What changed in this filing

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Item 1. Financial Statements

2024-10-15 compared with 2024-04-12 · 388 added, 515 removed, 215 unchanged (81% of the section changed)

2 unchanged sentences

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

Current Assets:

Cash and cash

Accounts receivable, net

Inventories, net

and cash equivalents

receivable, net

expenses and other

Total current assets

Property and equipment,

net of accumulated depreciation and amortization

Right-of-use assets, net of accumulated amortization

of $ 835,000 and $ 617,000 as of February 29, 2024 and May 31, 2023, respectively

Intangible assets, net

of accumulated amortization of $ 44,000 and $ 30,000 as of February 29, 2024 and May 31, 2023, respectively

Liabilities and Shareholders’

Current Liabilities:

Accounts payable and accrued

Accrued compensation

Advance from customers

current assets

and equipment, net of accumulated depreciation and amortization

assets, net of accumulated amortization of $ 986,000 and $ 910,000 as of August 31, 2024 and May 31, 2024, respectively

assets, net of accumulated amortization of $ 53,000 and $ 48,000 as of August 31, 2024 and May 31, 2024, respectively

and Shareholders’ Equity

payable and accrued expenses

from customers

liabilities, current portion

Total current liabilities

current liabilities

liabilities, net of current portion

Total Liabilities

Commitments and contingencies (Note 6)

Shareholders’ Equity:

Preferred stock, Series

A 5% convertible, $ 0.08 par value, 571,429 shares authorized, none issued and outstanding as of February 29, 2024 and May 31, 2023

Preferred stock, undesignated, no par value,

4,428,571 shares authorized, none issued and outstanding as of February 29, 2024 and May 31, 2023

and contingencies (Note 6)

Shareholders’

stock, Series A 5% convertible, $ 0.08 par value, 571,429 shares authorized, none issued and outstanding as of August 31, 2024 and

stock, undesignated, no par value, 4,428,571 shares authorized, none issued and outstanding as of August 31, 2024 and May 31, 2024

Preferred stock, value

Common stock, $ 0.08 par

value, 25,000,000 shares authorized, 16,821,646 issued and outstanding at February 29, 2024 and May 31, 2023, respectively

Additional paid-in

Accumulated other comprehensive

stock, $ 0.08 par value, 25,000,000 shares authorized, 16,821,646 issued and outstanding at August 31, 2024 and May 31, 2024, respectively

paid-in capital

other comprehensive loss

( 49,511,000 )

( 48,195,000 )

Total Shareholders’

Total Liabilities and

Shareholders’ Equity

Liabilities and Shareholders’ Equity

accompanying notes are an integral part of these statements.

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COMPREHENSIVE LOSS (UNAUDITED)

Cost of sales

( 1,166,000 )

the Three Months Ended August 31,

( 1,518,000 )

( 1,301,000 )

Operating expenses:

Selling, general and administrative

general and administrative

and development

operating expenses

Loss from operations

( 2,000,000 )

( 1,651,000 )

( 4,839,000 )

( 5,387,000 )

Other income:

and dividend income

Loss before income taxes

( 1,914,000 )

( 1,615,000 )

( 4,522,000 )

( 5,310,000 )

Provision (benefit) for

$ ( 1,918,000 )

$ ( 1,650,000 )

operating expense

from operations

( 1,368,000 )

( 1,232,000 )

Basic net loss per common

Diluted net loss per

Weighted average number of common and common equivalent

and interest income

before income taxes

( 1,312,000 )

( 1,109,000 )

for income taxes

$ ( 1,316,000 )

$ ( 1,132,000 )

Other comprehensive income (loss), net of tax:

Foreign currency translation

Comprehensive loss

net loss per common share

average number of common and common equivalent shares:

$ ( 1,316,000 )

$ ( 1,132,000 )

comprehensive loss, net of tax:

currency translation

Comprehensive

$ ( 1,322,000 )

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CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (UNAUDITED)

For the Nine Months Ended February 29, 2024

Additional Paid-in

Accumulated Other Comprehensive

Total Stockholder’s

Balances at May 31, 2023

$ ( 110,000 )

$ ( 42,217,000 )

Foreign currency translation

Share-based compensation

( 1,132,000 )

Balances at August 31, 2023

( 43,349,000 )

Foreign currency translation

Share-based compensation

( 1,507,000 )

Balances at November 30, 2023

( 44,856,000 )

Foreign currency translation

Share-based compensation

( 1,918,000 )

Balances at February

the Three Months Ended August 31, 2023

Comprehensive

Stockholders’

Comprehensive

at May 31, 2023

$ ( 110,000 )

$ ( 42,217,000 )

the Nine Months Ended February 28, 2023

Additional Paid-in

Accumulated Other Comprehensive

Total Stockholder’s

Balances at May 31, 2022

currency translation

( 1,132,000 )

Exercise of stock options

Net proceeds from ATM

Foreign currency translation

Share-based compensation

( 1,132,000 )

at August 31, 2023

$ ( 104,000 )

Balances at August 31, 2022

$ ( 43,349,000 )

Exercise of stock options

Net proceeds from ATM

Foreign currency translation

Share-based compensation

the Three Months Ended August 31, 2024

Stockholders’

Comprehensive

at May 31, 2024

$ ( 102,000 )

$ ( 48,195,000 )

Balances at November 30, 2022

$ ( 102,000 )

$ ( 48,195,000 )

Net proceeds from ATM

Foreign currency translation

Share-based compensation

currency translation

( 1,316,000 )

Balances at February

at August 31, 2024

$ ( 108,000 )

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CONSOLIDATED STATEMENTS OF CASH FLOWS

Cash flows from operating

the Three Months Ended August 31,

flows from operating activities:

$ ( 1,316,000 )

$ ( 1,132,000 )

Adjustments to reconcile

net loss to net cash used in operating activities:

Depreciation and amortization

Recovery for allowance on accounts

Inventory reserve

Share-based compensation

Amortization of right-of-use asset

Changes in assets and liabilities:

