BIOMERICA INC
For the period ended Aug 31, 2025. Filed Oct 14, 2025.
View on SEC.govAbout this filing
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, 2025 · Filed Oct 14, 2025
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 2025-02-28; filed 2025-04-14.
0001641172-25-004571
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-08-31; filed 2025-10-14.
0001493152-25-018043
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 70 previous paragraphs and 60 current paragraphs.
19 unchanged; 24 reworded; 16 added; 23 removed; 4 previous and 1 current paragraphs rearranged.
Tables are not compared: 6 previous and 5 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 (16)
Current report
Factors, among others, that could cause actual results and events to differ materially from those expressed or implied in any forward-looking statement include:
Current report
Additional factors that might cause actual results and our current expectations and projections to differ materially include, among other things, those discussed in this Quarterly Report as well as those under the section titled “Risk Factors,” and discussed elsewhere in our Annual Report and the other risks detailed from time-to-time in our reports and registration statements filed with the Securities and Exchange Commission (“SEC”). We intend that such forward-looking statements be subject to the safe harbors for such statements. These forward-looking statements are based on the current beliefs and expectations of our management and speak only as of the date of this Quarterly Report or, in the case of documents referred to or incorporated by reference, the date of those documents. You should not place undue reliance on these forward-looking statements, which are subject to significant known and unknown risks, uncertainties and other factors, which are in some cases, beyond our control and which could materially affect results. If underlying assumptions prove inaccurate or unknown risks or uncertainties materialize, actual results may differ materially from current expectations and projections.
Current report
Except as required by law, we do not undertake any obligation torevise or update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. If we do update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.
Current report
TECHNOLOGICAL ADVANCEMENTS AND PRODUCT DEVELOPMENT
Current report
We are currently in the process of applying for U.S. government payment or reimbursement for the inFoods® IBS product through the Medicare system. If we are successful in attaining reimbursement, we will move forward with applying for reimbursement of this product by private payer insurance companies. If patients are able to attain and use our inFoods® IBS product at no cost, or with a small co-payment, we believe this will dramatically increase our revenues from this product.
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, 2025, consolidated net sales reached approximately $1,380,000, compared to $1,807,000 for the same period in 2024, representing a decrease of $427,000, or 24%. The decline in revenue was primarily attributable to reduced retail market activity, lower international over-the-counter (“OTC”) sales related in part to tariff impacts, and decreased demand under certain contract manufacturing agreements. Additionally, we experienced continued volatility in clinical laboratory demand during the period. These declines were partially offset by increased demand for our inFoods® IBS product.
Current report
For the three months ended August 31, 2025, consolidated cost of sales amounted to approximately $956,000, or 69% of net sales, compared to $1,518,000, or 84% of net sales, for the same period in 2024, representing a decrease of $562,000, or 37%. The reduction in cost of sales was primarily driven by lower contract manufacturing costs, reflecting changes in product mix and improved production efficiency. In addition, we benefited from a reduction in direct labor costs following a Reduction in Force (“RIF”) implemented in the prior fiscal year. As a result of these factors, our gross margin improved compared to the same period of the previous year.
Current report
For the three months ended August 31, 2025, consolidated selling, general, and administrative expenses were approximately $1,330,000, compared to $1,360,000 for the same period in 2024, reflecting a decrease of $30,000, or 2%. The decrease was primarily attributable to a reduction of approximately $65,000 in salaries and wages resulting from a RIF executed in July 2024, a $68,000 decrease in stock-based compensation expense, and a $43,000 decrease in legal expenses related to lower inFoods® patent application activities. These decreases were partially offset by a $131,000 increase in professional service fees for ERC filings.
Current report
Interest, Dividend Income and Other Income
Current report
For the three months ended August 31, 2025, interest, dividend, and other income totaled approximately $1,123,000, compared to $56,000 for the same period in the prior year, representing an increase of approximately $1,067,000. The increase was primarily attributable to a $1,100,000 cash refund received from the Internal Revenue Service (IRS) on July 21, 2025, related to previously filed claims for the ERC, a refundable payroll tax credit established under the CARES Act. The ERC was available to eligible employers for wages paid during calendar year 2021 in response to the global COVID-19 pandemic. This credit represents a one-time benefit that is not expected to recur in future periods.
