserves the value of our proprietary rights or reputation.

OF THIRD-PARTY INTELLECTUAL PROPERTY

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AND TRADEMARKS

occasionally register our tradenames with the U.S.

Patent and Trademark Office (“USPTO”).

occasionally register our tradenames with the USPTO.

Of note, we registered the tradename

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AND INFOODS TECHNOLOGY

have filed over 100 international and Patent Corporation Treaty patents (“PCT”) and have over multiple provisional and non-provisional

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

Substantially all of our patents that are pending or registered pertain to the inFoods ®

technology platform.

most important family of patent applications pertains to our inFoods ® technology platform, which is a method of diagnosing

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Using a patient blood sample, a physician or lab can run our test to identify

specific foods (e.g., pork, milk, shrimp, broccoli, eggs) that, if eliminated from an IBS patient’s diet, can alleviate or reduce

specific foods (e.g., pork, milk, onions, sugar, chickpeas) that, if eliminated from an IBS patient’s diet, can alleviate or reduce

the individual’s IBS symptoms, including, but not limited to, constipation, diarrhea, bloating, cramping, severe pain, and indigestion.

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Since then, we have been granted a total of 19 patents;

The United States Patent and Trademark

Office (“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 (two patents), Canada, Japan (two

patents), Korea (two patents), Mexico, Panama, Peru, and Singapore, covering our InFoods ® IBS technology.

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.

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 (two patents), Canada, Japan (two patents),

Korea (two patents), Mexico, Panama, Peru, and Singapore, covering our inFoods ® IBS technology.

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.

are also developing and have filed patents with claims that cover products that target other diseases utilizing the inFoods ®

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We have dozens of patents in prosecution or review pertaining to these other diseases, including:

Dyspepsia, Crohn’s disease, Ulcerative Colitis, Gastroesophageal Reflux disease (“GERD”), Migraine Headaches, Depression,

Dyspepsia, Crohn’s disease, Ulcerative Colitis, GERD, Migraine Headaches, Depression,

and Osteoarthritis.

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China – IT based food monitoring and elimination technology.

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.

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.

addition to the use of our own patents, we have acquired from third parties the rights to manufacture and sell certain products that

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property is typically licensed to us under a limited license agreement enabling us to perform the services being contracted.

recently completed an endpoint determination clinical trial on our InFoods® IBS product.

Our business model for this product includes

the possible out-licensing of this product and the related patents to a large international life sciences or technology company that

would commercialize the product or assist us with the commercialization.

We may also out-license the patents or other intellectual property

pertaining to one or more of our other products including but not limited to our H.

have recently launched the inFoods ® IBS product.

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.

of May 31, 2023 and 2022, we employed a total of 62 and 64 employees, respectively, in the United States, Mexico, and Germany, of which

62 and 64 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.

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.

We occasionally employ temporary employees when needed.

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Sales & Marketing

also engage the services of many outside Ph.D.’s, M.D.’s, and other types of industry expert consultants and organizations

as well as medical institutions for technical support, regulatory advisors, marketing and public relations advisors, financial advisors,

contract product development and manufacturing organization, and other advisors on a regular basis.

We try to protect the Company with

the use of confidentiality, intellectual property ownership, and indemnifications agreements.

However, we cannot guarantee that the use

of such experts will fully protect the Company from third-party claims or from theft of our intellectual property.

Production & Operations

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.

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.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business