What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2026-01-14 compared with 2025-10-14 · 238 added, 175 removed, 134 unchanged (76% of the section changed)

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FORWARD-LOOKING

This Quarterly Report on Form 10-Q (“Form 10-Q” or “Quarterly

Report”) contains forward-looking statements within the meaning of the safe harbor provisions of Section 27A of the Securities

Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the

“Exchange Act”).

All statements in this Quarterly Report, other than statements of historical facts, including, without limitation,

statements regarding our strategy, future operations, future operating expenses, future financial position, future revenue, projected

costs, prospects, plans, intentions, expectations, goals and objectives may be forward-looking statements.

The forward-looking statements

in this Quarterly Report do not constitute guarantees of future performance, and actual results could differ materially from those expressed

or implied in any forward-looking statements.

In some cases, you can identify forward-looking statements by words such as “believe,”

“expect,” “anticipate,” “contemplate,” “estimate,” “project,” “forecast,”

“would,” “may,” “should,” “will,” “could,” “can,” “potential,”

“possible,” “proposed,” “plan,” “develop,” “opportunity,” “intend,”

“initiative,” “target,” “maintain,” “continue,” “strive,” “progress,”

“aim,” or the negative of these terms or other comparable expressions.

Quarterly Report on Form 10-Q (“Form 10-Q” or “Quarterly Report”) contains forward-looking statements within

the meaning of the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”),

and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

All statements in this Quarterly

Report, other than statements of historical facts, including, without limitation, statements regarding our strategy, future operations,

future operating expenses, future financial position, future revenue, projected costs, prospects, plans, intentions, expectations, goals

and objectives may be forward-looking statements.

The forward-looking statements in this Quarterly Report do not constitute guarantees

of future performance, and actual results could differ materially from those expressed or implied in any forward-looking statements.

In some cases, you can identify forward-looking statements by words such as “believe,” “expect,” “anticipate,”

“contemplate,” “estimate,” “project,” “forecast,” “would,” “may,”

“should,” “will,” “could,” “can,” “potential,” “possible,” “proposed,”

“plan,” “develop,” “opportunity,” “intend,” “initiative,” “target,”

“maintain,” “continue,” “strive,” “progress,” “aim,” or the negative of these

terms or other comparable expressions.

among others, that could cause actual results and events to differ materially from those expressed or implied in any forward-looking

statement include:

ability to raise additional capital and continue as a going concern;

accuracy of our estimates regarding expenses, future revenue, capital requirements and needs

for additional financing;

scope of protection we are able to establish and maintain for our intellectual property rights

covering our products and technology;

ability to compete in our industry, including against competitors that have significantly

greater financial, technical and marketing resources than we do;

ability to obtain and maintain government or regulatory certification in the countries and

regions we sell products in;

ability to maintain relations with our key distributors;

impact of global economic and political developments on our business, including rising inflation

and interest rates, capital market disruptions, bank failures, government shutdowns, economic

sanctions and economic slowdowns or recessions that may result from such developments which

could harm our research and development efforts as well as the value of our common stock

and our ability to access capital markets;

implementation of our business model and strategic plans for our business, products, and

risks related to third parties asserting intellectual property infringement claims against

impact of numerous laws and regulations that apply to us and compliance with these laws and

regulations, as they currently exist or as modified in the future;

risks related to product recalls, claims of liability, harm to patients or users of our products;

ability to retain the continued service of our key personnel and to identify, hire and retain

additional qualified professionals.

