BIOMERICA INC
For the period ended Feb 28, 2026. Filed Apr 13, 2026.
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.
Feb 28, 2026 · Filed Apr 13, 2026
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 2025-11-30; filed 2026-01-14.
0001493152-26-002286
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-02-28; filed 2026-04-13.
0001493152-26-016388
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 76 previous paragraphs and 75 current paragraphs.
34 unchanged; 27 reworded; 14 added; 14 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 7 previous and 7 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 (14)
Current report
Consolidated net sales were approximately $987,000 for the three months ended February 28, 2026, compared to $1,119,000 for the three months ended February 28, 2025, a decrease of approximately $132,000, or 12%. The decrease was primarily attributable to lower contract manufacturing revenue following the completion of a prior research and development project. This decrease was partially offset by increased sales in the over-the-counter product line, reflecting variability in demand from international customers. Subsequent to quarter end, the Company is currently evaluating additional contract manufacturing opportunities and has engaged in discussions with potential customers.
Current report
Consolidated cost of sales were approximately $1,031,000, or 104% of net sales, for the three months ended February 28, 2026, compared to $1,100,000, or 98% of net sales, for the three months ended February 28, 2025, a decrease of approximately $69,000, or 6%. The decrease was primarily attributable to lower contract manufacturing activity, partially offset by higher costs associated with increased over-the-counter product sales. Cost of sales as a percentage of net sales increased primarily due to product mix and lower sales volume in the current period.
Current report
Selling, General and Administrative
Current report
For the three months ended February 28, 2026, consolidated selling, general and administrative expenses were approximately $1,076,000, representing an increase of $64,000, or 6%, compared to $1,012,000 for the three months ended February 28, 2025. The increase was primarily attributable to a $60,000 increase in salaries and wages related restructuring in the sales and marketing team supporting inFoods® commercialization, a $45,000 increase in regulatory and compliance expenses, and a $15,000 increase in outside sales-related services associated with inFoods®. These increases were partially offset by a $37,000 decrease in outside administrative services and a $13,000 decrease in legal expenses. Overall, the increase reflects continued investment in commercialization activities for inFoods®, partially offset by cost management efforts in other areas.
Current report
For the three months ended February 28, 2026, consolidated research and development (“R&D”) expenses were approximately $178,000, representing a decrease of $39,000, or 18%, compared to $217,000 for the three months ended February 28, 2025. The decrease was primarily attributable to reduced R&D activity in the current period following the completion of the hp+detect™ project, as well as lower levels of development work related to inFoods®. As a result, salaries and wages within the research and development team decreased by approximately $32,000. In addition, expenses related to clinical trial studies and laboratory supplies decreased by approximately $8,000, reflecting the completion of certain research activities.
Current report
Dividend, Interest, and Other Income (Loss)
Current report
For the three months ended February 28, 2026, dividend, interest, and other income (loss) totaled approximately $(6,000), compared to income of $43,000 for the three months ended February 28, 2025, representing a decrease of $49,000. The change was primarily attributable to lower interest income resulting from reduced cash balances and lower market interest rates.
Current report
Nine months ended February 28, 2026
Current report
Consolidated net sales were approximately $3,578,000 for the nine months ended February 28, 2026, compared to $4,562,000 for the nine months ended February 28, 2025, representing a decrease of approximately $984,000, or 22%. The decrease was primarily attributable to lower contract manufacturing revenue, reflecting the completion of a prior research and development project. Additional decreases were attributable to reduced retail market activity from international distributors, partially related to tariff impacts, as well as variability in clinical laboratory sales during the period. These decreases were partially offset by increased demand for the inFoods® IBS product; however, such revenues remain in the early stages of commercialization and have only partially offset offset the decline in contract manufacturing and distributor-related sales.
Current report
For the nine months ended February 28, 2026, consolidated cost of sales was approximately $3,145,000, or 88% of net sales, compared to $3,820,000, or 84% of net sales, for the nine months ended February 28, 2025, representing a decrease of approximately $675,000, or 18%. The decrease was primarily attributable to lower contract manufacturing activity, as well as reduced clinical laboratory sales. Cost of sales as a percentage of net sales increased primarily due to changes in product mix and lower overall sales volume during the current period.