Accounts receivable

Prepaid expenses and other

Accounts payable and accrued expenses

Accrued compensation

Advance from customers

Reduction in lease liabilities

Net cash used in operating

to reconcile net loss to net cash used in operating activities:

and amortization

for allowance for credit losses

of right-of-use asset

in assets and liabilities:

expenses and other

payable and accrued expenses

from customers

in lease liabilities

cash used in operating activities

( 1,344,000 )

( 1,674,000 )

Cash flows from investing

Purchases of property and equipment

Expenditures related

to intangibles

Net cash used in investing

Cash flows from financing

Gross proceeds from sale of common stock

Costs from sale of common stock

Proceeds from exercise

of stock options

Net cash provided by financing activities

Effect of exchange rate

changes in cash

Net decrease in cash and cash equivalents

flows from investing activities:

of property and equipment

related to intangibles

cash used in investing activities

of exchange rate changes in cash

decrease in cash and cash equivalents

( 1,350,000 )

( 1,731,000 )

Cash and cash equivalents

at beginning of year

Cash and cash equivalents

at end of period

Supplemental Disclosure of Cash Flow Information:

Cash paid during the period

Non-cash investing and financing

Write off of intangible

assets, accumulated amortization

and cash equivalents at beginning of year

and cash equivalents at end of year

Disclosure of Cash Flow Information:

paid during the period for:

accompanying notes are an integral part of these statements.

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BASIS OF PRESENTATION

and its subsidiaries (which includes wholly-owned subsidiaries, Biomerica de Mexico and BioEurope GmbH) is a biomedical technology

company that develops, patents, manufactures and markets advanced diagnostic and therapeutic products used at the point-of-care (physicians’

offices and over-the-counter through drugstores and online) and in hospital/clinical laboratories for detection and/or treatment of medical

conditions and diseases.

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.

The Company’s products are designed to

enhance the health and well-being of people, while reducing total healthcare costs.

primary focus is the research, development, commercialization and eventual regulatory approval, of patented, diagnostic-guided therapy

(“DGT”) products based on our inFoods® Technology platform that treat gastrointestinal diseases, such as irritable bowel

syndrome (“IBS”), and other inflammatory diseases.

These inFoods based products are directed at chronic inflammatory illnesses

that are widespread and common, and as such address very large markets.

The first product we are launching using this patented inFoods

Technology is our inFoods IBS product which uses a simple blood sample to identify patient-specific foods that, when removed from their

diet, may alleviate IBS symptoms such as pain, bloating, diarrhea, cramping and constipation.

Instead of broad and difficult to manage

dietary restrictions, the inFoods IBS product works by identifying a patient’s above normal immunoreactivity to a panel of specific

foods that have been shown to often be problematic to IBS sufferers.

A food identified as positive (causing an abnormally high immune

response in the patient) is simply removed from the diet to help alleviate IBS symptoms.

have successfully launched our product across numerous gastroenterology (“GI”) physician groups in various states and

This includes collaboration with one of the largest GI groups in the US, now offering inFoods to their patients.

feedback from the GI specialty has been positive, and we are actively expanding our network by onboarding additional physician

These GI practices are beginning to prescribe inFoods IBS to their patients.

At the same time, we recognize the potential

to extend our product’s application to other physician segments.

We are convinced that forming partnerships in these other

segments is the most effective strategy for market penetration.

Currently, we are engaging in discussions with several potential

This strategy enables our newly formed sales team to focus on building strong relationships within the GI segment,

capitalizing on the distinct advantages of the inFoods IBS product.

Consequently, we anticipate sustained revenue growth from the

inFoods IBS product rollout in the upcoming quarters.

addition to our focus on the inFoods products, during the quarter, we also recently received FDA clearance for a new diagnostic test

called hp+detect™, which is used for the detection of the H.

pylori bacteria in a patient’s GI tract.

pylori bacteria

is estimated to infect 35% of the U.S.

population and 45% of the population in Europe’s five largest countries.

pylori infection

is the strongest known risk factor for gastric cancer and gastric cancer is the third most common cause of cancer-related death worldwide.

Physicians and medical centers will now be able use hp+detect™ to diagnose H.

pylori infection and monitor the safety and efficacy

of treatment.

This diagnostic test is sold directly to labs where patient samples are tested and diagnosis occurs.

During the quarter,

we hired a small sales team to market this product.

We also began making this test available to the end customer labs.

other 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 at Walmart, CVS Pharmacy and Amazon).

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.

March 2020, we began developing COVID-19 diagnostic tests to indicate if a person has been infected by COVID-19 or is currently infected.

We began selling these COVID-19 diagnostic tests during fiscal 2021, and we experienced significant revenues from such sales during fiscal

2021 and 2022 with lesser sales in fiscal 2023.

Due to falling demand, there were no sales of our COVID-19 related products in the twelve

months ended February 29, 2024.

As such, our COVID-19 product sales caused significant swings in our revenues over the past over the last four years

products that accounted for all of our revenues during the nine months ended February 29, 2024, are primarily focused on gastrointestinal

diseases, colorectal 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.

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 used at the

point-of-care (physicians’ offices and over-the-counter through drugstores and online) and in hospital/clinical laboratories

for detection and/or treatment of medical conditions and diseases.

Our diagnostic test products utilize immunoassay technology to analyze blood, urine, nasal,

or fecal material from patients in the diagnosis of various diseases, food intolerances and other medical complications, and to

measure the level of specific hormones, antibodies, antigens, or other substances, which may exist in the human body in extremely

small concentrations.

Our other existing products are primarily focused on gastrointestinal diseases, food intolerances, and certain esoteric

Company’s products are designed to enhance the health and well-being of people, while reducing total

healthcare costs.

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, common, and 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 causing an abnormally high

immune response in the patient.

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

removed from the diet to help alleviate IBS symptoms.

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

a) clinical laboratories and b) point-of-care (physicians’

offices and over-the-counter drugstores such as Walmart and CVS Pharmacy).

Most of our products are Conformite Europeenne (“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.

unaudited condensed consolidated financial statements herein have been prepared by management pursuant to the rules and regulations of

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considered necessary for a fair presentation have been included.