Current report
Excluding the ERC refund, interest and dividend income decreased by approximately $29,000, primarily due to lower market interest rates during the current quarter compared to the prior year.
Current report
LIQUIDITY, CAPITAL RESOURCES AND GOING CONCERN
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, 2025 and 2024, we did not acquire any new property, equipment, or patents.
Current report
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Removed paragraphs (23)
Previous report
In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should, ””could,” “contemplates,” “expects,” “intends,” “plans,” “targets,” “anticipates,” “believes,” “estimates,” “projects,” “predicts,” “potential” or “continue” or the negative of these terms or other comparable terminology. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve a number of risks, uncertainties and other factors, some of which are beyond our control. Actual results could differ materially from those indicated by such forward-looking statements. Important factors that could cause actual results to differ materially from those indicated by such forward-looking statements include, but are not limited to, those risks and uncertainties identified under “Risk Factors,” in our 2024 Annual Report on Form 10-K and the other risks detailed from time-to-time in our reports and registration statements filed with the Securities and Exchange Commission, or SEC. Except as required by law, we undertake no obligation to revise or update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
Previous 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 working with large reference laboratories, aiming to improve patient outcomes through early detection and effective treatment of H. pylori infections.
Previous report
Three months ended February 28, 2025
Previous report
Consolidated net sales were approximately $1,119,000 for the three months ended February 28, 2025, as compared to $1,017,000 for the three months ended February 29, 2024, an increase of approximately $102,000 or 10%. This increase for the three months ended February 28, 2025, was primarily attributed to increased sales of our food intolerance products, reflecting a growing interest and engagement in this category. 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 $1,100,000, or 98% of net sales, for the three months ended February 28, 2025, as compared to $1,166,000, or 115% of net sales, for the three months ended February 29, 2024, a decrease of approximately $66,000, or 6%. The decrease for the three months ended February 28, 2025 was primarily driven by the reduction in force (“RIF”) executed in July 2024, which helped to decrease labor costs for the quarter.
Previous report
For the three months ended February 28, 2025, consolidated selling, general, and administrative expenses amounted to approximately $1,012,000, representing a significant reduction of $496,000 or 33%, compared to $1,508,000 for the corresponding period in 2024. This reduction was primarily due to a $225,000 decrease in stock compensation for the administration and a Reduction in Force (RIF) implemented in July 2024, which resulted in a $183,000 decrease in payroll expenses. Additionally, legal expenses were reduced by $46,000. These efforts demonstrate our focus on operating discipline and cost optimization as we align our cost structure with near-term business priorities, while preserving the resources needed to support long-term growth.
Previous report
Interest and Dividend Income
Previous report
For the three months ended February 28, 2025, interest and dividend income totaled approximately $43,000, compared to $86,000 for the corresponding period in 2024, representing a decrease of $43,000, or 50%. This reduction was primarily attributable to lower market interest rates affecting our lower cash balances, which had decreased by February 28, 2025.
Previous report
Nine months ended February 28, 2025
Previous report
For the nine months ended February 28, 2025, consolidated net sales reached approximately $4,562,000, marking a 6% increase or $263,000 from $4,299,000 in the same period of 2024. This growth was largely driven by enhanced contract manufacturing billings and increased demand for our inFoods® IBS product. Although there was a decline in over-the-counter (OTC) sales due to reduced retail market activity, and some volatility in clinical laboratory sales, the company successfully maintained a positive sales trajectory through strategic diversification and bolstered demand in key sectors.
Previous report
For the nine months ended February 28, 2025, consolidated cost of sales was approximately $3,820,000, representing 84% of net sales, compared to $3,708,000, or 86% of net sales, for the same period in 2024. This 3% increase, amounting to $112,000, was primarily driven by expanded contract manufacturing sales. Notably, the implementation of a RIF in July 2024 effectively reduced direct labor costs, thereby contributing to improved gross margins.
