BIOMERICA INC
For the period ended Aug 31, 2024. Filed Oct 15, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Aug 31, 2024 · Filed Oct 15, 2024
BMRA$1.610.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-02-29; filed 2024-04-12.
0001493152-24-014474
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-08-31; filed 2024-10-15.
0001493152-24-041156
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 60 previous paragraphs and 49 current paragraphs.
14 unchanged; 8 reworded; 27 added; 35 removed; 3 previous and 0 current paragraphs rearranged.
Tables are not compared: 5 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (27)
Current report
Our extensive range of medical diagnostic products is sold worldwide, primarily in two markets: clinical laboratories and point-of-care settings, including physicians’ offices and over-the-counter sales at major retailers such as Walmart, CVS Pharmacy, and Amazon. Most of our products are Conformite Europeenne (“CE”) marked and/or registered with regulatory agencies in various countries for diagnostic use, with several also cleared by the FDA for sale in the United States.
Current report
Technological advances in medical diagnostics have enabled diagnostic tests to be performed not only in clinical laboratories but also at home and at the point-of-care in physicians’ offices. One of our key objectives has been to develop and market rapid diagnostic tests that are accurate, utilize easily obtained patient specimens, and are simple to perform without the need for complex instrumentation. Our home use (over-the-counter) and professional use (physicians’ office, clinics, etc.) rapid diagnostic test products help manage existing medical conditions and may save lives through early detection and diagnosis of specific diseases. Traditionally, such tests required the expertise of medical technologists and sophisticated equipment, with results often not available for days. We believe our rapid point-of-care tests, when properly used, can be as accurate as laboratory tests. Our products require limited to no instrumentation, deliver reliable results in minutes, and can be performed with confidence at home or in a physician’s office.
Current report
We invest resources in the research and development of new products designed to diagnose and, in some cases, treat several major medical diseases. These products are either internally developed or licensed from others. Our experienced and highly trained technical personnel, including Ph.D. holders and other scientists, are dedicated to developing new products and managing technology transfer activities. Our technical staff, many of whom have extensive experience from previous employment at large diagnostic manufacturing companies, bring a wealth of industry knowledge. Additionally, we rely on our Scientific Advisory Board, comprised of leading medical doctors and clinicians, to guide our clinical studies and product development efforts.
Current report
A key outcome from our recent research and development efforts is our patented diagnostic-guided therapy (“DGT”) product, developed on the inFoods® technology platform. This innovative product is designed to treat gastrointestinal conditions such as irritable bowel syndrome (“IBS”) and other inflammatory diseases. The DGT product targets chronic inflammatory illnesses that are widespread and prevalent in large markets. We have launched the inFoods® IBS product, which leverages this patented technology.
Current report
The inFoods® IBS product utilizes a simple blood test to identify patient-specific foods that, when eliminated from the diet, may alleviate IBS symptoms such as pain, bloating, diarrhea, cramping, and constipation. Unlike broad and difficult-to-manage dietary restrictions, the inFoods® IBS product pinpoints a patient’s heightened immunoreactivity to specific foods known to frequently trigger IBS symptoms. By removing the foods identified as problematic, patients can achieve relief from their IBS symptoms.
Current report
We launched our inFoods® product across numerous gastroenterology (“GI”) physician groups in various states and regions, including collaboration with one of the largest GI groups in the U.S. Feedback from GI specialty physicians have generally been positive, and we are actively expanding our network by onboarding additional physician practices. These GI practices are beginning to prescribe inFoods® IBS to their patients. Our dedicated sales team is deepening relationships within the GI segment and strategically targeting opportunities to introduce inFoods® to other medical specialties. By leveraging their expertise and building strong partnerships, our sales team is now working to engage with key physician groups outside the GI field such as integrated health practices and primary-care general practitioners. These efforts aim to broaden our market reach and enhance the overall adoption of inFoods® across various healthcare sectors and to capitalize on the distinct advantages of inFoods® for a strong foundation of meaningful growth in the future. We are also continuing to evaluate distribution, partnership and licensing opportunities with U.S. and multinational companies, which have the potential to significantly aid in the commercialization and accelerated growth of inFoods® products both domestically and internationally.