Operating results for the three and nine months ended February 29, 2024

are not necessarily indicative of the results that may be expected for the fiscal year ending May 31, 2024.

For further information,

refer to the audited consolidated financial statements and notes thereto for the fiscal year ended May 31, 2023 included in the Company’s

Operating results for the three months ended August 31, 2024 are not

necessarily indicative of the results that may be expected for the fiscal year ending May 31, 2025.

For further information, refer to

the audited consolidated financial statements and notes thereto for the fiscal year ended May 31, 2024 included in the Company’s

Annual Report on Form 10-K filed with the SEC on August 28, 2024.

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condensed consolidated financial statements include the accounts of Biomerica, Inc.

as well as its German subsidiary (BioEurope GmbH)

and Mexican subsidiary (Biomerica de Mexico).

and its wholly-owned subsidiaries Biomerica de Mexico and BioEurope GmbH.

All significant intercompany accounts and transactions have been eliminated in consolidation.

preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions

that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed

consolidated financial statements, and the reported amounts of revenues and expenses during the reported period.

Estimates that are made

include the allowance for doubtful accounts, which is estimated based on current as well as historical practices with a customer;

option forfeiture rates, which are calculated based on historical data;

inventory obsolescence, which is based on projected and historical

usage of materials;

and lease liability and right-of-use assets, which are calculated based on certain assumptions such as borrowing

rate, the likelihood of lease extensions to occur, asset valuation, among other things;

and other items that may be necessary to estimate

using current, historical and judgment based information.

Actual results could materially differ from those estimates.

In order to prepare our consolidated financial statements in conformity with GAAP, we must make a number of estimates

and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the

date of the financial statements.

Such estimates and assumptions affect the reported amounts of revenues and expenses during the reporting

Our estimates are based on historical experience and various other assumptions that we believe to be reasonable under the circumstances.

Different assumptions or conditions may cause actual results to differ materially from these estimates.

We monitor significant estimates

made during the preparation of our financial statements on an ongoing basis.

We believe our estimates and assumptions are reasonable under

the current conditions;

however, actual results may differ from these estimates under different future conditions.

believe that the estimates and assumptions that are most important to the portrayal of our financial condition and results of operations,

in that they require subjective or complex judgments, form the basis for the accounting policies deemed to be most critical to us.

These relate to revenue recognition, bad debts, inventory overhead application, inventory reserves, lease liabilities,

right-of-use assets and share based compensation.

We believe estimates and

assumptions related to these critical accounting policies are appropriate under the circumstances;

however, should future events or occurrences

result in unanticipated consequences, there could be a material impact on our future financial conditions or results of operations.

suggest that our significant accounting policies be read in conjunction with this Management’s Discussion and Analysis of Financial

Condition and Results of Operations of this Quarterly Report on Form 10-Q.

AND METHODS OF DISTRIBUTION

The Company employs a diverse range of distribution methods to deliver our products to our customers.

serve approximately 80 customers in our diagnostic business.

Among these, roughly 40 are foreign distributors, 10 are domestic distributors,

and the remainder primarily consists of domestic hospital and clinical laboratories, medical research institutions, medical schools, pharmaceutical

companies, chain drugstores, wholesalers, physicians’ offices, and e-commerce customers.

Company derives the majority of its revenues from the sale of domestically manufactured products in the U.S.

and Mexico, with some raw

materials sourced from Asia and other global regions.

Primarily, the Company’s revenue stream is bolstered by international sales

of its products.

However, the Company’s operations have been adversely affected by various global and economic disruptions stemming

from the COVID-19 pandemic, ongoing conflicts such as the war in Ukraine and Israel, and geopolitical tensions between China and the

United States.

challenges have resulted in disruptions across multiple facets of the Company’s operations, including supply chain disruptions,

cost inflation, potential loss of contracts and customers, travel restrictions, shipping and logistical challenges, diverse government

responses, and inherent international business risks in the Company’s operational regions.

Additionally, there is a risk of human

capital depletion among the Company, its partners, and customers, as well as potential interruptions to production and customer credit

Furthermore, the Company remains vulnerable to general economic downturns.

light of these prevailing global challenges, the Company remains steadfast in its strategic direction.

Our focus continues to be

driving inFoods IBS product growth within the U.S.

and launching our new H.

pylori test which recently received FDA clearance to further strengthen our domestic portfolio.

Both products

are domestically manufactured and marketed, enhancing the Company’s resilience amidst global uncertainties.

Looking ahead, we remain committed to expanding both products in certain international markets in the future.

Company has incurred net losses and negative cash flows from operations and has an accumulated deficit of approximately $ 46,774,000 as of February 29, 2024.

Management expects to continue to incur significant costs as it advances its clinical trials, product development,

and commercial product launch activities.

As of February 29, 2024, the Company had cash and cash equivalents of approximately $ 5,319,000

and working capital of approximately $ 6,855,000 .

majority of the Company’s revenues come from the sale of products it manufactures in the U.S.

and Mexico, with certain raw

materials sourced from Asia and other regions.

The Company’s diagnostic business serves a diverse customer base that includes both domestic and international distributors, as

well as hospitals, clinical laboratories, medical research institutions, pharmaceutical companies, drugstores, wholesalers, physicians’

offices, and e-commerce customers.

A significant portion of the Company’s revenues are derived from international sales.

Company employs a Director of Sales and Marketing for Europe and South America, based in Germany, who has over 20 years of

experience in diagnostics and life sciences.

This individual’s international business experience and multilingual capabilities

have facilitated strong relationships across Europe, Eastern Europe, Middle East, Latin America, Canada, and the U.S.

expects continued growth through the addition of new distributors and product lines in these regions.

markets its diagnostic products through distributors, advertising in medical and trade journals,

trade show exhibitions, direct mailings, and its internal sales team.

The two primary markets the Company targets are clinical laboratories

and point-of-care testing, including physicians’ offices and over-the-counter drug stores.

AND GOING CONCERN

Company has incurred net losses and negative cash flows from operations and has an accumulated deficit of approximately $ 49.5 million

as of August 31, 2024.