Current report
Selling, General and Administrative
Current report
For the nine months ended February 28, 2026, consolidated selling, general and administrative expenses were approximately $3,637,000, representing an increase of $93,000, or 3%, compared to $3,544,000 for the nine months ended February 28, 2025. The increase was primarily attributable to a $169,000 increase in regulatory and outside service costs, partially offset by a $99,000 decrease in sales commissions.
Current report
For the nine months ended February 28, 2026, consolidated R&D expenses were approximately $583,000, representing a decrease of $188,000, or 24%, compared to $771,000 for the nine months ended February 28, 2025. The decrease was primarily attributable to a $139,000 reduction in salaries and wages within the R&D team, reflecting reduced R&D activity during the current period. The reduction in R&D activity was driven by the completion of the hp+detect™ project and the transition of inFoods® IBS from development to commercialization, which also contributed to an approximately $40,000 decrease in related expenses. The reduction in R&D activity reflects the Company’s transition from development to commercialization of key products.
Current report
During the nine months ended February 28, 2025, cash used in operating activities was approximately $3,180,000. The primary drivers of this cash outflow included a net loss of approximately $3,429,000, an increase in accounts receivable of $327,000, a decrease in accounts payable and accrued expenses of $506,000, and a reduction in lease liabilities of $242,000. These uses of cash were partially offset by a decrease in inventories of approximately $766,000, as well as non-cash expenses of approximately $610,000. The non-cash expenses primarily consisted of depreciation and amortization, provision for expected credit losses on accounts receivable, inventory reserves, share-based compensation, and amortization of right-of-use assets.
Removed paragraphs (14)
Previous report
Consolidated net sales were approximately $1,210,000 for the three months ended November 30, 2025, as compared to $1,636,000 for the three months ended November 30, 2024, representing a decrease of approximately $426,000, or 26%. The decrease was primarily attributable to lower sales of Aware® products in the Middle East market, as well as reduced contract manufacturing billings and clinic laboratory sales, which were impacted by the timing and periodic nature of customer orders.
Previous report
Consolidated cost of sales was approximately $1,159,000, or 96% of net sales, for the three months ended November 30, 2025, as compared to $1,199,000, or 73% of net sales, for the three months ended November 30, 2024, representing a decrease of approximately $40,000, or 3%. The decrease was primarily attributable to lower sales volumes during the current quarter compared to the prior year same period, as well as lower inventory write-offs and production adjustments.
Previous report
Selling, General and Administrative Expenses
Previous report
For the three months ended November 30, 2025, consolidated selling, general, and administrative expenses amounted to approximately $1,231,000, compared to $1,173,000 for the corresponding period in 2024, an increase of $58,000 or 5%. The increase was primarily attributable to a $71,000 increase in salaries and wages primarily associated with a new hire in the sales and marketing team, a $67,000 increase in credit loss expense related to aged receivables, and a $34,000 increase in outside sales-related services related to inFoods®. These increases were partially offset by a $42,000 decrease in stock-based compensation within the administrative team, primarily due to changes in the Company’s stock price, and a $72,000 decrease in sales commissions resulting from lower sales volumes in the Middle East market.
Previous report
For the three months ended November 30, 2025, consolidated research and development (“R&D”) expenses totaled approximately $193,000, representing a decrease of 25% from $257,000 in the same period of 2024. The decrease was primarily attributable to a $46,000 reduction in R&D wages, reflecting fewer labor hours allocated to R&D, as well as a $17,000 decrease resulting from reduced participation in charitable sponsorships during the current period.
Previous report
For the three months ended November 30, 2025, dividend, interest, and other income totaled approximately $58,000, compared to $40,000 for the corresponding period in 2024, representing an increase of $18,000, or 45%. This increase was primarily attributable to dividend distributions received from an investment holding entity during the current period.