Current report
Beyond the inFoods® product line, the Company has achieved a significant milestone with the development of hp+detect™, a diagnostic test designed to detect Helicobacter pylori (“H. pylori”) bacteria in the gastrointestinal tract. H. pylori is a prevalent infection, affecting approximately 35% of the U.S. population and 45% of the population in Europe’s largest countries. This bacterium is the strongest known risk factor for gastric cancer, which remains one of the leading causes of cancer-related deaths worldwide.
Current report
The hp+detect™ test offers physicians and medical centers a reliable tool for diagnosing H. pylori infections and monitoring treatment efficacy. The test is marketed directly to laboratories, where patient samples are processed to provide timely and accurate diagnoses. To support the widespread adoption and distribution of hp+detect™, the Company is actively engaging with large reference laboratories, aiming to improve patient outcomes through early detection and effective treatment of H. pylori infections.
Current report
Due to the slower-than-expected launch of the Company’s key products, inFoods® IBS and hp+detect™, the Company has initiated significant cost-cutting measures to extend its cash runway and work towards increasing revenues to cover overhead costs. These measures include a workforce reduction of nearly 15% during this fiscal quarter, which incurred one-time labor costs such as severance, impacting typical cost trends and margins. In addition, the Company is actively exploring strategic opportunities to enhance and create shareholder value.
Current report
The following is a breakdown of revenues according to markets to which the products are sold:
Current report
For the three months ended August 31, 2024, consolidated net sales reached approximately $1,807,000, compared to $1,713,000 for the same period in 2023, representing an increase of $94,000, or 5%. This growth was largely driven by a $222,000 increase in higher demand from new and existing customers as well as new contract manufacturing agreements. However, over-the-counter (“OTC”) sales in the retail market declined by $116,000. In 2023, OTC sales benefited from the rollout of our products with CVS, which included large upfront orders. Additionally, this quarter’s performance was impacted by timing delays in clinical lab orders from our distributor in Asia.
Current report
For the three months ended August 31, 2024, consolidated cost of sales amounted to approximately $1,518,000, or 84% of net sales, compared to $1,301,000, or 76% of net sales, for the same period in 2023, representing an increase of $217,000, or 17%. A key driver of the cost increase was directly correlated to the growth in contract manufacturing sales. Additionally, direct labor costs were significantly impacted by one-time severance expenses related to the reduction in force (“RIF”) executed in July, which elevated labor costs and negatively impacted gross margins. Gross margin was negatively impacted by 12% by the one-time RIF expenses within the fiscal quarter. Excluding these RIF-related costs, gross margins are consistent with the prior period.
Current report
For the three months ended August 31, 2024, consolidated selling, general, and administrative expenses were approximately $1,360,000, compared to $1,172,000 for the same period in 2023, reflecting an increase of $188,000, or 16%. This increase was primarily driven by one-time severance expenses related to the July RIF and introduction of a sales force, which did not exist in the prior year. The new sales team added $146,000 in additional costs compared to the prior period. Legal expenses also rose by $64,000, as the prior year benefited from a one-time discount on legal fees related to settlement work. Excluding this discount, legal spending would have been consistent with historical levels.
Current report
For the three months ended August 31, 2024, consolidated research and development (“R&D”) expenses totaled approximately $297,000, representing a decrease of 37% from $472,000 in the same period of 2023. This $175,000 reduction was primarily driven by an $86,000 decline in R&D wages resulting from the one-time severance expenses associated with the RIF executed in July. In line with the Company’s strategic initiatives for cost-cutting measures, several clinical trials were reduced, resulting in decreased expenditures. Additionally, with the commercialization of inFoods® IBS, there has been a deliberate reduction in R&D allocations to this area, contributing to an overall decrease of $80,000 in related expenses.
Current report
For the three months ended August 31, 2024, interest and dividend income totaled approximately $56,000, compared to $123,000 for the corresponding period in 2023, representing a decrease of $67,000, or 54%. This reduction was primarily attributable to lower market interest rates affecting our lower cash balances, which had decreased by August 31, 2024.
Current report
LIQUIDITY, CAPITAL RESOURCES AND GOING CONCERN
Current report
The Company’s ability to continue as a going concern over the next twelve months is influenced by several factors, including:
Current report
Management has analyzed the Company’s cash flow requirements through November 2025 and beyond. Based on this analysis, we believe our current cash and cash equivalents are insufficient to meet our operating cash requirements and strategic growth objectives for the next twelve months.