As of August 31, 2024, the Company had cash and cash equivalents of approximately $ 2,820,000 and working capital

of approximately $ 4,294,000 .

July 21, 2020, the Company filed with the Securities and Exchange Commission (“SEC”) a Form S-3 shelf registration statement

and base prospectus which was declared effective by the SEC on September 30, 2020.

This shelf registration statement registered the sale

of up to $ 90,000,000 of the Company’s equity securities during the three years ended September 30, 2023.

the Company’s outstanding Registration Statement, on March 7, 2023, the Company sold 3,333,333 shares of common stock in a firm

commitment public offering at a gross sales price of $ 2.40 per share, with net total proceeds, after deducting issuance fees and expenses

of $ 700,000 , of approximately $ 7,300,000 .

Since the closing of the March 7, 2023 offering, a previously ATM facility has been withdrawn

and is not active.

replace the shelf registration statement that was set to expire on September 30, 2023, on September 27, 2023, the Company filed with

the SEC a new Form S-3 shelf registration statement and base prospectus which was declared effective by the SEC on September 29, 2023.

This new shelf registration statement registers the sale of up to $ 20,000,000 of the Company’s equity securities during the three

years ending September 29, 2026.

Company intends to use the net proceeds from past offerings and any future offerings for general corporate purposes, including, without

limitation, sales and marketing activities, clinical studies, product development, making acquisitions of assets, businesses, companies

or securities, capital expenditures, and for working capital needs.

has analyzed the cash requirements of the Company’s business through at least May 2025.

As a result of cash and cash equivalents

on hand on February 29, 2024, largely from the public offering, and the ability to raise additional funds if needed through the sale

of shares of the Company’s common stock, management believes the Company has sufficient funds to operate through at least May 2025.

The 2020 Shelf Registration Statement registered common

shares that could be issued by the Company in a maximum aggregate amount of up to $ 90,000,000 .

January 22, 2021, the Company filed a prospectus supplement to the base prospectus included in a registration statement filed with the

SEC on July 21, 2020, and declared effective by the SEC on September 30, 2020, for purposes of selling up to $ 15,000,000 in “at-the-market”

offerings, as defined in Rule 415 promulgated under the Securities Act (the “2021 ATM Offering”).

the year ended May 31, 2023, the Company sold 573,889

shares of its common stock at prices ranging from $ 3.15

pursuant to the 2021 ATM Offering, which resulted in gross proceeds of approximately $ 2,014,000

and net proceeds to the Company of $ 1,961,000 ,

after deducting commissions for each sale and legal, accounting, and other fees related to offering in the amount of $ 53,000 .

On March 7, 2023,

the Company sold 3,333,333 shares of common stock in a firm commitment public offering at a gross sales price of $ 2.40 per share, with

net total proceeds, after deducting issuance fees and expenses of $ 700,000 , of approximately $ 7,300,000 .

As a result of this public offering,

the Company terminated the 2021 ATM Offering.

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

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.

On May 10, 2024, the Company filed a prospectus supplement with the SEC 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.

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.

The average trading volume of our stock over the last three full calendar months is 83,068

shares per day and the high and low trading price of our stock during the same period of time was $ 0.59

and $ 0.28 , respectively.

continues to trade at low volumes and price, the amount of capital that we can raise under the ATM offering will be

Company intends to use the net proceeds from this offering for general corporate purposes, including, but not limited to, sales and marketing

activities, clinical studies and product development, acquisitions of assets, businesses, companies, or securities, capital expenditures,

and working capital needs.

Management assesses whether the Company has sufficient liquidity to fund its costs for the next twelve months from

each financial statement issuance date to determine if there is a substantial doubt about the Company’s ability to continue as a

going concern.

Company’s ability to continue as a going concern over the next twelve months is influenced by several factors, including:

need and ability to generate additional revenue from international opportunities and our new product launches;

need to access the capital and debt markets to meet current obligations and fund operations;

capacity to manage operating expenses and maintain gross margins as we grow;

ability to retain key employees and maintain critical operations with a substantially reduced workforce.

has analyzed the Company’s cash flow requirements through November 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

address our capital needs and sustain operations beyond the next year, we are actively pursuing strategies to increase sales, reduce

expenses, sell non-core assets, seek additional financing through debt or equity, and seek other strategic alternatives.

committed to these plans, there is no assurance that these efforts will be successful or sufficient to meet our capital requirements.

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% in July 2024

and a substantial reduction in other operating expenses.

factors raise substantial doubt about the Company’s ability to continue as a going concern.

Our future viability depends on the

successful execution of our strategic plans, securing additional financing, and achieving profitable operations.

Company’s consolidated financial statements as of August 31, 2024 were prepared on a going concern basis, which contemplates the

realization of assets and the settlement of liabilities and commitments in the normal course of business.

CONCENTRATION

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The Company does not believe it is exposed to any significant credit risks.

Net consolidated sales were approximately $ 1,017,000 and $ 1,111,000 for the three months ended February 29, 2024 and February 28, 2023, respectively,

and approximately $ 4,299,000 and $ 4,231,000 for the nine months ended February 29, 2024 and February 28, 2023, respectively.

the three months ended February 29, 2024, the Company had three key customers who are located in the United States and Aisa which accounted

for 44 % of net consolidated sales.

For the three months ended February 28, 2023, the Company had one key customer who is located in Asia

which accounted for 22 % of net consolidated sales.

For the nine months ended February 29, 2024, the Company had one key customer who

is located in Asia which accounted for 40 % of net consolidated sales.

For the nine months ended February 28, 2023, the Company had one

key customer who is located in Asia which accounted for 38 % of net consolidated sales.

gross receivables on February 29, 2024 and May 31, 2023 were approximately $ 1,153,000 and $ 751,000 , respectively.

As of February 2024,

the Company had three key customers, who are located in the United States and Asia which accounted for a total of 44 % of

gross accounts receivable.

