What changed in this filing

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Item 1. Financial Statements

2025-01-14 compared with 2024-10-15 · 414 added, 332 removed, 271 unchanged (73% of the section changed)

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CONSOLIDATED BALANCE SHEETS (UNAUDITED)

and cash equivalents

receivable, net

expenses and other

November 30, 2024

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

Cash and cash equivalents

Accounts receivable, net

Inventories, net

Prepaid expenses and other

Total current assets

Property and equipment, net of accumulated depreciation and amortization of $ 1,428,000 and $ 1,394,000 as of November 30, 2024 and May 31, 2024, respectively

Right-of-use assets, net of accumulated amortization of $ 1,064,000 and $ 910,000 as of November 30,

2024 and May 31, 2024, respectively

Intangible assets, net of accumulated amortization of $ 57,000 and $ 49,000 as of November 30, 2024

and May 31, 2024, respectively

Liabilities and Shareholders’ Equity

Current Liabilities:

liabilities, net of current portion

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

Accounts payable and accrued expenses

Accrued compensation

Advances from customers

Lease liabilities, current portion

Total current liabilities

Lease 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 November 30, 2024 and May 31, 2024

Preferred stock, undesignated, no par value, 4,428,571

shares authorized, none

issued and outstanding as of November 30, 2024 and May 31, 2024

Preferred stock value

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

Common stock, $ 0.08 par value, 25,000,000 shares authorized, 18,336,994 and 16,821,646 issued and outstanding

at November 30, 2024 and May 31, 2024, respectively

Additional paid-in-capital

Accumulated other comprehensive loss

Accumulated deficit

( 50,461,000 )

( 48,195,000 )

Shareholders’ Equity

Liabilities and Shareholders’ Equity

Total Shareholders’ Equity

Total Liabilities and Shareholders’ Equity

accompanying notes are an integral part of these statements.

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COMPREHENSIVE LOSS (UNAUDITED)

the Three Months Ended August 31,

For the Three Months Ended November 30,

For the Six Months Ended November 30,

Cost of sales

( 1,199,000 )

( 1,242,000 )

general and administrative

and development

operating expense

from operations

( 2,720,000 )

( 2,541,000 )

and interest income

before income taxes

Operating expenses:

Selling, general and administrative

Research and development

Total operating expenses

Loss from operations

( 1,608,000 )

( 2,363,000 )

for income taxes

( 2,839,000 )

Other income:

Interest and dividend income

Total other income

Loss before income taxes

( 1,499,000 )

net loss per common share

average number of common and common equivalent shares:

( 2,266,000 )

( 2,608,000 )

comprehensive loss, net of tax:

currency translation

Comprehensive

Benefit (provision) for income taxes

$ ( 950,000 )

$ ( 1,507,000 )

$ ( 2,266,000 )

$ ( 2,639,000 )

Basic net loss per common share

Diluted net loss per common share

Weighted average number of common and common equivalent shares:

$ ( 950,000 )

$ ( 1,507,000 )

$ ( 2,266,000 )

$ ( 2,639,000 )

Other comprehensive income (loss), net of tax:

Foreign currency translation

Comprehensive loss

$ ( 954,000 )

$ ( 1,507,000 )

$ ( 2,276,000 )

$ ( 2,633,000 )

accompanying notes are an integral part of these statements.

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CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (UNAUDITED)

the Three Months Ended August 31, 2023

Comprehensive

Stockholders’

Comprehensive

at May 31, 2023

the Three and Six Months Ended November 30, 2023

Additional Paid-in

Accumulated Other Comprehensive

Total Stockholders’

Balances at May 31, 2023

$ ( 110,000 )

$ ( 42,217,000 )

currency translation

Foreign currency translation

Share-based compensation

( 1,132,000 )

at August 31, 2023

Balances at August 31, 2023

( 43,349,000 )

Foreign currency translation

Share-based compensation

( 1,507,000 )

the Three Months Ended August 31, 2024

Stockholders’

Comprehensive

at May 31, 2024

( 1,507,000 )

Balances at November 30, 2023

$ ( 104,000 )

$ ( 44,856,000 )

the Three and Six Months Ended November 30, 2024

Additional Paid-in

Accumulated Other Comprehensive

Total Stockholders’

Balances at May 31, 2024

$ ( 102,000 )

currency translation

$ ( 48,195,000 )

Foreign currency translation

Share-based compensation

( 1,316,000 )

at August 31, 2024

( 1,316,000 )

Balances at August 31, 2024

( 49,511,000 )

Foreign currency translation

Net proceeds from ATM

Share-based compensation

Balances at November 30, 2024

$ ( 112,000 )

$ ( 50,461,000 )

( 50,461,000 )

accompanying notes are an integral part of these statements.