Current report
To address our capital needs and sustain operations beyond the next year, we are actively pursuing strategies to increase sales, reduce expenses, sell non-core assets, seek additional financing through debt or equity, and seek other strategic alternatives. While we are committed to these plans, there is no assurance that these efforts will be successful or sufficient to meet our capital requirements.
Current report
As part of our efforts to reduce costs, we have initiated significant cost-cutting measures to extend our cash runway and work towards increasing revenues to cover overhead costs. These measures include a workforce reduction of nearly 15% in July 2024 and a substantial reduction in other operating expenses.
Current report
As part of our financing plan, on September 28, 2023, we filed a “shelf” registration statement on Form S-3 with the Securities and Exchange Commission (“SEC”), which was declared effective on September 29, 2023, allowing us to issue up to $20,000,000 in common shares. Under this registration statement, shares of our common stock may be sold from time to time for up to three years from the filing date. On May 10, 2024, the we filed a prospectus supplement with the SEC to facilitate the sale of up to $5,500,000 in common stock through at-the-market (“ATM”) offerings, as defined in Rule 415 under the Securities Act. As part of this transaction, we incurred $81,000 in deferred offering costs. The amount of capital that we can raise under the ATM offering is highly dependent upon the trading volume and the trading price of our stock. The average trading volume of our stock over the last three full calendar months is approximately 83,068 shares per day and the high and low trading price of our stock during the same period of time was $0.59 and $0.28, respectively. If our stock continues to trade at low volumes and price, the amount of capital that we can raise under the ATM offering will be constrained.
Current report
We intend to use the net proceeds from the ATM offering for general corporate purposes, including, but not limited to, sales and marketing activities, clinical studies and product development, acquisitions of assets, businesses, companies, or securities, capital expenditures, and working capital needs.
Current report
While we are committed to these plans, there is no assurance that these efforts will be successful or sufficient to meet our capital requirements.
Current report
These factors raise substantial doubt about our ability to continue as a going concern. Our future viability depends on the successful execution of our strategic plans, securing additional financing, and achieving profitable operations.
Current report
During the three months ended August 31, 2024, cash used in operating activities was approximately $1,344,000. The primary factors that contributed to this were a loss of approximately $1,316,000, an increase in accounts receivable of $616,000, and a decrease in lease liability of $78,000. These were partially offset by a decrease in inventories of $429,000, a decrease in prepaid expenses and other of $106,000, and non-cash expenses of approximately $191,000.
Current report
During the three months ended August 31, 2024, we did not acquire any new property, equipment, or patents.
Current report
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Removed paragraphs (35)
Previous report
Our primary focus is the research, development, commercialization and in certain cases regulatory approval, of patented, diagnostic-guided therapy (“DGT”) products to treat gastrointestinal diseases, such as irritable bowel syndrome (“IBS”), and other inflammatory diseases. These inFoods based products are directed at chronic inflammatory illnesses that are widespread and common, and as such address very large markets. Our inFoods IBS product uses a simple blood sample to identify patient-specific foods that, when removed from the patient’s diet, may alleviate IBS symptoms such as pain, bloating, diarrhea, and constipation. Instead of broad and difficult to manage dietary restrictions, the inFoods IBS product works by identifying a patient’s above normal immunoreactivity to a panel of specific foods that have been shown to often be problematic to IBS suffers. A food identified as positive, and causing an abnormally high immune response in the patient is simply removed from the diet to help alleviate IBS symptoms.
Previous report
During fiscal 2022, we completed an endpoint determination clinical trial on our inFoods IBS product. This trial was conducted at Mayo Clinics in Florida and Arizona, Beth Israel Deaconess Medical Center Inc., a Harvard Medical School Teaching Hospital, University of Texas Health Science Center at Houston, Houston Methodist, the University of Michigan, and other institutions. This double blinded, placebo-controlled trial monitored IBS patients over an 8-week treatment period to determine the efficacy of our inFoods IBS product to improve the patients’ IBS symptoms or endpoints. The trial was designed to determine the difference in the improvement in IBS symptoms for patients in the treatment arm, versus patients in the placebo arm of the trial. The top-line trial results were reported in February 2022. Multiple endpoints demonstrated statistically significant improvements for participants in the treatment arm, indicating that the elimination of specific foods may meaningfully reduce the symptoms of IBS in each patient subtype (including patients with IBS-Constipation, IBS-Diarrhea & IBS-Mixed). The greatest clinical improvements, including but not limited to abdominal pain and bloating, were seen in patients diagnosed with IBS-Mixed and IBS Constipation, in the top line data. The purpose of the endpoint study was designed to provide efficacy data for the product, and to determine the primary symptom endpoint, or endpoints to be used in a possible final pivotal trial that would be conducted to attain the validation data needed to apply for U.S. Food and Drug Administration (“FDA”) product clearance. We are continuing to review and refine the complete dataset and have selected the final endpoint that we would intend to use in a possible final pivotal trial. No date has yet been set for commencing this final trial.