As of May 31, 2023, the Company had one key customer, who is located in Asia which accounted for a total of

36 % of gross accounts receivable.

the three months ended February 29, 2024, the Company had one key vendor which accounted for 50 % of the purchases of raw materials.

the three months ended February 28, 2023, the Company had two key vendors which accounted for 31 % of the purchase of raw materials.

the nine months ended February 29, 2024, the Company had one vendors which accounted for 18 % of the purchases of raw materials.

nine months ended February 28, 2023, there was no individual vendor that comprised more than 10 % of the Company’s purchases.

of February 29, 2024, the Company had two key vendors which accounted for 52 % of gross accounts payable.

As of May 31, 2023,

the Company had one key vendor which accounted for 23 % of gross accounts payable.

Company provides credit in the normal course of business to customers throughout the United States and in foreign markets.

performs ongoing credit evaluations of its customers and requires accelerated prepayment in some circumstances.

net sales were approximately $ 1,807,000

for the three months ended August 31, 2024, compared to $ 1,713,000

for the same period in 2023.

For the three months ended August 31, 2024, the Company had two key customers located in North America

and Asia, respectively, who collectively accounted for 55 %

of net sales.

For the three months ended August 31, 2023, the Company had one key customer located in a Asia, accounting

of net sales.

of August 31, 2024, and May 31, 2024, total gross receivables were approximately $ 1,582,000 and $ 966,000 , respectively.

On these dates,

the Company had two and four key customers, respectively, located in Asia and Europe.

These customers accounted for

67 % and 64 % of the gross accounts receivable, respectively.

For the three months ended August 31, 2024, and 2023, two and one key vendors

accounted for 34 %

of the purchases of raw materials, respectively.

As of August 31, 2024, and May 31, 2024, one and two key vendors represented 24 %

of the Company’s accounts payable, respectively.

AND CASH EQUIVALENTS

and cash equivalents consist of demand deposits and money market accounts with original maturities of less than three months.

RECEIVABLE, NET

Company extends unsecured credit to its customers on a regular basis.

International accounts are usually required to prepay until they

establish a history with the Company and at that time, they are extended credit at levels based on a number of criteria.

Based on various

criteria, initial credit levels for individual distributors are approved by designated officers and managers of the Company.

All increases

in credit limits are also approved by designated upper-level management.

International accounts are usually required to prepay until

they establish a history with the Company and at that time, they are extended credit at levels.

Initial credit levels for individual

distributors are approved by designated officers and managers of the Company based on various criteria.

All increases in credit limits are also approved by

designated upper-level management.

Company adopted Accounting Standards Update (“ASU”) No.

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the Company evaluated receivables on a quarterly basis and adjusted the allowance for doubtful accounts accordingly.

Balances over ninety

days old were usually reserved for unless collection was reasonably assured.

Balances over 90

days old were usually reserved unless collection was reasonably assured.

Under the application of ASC 326, the Company’s historical

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before shipping new sales orders.

of February 29, 2024 and May 31, 2023, the Company has established a reserve of approximately $ 23,000 and $ 29,000 , respectively, for

credit losses.

of August 31, 2024 and May 31, 2024, the Company has established a reserve of approximately $ 31,000 and $ 19,000 respectively, for credit

EXPENSES AND OTHER

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other, until either the inventory is physically received, or the insurance and other items are expensed.

of February 29, 2024 and May 31, 2023, the prepaids were approximately $ 268,000 and $ 300,000 , respectively, composed of prepayments to

of August 31, 2024 and May 31, 2024, the prepaids were approximately $ 132,000 and $ 238,000 , respectively, comprised of prepayments to

insurance and various other suppliers.

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current period charges and the allocation of fixed production overhead is based on the normal capacity of the production facilities.

inventories are comprised of approximately the following:

inventories are approximately the following:

SCHEDULE OF NET INVENTORIES

Raw materials

Work in progress

Finished products

Total gross inventory

Inventory reserves

Net inventory

gross inventory

for inventory obsolescence are recorded as necessary to reduce obsolete inventory to estimated net realizable value or to specifically

reserve for obsolete inventory.

As of February 29, 2024, and May 31, 2023, inventory reserves were approximately $ 491,000 and $ 672,000 ,

As of August 31, 2024, and May 31, 2024, inventory reserves were approximately $ 472,000 and $ 467,000 ,

respectively.

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or charged to income.

and amortization are provided over the estimated useful lives of the related assets, ranging from 5 to 10 years, using the straight-line

Leasehold improvements are amortized over the lesser of the estimated useful life of the asset or the term of the lease.

and amortization expense on property and equipment were approximately $ 16,000 and $ 15,000 for the three months ended February 29, 2024

and February 28, 2023, respectively, and approximately $ 46,000 and $ 51,000 for the nine months ended February 29, 2024 and February 28,

2023, respectively.

and amortization are provided over the estimated useful lives of the related assets, ranging from 5

years, using the straight-line method.

improvements are amortized over the lesser of the estimated useful life of the asset or the term of the lease.

Depreciation and amortization

expense on property and equipment was approximately $ 17,000

and $ 16,000 for the three months ended August

31, 2024 and 2023, respectively.

assets include trademarks, product rights, technology rights and patents, and are accounted for based on ASC 350 Intangibles –

Goodwill and Other (“ASC 350”).

In that regard, intangible assets that have indefinite useful lives are not amortized but

are tested annually for impairment or more frequently if events or changes in circumstances indicate that the asset might be impaired.

Goodwill and Other, In that regard, intangible assets that have indefinite useful lives are not amortized but are tested at least

annually for impairment or more frequently if events or changes in circumstances indicate that the asset might be

assets are being amortized using the straight-line method over the useful life, not to exceed 18 years for marketing and distribution

rights, 10 years for purchased technology use rights, and patents are based on their individual useful lives which average around 15

Amortization expense was approximately $ 4,000 for the three months ended February 29, 2024, and $ 3,000 for the corresponding period

ended February 28, 2023.

For the nine months ended February 29, 2024, and February 28, 2023, the expenses were approximately $ 13,000

and $ 15,000 , respectively.

Amortizing intangible assets are tested for impairment if management determines that events or changes in

circumstances indicate that the asset might be impaired.

Amortization expense was approximately $ 4,000 and $ 5,000 for the three months ended August 31, 2024 and 2023, respectively.