Previous report
Six months ended November 30, 2025
Previous report
For the six months ended November 30, 2025, consolidated net sales reached approximately $2,590,000, compared to $3,444,000 for the same period in 2024, representing a decrease of approximately $854,000, or 25%. The decrease was primarily attributable to lower clinic laboratory sales, which experienced volatility due to the periodic and infrequent nature of customer orders, as well as reduced contract manufacturing billings and lower OTC sales driven by decreased sales in the Middle East market.
Previous report
For the six months ended November 30, 2025, consolidated cost of sales was approximately $2,113,000, or 82% of net sales, compared to $2,720,000, or 79% of net sales, for the same period in 2024, representing a decrease of $607,000, or 22%. The decrease was primarily attributable to lower sales volumes across the clinical laboratory, OTC, and contract manufacturing businesses, which resulted in lower labor costs and reduced cost allocations. In addition, lower levels of aged inventory during the current period led to a decrease in inventory write-offs.
Previous report
Selling, General and Administrative Expenses
Previous report
For the six months ended November 30, 2025, consolidated selling, general, and administrative expenses totaled approximately $2,561,000, compared to $2,533,000 for the same period in 2024, representing an increase of approximately $28,000, or 1%. The increase was primarily attributable to a $114,000 increase in outside administrative services associated with tax credit advisory services provided for ERC, a $66,000 increase in stock-based compensation within the sales and marketing organization related to a new hire during the current period, compared to workforce reductions in the prior year period, and a $55,000 increase in credit loss expense under CECL related to aged receivables, for which payment plans have been established. These increases were partially offset by an $88,000 decrease in sales commissions resulting from reduced sales volumes in the Middle East market, a $73,000 decrease in salaries and wages within the sales and marketing team, and a $51,000 decrease in stock-based compensation expense within the administrative team.
Previous report
For the six months ended November 30, 2025, consolidated R&D expenses totaled approximately $405,000, representing a decrease of $149,000, or 27% from $554,000 in the same period of 2024. The decrease was primarily attributable to a $106,000 reduction in R&D salaries and wages, reflecting fewer labor hours allocated to R&D as the business progressed into later, commercialization focused development phases, as well as a $36,000 decrease in R&D expenses related to inFoods® during the current period.
Previous report
Dividend, Interest, and Other Income
Previous report
During the six months ended November 30, 2024, cash used in operating activities was approximately $2,135,000. The primary factors that contributed to this were a loss of approximately $2,266,000, an increase in accounts receivable of $387,000, and a decrease in accounts payable and accrued expenses of $290,000. These outflows were partially offset by a decrease in inventories of $585,000 and non-cash expenses of approximately $439,000.
Reworded paragraphs (27)
Previous wording
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 wording
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 in our 2025 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.
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 cost.
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 patient health and well-being while reducing healthcare costs.
Previous wording
Our range of medical diagnostic products is sold worldwide, primarily in two markets: clinical laboratories and point-of-care settings (physicians’ offices). 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 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 Conformité Européenne (“CE”) marked and/or registered with regulatory agencies in various countries for diagnostic use, with certain products approved by the U.S. Food and Drug Administration (“FDA”) for sale in the United States.
Previous wording
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 often 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 wording
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 at home or in a physician’s office.
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 advise on 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 guide our clinical studies and product development efforts.
Previous 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 our 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.
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. 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 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.
Current wording
We have introduced our inFoods® IBS product to select gastroenterology (“GI”) physician groups in multiple states and regions. 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 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.
Current wording
Our dedicated sales team is focused on building strong relationships within the GI segment while selectively exploring opportunities to introduce inFoods® IBS 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® IBS across multiple healthcare channels.
Previous wording
We are currently in the process of pursuing U.S. government payment or reimbursement for the inFoods® IBS product through the Medicare system. In connection with this process, the Centers for Medicare & Medicaid Services has established a reimbursement price applicable to this product. While the establishment of a reimbursement price does not guarantee coverage, utilization, or payment, management believes it represents an important step toward broader market access. Once Medicare reimbursement is achieved, we intend to also pursue reimbursement with private payer insurance companies. To the extent patients are able to access the inFoods® IBS product at reduced out of pocket cost, we expect adoption and utilization to increase.