Previous report
In fiscal 2023, we worked to set up the inFoods IBS test to be performed in a CLIA certified, and College of American Pathologists (“CAP”) accredited high-complexity laboratory facility and offered as a laboratory developed test (“LDT”). During the quarter ended February 28, 2023, the CLIA lab completed all validation testing necessary for the inFoods IBS product to be offered as an LDT, and patient samples are now being run at the lab. In late fiscal 2023, we trial launched this product with one large GI physician group that is now offering this product to their patients.
Previous report
During fiscal 2024, we have successfully launched the inFoods IBS test with numerous GI physician groups across multiple states and regions. While our initial efforts have yielded success within the GI specialty, we are keenly aware of the opportunity to expand across the application of our product to other physician segments. We are convinced that forming partnerships in these other segments is the most effective strategy for market penetration. Currently, we are engaging in discussions with several potential partners. This strategy enables our newly formed sales team to focus on building strong relationships within the GI segment, capitalizing on the distinct advantages of the inFoods IBS product. In tandem with our expansion efforts, we are drawing from key learnings from the initial launch to enhance the ordering experience. We are now driving improvements to optimize the process for physicians to order the inFoods IBS test, send patient blood samples to the CLIA lab, and receive the test results for their patients. These improvements are directly informed by our experience and feedback from the field, ensuring a smoother and more efficient experience for both physicians and patients. With these strategic initiatives in place, grounded in our understanding of market dynamics and user needs, we anticipate continued growth in revenues from the rollout of our inFoods IBS product in the coming quarters.
Previous report
We are also beginning the work of selecting and validating one new disease (such as ulcerative colitis or migraines), where there is evidence that certain foods can trigger or contribute to the symptoms found in these indications. We expect any new disease we target will follow a similar development pathway as inFoods IBS in simultaneously seeking FDA clearance of the product while also launching the product as an LDT.
Previous report
Our existing medical diagnostic products are sold worldwide primarily in two markets: 1) clinical laboratories and 2) point-of-care (physicians’ offices and OTC at Walmart, Walgreens, CVS Pharmacy, Amazon, etc.). The 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.
Previous report
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. We began selling these COVID-19 related diagnostic tests during fiscal 2021, and we experienced significant revenues from such sales during fiscal 2021 and 2022 with lesser sales in fiscal 2023. Due to falling demand, there were no sales of our COVID-19 related products in the three months ended February 29, 2024. As such, our COVID-19 product sales have caused significant swings in our revenues over the last four years.
Previous report
Our newly developed H. pylori diagnostic test is a pivotal addition to our product portfolio, offering vital insights into patients’ H. pylori infection status. This bacterium’s prevalence underscores the critical need for accurate diagnosis, given its potential to precipitate ulcers and, in severe cases, stomach cancers if left untreated.
Previous report
Additionally, on December 18, 2023, we achieved a significant milestone with FDA clearance for the H. pylori diagnostic test, paving the way for its commercialization in the United States. Leveraging this regulatory approval, we have initiated marketing efforts targeting the U.S. market, poised to capitalize on the pressing demand for reliable diagnostic solutions. Furthermore, recognizing the global significance of H. pylori infection, we have initiated discussions with international distributors to expand our market reach beyond U.S. borders. Anticipating traction in both domestic and international markets, we expect a favorable revenue trajectory during 2024.
Previous report
The majority of our research and development efforts are focused on development and commercialization of products such as our H. pylori product, improving and expanding the inFoods IBS product, developing other new products that utilize the inFoods platform, and developing new diagnostic products with outside medical diagnostic companies that we intend to manufacture for them.