Company assesses the recoverability of these intangible assets by determining whether the amortization of the asset’s balance over

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The Company uses a qualitative assessment to determine

whether there was any impairment.

During the nine months ended February 29, 2024, management did not identify any indicators of impairment.

During the nine months ended

February 28, 2023, an impairment adjustment was made of $ 6,000 .

whether there is any impairment.

During the three months ended August 31, 2024, and 2023, there were no impairment adjustments.

Company has made investments in a privately held Polish distributor, which is primarily engaged in distributing medical products and

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Management reviewed the underlying net assets of the Company’s equity method holding as

of February 29, 2024 and determined that the Company’s proportionate economic interest in the entity indicates that the equity

holding was not impaired.

There were no observable price changes in orderly transactions for identical or a similar holding or security

of the Company’s Cost Method Holdings during the period ended February 29, 2024.

Company follows the guidance of ASC 718, Share-based Compensation (“ASC 718”), which requires the use of the fair-value based

of August 31, 2024 and determined that the Company’s proportionate economic interest in the entity indicates that the equity holding

was not impaired.

There were no observable price changes in orderly transactions for identical or a similar holding or security of the

Company’s Cost Method Holdings during the period ended August 31, 2024.

Company follows the guidance of ASC 718, Share-based Compensation, 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

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the straight-line attribution method.

Company expensed approximately $ 633,000 in share-based compensation during the nine months ended February 29, 2024, and $ 1,006,000 for

the same period ended February 28, 2023.

following summary presents the options granted, exercised, expired, canceled and outstanding for the nine months ended February 29, 2024:

Company expensed approximately $ 77,000 and $ 170,000 of share-based compensation during the three months ended August 31, 2024 and 2023,

respectively.

following summary presents the options granted, exercised, expired, canceled and outstanding for the three months ended August 31, 2024:

SUMMARY OF OPTIONS ACTIVITY

Option Shares

Weighted Average Exercise Price

Options Outstanding at May 31, 2023

Cancelled or expired

Options Outstanding at February 29, 2024

Company has various contracts with customers.

All of the contracts specify that revenues from product sales are recognized at the time

the product is shipped, customarily FOB shipping point, which is when the transfer of control of goods has occurred, and at which point

title passes.

Company does not typically allow for returns from customers except in the event of defective merchandise and therefore does not establish

an allowance for returns.

In addition, the Company has contracts with customers wherein customers receive purchase discounts for achieving

specified sales volumes.

The Company evaluated the status of these contracts during the nine months ended February 29, 2024 and 2023,

and does not believe that any additional discounts will be given through the end of the contract periods.

for contract work performed by the Company for others are invoiced and recognized as that work has been performed and as the project

The Company sells clinical lab products to domestic and international distributors, including hospitals and clinical laboratories,

medical research institutions, medical schools and pharmaceutical companies.

OTC products are sold directly to drug stores and e-commerce

customers as well as to distributors.

Physician’s office products are sold to physicians and distributors, all of whom are categorized

below according to the type of products sold to them.

We also manufacture certain components on a contract basis for domestic and international

manufacturers.

of February 29, 2024, the Company had approximately $ 85,000 of advances from domestic customers, which are prepayments on orders for

future shipments.

Weighted Average

Exercise Price

Outstanding at May 31, 2024

Outstanding at August 31, 2024

Company has various contracts with customers, and these contracts specify the recognition of revenue based on the nature of the transaction.

from product sales are recognized at the time the product is shipped, customarily FOB shipping point, which is when the transfer of control

of goods has occurred and title passes.

This applies to clinical lab products sold to domestic and international distributors, including

hospitals, clinical laboratories, medical research institutions, medical schools, and pharmaceutical companies.

OTC products are sold

directly to drug stores, e-commerce customers, and distributors, while physicians’ office products are sold to physicians and distributors.

The Company does not allow returns except in cases of defective merchandise, and therefore, does not establish an allowance for returns.

Additionally, the Company has contracts with customers that provide purchase discounts contingent on achieving specified sales volumes.

These contracts are regularly evaluated, and the Company does not anticipate granting any discounts through the end of the contract period.

the Company offers margin guarantees to certain retail drug store customers to ensure a minimum profit margin.

Should pricing adjustments

cause these margins to fall below the agreed-upon thresholds, the Company is committed to compensating for the shortfall.

This arrangement

introduces variable consideration into our revenue recognition process.

These considerations are estimated monthly based on actual sales

and potential price reductions, ensuring accurate and compliant revenue reporting.

diagnostic testing services sold directly to patients or physician offices that require processing by a third-party CLIA-certified lab,

we recognize revenue once the lab has completed the test results.

services related to contract manufacturing, revenue is recognized when the service has been performed.

Services for some contract work

are invoiced and recognized as the project progresses.

of August 31, 2024, the Company had approximately $ 85,000 in advances from domestic customers, which are prepayments on orders for future

Disaggregation

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SCHEDULE OF DISAGGREGATION REVENUE

February 29, 2024

February 28, 2023

February 29, 2024

February 28, 2023

Three Months Ended

Nine Months Ended

February 29, 2024

February 28, 2023

February 29, 2024

February 28, 2023

Months Ended August 31,

Over-the-counter

Contract manufacturing

Physician’s office

Note 4 for additional information regarding geographic revenue concentrations.

manufacturing

Note 4 for additional information regarding revenue concentrations.

AND HANDLING FEES

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The Company expensed approximately $ 297,000 and $ 472,000 of research and development

costs during the three months ended February 29, 2024 and February 28, 2023, respectively.

Similarly, it expensed approximately $ 1,226,000

and $ 1,215,000 of research and development costs during the nine months ended February 29, 2024 and February 28, 2023, respectively.

the three months ended February 29, 2024, the Company had an income tax expense of approximately $ 4,000 .

For the nine months ended February

29, 2024, the Company had an income tax expense of approximately $ 35,000 .

These expenses consisted of state minimum taxes and miscellaneous

foreign taxes.

During the three and nine months ended February 29, 2024, the Company had a net operating loss (“NOL”) that

generated deferred tax assets for NOL carryforwards.