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CONSOLIDATED STATEMENTS OF CASH FLOWS

the Three Months Ended August 31,

flows from operating activities:

For the Six Months Ended November 30,

Cash flows from operating activities:

$ ( 2,266,000 )

$ ( 2,639,000 )

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

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

Depreciation and amortization

Provision for allowance for credit losses

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

Reduction in lease liabilities

Net cash used in operating activities

( 2,135,000 )

( 2,516,000 )

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

Cash flows from investing activities:

Purchases of property and equipment

Expenditures related to intangibles

Net cash used in investing activities

Cash flows from financing activities:

Gross proceeds from sale of common stock

Costs from sale of common stock

Deferred offering costs

Net cash provided by financing activities

Effect of exchange rate changes on cash

Net decrease in cash and cash equivalents

( 1,798,000 )

( 2,585,000 )

and cash equivalents at beginning of year

and cash equivalents at end of year

Disclosure of Cash Flow Information:

paid during the period for:

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 for:

Non-cash investing and financing activities:

Stock Issuance Receivable

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 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.

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 tests.

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

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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.

These products are directed at chronic inflammatory illnesses that are widespread, common, and address very large

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).

offices and over-the-counter).

Most of our products are Conformite Europeenne (“CE”) marked and/or sold for diagnostic

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States by the FDA.

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

the United States Securities and Exchange Commission (“SEC”).

The accompanying unaudited condensed consolidated financial

statements have been prepared under the presumption that users of the interim financial information have either read or have access to

the audited consolidated financial statements for the latest fiscal year ended May 31, 2024.

Accordingly, certain information and note

disclosures normally included in financial statements prepared in accordance with United States generally accepted accounting principles

(“GAAP”) have been condensed or omitted pursuant to such rules and regulations.

In the opinion of management, all adjustments

considered necessary for a fair presentation have been included.

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.

Management has evaluated all subsequent events and transactions through

the date of filing this report.

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

of the United States Securities and Exchange Commission (“SEC”).

The accompanying unaudited condensed consolidated

financial statements have been prepared under the presumption that users of the interim financial information have either read or

have access to the audited consolidated financial statements for the latest fiscal year ended May 31, 2024.

Accordingly, certain

information and note disclosures normally included in financial statements prepared in accordance with United States generally

accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to such rules and regulations.

opinion of management, all adjustments considered necessary for a fair presentation have been included.

Operating results for the

three and six months ended November 30, 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.

Management has evaluated all subsequent events and transactions through the date of filing this report.

SIGNIFICANT ACCOUNTING POLICIES

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

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

as well as its German subsidiary (BioEurope GmbH)

and Mexican subsidiary (Biomerica de Mexico).

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

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;

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

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

Our estimates

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

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

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.

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 the Management’s Discussion and Analysis of

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

AND METHODS OF DISTRIBUTION

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 Mexico, with certain raw materials

sourced from the U.S.

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,

wholesalers, physicians’ offices, and direct sales to consumers from its website.

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.

The Company expects continued growth

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

Company markets its diagnostic products through distributors, advertising in medical and trade journals, trade show exhibitions, direct

mailings, and through its internal sales team.

The two primary markets the Company targets are clinical laboratories and patient point-of-care

AND GOING CONCERN

Company has incurred net losses and negative cash flows from operations and has an accumulated deficit of approximately $ 50.5 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

as of November 30, 2024.

As of November 30, 2024, the Company had cash and cash equivalents of approximately $ 2,372,000 and working capital

of approximately $ 4,069,000 .

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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 ,

the year ended May 31, 2023, the Company sold 573,889 shares of its common stock at prices ranging from $ 3.15 to $ 4.26 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 .