Previous report
Our existing products that contributed to our fiscal 2024 revenues are primarily focused on gastrointestinal diseases, food intolerances, and certain esoteric tests. These diagnostic test products utilize immunoassay technology. Most of our products are CE marked and/or sold for diagnostic use where they are registered by each country’s regulatory agency. In addition, some products are cleared for sale in the United States by the FDA.
Previous report
Three months ended February 29, 2024
Previous report
Consolidated net sales were approximately $1,017,000 for the three months ended February 29, 2024, as compared to $1,111,000 for the three months ended February 28, 2023, a decrease of approximately $94,000, or 8%. This decrease for the three months ended February 29, 2024, was primarily attributed to reduced sales in food intolerance products. Sales in this segment are subject to periodic and infrequent orders, contributing to potential volatility in quarterly sales.
Previous report
Consolidated cost of sales were approximately $1,166,000, or 115% of net sales, for the three months ended February 29, 2024, as compared to $991,000, or 89% of net sales of net sales, for the three months ended February 28, 2023, an increase of approximately $175,000, or 18%. The increase for the three months ended February 29, 2024 was predominantly driven by the complexities of international shipping logistics, rather than fluctuations in material and labor costs associated with our product.
Previous report
Consolidated selling, general and administrative expenses were approximately $1,508,000 for the three months February 29, 2024, as compared to $1,379,000 for the three months ended February 28, 2023, an increase of approximately $129,000, or 9%. For the three months ended February 29, 2024, the increase was primarily driven by the establishment of a new sales force, resulting in a rise in total salaries and marketing expenses amounting to $212,000. However, these increases were partially offset by a decrease in legal expenses of $87,000.
Previous report
Consolidated research and development expenses were approximately $343,000 for the three months ended February 29, 2024, as compared to $392,000 for the three months ended February 28, 2023, a decrease of approximately $49,000, or 13%. The reduction in expenses for the three months ended February 29, 2024, was primarily driven by a reduction of salary and compensation costs for the research and development team.
Previous report
Interest and dividend income were approximately $86,000 for the three months ended February 29, 2024, as compared to $36,000 for the three months ended February 28, 2023, an increase of $50,000, or 139%. The increase was primarily driven by higher market interest rates on our cash and cash equivalents.
Previous report
Nine months ended February 29, 2024
Previous report
Consolidated net sales were approximately $4,299,000 for the nine months ended February 29, 2024, as compared to $4,231,000 for the nine months ended February 28, 2023, an increase of approximately $68,000, or 2%. This increase for the nine months ended February 29, 2024, shows growth across all non-COVID product lines underscoring the Company’s resilience despite the absence of COVID-related sales compared to the previous year.
Previous report
The growth was primarily attributed to an increase in sales of our food intolerance products, EZ Detect, Aware, and contract manufacturing activities. Notably, this growth highlights the effectiveness of our post-pandemic strategic initiatives focusing on our diverse product segments.
Previous report
Consolidated cost of sales were approximately $3,708,000, or 86% of net sales, for the nine months ended February 29, 2024, as compared to $3,814,000, or 90% of net sales, for the nine months ended February 28, 2023, a decrease of approximately $106,000, or 3%. The decrease for the nine months ended February 29, 2024, was primarily driven by a $160,000 decrease in costs associated with reduced sales of our COVID-19 products.
Previous report
Operating Expenses
Previous report
Selling, General and Administrative Expenses
Previous report
Consolidated selling, general and administrative expenses were approximately $4,204,000 for the nine months ended February 29, 2024, as compared to $4,589,000 for the nine months ended February 28, 2023, a decrease of approximately $385,000, or 8%. The decrease in the nine months ended February 29, 2024, was primarily driven by reductions of $384,000 in legal expenses, and $330,000 in share-based compensation expenses.
Previous report
Notably, these operating expense reductions were partially offset by investments in key areas of our business. This included an increase in marketing expenses for the recent CVS Pharmacy retail launch and the expansion of our sales team. Despite these increases, overall cost reductions compared to last year demonstrate our focus on strategically allocating our capital and maintaining financial discipline while pursuing growth opportunities.
Previous report
Research and Development
Previous report
Consolidated research and development expenses were approximately $1,226,000 for the nine months ended February 29, 2024, as compared to $1,215,000 for the nine months ended February 28, 2023, an increase of approximately $11,000, or 1%. The increase for the nine months ended February 29, 2024, was primarily driven by salaries and wages of $80,000, partially offset by a decrease in share-based compensation expenses of $32,500 and lab supplies expenses of $22,800.
Previous report
We have taken proactive measures to address the increased expenses in research and development. Over the last three months, we have worked on cost optimization resulting in reductions in salaries and compensation costs of $63,000 per quarter.
Previous report
Interest and Dividend Income
Previous report
Interest and dividend income were approximately $317,000 for the nine months ended February 29, 2024, as compared to $77,000 for the nine months ended February 28, 2023, an increase of $240,000, or 312%. The increase was primarily driven by higher market interest rates on our cash and cash equivalents.
Previous report
LIQUIDITY AND CAPITAL RESOURCES
Previous report
During the nine months ended February 28, 2023, cash used in operating activities was approximately $4,511,000. The primary factors that contributed to this were a net loss of approximately $5,348,000, partially offset by non-cash expenses of $1,100,000, primarily associated with stock-based compensation and account receivables provisions.
Previous report
During the nine months ended February 28, 2023, cash used in investing activities was approximately $64,000 for purchases of property and equipment.
Previous report
During the nine months ended February 28, 2023, cash provided by financing activities was approximately $2,040,000 which was a result of net proceeds from the sale of common stock of $1,961,000, and stock option exercises of $79,000.
Previous report
CRITICAL ACCOUNTING POLICIES
Reworded paragraphs (8)
Previous wording
You should read the following discussion and analysis in conjunction with our unaudited condensed consolidated financial statements and the accompanying notes thereto included in Part I, Item 1 of this Report and the audited consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended May 31, 2023 (our 2023 Annual Report). This discussion and analysis contains forward-looking statements that are based on our management’s current beliefs and assumptions, which statements are subject to substantial risks and uncertainties. Our actual results may differ materially from those expressed or implied by these forward-looking statements as a result of many factors, including those discussed in “Risk Factors” included in Part I, Item 1A of our 2023 Annual Report.
Current wording
You should read the following discussion and analysis in conjunction with our unaudited condensed consolidated financial statements and the accompanying notes thereto included in Part I, Item 1 of this Report and the audited consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended May 31, 2024 (our 2024 Annual Report). This discussion and analysis contains forward-looking statements that are based on our management’s current beliefs and assumptions, which statements are subject to substantial risks and uncertainties. Our actual results of operations may differ materially from those expressed or implied by these forward-looking statements as a result of many factors, including those discussed in “Risk Factors” included in Part I, Item 1A of our 2024 Annual Report.
Previous wording
Biomerica, Inc. and its subsidiaries (which includes wholly-owned subsidiaries, Biomerica de Mexico and BioEurope GmbH), is a biomedical technology company that develops, patents, manufactures and markets advanced diagnostic and therapeutic products used at the point-of-care (physicians’ offices and over-the-counter through drugstores and online) and in hospital/clinical laboratories for detection and/or treatment of medical conditions and diseases. Our diagnostic test kits are used to analyze blood, urine, nasal, or fecal material from patients in the diagnosis of various diseases, food intolerances and other medical complications, or to measure the level of specific hormones, antibodies, antigens, or other substances, which may exist in the human body in extremely small concentrations. The Company’s products are designed to enhance the health and well-being of people, while reducing total healthcare costs.
Current wording
We are a global biomedical technology company that develops, patents, manufactures and markets advanced diagnostic and therapeutic products. Our diagnostic test kits are used to analyze blood, urine, nasal or fecal material from patients in the diagnosis of various diseases, food intolerances and other medical complications . They can also be used to measure or detect the presence and levels of specific bacteria, hormones, antibodies, antigens and other substances, which may exist in the human body in extremely small concentrations. Our products are designed to enhance the health and well-being of people, while reducing total healthcare costs.
Previous wording
As of February 29, 2024 and May 31, 2023, the Company had cash and cash equivalents of approximately $5,319,000 and $9,719,000, respectively. As of February 29, 2024 and May 31, 2023, the Company had working capital of approximately $6,855,000 and $10,852,000, respectively. We believe that the aggregate of our existing cash and cash equivalents is sufficient to meet our operating cash requirements and strategic objectives for growth for at least the next year. To satisfy our capital requirements, including ongoing future operations, beyond next year, we are working on increasing sales, reducing expenses and may seek to raise additional financing through debt or equity financing.