Deferred income tax assets and liabilities are recognized for temporary differences

between the financial statements and income tax carrying values using tax rates in effect for the years such differences are expected

Due to uncertainties surrounding our ability to generate future taxable income and consequently realize such deferred income

tax assets, the Company has determined that it is more likely than not that these deferred tax assets will not be realized.

the Company has established a full valuation allowance against its deferred tax assets as of February 29, 2024.

costs during the three months ended August 31, 2024 and 2023, respectively.

Company had income tax expense for the three months ended August 31, 2024 of approximately $ 4,000 , consisting of state minimum and foreign

miscellaneous taxes.

During the three months ended August 31, 2024, the Company had a net operating loss (“NOL”) that generated

deferred tax assets for NOL carryforwards.

Deferred income tax assets and liabilities are recognized for temporary differences between

the financial statements and income tax carrying values using tax rates in effect for the years such differences are expected to reverse.

Due to uncertainties surrounding our ability to generate future taxable income and consequently realize such deferred income tax assets,

the Company has determined that it is more likely than not that these deferred tax assets will not be realized.

Accordingly, the

Company has established a full valuation allowance against its deferred tax assets as of August 31, 2024.

Company’s policy is to recognize any interest and penalties related to unrecognized tax benefits as a component of income tax expense.

For the nine months ended February 29, 2024, the Company had no accrued interest or penalties related to uncertain tax positions.

For the three months ended August 31, 2024, the Company had no accrued interest or penalties related to uncertain tax positions.

Company reports the cost of advertising as expense in the period in which those costs are incurred.

For the three months ended February

29, 2024, and February 28, 2023, advertising costs were approximately $ 25,000 and $ 51,000 , respectively.

During the nine months ended

February 29, 2024, and February 28, 2023, the costs were approximately $ 80,000 and $ 87,000 , respectively.

Advertising costs were approximately

$ 14,000 and $ 30,000 for the three months ended August 31, 2024 and 2023, respectively.

CURRENCY TRANSLATION

subsidiary located in Mexico operates primarily using the Mexican peso.

The subsidiary located in Germany operates primarily using the

The subsidiary located in Germany operates primarily using

dollar, with an immaterial amount of transactions occurring using the Euro.

Accordingly, assets and liabilities of these subsidiaries

are translated using exchange rates in effect at the end of the period, and revenues and costs are translated using average exchange

rates for the period.

The resulting translation adjustments to assets and liabilities are presented as a separate component of accumulated

other comprehensive loss.

There are no foreign currency transactions that are included in the condensed consolidated statements of operations

and comprehensive loss for the three and nine months ended February 29, 2024 and February 28, 2023.

Accordingly, assets and liabilities of these

subsidiaries are translated using exchange rates in effect at the end of the period, and revenues and costs are translated using

average exchange rates for the period.

The resulting translation adjustments to assets and liabilities are presented as a separate

component of accumulated other comprehensive loss.

There are no foreign currency transactions that are included in the condensed

consolidated statements of operations for the three months ended August 31, 2024 and 2023.

ASSETS AND LEASE LIABILITY

assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent our obligation

to make lease payments arising from the lease.

Right-of-use assets and lease liabilities are recognized at the lease commencement date

based on the estimated present value of fixed lease payments over the lease term.

Leases are classified as financing or operating which

will drive the expense recognition pattern.

February 2016, the Financial Accounting Standards Board (“FASB”) issued an accounting standard update which requires lessees

to recognize most leases on the balance sheet with a corresponding right-of-use asset.

Right-of-use assets represent the Company’s

right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from

Right-of-use assets and lease liabilities are recognized at the lease commencement date based on the estimated present value

of fixed lease payments over the lease term.

Leases are classified as financing or operating which will drive the expense recognition

The Company has elected to exclude short-term leases.

The Company leases office space and

copy machines, all of which are operating leases.

Most leases include the option to renew and the exercise of the renewal options is

at the Company’s sole discretion.

Options to extend or terminate a lease are considered in the lease term to the extent that the

option is reasonably certain of exercise.

The leases do not include the options to purchase the leased property.

The depreciable life

of assets and leasehold improvements are limited by the expected lease term.

The Company leases office space and copy machines, all of which are operating

Most leases include the option to renew and the exercise of the renewal options is at the Company’s sole discretion.

to extend or terminate a lease are considered in the lease term to the extent that the option is reasonably certain of exercise.

leases do not include the options to purchase the leased property.

The depreciable life of assets and leasehold improvements are limited

by the expected lease term.

LOSS PER SHARE

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The total amount of anti-dilutive stock options not included in the loss per share calculation

was 3,506,616 for February 29, 2024, and 2,336,116 for February 28, 2023, respectively.

at August 31, 2024 and 2023 was 3,306,116 and 2,363,116 , respectively.

ACCOUNTING PRONOUNCEMENTS

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on the Company’s present or future consolidated financial statements.

June 2016, the FASB issued ASU 2016-13.

This ASU requires the measurement of all expected credit losses for financial assets, including

trade receivables, held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts.

The guidance was initially effective for the Company for annual reporting periods beginning after December 15, 2019, and interim periods

within those fiscal years.

In November 2019, the FASB issued ASU 2019-10, “Financial Instruments - Credit Losses (Topic 326), Derivatives

and Hedging (Topic 815), and Leases (Topic 842):

Effective Dates,” which, among other things, defers the effective date of ASU

2016-13 for public filers that are considered smaller reporting companies as defined by the SEC to fiscal years beginning after December

15, 2022, including interim periods within those years.

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.

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.

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

December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740):

Improvements to Income Tax 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.

We are currently evaluating the effect of adopting this pronouncement on our financial statements and

SHAREHOLDERS’ EQUITY

the six months ended November 30, 2022, the Company sold 564,989 shares of its common stock at prices ranging from $ 3.15 to 4.26 under

its Form S-3 Registration Statement and ATM Offering which resulted in gross proceeds of approximately $ 1,988,000 and net proceeds to

the Company of approximately $ 1,937,000 after deducting commissions for each sale and legal, accounting, and other fees related to the

ATM Offering.