Current wording
We are currently in the process of pursuing U.S. government payment or reimbursement for the inFoods® IBS product through the Medicare system. In connection with this process, the Centers for Medicare & Medicaid Services has established and announced a national Medicare payment rate of $300 for inFoods® IBS under the Clinical Laboratory Fee Schedule, applicable to claims with dates of service beginning January 1, 2026. While the establishment of a reimbursement rate does not guarantee coverage, utilization, or payment, management believes it represents an important step toward broader market access and provides a foundation for potential increased patient access and initial claims activity. The Company has provided additional information regarding inFoods® IBS to the applicable Medicare Administrative Contractor for coverage and is awaiting response. As Medicare reimbursement becomes established, we intend to also pursue reimbursement with private payer insurance companies. To the extent patients are able to access the inFoods® IBS product at reduced out-of-pocket cost, we expect adoption and utilization to increase.
Previous 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 BioEurope GmbH, our European subsidiary, and Biomerica de Mexico, our Mexican subsidiary, 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, wars and other political strife. Although these factors have imposed a moderate 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, and our ability to sell our finished products into international markets. 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 BioEurope GmbH, our European subsidiary, and Biomerica de Mexico, our Mexican subsidiary, to mitigate some of the risk that tariffs and other policies may have on our revenues and operations.
Previous 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 marketing hp+detect™ to large end-customer laboratories and positioning the product for commercial adoption
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 marketing hp+detect™ to large end-customer laboratories and positioning the product for commercial adoption. We recently announced that we received our first commercial order for hp+detect™ from one of the largest clinical laboratory chains operating across Europe. The initial order is for the United Kingdom market, where hp+detect™ received registration from the UK Medicines and Healthcare products Regulatory Agency (MHRA) in February 2026.
Previous wording
We continue to balance revenue generated from our established diagnostic products and contract manufacturing services with investments in newer diagnostic-guided therapy products, including inFoods® IBS and hp+detect™. Management believes this diversified portfolio approach supports near-term cash generation while advancing longer-term growth initiatives.
Current wording
We continue to balance revenue generated from our established diagnostic products and contract manufacturing services with investments in newer diagnostic-guided therapy products, including inFoods® IBS and hp+detect™. Management believes this diversified portfolio approach supports near-term cash generation needs while advancing longer-term growth initiatives.
Previous wording
During the six months ended November 30, 2025, we continued our phased commercialization strategy for our inFoods® IBS product, prioritizing targeted gastroenterology practices to validate clinical workflows, refine physician education, and gather real-world feedback. This measured approach has informed sales and marketing investments and is intended to support a scalable broader launch.
Current wording
During the nine months ended February 28, 2026, we continued our phased commercialization strategy for our inFoods® IBS product, prioritizing targeted gastroenterology practices to validate clinical workflows, refine physician education, and gather real-world feedback. This measured approach has informed sales and marketing investments and is intended to support a scalable broader launch.
Previous wording
Due to the slower-than-expected launch of our key new products, inFoods® IBS and hp+detect™, we initiated significant cost-cutting measures to extend our cash runway and work towards increasing revenues to cover overhead costs. Additionally, during the six months ended November 30, 2025, the Company strengthened its liquidity position through a combination of operating cost controls, net proceeds of approximately $1,395,000 from the ATM offering. We are also actively exploring other strategic opportunities to enhance and create shareholder value.
Current wording
Due to the slower-than-expected launch of our key new products, inFoods® IBS and hp+detect™, we initiated significant cost-cutting measures to extend our cash runway and work towards increasing revenues to cover overhead costs. Additionally, during the nine months ended February 28, 2026, the Company strengthened its liquidity position through a combination of operating cost controls, and net proceeds of approximately $1,455,000 from the ATM offering. We are also actively exploring other major strategic opportunities to enhance and create shareholder value.