Current wording
As of August 31, 2024 and May 31, 2024, the Company had cash and cash equivalents of approximately $2,820,000 and $4,170,000, respectively. As of August 31, 2024 and May 31, 2024, the Company had working capital of approximately $4,294,000 and $5,527,000, respectively.
Previous wording
During the nine months ended February 29, 2024, cash used in operating activities was approximately $4,317,000. The primary factors that contributed to this was a loss of approximately $4,557,000, non-cash expenses of $723,000, primarily associated with depreciation and amortization, provision for allowance on accounts receivable, inventory reserves, share-based compensation, and amortization of right-of-use assets. This was partially offset by changes in asset and liability accounts of approximately $483,000.
Current wording
During the three months ended August 31, 2023, cash used in operating activities was approximately $1,674,000. The primary factors that contributed to this were a loss of approximately $1,132,000, non-cash expenses of $122,000, primarily associated with depreciation and amortization, share-based compensation, inventory reserves and amortization of right-of-use assets. This was partially offset by changes in asset and liability accounts of $664,000.
Previous wording
During the nine months ended February 29, 2024, cash used in investing activities was approximately $27,000 for purchases of property and equipment, and $64,000 in expenditures related to patents.
Current wording
During the three months ended August 31, 2023, cash used in investing activities was approximately $63,000. During the three months ended August 31, 2023, we purchased approximately $21,000 of property and equipment and had $42,000 in expenditures related to patents.
Previous wording
During the nine months ended February 29, 2024, cash provided by financing activities was $0, with no net proceeds from the sale of common stock or from stock option exercises.
Current wording
During the three months ended August 31, 2024, and 2023, the Company did not have any cash provided by financing activities, with no net proceeds from the sale of common stock or stock option exercises.
Previous wording
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make a number of estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Such estimates and assumptions affect the reported amounts of revenues and expenses during the reporting period. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. We continue to monitor significant estimates made during the preparation of our financial statements. On an ongoing basis, we evaluate estimates and assumptions based upon historical experience and various other factors and circumstances. We believe our estimates and assumptions are reasonable under the current conditions; however, actual results may differ from these estimates under different future conditions.
Current wording
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make a number of estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Such estimates and assumptions may affect the reported amounts of revenues and expenses during the reporting period. We evaluate and base our estimates and assumptions on historical experience and various other factors and circumstances that we believe to be reasonable. Different assumptions or conditions may cause actual results to differ materially from these estimates. We continue to monitor significant estimates made during the preparation of our financial statements. We believe our estimates and assumptions are reasonable under the current conditions; however, actual results may differ from these estimates under different future conditions.
Previous wording
We believe that the estimates and assumptions that are most important to the portrayal of our financial condition and results of operations, in that they require subjective or complex judgments, form the basis for the accounting policies deemed to be most critical to us. These relate to revenue recognition, credit losses, inventory overhead application, inventory reserves, right-of-use assets and lease liabilities and share-based compensation. We believe estimates and assumptions related to these critical accounting policies are appropriate under the circumstances; however, should future events or occurrences result in unanticipated consequences, there could be a material impact on our future financial condition or results of operations. We suggest that our significant accounting policies be read in conjunction with this Management’s Discussion and Analysis of Financial Condition and Results of Operations. Please refer to Note 2 for information on Significant Accounting Policies. Our critical accounting policies are discussed in our Annual Report on Form 10-K for the fiscal year ended May 31, 2023.
Current wording
We believe that the estimates and assumptions that are most important to the portrayal of our financial condition and results of operations, in that they require subjective or complex judgments, form the basis for the accounting policies deemed to be most critical to us. These relate to revenue recognition, bad debts, inventory overhead application, inventory reserves, lease liabilities and right-of-use assets. We believe estimates and assumptions related to these critical accounting policies are appropriate under the circumstances; however, should future events or occurrences result in unanticipated consequences, there could be a material impact on our future financial conditions or results of operations. There have been no significant changes to our critical accounting policies from those disclosed in our 2024 Annual Report. We suggest that our significant accounting policies be read in conjunction with this Management’s Discussion and Analysis of Financial Condition and Results of Operations. Please refer to Note 2 for information on Significant Accounting Policies.
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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Net Sales and Cost of Sales
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The following is a summary of operating expenses: