Core Insights - Biomerica reported a 6% increase in total revenue for the first quarter of fiscal 2025, reaching $1.8 million compared to $1.7 million in the same period last year, driven by higher demand and new contracts [3][7] - The company has implemented cost-saving measures expected to reduce annual expenses by 16% to 23%, translating to savings of $1.0 million to $1.4 million [4] - Biomerica's at-home PSA screening test has received approval from the Saudi Food and Drug Authority, enhancing accessibility for early prostate cancer detection [2] Financial Performance - Revenue for the first quarter of fiscal 2025 was $1.8 million, up from $1.7 million in the prior year [3][7] - Gross margin decreased to 16% from 24% year-over-year, impacted by one-time reduction-in-force costs [4][7] - Operating expenses rose slightly to $1.7 million from $1.6 million, primarily due to severance costs and new sales force expenses [5][7] - Operating loss increased to $1.4 million from $1.2 million, while net loss rose to $1.3 million from $1.1 million, largely due to RIF-related expenses [6][7] Product Developments - The inFoods® IBS pilot program with a group of 1,100 physicians has been completed, with potential for a systemwide launch based on positive results [2] - Biomerica is exploring distribution partnerships for inFoods® IBS to expand its market reach [2] - The company is in discussions with major clinical laboratories for its hp+detect™ product, which offers cost-effective and superior detection of Helicobacter pylori [2]

PART I - FINANCIAL INFORMATION [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) The unaudited condensed consolidated financial statements detail the company's financial position and performance for the quarter ended August 31, 2024 [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20(unaudited)%20%E2%80%93%20August%2031%2C%202024%20and%20May%2031%2C%202024) **Key Balance Sheet Data (August 31, 2024 vs. May 31, 2024)** | Metric | August 31, 2024 | May 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $2,820,000 | $4,170,000 | | Total current assets | $6,445,000 | $7,731,000 | | Total Assets | $7,870,000 | $9,254,000 | | Total current liabilities | $2,151,000 | $2,204,000 | | Total Liabilities | $2,524,000 | $2,663,000 | | Total Shareholders' Equity | $5,346,000 | $6,591,000 | | Accumulated deficit | $(49,511,000) | $(48,195,000)| [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss%20(unaudited)%20%E2%80%93%20Three%20Months%20Ended%20August%2031%2C%202024%20and%202023) **Key Operating Results (Three Months Ended August 31)** | Metric | 2024 ($) | 2023 ($) | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Net sales | 1,807,000 | 1,713,000 | 94,000 | 5% | | Cost of sales | (1,518,000) | (1,301,000) | (217,000) | 16.7% | | Gross profit | 289,000 | 412,000 | (123,000) | -29.9% | | Selling, general and administrative | 1,360,000 | 1,172,000 | 188,000 | 16% | | Research and development | 297,000 | 472,000 | (175,000) | -37.1% | | Loss from operations | (1,368,000) | (1,232,000) | (136,000) | 11% | | Net loss | (1,316,000) | (1,132,000) | (184,000) | 16.2% | | Basic net loss per common share | (0.08) | (0.07) | (0.01) | 14.3% | [Condensed Consolidated Statements of Shareholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders'%20Equity%20(unaudited)%20%E2%80%93%20Three%20Months%20Ended%20August%2031%2C%202024%20and%202023) **Shareholders' Equity Changes (Three Months Ended August 31)** | Metric | May 31, 2024 ($) | August 31, 2024 ($) | Change ($) | | :--- | :--- | :--- | :--- | | Total Stockholders' Equity | 6,591,000 | 5,346,000 | (1,245,000)| | Accumulated Deficit | (48,195,000) | (49,511,000) | (1,316,000)| | Share-based compensation | - | 77,000 | 77,000 | - The decrease in total stockholders' equity is primarily due to the **net loss incurred** during the period[8](index=8&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20(unaudited)%20%E2%80%93%20Three%20Months%20Ended%20August%2031%2C%202024%20and%202023) **Key Cash Flow Data (Three Months Ended August 31)** | Metric | 2024 ($) | 2023 ($) | Change ($) | | :--- | :--- | :--- | :--- | | Net cash used