Previous report
Operating Expenses
Previous report
For the nine months ended February 28, 2025, consolidated selling, general, and administrative expenses totaled approximately $3,544,000, compared to $4,204,000 for the same period in 2024. This represents a decrease of $660,000, or 16%. This notable reduction in expenses reflects our strategic financial management and can be attributed to multiple factors: the absence of a sales reserve for OTC products from the previous year, reducing costs by $175,000; a $262,000 decrease in stock compensation; and a $172,000 in payroll savings following a RIF implemented in July 2024. Furthermore, we reduced advertising expenses by $50,000. These overall cost reductions demonstrate our commitment to strategically allocating capital and maintaining financial discipline as we continue to pursue growth opportunities.
Previous report
For the nine months ended February 28, 2025, consolidated R&D expenses were approximately $771,000, a decrease of 37% from $1,226,000 during the same period in 2024. This $455,000 reduction was largely due to a $303,000 decrease in R&D wages following a RIF implemented in July 2024. As part of our strategic cost-cutting initiatives, several clinical trials were scaled back, leading to lower expenditures. Furthermore, with the commercialization of inFoods® IBS, we strategically reduced R&D funding in this area, which accounted for an additional $75,000 decrease in related expenses.
Previous report
Interest and Dividend Income
Previous report
For the nine months ended February 28, 2025, interest and dividend income totaled approximately $140,000, compared to $317,000 for the corresponding period in 2024, representing a decrease of $177,000, or 56%. This reduction was primarily attributable to lower market interest rates affecting our lower cash balances, which had decreased by February 28, 2025
Previous report
LIQUIDITY AND CAPITAL RESOURCES
Previous report
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.
Previous report
Importantly, we have made significant progress in reducing our underlying cost structure. When excluding the positive impact of proceeds from the ATM offering, our current quarterly cash burn has improved to approximately $800,000 compared to approximately $1,800,000 in the same period of last year. This reduction reflects our disciplined execution of cost saving initiatives, stronger sales from a more diverse portfolio, and tighter management of working capital.
Previous report
During the nine months ended February 28, 2025, cash used in investing activities was $0 for purchases of property and equipment, and $37,000 in expenditures related to patents.
Previous report
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.
Previous report
During the nine months ended February 28, 2025, net cash provided by financing activities amounted to approximately $2,116,000. This influx was primarily driven by net proceeds from the sale of common stock totaling $2,015,000 and proceeds from the exercise of stock options amounting to $16,000. These contributions were partially offset by deferred offering costs of $85,000.
Previous report
CRITICAL ACCOUNTING POLICIES
Reworded paragraphs (24)
Previous wording
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, and subject to the safe harbor created by the Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact, contained in this Quarterly Report are forward-looking statements. Such statements include declarations regarding our intent, belief, or current expectations, and those of our management.
Current wording
This Quarterly Report on Form 10-Q (“Form 10-Q” or “Quarterly Report”) contains forward-looking statements within the meaning of the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements in this Quarterly Report, other than statements of historical facts, including, without limitation, statements regarding our strategy, future operations, future operating expenses, future financial position, future revenue, projected costs, prospects, plans, intentions, expectations, goals and objectives may be forward-looking statements. The forward-looking statements in this Quarterly Report do not constitute guarantees of future performance, and actual results could differ materially from those expressed or implied in any forward-looking statements. In some cases, you can identify forward-looking statements by words such as “believe,” “expect,” “anticipate,” “contemplate,” “estimate,” “project,” “forecast,” “would,” “may,” “should,” “will,” “could,” “can,” “potential,” “possible,” “proposed,” “plan,” “develop,” “opportunity,” “intend,” “initiative,” “target,” “maintain,” “continue,” “strive,” “progress,” “aim,” or the negative of these terms or other comparable expressions.
Previous 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.
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 cost.
Previous wording
Our extensive range of medical diagnostic products is sold worldwide, primarily in two markets: clinical laboratories and point-of-care settings. Most of our products are Conformite Europeenne (“CE”) marked and/or registered with regulatory agencies in various countries for diagnostic use, with several also cleared by the FDA for sale in the United States.