In March 2023, we terminated the ATM offering agreement and sold 3,333,333 shares of our common stock in a firm commitment

public offering under the Company’s shelf registration statement.

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 .

On February 29, 2024, the Company did not have an open ATM offering in place.

No shares of common stock or other equity securities

of the Company were sold under the shelf registration statement during the nine months ended February 29, 2024.

September 28, 2023, the Company 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 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.

On May 10, 2024, the Company filed a prospectus supplement with the SEC 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.

No shares of common stock or other equity

securities of the Company were sold under the shelf registration statement during the three months ended August 31, 2024.

GEOGRAPHIC INFORMATION

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SCHEDULE OF GEOGRAPHIC INFORMATION

February 29, 2024

February 28, 2023

February 29, 2024

February 28, 2023

Three Months Ended

Nine Months Ended

February 29, 2024

February 28, 2023

February 29, 2024

February 28, 2023

Revenues from sales to unaffiliated customers:

North America

South America

of February 29, 2024, and May 31, 2023, approximately $ 575,000 and $ 626,000 of Biomerica’s gross inventory was located in Mexicali,

Months Ended August 31,

from sales to unaffiliated customers:

of August 31, 2024 and May 31, 2024, approximately $ 575,000 and $ 537,000 of Biomerica’s gross inventory was located in Mexicali,

Mexico, respectively.

of February 29, 2024, and May 31, 2023, approximately $ 15,000 and $ 17,000 of the Company’s property and equipment, net of accumulated

depreciation and amortization, was located in Mexicali, Mexico, respectively.

Company operates through leased facilities.

As of February 29, 2024, our corporate headquarters, situated at 17571 Von Karman Avenue

in Irvine, California, encompasses approximately 22,000 square feet of floor space, under lease since 2009.

The initial lease term for

our headquarters expired on August 31, 2016, with the Company exercising its option to extend for an additional sixty-month period through

the First Amendment to Lease on November 30, 2015.

Subsequently, on April 9, 2021, the Company opted for a second extension, securing

an additional five-year term, and was further granted a similar option for future extension.

A security deposit of approximately $ 22,000

was made in conjunction with the lease extension.

November 2016, our Mexican subsidiary, Biomerica de Mexico, entered a 10-year lease for approximately 8,100 square feet of manufacturing

space, with a single 10-year renewal option at lease end.

Additionally, Biomerica de Mexico leases a smaller unit on a month-to-month

basis for specific manufacturing processes.

In addition, our German subsidiary, BioEurope GmbH, maintains a small office in Lindau, Germany,

under a month-to-month lease agreement, serving as its headquarters.

of August 31, 2024 and May 31, 2024, approximately $ 13,000

of Biomerica’s property and equipment, net of accumulated depreciation and amortization, was located in Mexicali, Mexico,

respectively.

The Company leases facilities in Irvine, California and Mexicali, Mexico.

of August 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.

The lease for its headquarters expires in August 2026.

The Company has the option to extend the lease for

an additional five-year term.

The Company made a security deposit of approximately $ 22,000 .

November 2016, the Company’s Mexican subsidiary, Biomerica de Mexico, entered into a 10-year lease for approximately 8,100 square

feet of manufacturing space.

The Company has one 10-year option to renew at the end of the initial lease period.

Biomerica de Mexico

also leases a smaller unit on a month-to-month basis for use in the Company’s manufacturing process.

addition, the Company leases a small office in Lindau, Germany on a month-to-month basis, as headquarters for BioEurope GmbH, its Germany

purposes of determining straight-line rent expense, the lease term is calculated from the date the Company first takes possession of

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lease expense in the consolidated statements of operations and comprehensive loss when they are incurred.

following table presents information on our operating leases for the three months and nine months ended February 29, 2024 and February

following table presents information on our operating leases for the three months ended August 31, 2024 and 2023:

SCHEDULE OF OPERATING LEASES

February 29, 2024

February 28, 2023

February 29, 2024

February 28, 2023

Three Months Ended

Nine Months Ended

February 29, 2024

February 28, 2023

February 29, 2024

February 28, 2023

Operating lease cost

Variable lease cost

Short-term lease cost

Total lease cost

approximate maturity of lease liabilities as of February 29, 2024 are as follows:

Months Ended August 31,

approximate maturity of lease liabilities as of August 31, 2024 are as follows:

SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS

Year Ending February 29:

Operating Leases

Total minimum future lease payments

Ending May 31:

2025 (excluding the three months ended August 31, 2024)

minimum future lease payments

imputed interest

Total operating lease liabilities

following table summarizes the Company’s other supplemental lease information for the nine months ended February 29, 2024 and February

operating lease liabilities

following table summarizes the Company’s other supplemental lease information for the three months ended August 31, 2024 and 2023:

SCHEDULE OF OTHER SUPPLEMENTAL LEASE INFORMATION

February 29, 2024

February 28, 2023

Nine Months Ended

February 29, 2024

February 28, 2023

Cash paid for operating lease liabilities

Weighted-average remaining lease term (years)

Weighted-average discount rate

Months Ended August 31,

paid for operating lease liabilities

Weighted-average

remaining lease term (years)

Weighted-average

discount rate

Company also has various insignificant leases for office equipment.

COMMITMENTS AND CONTINGENCIES

Company is, from time to time, involved in legal proceedings, claims, and litigation arising in the ordinary course of business.

were no material legal proceedings pending as of February 29, 2024.

The Company is, from time to time, involved in legal proceedings, claims, and litigation arising in the ordinary course of business.

the amounts claimed may be substantial, the ultimate liability cannot presently be determined because of considerable uncertainties that

Therefore, it is possible the outcome of such legal proceedings, claims, and litigation could have a material effect on quarterly

or annual operating results or cash flows when resolved in a future period.

However, based on facts currently available, management believes

such matters will not have a material adverse effect on the Company’s consolidated financial position, results of operations or

were no legal proceedings pending as of August 31, 2024.

SUBSEQUENT EVENTS

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-Q

Item 1. Financial Statements