in operating activities | (1,344,000) | (1,674,000) | 330,000 | | Net cash used in investing activities | - | (63,000) | 63,000 | | Net decrease in cash and cash equivalents | (1,350,000) | (1,731,000) | 381,000 | | Cash and cash equivalents at end of year | 2,820,000 | 7,988,000 | (5,168,000)| - Cash used in operating activities **decreased by $330,000**, primarily due to a decrease in inventories and prepaid expenses, partially offset by an increase in accounts receivable[10](index=10&type=chunk)[91](index=91&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(unaudited)) [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 developing, manufacturing, and marketing advanced diagnostic and therapeutic products, particularly for gastrointestinal diseases like IBS with its **inFoods® IBS product**[11](index=11&type=chunk)[12](index=12&type=chunk) - Products are sold worldwide in clinical laboratories and point-of-care markets (physicians' offices, over-the-counter)[13](index=13&type=chunk) [NOTE 2: SIGNIFICANT ACCOUNTING POLICIES](index=8&type=section&id=NOTE%202%3A%20SIGNIFICANT%20ACCOUNTING%20POLICIES) [PRINCIPLES OF CONSOLIDATION](index=8&type=section&id=PRINCIPLES%20OF%20CONSOLIDATION) - The condensed consolidated financial statements include Biomerica, Inc and its wholly-owned subsidiaries, Biomerica de Mexico and BioEurope GmbH, with all significant intercompany accounts eliminated[15](index=15&type=chunk) [ACCOUNTING ESTIMATES](index=8&type=section&id=ACCOUNTING%20ESTIMATES) - Critical accounting policies requiring subjective judgments include revenue recognition, bad debts, inventory overhead application, inventory reserves, lease liabilities, right-of-use assets, and share-based compensation[16](index=16&type=chunk) [MARKETS AND METHODS OF DISTRIBUTION](index=9&type=section&id=MARKETS%20AND%20METHODS%20OF%20DISTRIBUTION) - The majority of the Company's revenues come from products manufactured in the U.S and Mexico, serving a diverse customer base including domestic and international distributors, hospitals, clinical laboratories, and e-commerce[17](index=17&type=chunk) - Marketing efforts include distributors, advertising, trade shows, direct mail, and an internal sales team, targeting clinical laboratories and point-of-care testing[18](index=18&type=chunk) [LIQUIDITY AND GOING CONCERN](index=9&type=section&id=LIQUIDITY%20AND%20GOING%20CONCERN) - The Company has incurred net losses and negative cash flows from operations, resulting in an **accumulated deficit of approximately $49.5 million** as of August 31, 2024[19](index=19&type=chunk) **Liquidity Position (August 31, 2024)** | Metric | Amount ($) | | :--- | :--- | | Cash and cash equivalents | 2,820,000 | | Working capital | 4,294,000 | - Management believes 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**[25](index=25&type=chunk)[26](index=26&type=chunk) - Strategies to address capital needs include increasing sales, reducing expenses (e.g., **15% workforce reduction in July 2024**), selling non-core assets, and seeking additional financing through debt or equity, including a **$20,000,000 shelf registration** and a **$5,500,000 ATM offering**[25](index=25&type=chunk)[88](index=88&type=chunk)[89](index=89&type=chunk) [CONCENTRATION OF CREDIT RISK](index=11&type=section&id=CONCENTRATION%20OF%20CREDIT%20RISK) - For the three months ended August 31, 2024, two key customers (North America and Asia) collectively accounted for **55% of net sales**[27](index=27&type=chunk) - As of August 31, 2024, two key customers (Asia and Europe) accounted for **67% of gross accounts receivable**[28](index=28&type=chunk) - Two key vendors accounted for **34% of raw material purchases** for the three months ended August 31, 2024[28](index=28&type=chunk) [CASH AND CASH EQUIVALENTS](index=11&type=section&id=CASH%20AND%20CASH%20EQUIVALENTS) - Cash and cash equivalents consist of demand deposits and money market accounts with original maturities of less than three months[29](index=29&type=chunk) [ACCOUNTS RECEIVABLE, NET](index=11&type=section&id=ACCOUNTS%20RECEIVABLE%2C%20NET) - The Company adopted ASU 2016-13 (CECL model) on June 1, 2023, for estimating expected credit losses[31](index=31&type=chunk) **Accounts Receivable Reserve** | Date | Reserve for Credit Losses ($) | | :--- | :--- | | August 31, 2024 | 31,000 | | May 31, 2024 | 19,000 | [PREPAID EXPENSES AND OTHER](index=12&type=section&id=PREPAID%20EXPENSES%20AND%20OTHER) **Prepaid Expenses and Other** | Date | Amount ($) | | :--- | :--- | | August 31, 2024 | 132,000 | | May 31, 2024 | 238,000 | [INVENTORIES, NET](index=13&type=section&id=INVENTORIES%2C%20NET) **Net Inventories** | Category | August 31, 2024 ($) | May 31, 2024 ($) | | :--- | :--- | :--- | | Raw materials | 1,442,000 | 1,519,000 | | Work in progress | 756,000 | 1,145,000 | | Finished products | 216,000 | 179,000 | | Total gross inventory | 2,414,000 | 2,843,000 | | Inventory reserves | (472,000) | (467,000) | | Net inventory | 1,942,000 | 2,376,000 | [PROPERTY AND EQUIPMENT, NET](index=13&type=section&id=PROPERTY%20AND%20EQUIPMENT%2C%20NET) **Depreciation and Amortization Expense (Property and Equipment)** | Period | 2024 ($) | 2023 ($) | | :--- | :--- | :--- | | Three months ended August 31 | 17,000 | 16,000 | [INTANGIBLE ASSETS, NET](index=13&type=section&id=INTANGIBLE%20ASSETS%2C%20NET) - Intangible assets, including trademarks, product rights, technology rights, and patents, are amortized using the straight-line method over useful lives not exceeding 18 years[37](index=37&type=chunk) **Amortization Expense (Intangible Assets)** | Period | 2024 ($) | 2023 ($) | | :--- | :--- | :--- | | Three months ended August 31 | 4,000 | 5,000 | - No impairment adjustments were made to intangible assets during the three months ended August 31, 2024 and 2023[38](index=38&type=chunk) [INVESTMENTS](index=13&type=section&id=INVESTMENTS) - The Company has an investment of approximately **$165,000 in a privately held Polish distributor**, representing about 6% ownership, accounted for at initial cost[39](index=39&type=chunk) - Management determined that the equity holding was not impaired as of August 31, 2024[40](index=40&type=chunk) [SHARE-BASED COMPENSATION](index=15&type=section&id=SHARE-BASED%20COMPENSATION) **Share-Based Compensation Expense (Three Months Ended August 31)** | Period | Amount ($) | | :--- | :--- | | 2024 | 77,000 | | 2023 | 170,000 | **Stock Options Outstanding (August 31, 2024)** | Metric | Shares | Weighted Average Exercise Price ($) | | :--- | :--- | :--- | | Options Outstanding | 3,306,116 | 2.53 | [REVENUE RECOGNITION](index=15&type=section&id=REVENUE%20RECOGNITION) - Revenue from product sales is recognized at the time of shipment (FOB shipping point), with no returns allowed except for defective merchandise[43](index=43&type=chunk) - The Company offers margin guarantees to certain retail drug store customers, introducing variable consideration estimated monthly[44](index=44&type=chunk) **Disaggregation of Revenue by Market (Three Months Ended August 31)** | Market | 2024 ($) | 2023 ($) | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Clinical lab | 1,278,000 | 1,289,000 | (11,000) | -1% | | Over-the-counter | 187,000 | 303,000 | (116,000) | -38% | | Contract manufacturing | 339,000 | 117,000 | 222,000 | 190% | | Physician's office | 3,000 | 4,000 | (1,000) | -25% | | Total | 1,807,000 | 1,713,000 | 94,000 | 5% | [SHIPPING AND HANDLING FEES](index=16&type=section&id=SHIPPING%20AND%20HANDLING%20FEES) - Shipping and handling fees billed to customers are included in net sales[48](index=48&type=chunk) [RESEARCH AND DEVELOPMENT](index=16&type=section&id=RESEARCH%20AND%20DEVELOPMENT) **Research and Development Costs (Three Months Ended August 31)** | Period | Amount ($) | | :--- | :--- | | 2024 | 297,000 | | 2023 | 472,000 | - **R&D costs decreased by 37% year-over-year**, expensed as incurred[49](index=49&type=chunk) [INCOME TAXES](index=16&type=section&id=INCOME%20TAXES) - Income tax expense for the three months ended August 31, 2024, was approximately $4,000, consisting of state minimum and foreign miscellaneous taxes[50](index=50&type=chunk) - A **full valuation allowance** has been established against deferred tax assets due to uncertainties in generating future taxable income[50](index=50&type=chunk) [ADVERTISING COSTS](index=16&type=section&id=ADVERTISING%20COSTS) **Advertising Costs (Three Months Ended August 31)** | Period | Amount ($) | | :--- | :--- | | 2024 | 14,000 | | 2023 | 30,000 | - Advertising costs **decreased by 53.3%** year-over-year[52](index=52&type=chunk) [FOREIGN CURRENCY TRANSLATION](index=16&type=section&id=FOREIGN%20CURRENCY%20TRANSLATION) - Assets and liabilities of foreign subsidiaries are translated using period-end exchange rates, while revenues and costs use average exchange rates, with translation adjustments presented as a component of accumulated other comprehensive loss[53](index=53&type=chunk) [RIGHT-OF-USE ASSETS AND LEASE LIABILITY](index=16&type=section&id=RIGHT-OF-USE%20ASSETS%20AND%20LEASE%20LIABILITY) - The Company recognizes most leases on the balance sheet as right-of-use assets and lease liabilities, classifying them as operating leases for office space and copy machines[54](index=54&type=chunk) **Lease Information (Three Months Ended August 31)** | Metric | 2024 ($) | 2023 ($) | | :--- | :--- | :--- | | Operating lease cost | 88,000 | 88,000 | | Total lease cost | 92,000 | 96,000 | - Weighted-average remaining lease term was **2.02 years** and the weighted-average discount rate was **6.50%** as of August 31, 2024[66](index=66&type=chunk) [NET LOSS PER SHARE](index=17&type=section&id=NET%20LOSS%20PER%20SHARE) - Basic loss per share is computed as net loss divided by the weighted average number of common shares outstanding. Diluted loss per share reflects potential dilution from stock options and other convertible securities[55](index=55&type=chunk) - Anti-dilutive stock options not included in the loss per share calculation were **3,306,116 at August 31, 2024**, and 2,363,116 at August 31, 2023[55](index=55&type=chunk) [RECENT ACCOUNTING PRONOUNCEMENTS](index=18&type=section&id=RECENT%20ACCOUNTING%20PRONOUNCEMENTS) - The Company is evaluating ASU 2023-07 (Improvements to Reportable Segment Disclosures) effective for fiscal years beginning after December 15, 2023, and ASU 2023-09 (Improvements to Income Tax Disclosures) effective for fiscal years beginning after December 15, 2024[56](index=56&type=chunk)[57](index=57&type=chunk) [NOTE 3: SHAREHOLDERS' EQUITY](index=18&type=section&id=NOTE%203%3A%20SHAREHOLDERS'%20EQUITY) - The Company has a shelf registration statement (effective September 29, 2023) allowing the issuance of up to **$20,000,000 in common shares** and an ATM offering (filed May 10, 2024) for up to **$5,500,000 in common stock**[58](index=58&type=chunk) - No shares of common stock or other equity securities were sold under the shelf registration statement during the three months ended August 31, 2024[58](index=58&type=chunk) [NOTE 4: GEOGRAPHIC INFORMATION](index=18&type=section&id=NOTE%204%3A%20GEOGRAPHIC%20INFORMATION) - The Company operates as one segment[59](index=59&type=chunk) **Revenues from Sales to Unaffiliated Customers (Three Months Ended August 31)** | Region | 2024 ($) | 2023 ($) | | :--- | :--- | :--- | | Asia | 817,000 | 1,026,000 | | Europe | 470,000 | 327,000 | | North America | 427,000 | 355,000 | | Middle East | 90,000 | - | | South America | 3,000 | 5,000 | | Total | 1,807,000 | 1,713,000 | - Approximately **$575,000 of gross inventory** and **$13,000 of property and equipment (net)** were located in Mexicali, Mexico, as of August 31, 2024[59](index=59&type=chunk) [NOTE 5: LEASES](index=19&type=section&id=NOTE%205%3A%20LEASES) - The Company leases facilities in Irvine, California (expires August 2026), Mexicali, Mexico (10-year lease with a 10-year renewal option), and a small office in Lindau, Germany (month-to-month)[62](index=62&type=chunk) **Total Lease Cost (Three Months Ended August 31)** | Period | Amount ($) | | :--- | :--- | | 2024 | 92,000 | | 2023 | 96,000 | **Approximate Maturity of Lease Liabilities (as of August 31, 2024)** | Year Ending May 31 | Operating Leases ($) | | :--- | :--- | | 2025 (excluding Q1) | 368,000 | | 2026 | 378,000 | | 2027 | 7,000 | | Total minimum future lease payments | 753,000 | | Less: imputed interest | 46,000 | | Total operating lease liabilities | 707,000 | [NOTE 6: COMMITMENTS AND CONTINGENCIES](index=19&type=section&id=NOTE%206%3A%20COMMITMENTS%20AND%20CONTINGENCIES) - There were no legal proceedings pending as of August 31, 2024, and management believes future matters will not have a material adverse effect on the Company's financial position[67](index=67&type=chunk) [NOTE 7: SUBSEQUENT EVENTS](index=19&type=section&id=NOTE%207%3A%20SUBSEQUENT%20EVENTS) - No subsequent events were noted[67](index=67&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management provides its perspective on financial performance, operational highlights, liquidity, and going concern issues for the quarter ended August 31, 2024 [OVERVIEW](index=21&type=section&id=OVERVIEW) - Biomerica is a global biomedical technology company focused on developing and marketing advanced diagnostic and therapeutic products, including rapid diagnostic tests for point-of-care and home use[70](index=70&type=chunk)[72](index=72&type=chunk) - Key products include the patented **inFoods® IBS** diagnostic-guided therapy for irritable bowel syndrome and **hp+detect™** for Helicobacter pylori detection[74](index=74&type=chunk)[77](index=77&type=chunk) - Due to slower-than-expected product launches, the Company initiated significant cost-cutting measures, including a **nearly 15% workforce reduction** in July 2024, to extend its cash runway[79](index=79&type=chunk) [RESULTS OF OPERATIONS](index=22&type=section&id=RESULTS%20OF%20OPERATIONS) [Net Sales and Cost of Sales](index=22&type=section&id=Net%20Sales%20and%20Cost%20of%20Sales) **Net Sales by Market (Three Months Ended August 31)** | Market | 2024 ($) | 2023 ($) | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Clinical lab | 1,278,000 | 1,289,000 | (11,000) | -1% | | Over-the-counter | 187,000 | 303,000 | (116,000) | -38% | | Contract manufacturing | 339,000 | 117,000 | 222,000 | 190% | | Physician's office | 3,000 | 4,000 | (1,000) | -25% | | Net Sales | 1,807,000 | 1,713,000 | 94,000 | 5% | - Net sales **increased by 5%** year-over-year, primarily driven by a **190% increase in contract manufacturing sales**, while over-the-counter (OTC) sales declined by 38%[80](index=80&type=chunk) - Consolidated cost of sales **increased by 17% to $1,518,000** (84% of net sales), with gross margin negatively impacted by 12% due to one-time severance expenses from the July workforce reduction[81](index=81&type=chunk) [Operating Expenses](index=22&type=section&id=Operating%20Expenses) **Operating Expenses (Three Months Ended August 31)** | Operating Expense | 2024 ($) | 2024 (% of Total Revenues) | 2023 ($) | 2023 (% of Total Revenues) | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | SG&A | 1,360,000 | 75% | 1,172,000 | 68% | 188,000 | 16% | | R&D | 297,000 | 16% | 472,000 | 28% | (175,000) | -37% | [Selling, General and Administrative Expenses](index=23&type=section&id=Selling%2C%20General%20and%20Administrative%20Expenses) - Selling, general, and administrative expenses **increased by $188,000 (16%)** due to one-time severance expenses from the July RIF and $146,000 in costs for a new sales force[82](index=82&type=chunk) [Research and Development](index=23&type=section&id=Research%20and%20Development) - Research and development expenses **decreased by $175,000 (37%)** due to an $86,000 decline in R&D wages from the July RIF, reduction in clinical trials, and a $80,000 decrease in allocations to inFoods® IBS R&D following its commercialization[83](index=83&type=chunk) [Interest and Dividend Income](index=23&type=section&id=Interest%20and%20Dividend%20Income) - Interest and dividend income **decreased by $67,000 (54%) to $56,000**, primarily due to lower market interest rates affecting reduced cash balances[84](index=84&type=chunk) [LIQUIDITY, CAPITAL RESOURCES AND GOING CONCERN](index=24&type=section&id=LIQUIDITY%2C%20CAPITAL%20RESOURCES%20AND%20GOING%20CONCERN) **Liquidity Position (August 31, 2024 vs. May 31, 2024)** | Metric | August 31, 2024 ($) | May 31, 2024 ($) | | :--- | :--- | :--- | | Cash and cash equivalents | 2,820,000 | 4,170,000 | | Working capital | 4,294,000 | 5,527,000 | - Management believes 