the ability to raise additional

capital and continue as a going concern;

the accuracy of our estimates

regarding expenses, future revenue, capital requirements and needs for additional financing;

the scope of protection

we are able to establish and maintain for our intellectual property rights covering our products and technology;

the ability to compete

in our industry, including against competitors that have significantly greater financial, technical and marketing resources than

the ability to obtain and

maintain government or regulatory certification in the countries and regions we sell products in;

the ability to maintain

relations with our key distributors;

the impact of global economic

and political developments on our business, including rising inflation and interest rates, capital market disruptions, bank failures,

government shutdowns, economic sanctions and economic slowdowns or recessions that may result from such developments which could

harm our research and development efforts as well as the value of our common stock and our ability to access capital markets;

the implementation of our

business model and strategic plans for our business, products, and technology;

the risks related to third

parties asserting intellectual property infringement claims against us;

the impact of numerous

laws and regulations that apply to us and compliance with these laws and regulations, as they currently exist or as modified in the

the risks related to product

recalls, claims of liability, harm to patients or users of our products;

the ability to retain the

continued service of our key personnel and to identify, hire and retain additional qualified professionals.

factors that might cause actual results and our current expectations and projections to differ materially include, among other things,

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

Our range of medical diagnostic products is sold worldwide, primarily in two markets:

clinical laboratories and point-of-care settings.

Most of our products are Conformite Europeenne (“CE”) marked and/or registered with regulatory agencies in various countries

for diagnostic use, with several also cleared by the U.S.

Food and Drug Administration (“FDA”) for sale in the United States.

range of medical diagnostic products is sold worldwide, primarily in two markets:

clinical laboratories and point-of-care settings (physicians’ offices).

Most of our products are Conformite Europeenne (“CE”) marked and/or registered with regulatory agencies in various

countries for diagnostic use, with several also cleared by the FDA for sale in the

United States.

TECHNOLOGICAL

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We believe our

rapid point-of-care tests, when properly used, can be as accurate as laboratory tests.

rapid point-of-care tests, when properly used, can often be as accurate as laboratory tests.

Our products require limited to no instrumentation,

deliver reliable results in minutes, and can be performed with confidence at home or in a physician’s office.

RESEARCH AND DEVELOPMENT

AND DEVELOPMENT

invest resources in the research and development of new products designed to diagnose and, in some cases, treat several major medical

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target chronic inflammatory illnesses that are widespread and prevalent in large markets.

We have launched inFoods® IBS product,

which leverages this patented technology.

The inFoods® IBS product utilizes a simple blood test to identify patient-specific

foods that, when eliminated from the diet, may help reduce IBS symptoms such as pain, bloating, diarrhea, cramping, and

constipation.

Unlike broad and difficult to manage dietary restrictions, the inFoods® IBS product pinpoints a patient’s

heightened immunoreactivity to specific foods known to frequently trigger IBS symptoms.

By removing the foods identified as

problematic, patients can achieve relief from IBS symptoms.

have introduced our inFoods® IBS product to select gastroenterology (“GI”) physician groups in multiple states and

regions, including in collaboration with one of the largest GI physician groups in the United States.

This initial phase was focused

on gathering real-world feedback, optimizing physician engagement, and validating operational processes.

GI physician feedback has

been generally positive, and we are continuing to expand our network by onboarding additional physician practices.

dedicated sales team is focused on building strong relationships within the GI segment while selectively exploring opportunities to

introduce our inFoods® IBS products to other medical specialties, including integrated health practices and primary-care

These efforts are intended to lay the groundwork for broader adoption by showcasing the distinct clinical value of

inFoods® across multiple healthcare channels.

We have launched our inFoods® IBS

product, which leverages this patented technology.

The inFoods® IBS product utilizes a simple blood test to identify

patient-specific foods that, when eliminated from the diet, may help reduce IBS symptoms such as pain, bloating, diarrhea, cramping,

and constipation.

Unlike broad and difficult to manage dietary restrictions, the inFoods® IBS product pinpoints a

patient’s heightened immunoreactivity to specific foods known to frequently trigger IBS symptoms.

By removing the foods

identified as problematic, patients can achieve relief from IBS symptoms.

have introduced our inFoods® IBS product to select gastroenterology (“GI”) physician groups in multiple states and regions,

including in collaboration with one of the largest GI physician groups in the United States.

This initial phase was focused on gathering

real-world feedback, optimizing physician engagement, and validating operational processes.

GI physician feedback has been generally

positive, and we are continuing to expand our network by onboarding additional physician practices.

dedicated sales team is focused on building strong relationships within the GI segment while selectively exploring opportunities to introduce

our inFoods® IBS products to other medical specialties, including integrated health practices and primary-care providers.

These efforts

are intended to lay the groundwork for broader adoption by showcasing the distinct clinical value of inFoods® across multiple healthcare

Concurrently,

we are evaluating distribution, partnership, and licensing opportunities with U.S.

companies to support a scalable, broad

market launch.

These potential collaborations could significantly enhance the commercialization trajectory of inFoods® IBS

products, both domestically and internationally.

are currently in the process of applying for U.S.

we are evaluating and working with distribution, partnership, and licensing opportunities with U.S.

companies to support a scalable,

broad market launch.

One such distribution opportunity is the partnership previously announced with Henry Schein who is utilizing their

sales force to introduce and sell the inFoods® IBS product to physicians in the U.S.

We expect these potential collaborations

to significantly enhance the commercialization trajectory of inFoods® IBS products, both domestically and internationally.

are currently in the process of pursuing U.S.

government payment or reimbursement for the inFoods® IBS product through the Medicare

If we are successful in attaining reimbursement, we will move forward with applying for reimbursement of this product by private

payer insurance companies.

If patients are able to attain and use our inFoods® IBS product at no cost, or with a small co-payment,

we believe this will dramatically increase our revenues from this product.

In connection with this process, the Centers for Medicare & Medicaid Services has established a reimbursement price applicable to this product.

While the establishment of a reimbursement price does

not guarantee coverage, utilization, or payment, management believes it represents an important step toward broader market access.

Medicare reimbursement is achieved, we intend to also pursue reimbursement with private payer insurance companies.

To the extent patients

are able to access the inFoods® IBS product at reduced out of pocket cost, we expect adoption and utilization to increase.

we continue to pursue commercial opportunities in both U.S.

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We are also focusing on alternative manufacturing and shipping strategies of our products through

our European subsidiary (BioEurope), and our Mexican subsidiary (BioMexico), to mitigate some of the risk these policies may have on

our revenues and operations.

addition, in December 2023 we received FDA clearance for hp+detect™, a diagnostic test designed to detect Helicobacter pylori (H.

BioEurope GmbH, our European subsidiary, and Biomerica de Mexico, our Mexican subsidiary, to mitigate some of the risk

these policies may have on our revenues and operations.

In addition, in December 2023 we received FDA clearance for hp+detect™, a diagnostic test designed to detect Helicobacter pylori

pylori”) bacteria in the gastrointestinal tract.

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treatment effectiveness.

We are actively promoting hp+detect™ to large end-customer laboratories and positioning the product for

We are actively marketing hp+detect™ to large end-customer laboratories and positioning the product for

commercial adoption

to the slower-than-expected launch of our key products, inFoods ® IBS and hp+detect ™ , we have initiated

We continue to balance revenue generated from our established diagnostic products and contract manufacturing services with investments

in newer diagnostic-guided therapy products, including inFoods® IBS and hp+detect™.

Management believes this diversified portfolio

approach supports near-term cash generation while advancing longer-term growth initiatives.

the six months ended November 30, 2025, we continued our phased commercialization strategy for our inFoods® IBS product,

prioritizing targeted gastroenterology practices to validate clinical workflows, refine physician education, and gather real-world feedback.

This measured approach has informed sales and marketing investments and is intended to support a scalable broader launch.

to the slower-than-expected launch of our key new products, inFoods ® IBS and hp+detect ™ , we initiated

significant cost-cutting measures to extend our cash runway and work towards increasing revenues to cover overhead costs.

Additionally,

during the three months ended August 31, 2025, we raised $912,000 in net proceeds from the ATM offering filed in May 2024 providing additional

liquidity to support our operations.

We are actively exploring strategic opportunities to enhance and create shareholder value.

during the six months ended November 30, 2025, the Company strengthened its liquidity position through a combination of operating cost

controls, net proceeds of approximately $1,395,000 from the ATM offering.

We are also actively exploring other strategic

opportunities to enhance and create shareholder value.

OF OPERATIONS

months ended November 30, 2025

Sales and Cost of Sales

following is a breakdown of revenues according to markets to which the products are sold:

Three Months Ended

Three Months Ended November 30,

Increase (Decrease)

August 31, 2025

August 31, 2024

Contract manufacturing

Over-the-counter

Contract manufacturing

Physician’s office

the three months ended August 31, 2025, consolidated net sales reached approximately $1,380,000, compared to $1,807,000 for the same

period in 2024, representing a decrease of $427,000, or 24%.

The decline in revenue was primarily attributable to reduced retail market

activity, lower international over-the-counter (“OTC”) sales related in part to tariff impacts, and decreased demand under certain

contract manufacturing agreements.

Additionally, we experienced continued volatility in clinical laboratory demand during the

These declines were partially offset by increased demand for our inFoods® IBS product.

the three months ended August 31, 2025, consolidated cost of sales amounted to approximately $956,000, or 69% of net sales, compared

to $1,518,000, or 84% of net sales, for the same period in 2024, representing a decrease of $562,000, or 37%.

The reduction in cost of

sales was primarily driven by lower contract manufacturing costs, reflecting changes in product mix and improved production efficiency.

In addition, we benefited from a reduction in direct labor costs following a Reduction in Force (“RIF”) implemented in the prior fiscal year.

result of these factors, our gross margin improved compared to the same period of the previous year.

net sales were approximately $1,210,000 for the three months ended November 30, 2025, as compared to $1,636,000 for the three months

ended November 30, 2024, representing a decrease of approximately $426,000, or 26%.

The decrease was primarily attributable to lower

sales of Aware® products in the Middle East market, as well as reduced contract manufacturing billings and clinic laboratory sales,

which were impacted by the timing and periodic nature of customer orders.

cost of sales was approximately $1,159,000, or 96% of net sales, for the three months ended November 30, 2025, as compared to $1,199,000,

or 73% of net sales, for the three months ended November 30, 2024, representing a decrease of approximately $40,000, or 3%.

was primarily attributable to lower sales volumes during the current quarter compared to the prior year same period, as well as lower

inventory write-offs and production adjustments.

following is a summary of operating expenses:

Three Months Ended August 31,

Three Months Ended November 30,

Increase (Decrease)

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General and Administrative Expenses

the three months ended August 31, 2025, consolidated selling, general, and administrative expenses were approximately $1,330,000,

compared to $1,360,000 for the same period in 2024, reflecting a decrease of $30,000, or 2%.

The decrease was primarily

attributable to a reduction of approximately $65,000 in salaries and wages resulting from a RIF executed in July 2024, a $68,000

decrease in stock-based compensation expense, and a $43,000 decrease in legal expenses related to lower inFoods® patent

application activities.

These decreases were partially offset by a $131,000 increase in professional service fees for ERC filings.

the three months ended November 30, 2025, consolidated selling, general, and administrative expenses amounted to approximately $1,231,000,

compared to $1,173,000 for the corresponding period in 2024, an increase of $58,000 or 5%.

The increase was primarily attributable to

a $71,000 increase in salaries and wages primarily associated with a new hire in the sales and marketing team, a $67,000 increase in

credit loss expense related to aged receivables, and a $34,000 increase in outside sales-related services related to inFoods®.

These increases were partially offset by a $42,000 decrease in stock-based compensation within the administrative team, primarily due

to changes in the Company’s stock price, and a $72,000 decrease in sales commissions resulting from lower sales volumes in the

Middle East market.

and Development

the three months ended August 31, 2025, consolidated research and development (“R&D”) expenses totaled approximately

the three months ended November 30, 2025, consolidated research and development (“R&D”) expenses totaled approximately

$193,000, representing a decrease of 25% from $257,000 in the same period of 2024.

The decrease was primarily driven by a $60,000

reduction in payroll expenses resulting from a RIF implemented in July 2024, and approximately $23,000 in cost savings related to lower

spending on inFoods® research and development projects.

Dividend Income and Other Income

the three months ended August 31, 2025, interest, dividend, and other income totaled approximately $1,123,000, compared to $56,000 for

the same period in the prior year, representing an increase of approximately $1,067,000.

The decrease was primarily attributable to a $46,000

reduction in R&D wages, reflecting fewer labor hours allocated to R&D, as well as a $17,000 decrease resulting from reduced participation

in charitable sponsorships during the current period.

Dividend, Interest, and Other Income

the three months ended November 30, 2025, dividend, interest, and other income totaled approximately $58,000, compared to $40,000

for the corresponding period in 2024, representing an increase of $18,000, or 45%.

This increase was primarily attributable to

dividend distributions received from an investment holding entity during the current period.

months ended November 30, 2025

Sales and Cost of Sales

following is a breakdown of revenues according to markets to which the products are sold:

Six Months Ended November 30,

Increase (Decrease)

Over-the-counter

Contract manufacturing

Physician’s office

the six months ended November 30, 2025, consolidated net sales reached approximately $2,590,000, compared to $3,444,000 for the same

period in 2024, representing a decrease of approximately $854,000, or 25%.

The decrease was primarily attributable to lower clinic laboratory

sales, which experienced volatility due to the periodic and infrequent nature of customer orders, as well as reduced contract manufacturing

billings and lower OTC sales driven by decreased sales in the Middle East market.

the six months ended November 30, 2025, consolidated cost of sales was approximately $2,113,000, or 82% of net sales, compared to $2,720,000,

or 79% of net sales, for the same period in 2024, representing a decrease of $607,000, or 22%.

The decrease was primarily attributable

to lower sales volumes across the clinical laboratory, OTC, and contract manufacturing businesses, which resulted in lower labor costs

and reduced cost allocations.

In addition, lower levels of aged inventory during the current period led to a decrease in inventory write-offs.

following is a summary of operating expenses:

Six Months Ended November 30,

Increase (Decrease)

Operating Expense

Total Revenues

Operating Expense

Total Revenues

Selling, General and Administrative Expenses

Research and Development

General and Administrative Expenses

the six months ended November 30, 2025, consolidated selling, general, and administrative expenses totaled approximately $2,561,000,

compared to $2,533,000 for the same period in 2024, representing an increase of approximately $28,000, or 1%.

The increase was primarily

attributable to a $114,000 increase in outside administrative services associated with tax credit advisory services provided for ERC,

a $66,000 increase in stock-based compensation within the sales and marketing organization related to a new hire during the current period,

compared to workforce reductions in the prior year period, and a $55,000 increase in credit loss expense under CECL related to aged receivables,

for which payment plans have been established.

These increases were partially offset by an $88,000 decrease in sales commissions resulting

from reduced sales volumes in the Middle East market, a $73,000 decrease in salaries and wages within the sales and marketing team,

and a $51,000 decrease in stock-based compensation expense within the administrative team.

and Development

the six months ended November 30, 2025, consolidated R&D expenses totaled approximately $405,000, representing a decrease of $149,000,

or 27% from $554,000 in the same period of 2024.

The decrease was primarily attributable to a $106,000 reduction in R&D salaries

and wages, reflecting fewer labor hours allocated to R&D as the business progressed into later, commercialization focused development

phases, as well as a $36,000 decrease in R&D expenses related to inFoods® during the current period.

Dividend, Interest, and Other Income

the six months ended November 30, 2025, dividend.

interest, and other income totaled approximately $1,180,000, compared to $97,000

for the corresponding period in 2024, representing an increase of $1,083,000, or 1116%.

The increase was primarily attributable to a

$1,100,000 cash refund received from the Internal Revenue Service (IRS) on July 21, 2025, related to previously filed claims for the ERC,

a refundable payroll tax credit established under the CARES Act.

was available to eligible employers for wages paid during calendar year 2021 in response to the global COVID-19 pandemic.

represents a one-time benefit that is not expected to recur in future periods.

the ERC refund, interest and dividend income decreased by approximately $29,000, primarily due to lower market interest rates during the current quarter compared to the prior year.

CAPITAL RESOURCES AND GOING CONCERN

$1,100,000 cash refund received from the Internal Revenue Service (IRS) on July 21, 2025, related to previously filed claims for the

ERC, a refundable payroll tax credit established under the CARES Act.

The ERC was available to eligible employers for wages paid

during calendar year 2021 in response to the global COVID-19 pandemic.

This credit represents a one-time benefit that is not

expected to recur in future periods.

the ERC refund, interest and dividend income decreased by approximately $29,000, primarily due to lower market interest rates during

the current quarter compared to the prior year.

AND CAPITAL RESOURCES AND GOING CONCERN

following are the principal sources of liquidity:

August 31, 2025

November 30, 2025

Cash and cash equivalents

Working capital including cash and cash equivalents

of August 31, 2025 and May 31, 2025, we had cash and cash equivalents of approximately $3,053,000 and $2,399,000, respectively.

As of August 31, 2025 and May 31, 2025, we had working capital of approximately $4,206,000 and $3,135,000, respectively.

Our 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;

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

has analyzed our cash flow requirements through November 2026 and beyond.

Based on this analysis, we believe our current

cash and cash equivalents are insufficient to meet our operating cash requirements and strategic growth objectives for the next twelve

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.

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.

of November 30, 2025 and May 31, 2025, we had cash and cash equivalents of approximately $2,543,000 and $2,399,000, respectively.

of November 30, 2025 and May 31, 2025, we had working capital of approximately $3,592,000 and $3,135,000, respectively.

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

Our need and ability to generate additional revenue

from international opportunities and our new product launches;

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

Our capacity to manage operating expenses and maintain

gross margins as we grow;

Our ability to retain key employees and maintain critical

operations with a substantially reduced workforce;

Certain SEC regulations that limit the amount of capital

we can raise through issuance of its equity.

These factors raise substantial doubt about our ability

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financing, and achieving profitable operations.

As part of our financing plan, on September 28, 2023,

we filed a “shelf” registration statement on Form S-3 with the SEC, which was declared effective on September 29, 2023, allowing

the Company to issue up to $20,000,000 in shares of our common stock.

On May 10, 2024, the Company filed a prospectus supplement to the

“shelf” registration statement on Form S-3 with the SEC.

This prospectus supplement was intended to facilitate the sale of

up to $5,500,000 in common stock through the 2024 ATM Offering.

As part of this transaction, we incurred $81,000 in deferred offering

costs during the year ended May 31, 2024.

During the three months ended August 31, 2025, we sold 258,569 shares of its common stock at prices ranging from

$3.34 to $3.69 pursuant to the 2024 ATM Offering, which resulted in gross proceeds of approximately $939,000 and net proceeds to us of

$912,000 after deducting commissions for each sale and legal, accounting, and other fees related to offering in the amount of $27,000.

including $8,000 of previously capitalized deferred offering cost.

We intend to use the net proceeds from the 2024 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.

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

has analyzed our cash flow requirements through November 2026 and beyond.

Based on this analysis, we believe our current cash and cash

equivalents are insufficient to meet our operating cash requirements and strategic growth objectives for the next twelve months.

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.

part of our financing plan, on September 28, 2023, we filed the Shelf Registration Statement allowing us to issue up to

$20,000,000 in shares of our common stock.

On May 10, 2024, the Company filed a prospectus supplement to the Shelf

Registration Statement on Form S-3.

This prospectus supplement was intended to facilitate the sale of up to $5,500,000

in common stock through the 2024 ATM Offering.

As part of this transaction, we incurred $81,000 in deferred offering costs during

the year ended May 31, 2024.

the six months ended November 30, 2025, we sold 391,125 shares of its common stock at prices ranging from $3.34 to $4.02 pursuant

to the 2024 ATM Offering, which resulted in gross proceeds of approximately $1,432,000 and net proceeds to us of $1,395,000 after deducting

commissions for each sale and legal, accounting, and other fees related to offering in the amount of $37,000.

intend to use the net proceeds from the 2024 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.

we are committed to addressing our capital needs and sustain operations beyond the next year, there is no assurance that these efforts will be successful or sufficient to meet our capital requirements.

factors raise substantial doubt about our ability to continue as a going concern.

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

During the three months

ended August 31, 2025, cash used in operating activities was approximately $268,000.

The primary factors that contributed to this were

a net income of approximately $2,000, an increase in accounts receivable of $512,000, a decrease in accrued compensation of

$63,000 and a decrease in lease liability of $86,000.

These were partially offset by a decrease in inventories

of $10,000, a decrease in prepaid expenses of $87,000, and non-cash expenses of $280,000.

the three months ended August 31, 2024, cash used in operating activities was approximately $1,344,000.

the six months ended November 30, 2025, cash used in operating activities was approximately $1,259,000.

The primary factors that contributed

to this were a loss of approximately $1,316,000, an increase in accounts receivable of $616,000, and a decrease in lease liability of

These were partially offset by a decrease in inventories of $429,000, a decrease in prepaid expenses and other of $106,000,

and non-cash expenses of approximately $191,000.

the three months ended August 31, 2025 and 2024, we did not acquire any new property, equipment, or

During the three months

ended August 31, 2025, cash provided by financing activities

was approximately $920,000.

We received gross proceeds of $939,000 from the sale of our common stock, with costs for sale of $19,000.

In contrast, during the three months ended August 31, 2024, and 2023, we did not have any cash provided by financing activities,

as there were no net proceeds from the sale of common stock or stock option exercises.

to this were a loss of approximately $1,318,000, an increase in accounts receivable of $285,000, decrease in lease liabilities of $175,000,

decrease in accrued compensation of $110,000.

These outflows were partially offset by a decrease in prepaid expenses and other of $78,000,

an increase in accounts payable and accrued expenses of $70,000, and non-cash expenses of approximately $488,000.

the six months ended November 30, 2024, cash used in operating activities was approximately $2,135,000.

The primary factors that contributed

to this were a loss of approximately $2,266,000, an increase in accounts receivable of $387,000, and a decrease in accounts payable and

accrued expenses of $290,000.

These outflows were partially offset by a decrease in inventories of $585,000 and non-cash expenses of

approximately $439,000.

the six months ended November 30, 2025, cash used in investing activities was $0.

the six months ended November 30, 2024, cash used in investing activities was $33,000 for expenditures related to patents.

the six months ended November 30, 2025, cash provided by financing activities amounted to $1,402,000, primarily resulting from gross

proceeds of approximately $1,432,000 from the sale of common stock.

the six months ended November 30, 2024, cash provided by financing activities amounted to $380,000, primarily resulting from gross proceeds

of $392,000 from the sale of common stock.

BALANCE SHEET ARRANGEMENTS

were no off-balance sheet arrangements as of August 31, 2025.

ACCOUNTING POLICIES AND ESTIMATES

were no off-balance sheet arrangements as of November 30, 2025.

ACCOUNTING POLICIES

preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of

23 unchanged sentences

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)

and are not required to provide the information under this item.

are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.

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 2. Management’s Discussion and Analysis