What changed in this filing

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Item 1. Financial Statements

2022-04-14 compared with 2022-01-12 · 84 added, 95 removed, 392 unchanged (31% of the section changed)

6 unchanged sentences

Accounts receivable, less allowance for doubtful accounts

of $ 27,777 and $ 837,415 as of November 30, 2021 and May 31, 2021, respectively

of $ 20,293 and $ 837,415 as of February 28, 2022 and May 31, 2021, respectively

Inventories, net

2 unchanged sentences

Property and equipment, net of accumulated depreciation and amortization

of $ 2,026,764 and $ 1,972,357 as of November 30, 2021 and May 31, 2021, respectively

Right of use assets, net of accumulated amortization of $ 595,116 and $ 469,077

as of November 30, 2021 and May 31, 2021, respectively

Intangible assets, net of accumulated amortization of $ 91,030 and $ 126,769 as

of November 30, 2021 and May 31, 2021, respectively

of $ 2,046,612 and $ 1,972,357 as of February 28, 2022 and May 31, 2021, respectively

Right of use assets, net of accumulated amortization

of $ 658,773 and $ 469,077 as of February 28, 2022 and May 31, 2021, respectively

Intangible assets, net of accumulated amortization

of $ 49,253 and $ 126,769 as of February 28, 2022 and May 31, 2021, respectively

Liabilities and Shareholders' Equity

2 unchanged sentences

Accrued compensation

Advance from customers

Advances from customers

Lease liability, current portion

5 unchanged sentences

Preferred stock, Series A 5% convertible, $ 0.08 par value,

571,429 shares authorized, none issued and outstanding as of November 30, 2021 and

571,429 shares authorized, none issued and outstanding as of February 28, 2022 and

Preferred stock, undesignated, no par value,

4,428,571 shares authorized, none issued and outstanding as of November 30, 2021 and

4,428,571 shares authorized, none issued and outstanding as of February 28, 2022 and

Common stock, $ 0.08 par value,

25,000,000 shares authorized, 12,851,924 and 12,307,157 issued and outstanding at

November 30, 2021 and May 31, 2021, respectively

February 28, 2022 and May 31, 2021, respectively

Additional paid-in-capital

11 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

(As Restated)

5 unchanged sentences

( 5,791,593 )

Gross profit (loss)

Operating expenses:

6 unchanged sentences

( 5,777,393 )

( 3,612,048 )

Other income:

4 unchanged sentences

( 5,723,632 )

( 3,595,974 )

Provision for income taxes

( 1,125,274 )

(Provision) benefit for income taxes

( 2,124,541 )

8 unchanged sentences

( 5,735,033 )

( 3,610,492 )

Other comprehensive loss, net of tax:

4 unchanged sentences

( 5,743,720 )

( 3,613,742 )

The accompanying notes are an integral part of these statements.

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited)

For the Six Months Ended November 30, 2020 (As Restated)

Comprehensive

For the Nine Months Ended February 28, 2021 (As Restated)

Series A 5% Convertible

Preferred Stock

Comprehensive

Paid-in Capital

2 unchanged sentences

Exercise of stock options

Net proceeds from ATM

Foreign currency translation

Conversion of preferred to common stock

Compensation expense in connection with options granted

1 unchanged sentence

( 5,735,033 )

Balances, November 30, 2020, restated

Balances, February 28, 2021, restated

( 28,835,114 )

For the Six Months Ended November 30, 2021

Comprehensive

For the Nine Months Ended February 28, 2022

Series A 5% Convertible

Preferred Stock

Comprehensive

Paid-in Capital

4 unchanged sentences

Foreign currency translation

Compensation expense in connection with

options granted

Compensation expense in connection with options granted

( 2,772,023 )

Balances, November 30, 2021

Balances, February 28, 2022

( 33,318,358 )

3 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended

Nine Months Ended

(As Restated)

15 unchanged sentences

Accrued compensation

Advance from customers

Advances from customers

Net cash provided by (used in) operating activities

15 unchanged sentences

Cash paid during the period for:

Non-cash investing and financing activities:

Increase in right-of-use asset due to lease extension or establishment

Increase in lease liability due to lease extension or establishment

The accompanying notes are an integral part of these statements.

6 unchanged sentences

The Company's products are designed to enhance the health and well-being of people, while reducing total healthcare costs.

Our primary focus is the research and development of patented, diagnostic-guided therapy (“DGT”) products to treat gastrointestinal diseases, such as irritable bowel syndrome, and other inflammatory diseases.

Our primary focus is the research, development, and regulatory approval of patented, diagnostic-guided therapy (“DGT”) products to treat gastrointestinal diseases, such as irritable bowel syndrome, and other inflammatory diseases.

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

Our existing medical diagnostic products that are in the market are sold worldwide primarily in two markets:

1) clinical laboratories and 2) point-of-care (physicians' offices and over-the-counter drugstores like Walmart and Walgreens).

1) clinical laboratories and 2) point-of-care (physicians' offices and drugstores like Walmart and Walgreens).

Our diagnostic test kits are used to analyze blood, urine, nasal or fecal specimens from patients in the diagnosis of various diseases, food intolerances and other medical complications, by measuring or detecting the existence and/or level of specific bacteria, hormones, antibodies, antigens or other substances, which may exist in a patient’s body, stools, or blood, often in extremely small concentrations.

Due to the global 2019 SARS-CoV-2 novel coronavirus pandemic, in March 2020 we began developing COVID-19 products to indicate if a person has been infected by COVID-19.

While the Company does offer a COVID-19 antibody diagnostic test, all of our COVID-19 revenues in fiscal 2022 have come from international sales of our antigen tests that use a patient’s nasal fluid sample to detect if the patient is currently infected with the virus.

Due to the global 2019 SARS-CoV-2 novel coronavirus pandemic, in March 2020 we began developing COVID-19 products to indicate if a person has been infected by COVID-19, or is currently infected.

While the Company does offer a COVID-19 antibody diagnostic test, all of our COVID-19 revenues in fiscal 2022 have come from international sales of our COVID-19 antigen tests that use a patient’s nasal fluid sample to detect if the patient is currently infected with the virus.

The other products we sell are primarily focused on gastrointestinal diseases, food intolerances, and certain esoteric tests.

14 unchanged sentences

Additionally, our calculation expensed the option at vesting dates versus pro-rata over the period the requisite service was provided.

As a result of these errors, certain previously reported amounts in the condensed consolidated statement of operations, condensed consolidated statement of stockholders’ equity and condensed consolidated statement of cash flows for the periods ended November 30, 2020, were materially misstated;

accordingly, we have restated the prior period financial statements.

17 unchanged sentences

These ongoing pandemic related disruptions have materially negatively impacted the Company’s operations and financial performance and may continue to have significant material negative impacts on the Company .

The Company has incurred net losses and negative cash flows from operations and has an accumulated deficit of approximately $ 33.2 million as of November 30, 2021.

The Company has incurred net losses and negative cash flows from operations and has an accumulated deficit of approximately $ 33.3 million as of February 28, 2022.

Management expects to continue to incur significant costs as it advances its clinical trials and product development activities.

4 unchanged sentences

The Company intends to use the net proceeds from such offering for general corporate purposes, including, without limitation, sales and marketing activities, clinical studies and product development, making acquisitions of assets, businesses, companies or securities, capital expenditures, and for working capital needs.

Under an ATM Agreement, sales of shares are deemed to be “at the market offerings” as defined in Rule 415 promulgated under the Securities Act.

Under an ATM Agreement, sales of shares are deemed to be sold “at the market offerings” as defined in Rule 415 promulgated under the Securities Act.

The sales agent under the ATM Agreement agrees to use commercially reasonable efforts to sell on the Company’s behalf all of the shares requested to be sold from time to time by the Company, consistent with its normal trading and sales practices, on mutually agreed terms between the sales agent and the Company.

The Company has no obligation to sell any of the shares under the ATM Agreement, and may at any time suspend offers under, or terminate the ATM Agreement.

As a result of cash and cash equivalents on hand at November 30, 2021, management believes the Company has sufficient funds to operate through February 2023 and the ability to raise additional funds through the ATM Agreement noted above.

As a result of cash and cash equivalents on hand at February 28, 2022, and the ability to raise additional funds through the ATM Agreement noted above, management believes the Company has sufficient funds to operate through May 2023.

CONCENTRATION OF CREDIT RISK

The Company maintains cash balances at certain financial institutions in excess of amounts insured by federal agencies.

As of November 30, 2021, the Company had approximately $ 6,950,000 of uninsured cash.

As of February 28, 2022, the Company had approximately $ 9,765,000 of uninsured cash.

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

For the six months ended November 30, 2021 and 2020, the Company had two and one key customers which accounted for 66 % and 35 % of net consolidated sales, respectively.

At November 30, 2021 and May 31, 2021, the Company had three and two key distributors which accounted for a total of 73 % and 73 %, respectively, of gross accounts receivable.

For the six months ended November 30, 2021 and 2020, the Company had one and two key vendors which accounted for 77 % and 56 % of the purchases of raw materials, respectively.

As of November 30, 2021 and May 31, 2021, the Company had one key vendor which accounted for 47 % and 17 %, respectively, of accounts payable.

For the nine months ended February 28, 2022 and 2021, the Company had three and two key customers who are located in foreign countries which accounted for 75 % and 66 % of net consolidated sales, respectively.

At February 28, 2022 and May 31, 2021, the Company had one and two key customers who are located in foreign countries which accounted for a total of 67 % and 73 %, respectively, of gross accounts receivable.

For the nine months ended February 28, 2022 and 2021, the Company had one k ey vendor which accounted for 85 % and 62 % of the purchases of raw materials, respectively.

As of February 28, 2022 and May 31, 2021, the Company had one key vendor which accounted for 80 % and 17 %, respectively , of accounts payable.

CASH AND CASH EQUIVALENTS

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

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

ACCOUNTS RECEIVABLE

7 unchanged sentences

Management monitors the payments for these large balances closely and very often requires payment of existing invoices before shipping new sales orders.

The Company has established a reserve of approximately $ 28,000 for doubtful accounts as of November 30, 2021.

The Company has established a reserve of approximately $ 20,000 for doubtful accounts as of February 28, 2022.

PREPAID EXPENSES AND OTHER

1 unchanged sentence

These items are reported as prepaid expenses and other, until either the inventory is physically received or the insurance and other items are expensed.

As of November 30, 2021 and May 31, 2021, the prepaid expenses and other were approximately $ 1,097,000 and $ 370,000 , respectively.

As of February 28, 2022 and May 31, 2021, the prepaid expenses and other were approximately $ 667,000 and $ 370,000 , respectively .

The prepaid expenses and other balance were composed of prepayments to raw materials suppliers, insurance and various other suppliers.

3 unchanged sentences

Management evaluates quantities on hand, physical condition, and technical functionality as these characteristics may be impacted by anticipated customer demand for current products and new product introductions.

The reserve is adjusted based on such evaluation, with a corresponding provision included in cost of sales.

The inventory reserve (as described below) is adjusted based on such evaluation, with a corresponding provision included in cost of sales.

Abnormal amounts of idle facility expenses, freight, handling costs and wasted material are recognized as current period charges and the allocation of fixed production overhead is based on the normal capacity of the production facilities.

Inventories approximate the following at:

Net inventories are approximately the following:

Raw materials

2 unchanged sentences

Reserves for inventory obsolescence are recorded as necessary to reduce obsolete inventory carrying value to estimated realizable value or to specifically reserve for obsolete inventory that the Company intends to dispose of.

As of November 30, 2021 and May 31, 2021, inventory reserves were approximately $ 1,799,000 and $ 1,617,000 , respectively.

Of the inventory reserve, approximately $ 1,686,000 was related to a market downturn in our COVID-19 antibody test and materials, as the market shifted to COVID-19 PCR viral tests and antigen tests.

As of February 28, 2022 and May 31, 2021, inventory reserves were approximately $ 1,888,000 and $ 1,617,000 , respectively.

Of the inventory reserve as of February 28, 2022, approximately $ 1,686,000 was related to a market downturn in our COVID-19 antibody test and materials, as the market shifted to COVID-19 PCR viral tests and antigen tests.

PROPERTY AND EQUIPMENT, NET

5 unchanged sentences

Leasehold 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 were approximately $ 26,000 and $ 26,000 for the three months ended November 30, 2021 and 2020, and approximately $ 54,000 and $ 53,000 for the six months ended November 30, 2021 and 2020, respectively.

Depreciation and amortization expense on property and equipment were approximately $ 26,000 for the three months ended February 28, 2022 and 2021, and approximately $ 80,000 and $ 78,000 for the nine months ended February 28, 2022 and 2021, respectively.

INTANGIBLE ASSETS, NET

2 unchanged sentences

Intangible 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 20 years for patents.

Amortization was approximately $ 7,000 and $ 6,000 for the three months ended November 30, 2021 and 2020 and approximately $ 14,000 and $ 12,000 for the six months ended November 30, 2021 and 2020, respectively.

Amortization was approximately $ 8,000 and $ 4,000 for the three months ended February 28, 2022 and 2021 and approximately $ 22,000 and $ 16,000 for the nine months ended February 28, 2022 and 2021, respectively.

The Company assesses the recoverability of these intangible assets by determining whether the amortization of the asset’s balance over its remaining life can be recovered through projected undiscounted future cash flows.

The Company uses a qualitative assessment to determine whether there was any impairment.

No impairment adjustment was required as of November 30 , 2021 or 2020.

No impairment adjustment was required as of February 28, 2022 or 2021.

From time-to-time, the Company makes investments in privately-held companies.

14 unchanged sentences

Treasury yield curve in effect at the time of grant for the period of the expected term.

The following summary presents the options and warrants granted, exercised, expired, canceled and outstanding for the six months ended November 30, 2021:

The following summary presents the options and warrants granted, exercised, expired, canceled and outstanding for the nine months ended February 28, 2022:

Option Shares

2 unchanged sentences

Cancelled or expired

Outstanding November 30, 2021

During the six months ended November 30, 2021, options to purchase 21,500 shares of common stock were exercised at prices ranging from $ 1.20 to $ 3.62 .

Outstanding February 28, 2022

During the nine months ended February 28, 2022, options to purchase 23,500 shares of common stock were exercised at prices ranging from $ 1.20 to $ 3.62 .

Total net proceeds to the Company were $ 39,175 .

During the six months ended November 30, 2021, the Company granted 24,000 options to purchase common stock at an average purchase price of $ 4.25 .

During the nine months ended February 28, 2022, the Company granted 307,000 options to purchase common stock at an average purchase price of $ 4.44 .

REVENUE RECOGNITION

1 unchanged sentence

All of the contracts specify that revenues from product sales are recognized at the time the product is shipped, customarily FOB shipping point, which is when the transfer of control of goods has occurred and at which point title passes.

The Company does not typically allow for returns except in the event of defective merchandise and therefore does not establish an allowance for returns.

The Company does not typically allow for returns from international customers except in the event of defective merchandise and therefore does not establish an allowance for returns.

The Company does allow for a return merchandise allowance of approximately one percent of sales to certain domestic retailers.

This allowance reduces revenue recognition by approximately one percent, and is included in sales discounts.

In addition, the Company has contracts with customers wherein they receive purchase discounts for achieving specified sales volumes.

The Company evaluated the status of these contracts as of November 30 , 2021 and 2020, and does not believe that any additional discounts will be given through the end of the contract periods.

The Company evaluated the status of these contracts as of February 28, 2022 and 2021, and does not believe that any additional discounts will be given through the end of the contract periods.

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

3 unchanged sentences

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

During the quarter ended February 28, 2022, the Company had approximately $ 3,213,000 of advances from certain foreign customers.

The majority of these advances are prepayments on orders that are expected to ship during our fourth quarter ended May 31, 2022.

Disaggregation of revenue:

1 unchanged sentence

Three Months Ended

Six Months Ended

Nine Months Ended

Physician's office

6 unchanged sentences

Research and development costs are expensed as incurred.

The Company expensed approximately $ 619,000 and $ 617,000 of research and development costs during the three months ended November 30, 2021 and 2020 and approximately $ 1,058,000 and $ 1,328,000 during the six months ended November 30, 2021 and 2020, respectively.

The Company has provided a valuation allowance on deferred income tax assets of approximately $ 6,462,000 and $ 5,904,000 as of November 30, 2021 and May 31, 2021, respectively.

The Company expensed approximately $ 457,000 and $ 564,000 of research and development costs during the three months ended February 28, 2022 and 2021 and approximately $ 1,515,000 and $ 1,892,000 during the nine months ended February 28, 2022 and 2021, respectively.

The Company has provided a valuation allowance on deferred income tax assets of approximately $ 6,479,000 and $ 5,904,000 as of February 28, 2022 and May 31, 2021, respectively.

FOREIGN CURRENCY TRANSLATION

4 unchanged sentences

The resulting adjustments to assets and liabilities are presented as a separate component of accumulated other comprehensive loss.

There are no adjustments to foreign currency loss that are included in the consolidated statements of operations for the three and six months ended November 30, 2021 and 2020.

There are no adjustments to foreign currency loss that are included in the consolidated statements of operations for the three and nine months ended February 28, 2022 and 2021.

RIGHT-OF-USE ASSETS AND LEASE LIABILITY

10 unchanged sentences

Diluted loss per share reflects the potential dilution that could occur from common shares issuable through stock options, warrants and other convertible securities using the treasury stock method.

The total amount of anti-dilutive stock options not included in the loss per share calculation at November 30, 2021 and 2020 was 2,059,116 and 1,399,763 , respectively.

The total amount of anti-dilutive stock options not included in the loss per share calculation at February 28, 2022 and 2021 was 2,336,116 and 1,360,192 , respectively.

RECENT ACCOUNTING PRONOUNCEMENTS

1 unchanged sentence

SHAREHOLDERS’ EQUITY

Stock option expense during the six months ended November 30, 2021 and 2020 was approximately $ 634,000 and $ 500,000 (as restated, see Note 8 to these Financial Statements), respectively.

During the six months ended November 30, 2021, the Company sold 363,670 shares of its common stock at prices ranging from $ 4.02 to $ 5.63 under its January 22, 2021 prospectus supplement and the ATM Agreement (see Note 2 to these Financial Statements) which resulted in gross proceeds of approximately $ 1,751,000 and net proceeds to the Company of approximately $ 1,684,000 after deducting commissions for each sale and legal, accounting and other fees related to the filing of the Form S-3.

Stock option expense during the nine months ended February 28, 2022 and 2021 was approximately $ 959,000 and $ 1,022,000 (as restated, see Note 8 to these Financial Statements), respectively.

During the nine months ended February 28, 2022, the Company sold 521,267 shares of its common stock at prices ranging from $ 4.02 to $ 5.63 under its January 22, 2021 prospectus supplement and the ATM Agreement (see Note 2 to these Financial Statements) which resulted in gross proceeds of approximately $ 2,402,000 and net proceeds to the Company of approximately $ 2,317,000 after deducting commissions for each sale and legal, accounting and other fees related to the filing of the Form S-3.

GEOGRAPHIC INFORMATION

2 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

Revenues from sales to unaffiliated customers:

1 unchanged sentence

South America

As of November 30, 2021 and May 31, 2021, approximately $ 574,000 and $ 803,000 of Biomerica’s gross inventory was located in Mexicali, Mexico, respectively.

As of November 30, 2021 and May 31, 2021, approximately $ 22,000 and $ 25,000 of Biomerica’s property and equipment, net of accumulated depreciation and amortization, was located in Mexicali, Mexico, respectively.

As of February 28, 2022 and May 31, 2021, a pproximately $ 142,000 and $ 803,000 of Biomerica’s gross inventory was located in Mexicali, Mexico, respectively.

As of February 28, 2022 and May 31, 2021, approximately $ 19,000 and $ 25,000 of Biomerica’s property and equipment, net of accumulated depreciation and amortization, was located in Mexicali, Mexico, respectively.

On June 18, 2009, the Company entered into an agreement to lease a building in Irvine, California.

4 unchanged sentences

The Company was also granted an additional five years lease extension option through August 2031.

The rent is currently $ 25,970 per month and will increase by 3 % each year at the beginning of September.

The rent is currently $ 25,588 per month.

The security deposit of $ 22,078 remains the same.

8 unchanged sentences

Rent expense in the U.S.

for the six months ended November 30, 2021 and 2020 was approximately $ 155,000 and $ 152,000 , respectively.

Rent expense for the Mexico facility for the six months ended November 30, 2021 and 2020 was approximately $ 21,000 and $ 22,000 , respectively.

for the nine months ended February 28, 2022 and 2021 was approximately $ 230,000 and $ 227,000 , respectively.

Rent expense for the Mexico facility for the nine months ended February 28, 2022 and 2021 was approximately $ 31,000 .

For purposes of determining straight-line rent expense, the lease term is calculated from the date the Company first takes possession of the facility, including any periods of free rent and any renewal option periods that the Company is reasonably certain of exercising.

2 unchanged sentences

Such amounts are generally variable and therefore not included in the measurement of the right-of-use asset and related lease liability but are instead recognized as variable lease expense in the Consolidated Statements of Operations and Comprehensive Loss when they are incurred.

Supplemental cash flow information related to leases for the six months ended November 30, 2021:

Supplemental cash flow information related to leases for the nine months ended February 28, 2022:

Operating cash flows from operating leases

3 unchanged sentences

Weighted average discount rate

The approximate maturity of lease liabilities as of November 30, 2021 are as follows:

The approximate maturity of lease liabilities as of February 28, 2022 are as follows:

Less than 1 year

9 unchanged sentences

However, based on facts currently available, management believes such matters will not have a material adverse effect on the Company's consolidated financial position, results of operations or cash flows.

There were no legal proceedings pending as of November 30, 2021.

On July 2, 2020, we received a notice of investigation and subpoena from the Division of Enforcement of the SEC.

The subpoena requested information and documents related to events leading up to our March 17, 2020 announcement that, among other things, we had commenced shipping samples of our COVID-19 IgG/IgM Rapid Test to countries outside of the United States.

In addition, on December 15, 2020, the SEC sent a second subpoena related to this same investigation to Zack Irani, the Company’s CEO, requesting personal and Company documents and information held by Mr.

The Company and Mr.

Irani cooperated fully with the SEC’s investigation and provided information as requested.

On December 2, 2021, the Company was notified by the SEC that they had concluded their investigations with no enforcement action recommendations.

The notices of investigation conclusion pertain to the Subpoena for information sent to the Company in July 2020, as well as the Subpoena for information sent to the Company’s CEO in December 2020.

There were no legal proceedings pending as of February 28, 2022.

CONTRACTS AND LICENSING AGREEMENTS

On April 15, 2021, the Company signed a general merchandise agreement with Walmart for the Company’s EZ Detect product.

On June 21, 2021, the Company signed an exclusive distribution and marketing agreement in Canada for its Helicobacter Pylori (H.

Pylori) test.

SUBSEQUENT EVENTS

Subsequent to November 30, 2021, the Company sold 157,597 shares of its common stock under its S-3 “shelf” Registration statement.

The average sale price was $ 4.13 per share.

Net proceeds to the Company were approximately $ 634,000 .

At the December 9, 2021 board meeting, the Board of Directors approved the grant of 283,000 options to purchase shares of the Company’s common stock to officers, directors and certain employees.

The options are exercisable by outside board members one year from date of grant and for officers and employees one-quarter per year with the first quarter vesting one year from date of grant.

The options will be at the exercise price of $ 4.46 per share and expire ten years from date of grant.

We held our Annual Meeting of Stockholders on December 9, 2021, to consider and vote on the proposals set forth in our proxy statement filed with the Securities and Exchange Commission on September 28, 2021.

Please refer to the Form 8-K filed on December 10, 2021 for a description of the results of the meeting.

RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

During September 2021, the Company determined that errors were included in the previously issued financial statements as described below.

As a result, we restated our financial statements for the periods ended November 30, 2020.

As a result, we restated our financial statements for the periods ended February 28, 2021.

The Company discovered the errors listed below.

4 unchanged sentences

However, this does not impact the Company’s cash, revenues or other aspects of ongoing operations.

The restatement for the quarter ended November 30, 2020 resulted in no changes in the provision for income taxes.

The effect of the restatement on the consolidated statement of operations for the three months ended November 30, 2020 is as follows:

The restatement for the quarter ended February 28, 2021 resulted in no changes in the provision for income taxes.

The effect of the restatement on the consolidated statement of operations for the three months ended February 28, 2021 is as follows:

As Previously Reported

14 unchanged sentences

Diluted net loss per common share

The effect of the restatement on the consolidated statement of operations for the six months ended November 30, 2020 is as follows:

Comprehensive loss

( 1,844,747 )

( 2,129,978 )

The effect of the restatement on the consolidated statement of operations for the nine months ended February 28, 2021 is as follows:

As Previously Reported

17 unchanged sentences

( 5,743,720 )

The effect of the restatement on the consolidated statement of cash flows for the period ended November 30, 2020 is as follows:

The effect of the restatement on the consolidated statement of cash flows for the period ended February 28, 2021 is as follows:

As Previously Reported

9 unchanged sentences

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