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 .

of this public offering, the Company terminated the 2021 ATM Offering.

part of our financing plan, on September 28, 2023, we filed a new “shelf” registration statement on Form S-3 with the SEC,

to replace the expiring S-3 that was filed in July 2020, 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 886,303 shares per day and the high and low trading price of our stock during the same period of time was $ 0.48 and $ 0.26 ,

respectively.

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

will be constrained.

Company intends to use the net proceeds from any funds raised through the ATM 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.

the six months ended November 30, 2024, the Company sold 1,515,348 shares of its common stock at prices ranging from $ 0.36 to $ 0.47 pursuant

to the May 2024 ATM Offering, which resulted in gross proceeds of approximately $ 603,000 and net proceeds to the Company of $ 567,000 ,

after deducting commissions for each sale and legal, accounting, and other fees related to offering in the amount of $ 36,000 .

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;

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.

The 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 sales within the US of existing products, and

from 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;

capacity to manage operating expenses and maintain or increase 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.

SEC regulations that limit the amount of capital the Company can raise through issuance of its equity.

has analyzed the Company’s cash flow requirements through February 2026 and beyond.

Based on this analysis, we believe our current

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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.

part of our efforts to reduce costs, we are executing significant cost-cutting measures to extend our cash runway and work towards

increasing revenues to cover overhead costs.

These measures included a workforce reduction of nearly 15% in July 2024 and a

substantial reduction in other operating expenses.

Additionally, we have successfully raised $567,000 in net proceeds from the May

2024 ATM offering, providing additional liquidity to support our operations.

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

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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.

Company’s consolidated financial statements as of November 30, 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 has uninsured balances.

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

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

The Company does not believe it is exposed to any significant credit risks from the financial institution.

Company provides credit in the normal course of business to customers throughout the U.S.

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.

net sales were approximately $ 1,636,000 and $ 1,567,000 for the three months ended November 30, 2024 and 2023, respectively, and approximately

$ 3,444,000 and $ 3,281,000 for the six months ended November 30, 2024 and 2023, respectively.

the three months ended November 30, 2024, the Company had four key customers who are located in the Middle East, Asia and Europe, which

accounted for 58 % of net consolidated sales.

For the three months ended November 30, 2023, the Company had two key customers who are

located in foreign countries which accounted for 52 % of net consolidated sales.

For the six months ended November 30, 2024, the Company

had two key customers who are located in North America and Asia which accounted for 46 % of net consolidated sales.

For the six months

ended November 30, 2023, the Company had one key customer who is located in Asia which accounted for 49 % of net consolidated sales.

of November 30, 2024 and May 31, 2024, total gross receivables were approximately $ 1,353,000 and $ 966,000 , respectively.

On these dates,

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

the Company had five and four key customers, respectively, located in North America, Asia and Europe.

These customers accounted for 78 %

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.

the three months ended November 30, 2024, the Company had two key vendors which accounted for 32 % of the purchases of raw materials.

For the three months ended November 30, 2023, the Company had five key vendors which accounted for 75 % of the purchases of raw materials.

For the six months ended November 30, 2024, the Company had two vendors which accounted for 24 % of the purchases of raw materials.

the six months ended November 30, 2023, the Company had five vendors which accounted for 76 % of the purchases of raw materials.

of November 30, 2024 and May 31, 2024, the Company had two key vendors which accounted for 41 % and 69 % respectively, of accounts payable.

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.

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 extends unsecured credit to its customers as part of its standard business practices.

International customers are typically required

to prepay until a credit history with the Company is established, at which point credit levels are determined based on various criteria.

Initial credit limits for distributors are approved by designated officers or managers, while any increases require authorization from

upper-level management.

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

2016-13, Financial Instruments – Credit Losses (codified as

Accounting Standards Codification (“ASC”) 326) on June 1, 2023.

2016-13, Financial Instruments – Credit Losses (codified

as Accounting Standards Codification (“ASC”) 326) on June 1, 2023.

ASC 326 adds to U.S.

GAAP the current expected credit loss

(“CECL”) model, a measurement model based on expected losses rather than incurred losses.

GAAP the current expected credit

loss (“CECL”) model, a measurement model based on expected losses rather than incurred losses.

Prior to the adoption of ASC

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

326, the Company evaluated receivables on a quarterly basis and adjusted the allowance for accordingly.

Balances over

days old were usually reserved unless collection was reasonably assured.

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

credit loss experience provides the basis for the estimation of expected credit losses, as well as current economic and business conditions,

and anticipated future economic events that may impact collectability.

In developing its expected credit loss estimate, the Company evaluated

the appropriate grouping of financial assets based upon its evaluation of risk characteristics, including consideration of the types

of products and services sold.

Account balances are written off against the allowance for expected credit losses after all means of collection

have been exhausted and the potential for recovery is considered remote.

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

Under the application of ASC 326, the Company’s

historical credit loss experience provides the basis for the estimation of expected credit losses, as well as current economic and business

conditions, and anticipated future economic events that may impact collectability.

In developing its expected credit loss estimate, the

Company evaluated the appropriate grouping of financial assets based upon its evaluation of risk characteristics, including consideration

of the types of products and services sold.

Account balances are written off against the allowance for expected credit losses after all

means of collection have been exhausted and the potential for recovery is considered remote.

Occasionally,

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before shipping new sales orders.

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

of November 30, 2024 and May 31, 2024, the Company has established a reserve of approximately $ 27,000 and $ 19,000 , respectively, for

credit losses.

EXPENSES AND OTHER

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

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.

of November 30, 2024 and May 31, 2024, the prepaids expenses were approximately $ 458,000

and $ 238,000 ,

respectively, and were composed of prepayments to insurance and various other suppliers.

Company values inventory at the lower of cost (determined using a combination of specific lot identification and the first-in, first-out

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inventories are approximately the following:

SCHEDULE OF NET INVENTORIES

gross inventory

OF NET INVENTORIES

November 30, 2024

Raw materials

Work in progress

Finished products

Total gross inventory

Inventory reserves

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

As of November 30, 2024, and May 31, 2024, inventory reserves were approximately $ 469,000 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

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, 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

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 $ 17,000 and $ 15,000 for the three months ended November 30, 2024

and 2023, respectively, and approximately $ 34,000 and $ 30,000 for the six months ended November 30, 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.

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.

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 and $ 5,000 for the three months ended August 31, 2024 and 2023, respectively.

Amortization expense was approximately $ 4,000 for the three months ended November 30, 2024, and 2023, respectively, and approximately

$ 8,000 for the six months ended November 30, 2024, and 2023, respectively.

Amortizing intangible assets are tested for impairment if

management determines that events or changes in circumstances indicate that the asset might be impaired.

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 is any impairment.

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

whether there was any impairment.

During the six months ended November 30, 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 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.

of November 30, 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 November 30, 2024.

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

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the straight-line attribution method.

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:

During the three months ended November 30, 2024, the Company expensed approximately $ 155,000 in share-based compensation,

compared to $ 122,000 for the same period in 2023.

For the six months ended November 30, share-based compensation expenses were approximately

$ 232,000 in 2024 and $ 292,000 in 2023.

following summary presents the options granted, exercised, expired, cancelled and outstanding for the six months ended November 30, 2024:

SUMMARY OF OPTIONS ACTIVITY

Option Shares

Weighted Average

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Outstanding at May 31, 2024

Outstanding at August 31, 2024

Cancelled or expired

Outstanding at November 30, 2024

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

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OTC products are sold

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

directly to 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.

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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,

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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

of November 30, 2024, the Company had approximately $ 85,000 in advances from domestic customers, which are prepayments on orders for

future shipments.

Disaggregation

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SCHEDULE OF DISAGGREGATION REVENUE

Months Ended August 31,

Three Months Ended November 30,

Six Months Ended November 30,

Over-the-counter

manufacturing

Note 4 for additional information regarding revenue concentrations.

Contract manufacturing

Physician’s office

Note 4 for additional information regarding geographic revenue concentrations.

AND HANDLING FEES

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The Company expensed approximately $ 257,000 and $ 412,000 of research and development

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

costs during the three months ended November 30, 2024 and 2023, respectively, and approximately $ 554,000 and $ 883,000 of research and

development costs during the six months ended November 30, 2024 and 2023, respectively.

the three months ended November 30, 2024, the Company had an income tax expense of approximately $ 3,000 .

For the six months ended November

30, 2024, the Company had an income tax expense of approximately $ 0 .

These expenses consisted of state minimum taxes and miscellaneous

foreign taxes.

During the three and six months ended November 30, 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 November 30, 2024.

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

For the three and six months ended November 30, 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.

Advertising costs were approximately

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

$ 12,000 and $ 26,000 for the three months ended November 30, 2024 and 2023, respectively, and approximately $ 26,000 and $ 56,000 during

the six months ended November 30, 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 subsidiary located in Germany operates primarily using the

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 for the three months ended August 31, 2024 and 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 and six months ended November 30, 2024 and 2023.

ASSETS AND LEASE LIABILITY

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

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

on November 30, 2024 and 2023 was 3,214,616 and 2,280,116 , respectively.

ACCOUNTING PRONOUNCEMENTS

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on the Company’s present or future 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

November 2023, the FASB issued ASU 2023-07, “Improvements to Reportable Segment Disclosures.” The ASU includes enhanced disclosure

requirements, primarily related to significant segment expenses that are regularly provided to and used by the chief operating decision

maker (“CODM”).

The amendments are to be applied retrospectively to all prior periods presented in the financial statements.

ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, with early adoption permitted.

We are currently evaluating

the effect of adopting this pronouncement on our financial statements and disclosures.

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

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

In November 2024, the FASB issued ASU 2024-03, “Income

Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40)”.

The ASU includes enhanced

disclosure requirements, which mandates enhanced transparency in financial statements by requiring detailed disclosures of specific expenses

like inventory purchases, employee compensation, depreciation, and intangible asset amortization.

ASU 2024-03 are effective for annual

reporting periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December

Early adoption is permitted.

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

and disclosures.

SHAREHOLDERS’ EQUITY

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.

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.

November 30, 2023, 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 six months ended November 30, 2023.

During the six months ended November

30, 2024, the Company sold 1,515,348 shares of its common stock at prices ranging from $ 0.36 to $ 0.47 under its Form S-3 Registration

Statement and ATM Offering which resulted in gross proceeds of approximately $ 603,000 and net proceeds to the Company of approximately

$ 567,000 after deducting commissions for each sale and legal, accounting, and other fees related to the ATM Offering.

GEOGRAPHIC INFORMATION

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SCHEDULE OF GEOGRAPHIC INFORMATION

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,

Three Months Ended November 30,

Months Ended November 30,

Revenues from sales to unaffiliated customers:

North America

South America

of November 30, 2024 and May 31, 2024, approximately $ 512,000 and $ 537,000 of the Company’s gross inventory was located in Mexicali,

Mexico, respectively.

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

of November 30, 2024 and May 31, 2024, approximately $ 12,000 and $ 14,000 of the Company’s property and equipment, net of accumulated

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

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

of November 30, 2024, the Company had approximately 22,000 square feet of floor space at its corporate headquarters at 17571 Von Karman

Avenue in Irvine, California.

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Biomerica de Mexico

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

also leases a smaller unit on a month-to-month basis for use in one 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

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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 ended August 31, 2024 and 2023:

following table presents information on our operating leases for the three and six months ended November 30, 2024 and 2023:

SCHEDULE OF OPERATING LEASES

Months Ended August 31,

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

Three Months Ended November 30,

Six Months Ended November 30,

Operating lease cost

Variable lease cost

Short-term lease cost

Total lease cost

approximate maturity of lease liabilities as of November 30, 2024 are as follows:

SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS

Ending May 31:

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

minimum future lease payments

Year Ending November 30:

2025 (excluding the six months ended November 30, 2024)

Total minimum future lease payments

imputed interest

operating lease liabilities

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

Total operating lease liabilities

following table summarizes the Company’s other supplemental lease information for the six months ended November 30, 2024 and 2023:

SCHEDULE OF OTHER SUPPLEMENTAL LEASE INFORMATION

Months Ended August 31,

paid for operating lease liabilities

Weighted-average

remaining lease term (years)

Weighted-average

discount rate

Six Months Ended November 30,

Cash 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

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

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

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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

were no material legal proceedings pending as of November 30, 2024.

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