Current wording
Our range of medical diagnostic products is sold worldwide, primarily in two markets: clinical laboratories and point-of-care settings. Most of our products are Conformite Europeenne (“CE”) marked and/or registered with regulatory agencies in various countries for diagnostic use, with several also cleared by the U.S. Food and Drug Administration (“FDA”) for sale in the United States.
Previous wording
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 wording
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 advise on our clinical studies and product development efforts.
Previous wording
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 wording
A key outcome from our research and development efforts is our patented diagnostic-guided therapy (“DGT”) product, developed on the inFoods® technology platform. This innovative technology is designed to aid in the management of gastrointestinal conditions such as irritable bowel syndrome (“IBS”) and other inflammatory diseases. DGT products target chronic inflammatory illnesses that are widespread and prevalent in large markets. We have launched inFoods® IBS product, which leverages this patented technology. The inFoods® IBS product utilizes a simple blood test to identify patient-specific foods that, when eliminated from the diet, may help reduce IBS symptoms such as pain, bloating, diarrhea, cramping, and constipation. Unlike broad and difficult to manage dietary restrictions, the inFoods® IBS product pinpoints a patient’s heightened immunoreactivity to specific foods known to frequently trigger IBS symptoms. By removing the foods identified as problematic, patients can achieve relief from IBS symptoms.
Previous wording
We began commercializing our inFoods® product with select gastroenterology (“GI”) physician groups in various states and regions, including collaboration with one of the largest GI groups in the U.S. This initial phase was focused on gathering real-world feedback, optimizing physician engagement, and validating operational processes. Feedback from GI specialists has been generally positive, and we are continuing to expand our network by onboarding additional physician practices.
Current wording
We have introduced our inFoods® IBS product to select gastroenterology (“GI”) physician groups in multiple states and regions, including in collaboration with one of the largest GI physician groups in the United States. This initial phase was focused on gathering real-world feedback, optimizing physician engagement, and validating operational processes. GI physician feedback has been generally positive, and we are continuing to expand our network by onboarding additional physician practices.
Previous wording
Our dedicated sales team is focused on building strong relationships within the GI segment while selectively exploring opportunities to introduce inFoods® to other medical specialties, including integrated health practices and primary-care providers. These efforts are intended to lay the groundwork for broader adoption by showcasing the distinct clinical value of inFoods® across multiple healthcare channels.
Current wording
Our dedicated sales team is focused on building strong relationships within the GI segment while selectively exploring opportunities to introduce our inFoods® IBS products to other medical specialties, including integrated health practices and primary-care providers. These efforts are intended to lay the groundwork for broader adoption by showcasing the distinct clinical value of inFoods® across multiple healthcare channels.
Previous wording
Concurrently, we are evaluating distribution, partnership, and licensing opportunities with U.S.companies to support a scalable, broad market launch. These potential collaborations could significantly enhance the commercialization trajectory of inFoods® products, both domestically and internationally.
Current wording
Concurrently, we are evaluating distribution, partnership, and licensing opportunities with U.S. companies to support a scalable, broad market launch. These potential collaborations could significantly enhance the commercialization trajectory of inFoods® IBS products, both domestically and internationally.
Previous wording
As we continue pursue commercial opportunities in both U.S. and international markets, we remain attentive to evolving global economic conditions, including uncertainties related to international trade policies, tariffs, and supply chain dynamics. Although these factors have not had a material impact on our operations to date, future changes in trade regulations, tariff structures, or logistical constraints could influence the cost, availability, or timing of materials and components used in our manufacturing processes. We continue to monitor these developments closely and are actively implementing contingency plans, including alternative sourcing strategies and supplier diversification, to support supply chain continuity, maintain operational efficiency, and help mitigate potential future impacts. We are also focusing on alternative manufacturing and shipping strategies of our products through our European subsidiary (BioEurope), and our Mexican subsidiary (BioMexico), to mitigate some of the risk these policies may have on our revenues and operations.
Current wording
As we continue to pursue commercial opportunities in both U.S. and international markets, we remain attentive to evolving global economic conditions, including uncertainties related to international trade policies, tariffs, and supply chain dynamics. Although these factors have not had a material impact on our operations to date, future changes in trade regulations, tariff structures, or logistical constraints could influence the cost, availability, or timing of materials and components used in our manufacturing processes. We continue to monitor these developments closely and are actively implementing contingency plans, including alternative sourcing strategies and supplier diversification, to support supply chain continuity, maintain operational efficiency, and help mitigate potential future impacts. We are also focusing on alternative manufacturing and shipping strategies of our products through our European subsidiary (BioEurope), and our Mexican subsidiary (BioMexico), to mitigate some of the risk these policies may have on our revenues and operations.
Previous wording
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 wording
In addition, in December 2023 we received FDA clearance for 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 recognized as the highest known risk factor for gastric cancer, which remains one of the leading causes of cancer-related deaths globally. The hp+detect™ test is marketed directly to laboratories and is intended to provide physicians and medical centers with a reliable tool for diagnosing H. pylori infections and monitoring treatment effectiveness. We are actively promoting hp+detect™ to large end-customer laboratories and positioning the product for commercial adoption.
Previous wording
Due to the slower-than-expected launch of the Company’s key products, inFoods® IBS and hp+detect™, the Company has executed 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 year, which incurred costs such as severance, impacting typical cost trends and margins. Additionally, we raised $2,015,000 in net proceeds from the ATM offering filed in May 2024, providing additional liquidity to support our operations. The Company is actively exploring strategic opportunities to enhance and create shareholder value.
Current wording
Due to the slower-than-expected launch of our key products, inFoods® IBS and hp+detect™, we have initiated significant cost-cutting measures to extend our cash runway and work towards increasing revenues to cover overhead costs. Additionally, during the three months ended August 31, 2025, we raised $912,000 in net proceeds from the ATM offering filed in May 2024 providing additional liquidity to support our operations. We are actively exploring strategic opportunities to enhance and create shareholder value.
Previous wording
For the three months ended February 28, 2025, consolidated research and development (“R&D”) expenses totaled approximately $217,000, representing a decrease of 37% from $343,000 in the same period of 2024. This $126,000 reduction was primarily driven by a $64,000 decline in R&D wages due to a RIF executed in July 2024, and a reduction of $39,000 in expenses related to clinical trial studies.
Current wording
For the three months ended August 31, 2025, consolidated research and development (“R&D”) expenses totaled approximately $212,000, representing a decrease of $85,000, 29% from $297,000 in the same period of 2024. The decrease was primarily driven by a $60,000 reduction in payroll expenses resulting from a RIF implemented in July 2024, and approximately $23,000 in cost savings related to lower spending on inFoods® research and development projects.
Previous wording
As of February 28, 2025 and May 31, 2024, the Company had cash and cash equivalents of approximately $3,058,000 and $4,170,000, respectively. As of February 28, 2025 and May 31, 2024, the Company had working capital of approximately $4,555,000 and $5,527,000, respectively.
Current wording
As of August 31, 2025 and May 31, 2025, we had cash and cash equivalents of approximately $3,053,000 and $2,399,000, respectively. As of August 31, 2025 and May 31, 2025, we had working capital of approximately $4,206,000 and $3,135,000, respectively.
Previous wording
The Company’s ability to continue as a going concern over the next twelve months is influenced by several factors, including:
Current wording
Our ability to continue as a going concern over the next twelve months is influenced by several factors, including:
Previous wording
Management has analyzed the Company’s cash flow requirements through May 2026 and beyond. Based on this analysis, we believe our current cash and cash equivalents are insufficient to meet our operating cash requirements and strategic growth objectives for the next twelve months.
Current wording
Management has analyzed our cash flow requirements through November 2026 and beyond. Based on this analysis, we believe our current cash and cash equivalents are insufficient to meet our operating cash requirements and strategic growth objectives for the next twelve months.
Previous wording
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 issuance of 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 wording
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.
Previous wording
As part of our efforts to reduce costs, we are executing significant cost-cutting measures to extend our cash runway and work towards increasing revenues to cover overhead costs. These measures included a workforce reduction of nearly 15% in July 2024 and a substantial reduction in other operating expenses.
Current wording
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.
Previous wording
As part of our financing plan, on September 28, 2023, we filed a new “shelf” registration statement on Form S-3 with the SEC, to replace the expiring S-3 that was filed in July 2020, 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, 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 7,798,345 shares per day and the high and low trading price of our stock during the same period of time was $0.27 and $1.03, 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 wording
As part of our financing plan, on September 28, 2023, we filed a “shelf” registration statement on Form S-3 with the SEC, which was declared effective on September 29, 2023, allowing the Company to issue up to $20,000,000 in shares of our common stock. On May 10, 2024, the Company filed a prospectus supplement to the “shelf” registration statement on Form S-3 with the SEC. This prospectus supplement was intended to facilitate the sale of up to $5,500,000 in common stock through the 2024 ATM Offering. As part of this transaction, we incurred $81,000 in deferred offering costs during the year ended May 31, 2024.
Previous wording
During the nine months ended February 28, 2025, the Company sold 3,525,359 shares of its common stock at prices ranging from $0.36 to $1.04 pursuant to the May 2024 ATM Offering, which resulted in gross proceeds of approximately $2,143,000 and net proceeds to the Company of $2,015,000 after deducting commissions for each sale and legal, accounting, and other fees related to offering in the amount of $128,000.
Current wording
During the three months ended August 31, 2025, we sold 258,569 shares of its common stock at prices ranging from $3.34 to $3.69 pursuant to the 2024 ATM Offering, which resulted in gross proceeds of approximately $939,000 and net proceeds to us of $912,000 after deducting commissions for each sale and legal, accounting, and other fees related to offering in the amount of $27,000. including $8,000 of previously capitalized deferred offering cost.
Previous wording
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 wording
We intend to use the net proceeds from the 2024 ATM Offering for general corporate purposes, including, but not limited to, sales and marketing activities, clinical studies and product development, acquisitions of assets, businesses, companies, or securities, capital expenditures, and working capital needs.
Previous wording
During the nine months ended February 28, 2025, cash used in operating activities totaled approximately $3,180,000. The primary contributors to this outflow were a net loss of approximately $3,429,000, an increase in accounts receivable of $327,000, a decrease in accounts payable and accrued expenses totaling $506,000, and a reduction in lease liabilities of $242,000. These cash outflows were partially offset by a decrease in inventories of $766,000 and non-cash expenses of $610,000. The non-cash expenses included depreciation and amortization, provision for allowance on accounts receivable, inventory reserves, share-based compensation, and amortization of right-of-use assets.
Current wording
During the three months ended August 31, 2025, cash used in operating activities was approximately $268,000. The primary factors that contributed to this were a net income of approximately $2,000, an increase in accounts receivable of $512,000, a decrease in accrued compensation of $63,000 and a decrease in lease liability of $86,000. These were partially offset by a decrease in inventories of $10,000, a decrease in prepaid expenses of $87,000, and non-cash expenses of $280,000.
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, 2025, cash provided by financing activities was approximately $920,000. We received gross proceeds of $939,000 from the sale of our common stock, with costs for sale of $19,000. In contrast, during the three months ended August 31, 2024, and 2023, we did not have any cash provided by financing activities, as there were no net proceeds from the sale of common stock or stock option exercises.
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, 2024.
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 2025 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.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
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 near-term financing, and achieving profitable operations.
Rearranged previous paragraphs (4)
Previous report — wording carried elsewhere
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Previous report — wording carried elsewhere
A key outcome from our research and development efforts is our patented diagnostic-guided therapy (“DGT”) product, developed on the inFoods® technology platform. This innovative technology 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.
Previous report — wording carried elsewhere
Net Sales and Cost of Sales
Previous report — wording carried elsewhere
The following is a summary of operating expenses: