Core Insights - Biomerica, Inc. announced that the Centers for Medicare & Medicaid Services (CMS) has set a national Medicare payment rate of $300 for its inFoods® IBS test, effective January 1, 2026, under the Clinical Laboratory Fee Schedule (CLFS) [1][9] - The establishment of a dedicated CPT® Proprietary Laboratory Analyses (PLA) code for inFoods® IBS, effective October 1, 2025, enhances the test's market position and patient access [2] Commercial Milestone - The $300 payment rate from CMS provides a foundation for negotiations with private insurers, as CMS is the largest payer in the U.S. healthcare system, accounting for approximately 21% of total healthcare expenditure [3][9] - The CEO of Biomerica emphasized that the pricing determination is a significant milestone for both the company and patients suffering from IBS, positioning the company for commercial growth in 2026 and beyond [4] Market Need - Irritable bowel syndrome (IBS) affects about 10% to 15% of adults in the U.S., translating to over 30 million potential patients, highlighting a significant unmet medical need [4] - Current treatment options for IBS often provide inconsistent relief and may involve side effects, with no FDA-approved drugs for the IBS-M subtype, which represents about one-third of the IBS market [4] Product Efficacy - The inFoods® IBS test utilizes a personalized diagnostic approach to identify food triggers for IBS symptoms, allowing for targeted dietary recommendations [5] - Clinical trials demonstrated that 59.6% of patients who eliminated identified trigger foods met the FDA-standard target for abdominal pain reduction, compared to 42.2% in the control group [6] - Notable efficacy was observed in difficult-to-treat populations, with 67.1% of IBS-C patients and 66% of IBS-M patients achieving FDA-target pain reduction [7] Strategic Positioning - The combination of clinical evidence, a dedicated PLA code, and a national CLFS price represents a pivotal moment for inFoods® IBS [8] - The company plans to work with Medicare Administrative Contractors to secure coverage for the inFoods® IBS test and leverage the established pricing to negotiate with private insurers [10] Value Proposition - The CMS pricing announcement enhances Biomerica's market opportunity by providing a differentiated offering, a large patient population, a personalized medicine approach, and platform potential for additional gastrointestinal conditions [11]

Core Insights - Biomerica, Inc. has received authorization from the Egyptian Drug Authority for its complete portfolio of rapid diagnostic tests, enhancing access to early detection tools for cancer and chronic diseases in Egypt [1][2][10] Product Portfolio - The authorized screening tests include those for colorectal disease, breast self-examination, prostate disease, kidney disease, and H. pylori infection, all designed for point-of-care use [1][3][7] - Tests provide quick results within minutes and do not require laboratory sample processing, making them suitable for diverse clinical and community settings [3][14] Market Need - Colorectal cancer is the 7th most common cancer in Egypt, with an incidence of approximately 5 to 10 cases per 100,000 persons per year, and a concerning trend of late-stage diagnoses [4] - Breast cancer is the most common cancer among women in Egypt, with an age-standardized incidence rate of about 55.4 per 100,000 persons per year, and poorer mortality outcomes due to late-stage diagnosis [5] - Prostate cancer ranks as the fourth most common cancer in Egypt, with increasing incidence rates [6] Health Statistics - Approximately 13% of adults in Egypt are living with chronic kidney disease, which has been among the top five causes of death from 2009 to 2019 [8] - H. pylori infection prevalence in Egypt ranges from 50% to 70%, affecting a significant portion of the population [8] Strategic Impact - The authorization supports national public health efforts to improve early disease detection, enhance health outcomes, and reduce long-term healthcare costs [9][10] - Biomerica's expansion in the Middle East and North Africa (MENA) region is reinforced by this authorization, aligning with global preventive care trends [11]

Core Insights - Biomerica, Inc. has announced the publication of a large multicenter clinical trial demonstrating the effectiveness of its inFoods® IBS diagnostic-guided therapy in managing Irritable Bowel Syndrome (IBS) symptoms [1][3][10] Study Overview - The clinical trial was randomized, multicenter, double-blind, and placebo-controlled, evaluating the inFoods® IBS test's ability to identify patient-specific dietary triggers and guide targeted food elimination [2][4] - The study involved 223 IBS patients across eight major U.S. academic medical centers, including renowned institutions like Mayo Clinic and Harvard Beth Israel Deaconess Medical Center [4] Key Findings - Patients following the inFoods® IBS-guided elimination diet experienced significantly greater symptom relief, with 59.6% achieving the FDA-defined target for abdominal pain reduction compared to 42.1% in the control group [9] - Particularly strong results were noted in difficult-to-treat IBS subtypes, with 67.1% of IBS-C patients and 66.0% of IBS-M patients responding positively to the treatment [9] Methodology and Innovation - The inFoods® IBS assay utilizes a proprietary discriminatory p-value method to identify foods causing abnormal IgG responses unique to IBS patients, allowing for a more focused dietary approach [7][10] - The study design addressed limitations of previous research by employing an IBS-specific food panel and robust statistical methodology, enhancing the reliability of the findings [6][10] Clinical Implications - The results support a shift towards precision medicine in gastrointestinal care, where individualized biological markers guide tailored treatment decisions rather than generalized approaches [12][11] - The inFoods® IBS protocol typically results in the elimination of only 2 to 4 foods per patient, making it a more practical and sustainable option compared to broader dietary strategies like the low-FODMAP diet [8][10] Recognition and Future Outlook - The inclusion of inFoods® IBS in Biotherapeutics Quarterly highlights the growing recognition of Biomerica's innovation among healthcare professionals [13] - The study's outcomes underscore the potential of diagnostic-guided dietary strategies to address unmet clinical needs, particularly for IBS-M patients, for whom no FDA-approved medications currently exist [11][12]

Core Viewpoint - Biomerica, Inc. is expanding its Contract Development and Manufacturing Organization (CDMO) services to meet increasing market demand for advanced medical diagnostic solutions [1][2]. Group 1: Company Overview - Biomerica has over 40 years of experience in assay development, manufacturing, and regulatory compliance, making it a sought-after partner for biotechnology and diagnostic companies [2]. - The company is positioned to capture growing demand for outsourced diagnostic development and production, supported by ISO 13485 certification and an FDA registered cGMP manufacturing facility [5]. Group 2: CDMO Services Expansion - The expansion of CDMO services aims to provide end-to-end support from concept through commercial manufacturing, addressing the needs of both large and small diagnostic organizations [3][5]. - Biomerica's CDMO services include capabilities in lateral flow, point-of-care diagnostics, ELISA tests, and Multiplex ELISA assays, which help partners reduce timelines and ensure high-quality outcomes [4][5]. Group 3: Marketing and Visibility - The company has updated its corporate website to prominently feature its CDMO capabilities, facilitating easier access for potential partners to understand the expanded service offerings [4]. - The updated site includes service descriptions and resources to support collaboration with innovators [4]. Group 4: Comprehensive Capabilities - Biomerica offers a range of services including custom assay development, antibody and reagent services, recombinant antibody development, manufacturing and assembly, and supply chain and technology transfer [7][8]. - These services are designed to enhance the efficiency and scalability of product development for pharmaceutical, biotechnology, and diagnostic companies [8].

Core Insights - Biomerica has entered a marketing services arrangement with Henry Schein to promote its inFoods® IBS test across the U.S., excluding New York, marking a significant step in its commercialization strategy [1][2][3] Company Overview - Biomerica, Inc. is a global biomedical technology company focused on developing diagnostic and therapeutic products for gastrointestinal and inflammatory diseases [13] - Henry Schein, Inc. is the largest provider of health care solutions to office-based dental and medical practitioners, with over $12 billion in annual sales in 2024 and a strong distribution network [2][11] Product Details - The inFoods® IBS test is a diagnostic-guided therapy that identifies food triggers for IBS symptoms, allowing for personalized dietary recommendations [6] - The test has shown significant efficacy in clinical studies, particularly for IBS-M patients, with 59.6% of patients in the treatment group achieving the FDA's endpoint for abdominal pain reduction [4][7] Market Context - IBS affects approximately 10% to 15% of adults in the U.S., leading to a lower quality of life and decreased work productivity for those affected [5] - The partnership with Henry Schein is expected to enhance the adoption of this non-drug therapy, addressing a significant unmet need in the IBS market [2][3]

Core Insights - Biomerica, Inc. reported financial results for the first quarter ended August 31, 2025, highlighting a decrease in net sales but an improvement in gross profit due to a favorable product mix and higher-margin services [1][7][9] Financial Performance - Net sales for Q1 fiscal 2026 were $1.4 million, down from $1.8 million in Q1 fiscal 2025, attributed to reduced retail activity and international order timing, partially offset by increased sales of inFoods IBS products [7][10] - Gross margin improved to 31% from 16% year-over-year, driven by a higher-margin product mix [10] - Operating expenses decreased to $1.5 million from $1.7 million, reflecting ongoing cost discipline [8][10] - Operating loss improved to $1.1 million from $1.4 million, with a net profit of approximately $2,000 compared to a net loss of $1.3 million in the prior year [9][10] Product Developments - The inFoods IBS test received a Proprietary Laboratory Analysis (PLA) code, facilitating reimbursement claims for healthcare providers [2] - The UAE Ministry of Health approved the Fortel Ulcer Test and Fortel Kidney Test for home use, enhancing access to diagnostic tools for gastric diseases and kidney damage [3][4] - Biomerica launched the AI-backed inFoods IBS Trigger Food Navigator to support personalized dietary plans for IBS patients [5] Clinical Validation - A multicenter trial published in June 2025 demonstrated the effectiveness of the inFoods IBS test, with significant outcomes in symptom relief for IBS patients [12][14]

PART I - FINANCIAL INFORMATION [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents Biomerica, Inc.'s unaudited condensed consolidated financial statements for the three months ended August 31, 2025, and comparative periods, including key financial statements and explanatory notes [Condensed Consolidated Balance Sheets (unaudited) – August 31, 2025 and May 31, 2025](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The condensed consolidated balance sheets show an increase in total assets and shareholders' equity, primarily driven by an increase in cash and accounts receivable, while total liabilities decreased slightly | Metric | August 31, 2025 | May 31, 2025 | Change ($) | Change (%) | | :-------------------------------- | :-------------- | :----------- | :--------- | :--------- | | Cash and cash equivalents | $3,053,000 | $2,399,000 | $654,000 | 27.26% | | Accounts receivable, net | $1,205,000 | $731,000 | $474,000 | 64.84% | | Total current assets | $5,899,000 | $4,875,000 | $1,024,000 | 21.01% | | Total Assets | $6,854,000 | $5,945,000 | $909,000 | 15.29% | | Total current liabilities | $1,693,000 | $1,740,000 | $(47,000) | -2.70% | | Total Liabilities | $1,699,000 | $1,840,000 | $(141,000) | -7.66% | | Total Shareholders' Equity | $5,155,000 | $4,105,000 | $1,050,000 | 25.58% | [Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (unaudited) – Three Months Ended August 31, 2025 and 2024](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20%28Loss%29) The company reported a net income of $2,000 for the three months ended August 31, 2025, a significant improvement from a net loss of $1,316,000 in the prior year, primarily due to a substantial increase in other income, largely from an Employee Retention Credit refund | Metric | Three Months Ended August 31, 2025 | Three Months Ended August 31, 2024 | Change ($) | Change (%) | | :------------------------------------ | :--------------------------------- | :--------------------------------- | :--------- | :--------- | | Net sales | $1,380,000 | $1,807,000 | $(427,000) | -23.63% | | Cost of sales | $(956,000) | $(1,518,000) | $562,000 | -37.02% | | Gross profit | $424,000 | $289,000 | $135,000 | 46.71% | | Total operating expense | $1,542,000 | $1,657,000 | $(115,000) | -6.94% | | Loss from operations | $(1,118,000) | $(1,368,000) | $250,000 | -18.27% | | Total other income | $1,123,000 | $56,000 | $1,067,000 | 1905.36% | | Income (loss) before income taxes | $5,000 | $(1,312,000) | $1,317,000 | -100.38% | | Net income (loss) | $2,000 | $(1,316,000) | $1,318,000 | -100.15% | | Basic net income (loss) per common share | $0.00 | $(0.63) | $0.63 | -100.00% | | Diluted net income (loss) per common share | $0.00 | $(0.63) | $0.63 | -100.00% | - Net sales decreased by **23.63% YoY** to **$1,380,000**, while gross profit increased by **46.71% YoY** to **$424,000** due to a larger decrease in cost of sales[14](index=14&type=chunk) - Other income saw a substantial increase of **$1,067,000**, primarily driven by a **$1,100,000** Employee Retention Credit (ERC) refund[14](index=14&type=chunk)[81](index=81&type=chunk)[120](index=120&type=chunk) [Condensed Consolidated Statements of Shareholders' Equity (unaudited) – Three Months Ended August 31, 2025 and 2024](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders%27%20Equity) Shareholders' equity increased significantly for the three months ended August 31, 2025, primarily due to net proceeds from common stock sales and share-based compensation, contrasting with a net loss in the prior year | Metric | August 31, 2025 | May 31, 2025 | Change ($) | | :-------------------------------- | :-------------- | :----------- | :--------- | | Common Stock Shares | 2,815,410 | 2,546,216 | 269,194 | | Common Stock Amount | $225,000 | $203,000 | $22,000 | | Additional Paid-in Capital | $58,198,000 | $57,175,000 | $1,023,000 | | Accumulated Deficit | $(53,166,000) | $(53,168,000)| $2,000 | | Total Stockholders' Equity | $5,155,000 | $4,105,000 | $1,050,000 | - Net proceeds from sales of common stock contributed **$912,000** to shareholders' equity for the three months ended August 31, 2025[19](index=19&type=chunk)[84](index=84&type=chunk) - Share-based compensation added **$133,000** to shareholders' equity for the three months ended August 31, 2025[19](index=19&type=chunk) [Condensed Consolidated Statements of Cash Flows (unaudited) – Three Months Ended August 31, 2025 and 2024](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash and cash equivalents increased significantly for the three months ended August 31, 2025, primarily driven by cash provided by financing activities, which offset cash used in operating activities | Metric | Three Months Ended August 31, 2025 | Three Months Ended August 31, 2024 | Change ($) | | :------------------------------------ | :--------------------------------- | :--------------------------------- | :--------- | | Net cash used in operating activities | $(268,000) | $(1,344,000) | $1,076,000 | | Net cash provided by financing activities | $920,000 | $0 | $920,000 | | Net increase (decrease) in cash and cash equivalents | $654,000 | $(1,350,000) | $2,004,000 | | Cash and cash equivalents at end of period | $3,053,000 | $2,820,000 | $233,000 | - Cash used in operating activities decreased significantly from **$(1,344,000)** in 2024 to **$(268,000)** in 2025, a **79.9%** improvement[22](index=22&type=chunk) - Financing activities provided **$920,000** in cash in 2025, primarily from common stock sales, compared to no cash from financing in 2024[22](index=22&type=chunk)[135](index=135&type=chunk) [Notes to Condensed Consolidated Financial Statements (unaudited)](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes provide essential context for the financial statements, detailing business operations, accounting policies, liquidity, and specific financial items, including ASC 326 adoption and ERC recognition [NOTE 1: BASIS OF PRESENTATION](index=8&type=section&id=NOTE%201%3A%20BASIS%20OF%20PRESENTATION) Biomerica, Inc. is a global biomedical technology company focused on diagnostic and therapeutic products, with unaudited interim financial statements prepared in accordance with SEC rules and GAAP - Biomerica, Inc. is a global biomedical technology company developing, patenting, manufacturing, and marketing advanced diagnostic and therapeutic products[24](index=24&type=chunk) - Primary focus is on diagnostic-guided therapy (DGT) products for gastrointestinal diseases, such as the inFoods® IBS product[25](index=25&type=chunk) - Products are sold worldwide in clinical laboratories and point-of-care markets, with some CE marked and/or FDA cleared[26](index=26&type=chunk) [NOTE 2: SIGNIFICANT ACCOUNTING POLICIES](index=8&type=section&id=NOTE%202%3A%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note outlines significant accounting policies, critical estimates, and revenue recognition, highlighting ongoing operating losses and 'going concern' doubt, which management addresses through cost reduction and capital raising strategies - The company has incurred recurring operating losses and negative cash flows, with an accumulated deficit of approximately **$53,200,000** as of August 31, 2025, raising substantial doubt about its ability to continue as a going concern[34](index=34&type=chunk)[40](index=40&type=chunk) - Management is actively pursuing strategies to increase sales, reduce expenses, sell non-core assets, and seek additional financing to address capital needs[39](index=39&type=chunk) - The company sold **258,569** shares of common stock through an ATM offering, generating net proceeds of **$912,000** during the three months ended August 31, 2025, for general corporate purposes[36](index=36&type=chunk)[37](index=37&type=chunk) Net Sales by Market (Three Months Ended August 31) | Market | 2025 ($) | 2024 ($) | Change ($) | Change (%) | | :------------------ | :------- | :------- | :--------- | :--------- | | Clinical lab | 1,024,000| 1,278,000| (254,000) | -19.87% | | Contract manufacturing | 192,000 | 339,000 | (147,000) | -43.36% | | Over-the-counter | 161,000 | 187,000 | (26,000) | -13.90% | | Physician's office | 3,000 | 3,000 | 0 | 0.00% | | **Total** | **1,380,000**| **1,807,000**| **(427,000)**| **-23.63%**| - The company adopted ASC 326 (CECL model) for credit losses on June 1, 2023, establishing a reserve of approximately **$64,000** for credit losses as of August 31, 2025[49](index=49&type=chunk)[50](index=50&type=chunk) Inventory Composition (August 31, 2025 vs. May 31, 2025) | Inventory Type | August 31, 2025 ($) | May 31, 2025 ($) | | :--------------- | :------------------ | :--------------- | | Raw materials | 976,000 | 1,071,000 | | Work in progress | 816,000 | 743,000 | | Finished products| 159,000 | 147,000 | | Total gross inventory | 1,951,000 | 1,961,000 | | Inventory reserves | (478,000) | (471,000) | | Net inventory | 1,473,000 | 1,490,000 | - Share-based compensation expense for stock options was **$74,000** for the three months ended August 31, 2025, down from **$77,000** in the prior year. Restricted stock awards expense was **$59,000** for the three months ended August 31, 2025, with no expense in the prior year[64](index=64&type=chunk)[65](index=65&type=chunk) - Revenue from product sales is recognized at the time of shipment (FOB shipping point), and diagnostic testing services revenue is recognized upon completion of test results by a third-party lab[67](index=67&type=chunk)[68](index=68&type=chunk) - Research and development costs decreased by **29%** to **$212,000** for the three months ended August 31, 2025, compared to **$297,000** in the prior year[72](index=72&type=chunk) - The company recognized **$3,000** in income tax expense for state minimum and foreign miscellaneous taxes, and has a full valuation allowance against deferred tax assets due to uncertainties in generating future taxable income[73](index=73&type=chunk) - Operating lease costs were **$88,000** for both periods, with a weighted-average remaining lease term of **1.02 years** and a weighted-average discount rate of **5.78%** as of August 31, 2025[92](index=92&type=chunk) [NOTE 3: SHAREHOLDERS' EQUITY](index=17&type=section&id=NOTE%203%3A%20SHAREHOLDERS%27%20EQUITY) This note details changes in shareholders' equity, highlighting capital raised through the 2024 ATM Offering and net proceeds from common stock sales - The company filed a 'shelf' registration statement on Form S-3, effective September 29, 2023, allowing issuance of up to **$20,000,000** in common stock[83](index=83&type=chunk) - During the three months ended August 31, 2025, **258,569** shares of common stock were sold via the 2024 ATM Offering, yielding gross proceeds of **$939,000** and net proceeds of **$912,000**[84](index=84&type=chunk) [NOTE 4: GEOGRAPHIC INFORMATION](index=18&type=section&id=NOTE%204%3A%20GEOGRAPHIC%20INFORMATION) The company operates as a single segment but provides disaggregated revenue information by geographic region, showing a decline in sales across all major regions for the three months ended August 31, 2025 Revenues from Sales to Unaffiliated Customers by Region (Three Months Ended August 31) | Region | 2025 ($) | 2024 ($) | Change ($) | Change (%) | | :------------- | :------- | :------- | :--------- | :--------- | | Asia | 670,000 | 817,000 | (147,000) | -17.99% | | Europe | 305,000 | 470,000 | (165,000) | -35.11% | | North America | 318,000 | 427,000 | (109,000) | -25.53% | | Middle East | 85,000 | 90,000 | (5,000) | -5.56% | | South America | 2,000 | 3,000 | (1,000) | -33.33% | | **Total** | **1,380,000**| **1,807,000**| **(427,000)**| **-23.63%**| - Approximately **$480,000** of gross inventory and **$9,000** of net property and equipment were located in Mexicali, Mexico, as of August 31, 2025[85](index=85&type=chunk)[86](index=86&type=chunk) [NOTE 5: LEASES](index=19&type=section&id=NOTE%205%3A%20LEASES) The company leases facilities in Irvine, California, and Mexicali, Mexico, as well as a small office in Lindau, Germany. Lease liabilities are recognized on the balance sheet, with operating lease costs remaining stable year-over-year - The company leases approximately **22,000 square feet** for its corporate headquarters in Irvine, California, with the lease expiring in August 2026 and an option for a five-year extension[89](index=89&type=chunk) - Biomerica de Mexico leases **8,100 square feet** of manufacturing space under a 10-year lease with a 10-year renewal option[90](index=90&type=chunk) Lease Costs (Three Months Ended August 31) | Lease Cost Type | 2025 ($) | 2024 ($) | | :---------------- | :------- | :------- | | Operating lease cost | 88,000 | 88,000 | | Variable lease cost | 3,000 | 2,000 | | Short-term lease cost | - | 2,000 | | **Total lease cost** | **91,000** | **92,000** | [NOTE 6: COMMITMENTS AND CONTINGENCIES](index=19&type=section&id=NOTE%206%3A%20COMMITMENTS%20AND%20CONTINGENCIES) The company is occasionally involved in legal proceedings but had no pending matters as of August 31, 2025, with management believing future outcomes will not materially affect its financial position - No legal proceedings were pending as of August 31, 2025[94](index=94&type=chunk) - Management believes that any potential future legal outcomes will not have a material adverse effect on the company's consolidated financial position, results of operations, or cash flows[94](index=94&type=chunk) [NOTE 7: SUBSEQUENT EVENTS](index=20&type=section&id=NOTE%207%3A%20SUBSEQUENT%20EVENTS) There were no subsequent events to report after the period ended August 31, 2025, through the filing date of the report - No subsequent events were reported[95](index=95&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on financial condition and results for the three months ended August 31, 2025, covering operations, product development, revenues, expenses, liquidity, and 'going concern' strategies [Forward-Looking Statements](index=21&type=section&id=Forward-Looking%20Statements) This section cautions that the report contains forward-looking statements regarding future performance and financial position, subject to risks and uncertainties that could cause actual results to differ materially - The report contains forward-looking statements that are not guarantees of future performance and actual results may differ materially[97](index=97&type=chunk) - Key factors influencing actual results include the ability to raise capital, accuracy of estimates, intellectual property protection, competition, regulatory certifications, distributor relations, global economic impacts, and retention of key personnel[98](index=98&type=chunk)[100](index=100&type=chunk) [Overview](index=21&type=section&id=Overview) Biomerica is a global biomedical technology company specializing in advanced diagnostic and therapeutic products, enhancing health and reducing healthcare costs through worldwide sales - Biomerica is a global biomedical technology company that develops, patents, manufactures, and markets advanced diagnostic and therapeutic products[100](index=100&type=chunk) - Products are sold worldwide in clinical laboratories and point-of-care settings, with many being CE marked and/or FDA cleared[102](index=102&type=chunk) [Technological Advancements and Product Development](index=22&type=section&id=Technological%20Advancements%20and%20Product%20Development) The company focuses on developing rapid, accurate, and easy-to-use diagnostic tests for point-of-care and home use, aiming to provide quick and reliable results without complex instrumentation - A key objective is to develop and market rapid diagnostic tests that are accurate, use easily obtained patient specimens, and are simple to perform without complex instrumentation[103](index=103&type=chunk) - The company believes its rapid point-of-care tests can be as accurate as laboratory tests, delivering reliable results in minutes[103](index=103&type=chunk) [Research and Development](index=22&type=section&id=Research%20and%20Development) Biomerica invests in R&D for new diagnostic and therapeutic products, notably its patented inFoods® IBS platform, expanding commercialization efforts and recently receiving FDA clearance for hp+detect™ - A key outcome of R&D is the patented diagnostic-guided therapy (DGT) product, inFoods® IBS, designed to identify patient-specific foods that trigger IBS symptoms[105](index=105&type=chunk) - The company is expanding inFoods® IBS to GI physician groups and exploring distribution, partnership, and licensing opportunities[107](index=107&type=chunk)[109](index=109&type=chunk) - In December 2023, the company received FDA clearance for hp+detect™, a diagnostic test for Helicobacter pylori bacteria[112](index=112&type=chunk) - Due to slower-than-expected product launches, the company initiated significant cost-cutting measures and raised **$912,000** in net proceeds from an ATM offering to extend cash runway[113](index=113&type=chunk) [Results of Operations](index=24&type=section&id=Results%20of%20Operations) The company experienced a **24%** decrease in net sales for the three months ended August 31, 2025, but gross profit improved, operating expenses decreased, and a substantial ERC refund led to net income [Net Sales and Cost of Sales](index=24&type=section&id=Net%20Sales%20and%20Cost%20of%20Sales) Net sales decreased by **24%** to **$1,380,000**, primarily due to reduced retail activity, lower international OTC sales, and decreased contract manufacturing demand. Despite this, gross profit increased by **47%** due to a larger reduction in cost of sales, driven by changes in product mix, improved efficiency, and reduced labor costs Net Sales by Market (Three Months Ended August 31) | Market | August 31, 2025 ($) | August 31, 2024 ($) | Change ($) | Change (%) | | :------------------ | :------------------ | :------------------ | :--------- | :--------- | | Clinical lab | 1,024,000 | 1,278,000 | (254,000) | -20% | | Contract manufacturing | 192,000 | 339,000 | (147,000) | -43% | | Over-the-counter | 161,000 | 187,000 | (26,000) | -14% | | Physician's office | 3,000 | 3,000 | - | 0% | | **Total** | **1,380,000** | **1,807,000** | **(427,000)**| **-24%** | - Consolidated net sales decreased by **$427,000** (**24%**) to **$1,380,000** for the three months ended August 31, 2025, compared to the same period in 2024[115](index=115&type=chunk) - Cost of sales decreased by **$562,000** (**37%**) to **$956,000**, improving gross margin due to lower contract manufacturing costs and reduced direct labor[116](index=116&type=chunk) [Operating Expenses](index=24&type=section&id=Operating%20Expenses) Total operating expenses decreased by **7%** year-over-year, with SG&A decreasing due to RIF and lower stock-based compensation, and R&D decreasing due to payroll reductions and cost savings Operating Expenses (Three Months Ended August 31) | Expense Type | 2025 ($) | 2025 (% of Total Revenues) | 2024 ($) | 2024 (% of Total Revenues) | Change ($) | Change (%) | | :-------------------------------- | :------- | :------------------------- | :------- | :------------------------- | :--------- | :--------- | | Selling, General and Administrative | 1,330,000| 96% | 1,360,000| 75% | (30,000) | -2% | | Research and Development | 212,000 | 15% | 297,000 | 16% | (85,000) | -29% | - SG&A expenses decreased by **$30,000** (**2%**) due to a **$65,000** reduction in salaries/wages from a RIF, a **$68,000** decrease in stock-based compensation, and a **$43,000** decrease in legal expenses, partially offset by a **$131,000** increase in professional service fees for ERC filings[118](index=118&type=chunk) - R&D expenses decreased by **$85,000** (**29%**) due to a **$60,000** reduction in payroll from a RIF and **$23,000** in cost savings on inFoods® R&D projects[119](index=119&type=chunk) [Interest, Dividend Income and Other Income](index=24&type=section&id=Interest%2C%20Dividend%20Income%20and%20Other%20Income) Other income increased substantially by **$1,067,000**, primarily due to a **$1,100,000** cash refund from the IRS for the Employee Retention Credit (ERC), a one-time, non-recurring benefit - Interest, dividend, and other income increased by **$1,067,000** to **$1,123,000** for the three months ended August 31, 2025[120](index=120&type=chunk) - The increase was primarily driven by a **$1,100,000** cash refund from the IRS related to the Employee Retention Credit (ERC) for calendar year 2021, which is a one-time, non-recurring item[120](index=120&type=chunk) [Liquidity, Capital Resources and Going Concern](index=26&type=section&id=Liquidity%2C%20Capital%20Resources%20and%20Going%20Concern) The company's current cash is insufficient for operating requirements and growth, raising 'going concern' doubt, which management addresses through sales increases, expense reductions, and additional financing, including ATM offerings Liquidity Metrics | Metric | August 31, 2025 ($) | May 31, 2025 ($) | | :-------------------------------- | :------------------ | :--------------- | | Cash and cash equivalents | 3,053,000 | 2,399,000 | | Working capital | 4,206,000 | 3,135,000 | - Current cash and cash equivalents are insufficient to meet operating cash requirements and strategic growth objectives for the next twelve months, raising substantial doubt about the company's ability to continue as a going concern[123](index=123&type=chunk)[125](index=125&type=chunk)[130](index=130&type=chunk) - Strategies to address capital needs include increasing sales, reducing expenses, selling non-core assets, and seeking additional debt or equity financing[124](index=124&type=chunk) - The company raised **$912,000** in net proceeds from the 2024 ATM Offering during the three months ended August 31, 2025, intended for general corporate purposes[127](index=127&type=chunk)[129](index=129&type=chunk) [Operating Activities](index=27&type=section&id=Operating%20Activities) Cash used in operating activities significantly decreased to **$268,000** for the three months ended August 31, 2025, a substantial improvement from **$1,344,000** in the prior year, primarily due to net income and changes in working capital - Cash used in operating activities was approximately **$268,000** for the three months ended August 31, 2025, compared to **$1,344,000** in the prior year[131](index=131&type=chunk)[132](index=132&type=chunk) - Key factors contributing to cash used in operating activities in 2025 included a net income of **$2,000**, an increase in accounts receivable of **$512,000**, and decreases in accrued compensation and lease liabilities, partially offset by non-cash expenses and decreases in inventories and prepaid expenses[131](index=131&type=chunk) [Investing Activities](index=27&type=section&id=Investing%20Activities) The company did not acquire any new property, equipment, or patents during the three months ended August 31, 2025, or the same period in 2024 - No new property, equipment, or patents were acquired during the three months ended August 31, 2025, or 2024[133](index=133&type=chunk) [Financing Activities](index=28&type=section&id=Financing%20Activities) Cash provided by financing activities was **$920,000** for the three months ended August 31, 2025, entirely from the net proceeds of common stock sales through the ATM offering, a significant change from no financing activities in the prior year - Cash provided by financing activities was approximately **$920,000** for the three months ended August 31, 2025[135](index=135&type=chunk) - This cash was generated from gross proceeds of **$939,000** from common stock sales, offset by **$19,000** in costs[135](index=135&type=chunk) - There was no cash provided by financing activities in the comparable period of 2024[135](index=135&type=chunk) [Off Balance Sheet Arrangements](index=28&type=section&id=Off%20Balance%20Sheet%20Arrangements) The company reported no off-balance sheet arrangements as of August 31, 2025 - There were no off-balance sheet arrangements as of August 31, 2025[136](index=136&type=chunk) [Critical Accounting Policies and Estimates](index=28&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) The preparation of financial statements requires significant estimates and assumptions for revenue recognition, bad debts, inventory, and leases, with no significant changes to critical accounting policies from the prior annual report - Critical accounting policies and estimates include revenue recognition, bad debts, inventory overhead application, inventory reserves, lease liabilities, and right-of-use assets[138](index=138&type=chunk) - No significant changes to critical accounting policies were reported from the 2025 Annual Report[138](index=138&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=28&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) As a smaller reporting company, Biomerica, Inc. is exempt from providing quantitative and qualitative disclosures about market risk - As a smaller reporting company, Biomerica, Inc. is exempt from providing quantitative and qualitative disclosures about market risk[139](index=139&type=chunk) [Item 4. Controls and Procedures](index=28&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of August 31, 2025, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that disclosure controls and procedures were effective at a reasonable assurance level as of August 31, 2025[141](index=141&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter ended August 31, 2025[142](index=142&type=chunk) PART II - OTHER INFORMATION [Item 1. Legal Proceedings](index=29&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in legal proceedings in the ordinary course of business but had no pending matters as of August 31, 2025, with management believing future outcomes will not materially affect its financial position - No legal proceedings were pending as of August 31, 2025[144](index=144&type=chunk) - Management believes that any future legal matters will not have a material adverse effect on the company's consolidated financial position, results of operations, or cash flows[144](index=144&type=chunk) [Item 1A. Risks Factors](index=29&type=section&id=Item%201A.%20Risks%20Factors) Investing in the company's common stock involves risks, and no material changes to previously disclosed risk factors occurred during the three months ended August 31, 2025 - Investing in the company's common stock involves certain risks, detailed in this report and the 2025 Annual Report[145](index=145&type=chunk) - No material changes to the risk factors described in the 2025 Annual Report occurred during the three months ended August 31, 2025[146](index=146&type=chunk) [Item 5. Other Information](index=29&type=section&id=Item%205.%20Other%20Information) Dr. Jane Emerson will step down as a Board member, effective November 1, 2025, with no disagreement with the company cited as the reason - Dr. Jane Emerson will step down as a Board member, effective November 1, 2025[147](index=147&type=chunk) - Her resignation was not due to any disagreement with the company's operations, policies, or practices[147](index=147&type=chunk) [Item 6. Exhibits](index=29&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed or furnished as part of the quarterly report on Form 10-Q, including certifications and interactive data files - The report includes certifications from the Principal Executive Officer and Principal Financial Officer (Exhibits 31.1, 31.2, 32.1, 32.2)[148](index=148&type=chunk) - Interactive data files (XBRL) are furnished as Exhibit 101 and its sub-components, along with a Cover Page Interactive Data File (Exhibit 104)[148](index=148&type=chunk) [Signatures](index=30&type=section&id=Signatures) The report was signed by Zackary S. Irani, Chief Executive Officer, and Gary Lu, Chief Financial Officer, on October 14, 2025 - The report was signed by Zackary S. Irani, CEO, and Gary Lu, CFO, on October 14, 2025[150](index=150&type=chunk)

Core Insights - Biomerica Inc. has appointed Gary Huff as an independent board member, bringing extensive leadership experience in the diagnostics and healthcare services industry [1][2][3] - Mr. Huff's background includes serving as CEO of LabCorp Diagnostics and managing commercial laboratories across various sizes and sectors, contributing to sustainable growth and operational efficiencies [2][3] - Biomerica's innovative product, inFoods® IBS, aims to transform the management of irritable bowel syndrome (IBS) by identifying patient-specific food triggers [3][4] Company Overview - Biomerica, Inc. is a global biomedical technology company focused on developing, patenting, manufacturing, and marketing advanced diagnostic and therapeutic products for medical conditions, particularly gastrointestinal and inflammatory diseases [10] - The company aims to enhance health and well-being while reducing healthcare costs through its diagnostic solutions [10] Product Insights - inFoods® IBS is a diagnostic-guided therapy that utilizes a finger-stick blood sample to identify food triggers for IBS symptoms, allowing for targeted dietary changes [4][9] - A recent clinical trial published in June 2025 demonstrated that 59.6% of patients in the treatment group achieved significant abdominal pain reduction compared to 42.1% in the control group, indicating the product's potential effectiveness [5][8] Leadership and Strategic Vision - Gary Huff's appointment is expected to provide valuable insights as Biomerica expands its market presence and enhances its innovative diagnostic portfolio [3] - Mr. Huff has a proven track record in building successful diagnostics businesses and delivering shareholder value, which aligns with Biomerica's growth objectives [2][3]

Core Viewpoint - Biomerica, Inc. has launched the inFoods IBS Trigger Food Navigator, an AI-backed digital tool aimed at improving dietary compliance and treatment success for patients with Irritable Bowel Syndrome (IBS) [1][4]. Product Overview - The inFoods IBS test identifies an average of two to four specific foods that trigger IBS symptoms, allowing for a targeted dietary plan [2]. - The Trigger Food Navigator enhances this by providing smart meal suggestions, ingredient substitutions, and simplified meal planning tools [2][4]. Patient Benefits - The inFoods IBS test allows patients to maintain most of their current diet with minor adjustments, making it easier than traditional restrictive diets [3]. - The AI-backed Navigator empowers patients to manage their IBS symptoms effectively, leading to improved adherence to dietary plans and better symptom relief [4][15]. Clinical Results - A pivotal clinical study published in June 2025 showed that 59.6% of patients in the treatment group achieved significant abdominal pain reduction, compared to 42.2% in the control group [8][16]. - Among IBS-C patients, 67.1% in the treatment group achieved the endpoint versus 35.8% in the control group, and for IBS-M patients, 66.0% versus 29.5% [8][16]. Access and Integration - The Trigger Food Navigator is available at no additional cost for patients who have purchased the inFoods IBS test, with easy access through healthcare providers or online [9]. Company Background - Biomerica, Inc. is a global biomedical technology company focused on developing advanced diagnostic and therapeutic products, particularly for gastrointestinal and inflammatory diseases [10][11].

Core Insights - Biomerica, Inc. has received approval from the UAE Ministry of Health and Prevention for its Fortel Kidney Test for home use, enhancing access to early kidney damage detection tools in high-risk populations [1][4][6] - The Fortel Kidney Test is a rapid, 10-minute diagnostic tool that detects low levels of albumin in urine, a key early indicator of kidney disease, particularly beneficial for individuals with diabetes and hypertension [2][9] - The prevalence of diabetes and hypertension in the UAE is significant, with diabetes affecting approximately one in four nationals and hypertension prevalence around 31%, highlighting the need for early detection tools [3][9] Company Overview - Biomerica is a global biomedical technology company focused on developing advanced diagnostic and therapeutic products for point-of-care and clinical laboratory use, aiming to improve health outcomes while reducing healthcare costs [7] - The company has a growing presence in the Middle East, building on the success of its other diagnostic products, and plans to distribute the Fortel Kidney Test through pharmacies, clinics, and hospitals across the UAE [4][6] Industry Context - Chronic kidney disease (CKD) affects over 840 million people globally and is on the rise, necessitating effective early detection and intervention strategies [5] - The Fortel Kidney Test aligns with the urgent need for preventive healthcare solutions in regions with high rates of diabetes and hypertension, positioning Biomerica as a leader in preventive diagnostics [6]