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**[87](index=87&type=chunk)[90](index=90&type=chunk) - Strategies to address capital needs include increasing sales, reducing expenses (e.g., **15% workforce reduction in July 2024**), selling non-core assets, and seeking additional financing through a **$20,000,000 shelf registration** and a **$5,500,000 at-the-market (ATM) offering**[88](index=88&type=chunk)[89](index=89&type=chunk) - The amount of capital that can be raised under the ATM offering is highly dependent on **low stock trading volume** (average 83,068 shares/day) and price ($0.28-$0.59)[89](index=89&type=chunk) [OFF BALANCE SHEET ARRANGEMENTS](index=26&type=section&id=OFF%20BALANCE%20SHEET%20ARRANGEMENTS) - There were no off-balance sheet arrangements as of August 31, 2024[93](index=93&type=chunk) [CRITICAL ACCOUNTING POLICIES AND ESTIMATES](index=26&type=section&id=CRITICAL%20ACCOUNTING%20POLICIES%20AND%20ESTIMATES) - The Company's critical accounting policies and estimates remain consistent with those disclosed in the 2024 Annual Report[95](index=95&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=26&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) As a smaller reporting company, Biomerica is not required to provide these disclosures - As a smaller reporting company, the registrant is not required to provide information under this item[96](index=96&type=chunk) [Item 4. Controls and Procedures](index=26&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded the company's disclosure controls and procedures were effective at a 'reasonable assurance' level as of August 31, 2024 - The Chief Executive Officer and Chief Financial Officer concluded that disclosure controls and procedures were **effective at the 'reasonable assurance' level** as of August 31, 2024[98](index=98&type=chunk) - There have been **no material changes** in internal control over financial reporting during the quarter ended August 31, 2024[98](index=98&type=chunk) PART II - OTHER INFORMATION [Item 1. Legal Proceedings](index=27&type=section&id=Item%201.%20Legal%20Proceedings) The company reports no pending legal proceedings as of August 31, 2024 - There were **no legal proceedings pending** as of August 31, 2024[100](index=100&type=chunk) [Item 1A. Risks Factors](index=27&type=section&id=Item%201A.%20Risks%20Factors) No material changes to risk factors were identified during the quarter - No material changes to the risks and uncertainties described in Part I, Item 1A, Risk Factors, of the 2024 Annual Report during the three months ended August 31, 2024[102](index=102&type=chunk) [Item 5. Other Information](index=27&type=section&id=Item%205.%20Other%20Information) No other information was reported under this item - No other information was reported under this item[102](index=102&type=chunk) [Item 6. Exhibits](index=27&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed as part of the quarterly report - The exhibits include interactive data files (XBRL Instance Document, Taxonomy Extension Schema, Calculation Linkbase, Definition Linkbase, Label Linkbase, Presentation Linkbase) and certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act[103](index=103&type=chunk)[104](index=104&type=chunk) [Signatures](index=28&type=section&id=Signatures) The report is officially signed by the Chief Executive Officer and Chief Financial Officer - The report was signed by Zackary S. Irani (Chief Executive Officer) and Gary Lu (Chief Financial Officer) on October 15, 2024[106](index=106&type=chunk)

Core Insights - Biomerica, Inc. has received approval from the Saudi Food and Drug Authority for its Fortel® Prostate (PSA) Screening Test, enabling at-home early detection of prostate cancer [1][3] - The Fortel® PSA test is a rapid diagnostic tool that provides results within 10 minutes using a simple finger-prick blood sample, making it accessible for men [2] - The company is strategically expanding into the Middle East, addressing the growing public health concern of prostate cancer in the region [3] Product Performance - The Fortel® PSA test has shown exceptional performance with 100% sensitivity, 95% specificity, and 97.5% accuracy compared to laboratory methods [4] - A study from Ain Shams University in Egypt confirmed the test's robust performance with 97.2% sensitivity, 96.2% specificity, and 96.7% accuracy [4] Market Context - Globally, approximately 1.4 million new cases of prostate cancer were diagnosed in 2020, leading to 375,000 deaths, making it the second most common cancer among men [5] - Prostate cancer is increasingly recognized as a significant public health challenge in the Middle East, with a noted gap in comprehensive studies compared to Europe and North America [5] Future Outlook - Biomerica has shipped its first order of the Fortel® PSA Screening Tests to distributors in Saudi Arabia and is committed to expanding its presence in the region [6]

Total Revenue Increases 1% Year-Over-Year – Core Revenue Excluding COVID Tests Climbs 5%, Reflecting Stronger Growth Significant Cost Savings Plan Implemented After Year End – Expected to Deliver Expense Reductions of $1.0 to $1.4 Million in the Coming Year inFoods® IBS Pilot with Large 1,100 Physician Group Progressing Ahead of Schedule IRVINE, Calif., Aug. 29, 2024 (GLOBE NEWSWIRE) -- Biomerica, Inc. (NASDAQ: BMRA) today reported its financial results for the fiscal year ended May 31, 2024. The Company ac ...

Financial Performance - For fiscal 2024, the company's net sales were approximately $5,415,000, representing an increase of $76,000, or 1%, compared to $5,339,000 for fiscal 2023[147] - The consolidated cost of sales for fiscal 2024 was approximately $4,804,000, or 89% of net sales, compared to $4,893,000, or 92% of net sales, for fiscal 2023[148] - Selling, general, and administrative expenses decreased by $598,000, or 10%, to approximately $5,487,000 for fiscal 2024[150] - Research and development expenses were approximately $1,491,000 for fiscal 2024, a decrease of $93,000, or 6%, compared to fiscal 2023[151] - Cash used in operating activities for fiscal 2024 was approximately $5,361,000, a slight decrease from $5,474,000 in fiscal 2023, with a loss of approximately $5,978,000 reported in 2024 compared to $7,140,000 in 2023[160][161] - Cash used in investing activities increased to approximately $115,000 in fiscal 2024 from $78,000 in fiscal 2023, with $51,000 spent on property and equipment and $64,000 on patent expenditures in 2024[162] - Cash used in financing activities was approximately $81,000 in fiscal 2024, a significant decrease from cash provided by financing activities of $9,390,000 in fiscal 2023[163] - The company reported no net proceeds from the sale of common stock in fiscal 2024, compared to $9,309,000 in fiscal 2023[164] Cash Position - The company had cash and cash equivalents of approximately $4,170,000 as of May 31, 2024, down from $9,719,000 in 2023[153] - Cash and cash equivalents decreased from $9,719,000 in May 2023 to $4,170,000 in May 2024, representing a decline of approximately 57%[157] Cost-Cutting Measures - The company has initiated significant cost-cutting measures, including a workforce reduction of nearly 15%, to extend its cash runway[146] - The company implemented a workforce reduction of nearly 15% in July 2024 as part of cost-cutting measures[168] Product Development - The company received FDA clearance in December 2023 for hp+detect, a new diagnostic test for detecting H. pylori, which affects an estimated 35% of the U.S. population[145] - The company launched the inFoods IBS product, which utilizes a simple blood test to identify patient-specific foods that may alleviate IBS symptoms[142] Inventory Management - Inventory valuation reserves totaled $467,000 as of May 31, 2024, representing approximately 16% of total inventory, down from $672,000 or 25% in 2023[175] Strategic Planning and Financing - The company is actively pursuing strategies to increase sales, reduce expenses, and seek additional financing to sustain operations beyond the next year[153] - The company has significant reliance on successful execution of strategic plans and securing additional financing to continue as a going concern[158] Regulatory and Accounting Changes - The company adopted ASU 2016-03 on June 1, 2023, which did not have a material impact on its financial statements[177] - The FASB issued ASU 2023-09, effective for fiscal years beginning after December 15, 2024, focusing on enhanced income tax disclosures[179] - The company is currently evaluating the impact of adopting ASU 2023-09 on its financial statements and disclosures[179] Public Float and Market Value - The public float was reported at $7,037,587, limiting the aggregate market value of securities sold under the 2023 Shelf Registration Statement to $2,345,862[166] Financial Statements - Consolidated financial statements include balance sheets, statements of operations, shareholders' equity, and cash flows for the years ended May 31, 2024, and 2023[180]

Core Insights - Biomerica, Inc. is a global biomedical technology company focused on developing diagnostic and therapeutic products for gastrointestinal and inflammatory diseases [1][4] - The company has introduced a self-collection system for its inFoods® IBS test, allowing patients to collect blood samples at home, which enhances accessibility for IBS sufferers [5][10] - The inFoods® IBS test identifies specific food triggers for Irritable Bowel Syndrome (IBS), aiming to provide targeted dietary recommendations to alleviate symptoms [11] Company Developments - The inFoods® IBS test is the first of its kind to enable patients to self-collect blood samples using a finger-stick method [4][5] - This innovation is expected to significantly expand the market reach of the inFoods® IBS product through telehealth and online medical providers [5] - The company aims to deliver cost-effective, non-pharmaceutical solutions for managing IBS by identifying dietary triggers [10] Market Context - IBS affects one in twenty Americans, leading to annual direct medical costs of up to $10 billion [6] - The complexity of IBS has historically made it challenging to develop effective treatments, leaving many patients with inadequate relief [6] - The clinical outcomes of the inFoods IBS test have shown significant improvement in abdominal pain intensity compared to placebo, indicating its potential effectiveness [11]

inFoods® IBS test is the first of its kind to identify specific foods that can trigger an Irritable Bowel Syndrome (IBS) symptoms "Our goal is to deliver cost-effective, non-pharmaceutical solutions that manage IBS by pinpointing and eliminating specific dietary triggers," said Zack Irani, CEO of Biomerica. "This innovation is an important step to opening access to IBS patients and their healthcare providers." inFoods® IBS patients can now conveniently self-collect a blood sample using a simple finger-stick ...

With IBS affecting 10 to 15% of the global population, the associated $21 billion in direct medical costs and absenteeism underscores the urgent need of innovative solutions. Recognized as the 7th most common diagnosis by all physicians, IBS represents a significant healthcare burden. inFoods IBS offers a groundbreaking method to identify foods that can trigger IBS symptoms, revolutionizing how IBS symptoms are managed. inFoods IBS is backed by extensive clinical research that has demonstrated remarkable ef ...

Dubai Healthcare Authority Granted Insurance Reimbursement for Biomerica's EZ Detect™ Colon Disease Screening Test EZ Detect™ is a simple FDA cleared 2-minute at-home test that detects early warning signs of colorectal cancer, the third most common cancer worldwideAware® is an FDA cleared simple at-home device clinically tested to increase sensitivity in breast self-exams; about 80% of breast cancers are detected by women themselves noticing changes in their breastsFirst order placed for both Colon Disease ...

- Expansion into new offices within current major groups, including Northeast and Ohio; Expansion into new major group in Texas. - Average quarterly increase in physicians prescribing inFoods more than doubled each quarter over the past 12 months. - Biomerica in discussions for launch of inFoods IBS with large non-GI physician groups opening new market for the product. - Company receives notice of allowance for five new patents in Europe, Canada and Japan; the inFoods technology now has 25 Issued/allowed p ...