Previous wording
For the six months ended November 30, 2025, dividend. interest, and other income totaled approximately $1,180,000, compared to $97,000 for the corresponding period in 2024, representing an increase of $1,083,000, or 1116%. 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 wording
For the nine months ended February 28, 2026, dividend, interest, and other income totaled approximately $1,174,000, compared to $140,000 for the corresponding period in 2025, representing an increase of $1,034,000, or 739%. This increase was primarily attributable to $1,100,000 related to the Employee Retention Credit (“ERC”), a refundable payroll-tax credit established under the Coronavirus Aid, Relief, and Economic Security (“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.
Previous wording
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 wording
Excluding the ERC refund, interest and dividend income decreased by approximately $49,000, primarily due to lower market interest rates during the current quarter compared to the prior quarter.
Previous wording
LIQUIDITY AND CAPITAL RESOURCES AND GOING CONCERN
Current wording
LIQUIDITY AND CAPITAL RESOURCES
Previous wording
As of November 30, 2025 and May 31, 2025, we had cash and cash equivalents of approximately $2,543,000 and $2,399,000, respectively. As of November 30, 2025 and May 31, 2025, we had working capital of approximately $3,592,000 and $3,135,000, respectively.
Current wording
As of February 28, 2026 and May 31, 2025, we had cash and cash equivalents of approximately $1,336,000 and $2,399,000, respectively. As of February 28, 2026 and May 31, 2025, we had working capital of approximately $2,562,000 and $3,135,000, respectively. We have experienced variability in our revenue and a reduction in our cash position in recent periods, which has impacted our liquidity.
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 equity, and seek other strategic alternatives.
Current wording
To address our capital needs and sustaining 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
During the six months ended November 30, 2025, we sold 391,125 shares of its common stock at prices ranging from $3.34 to $4.02 pursuant to the 2024 ATM Offering, which resulted in gross proceeds of approximately $1,432,000 and net proceeds to us of $1,395,000 after deducting commissions for each sale and legal, accounting, and other fees related to offering in the amount of $37,000.
Current wording
During the nine months ended February 28, 2026, we sold 414,633 shares of our common stock at prices ranging from $2.42 to $4.02 pursuant to the 2024 ATM Offering, which resulted in gross proceeds of approximately $1,495,000 and net proceeds to us of $1,455,000 after deducting commissions for each sale and legal, accounting, and other fees related to offering in the amount of $40,000.
Previous wording
While we are committed to addressing our capital needs and sustain operations beyond the next year, there is no assurance that these efforts will be successful or sufficient to meet our capital requirements.
Current wording
While we are committed to addressing our capital needs and sustaining operations beyond the next year, there is no assurance that these efforts will be successful or sufficient to meet our capital requirements. Our future viability depends on the successful execution of our strategic plans, securing additional financing, and achieving profitable operations.
Previous wording
During the six months ended November 30, 2025, cash used in operating activities was approximately $1,259,000. The primary factors that contributed to this were a loss of approximately $1,318,000, an increase in accounts receivable of $285,000, decrease in lease liabilities of $175,000, decrease in accrued compensation of $110,000. These outflows were partially offset by a decrease in prepaid expenses and other of $78,000, an increase in accounts payable and accrued expenses of $70,000, and non-cash expenses of approximately $488,000.
Current wording
During the nine months ended February 28, 2026, cash used in operating activities was approximately $2,509,000. The primary drivers of this cash outflow included a net loss of approximately $2,630,000, an increase in accounts receivable of $221,000, a decrease in lease liabilities of $265,000, and a decrease in accrued compensation of $47,000. These uses of cash were partially offset by an increase in accounts payable and accrued expenses of approximately $58,000, as well as non-cash expenses of approximately $633,000. The non-cash expenses primarily consisted of depreciation and amortization, provision for expected credit losses on accounts receivable, inventory reserves, share-based compensation, and amortization of right-of-use assets.
Previous wording
During the six months ended November 30, 2024, cash used in investing activities was $33,000 for expenditures related to patents.
Current wording
During the nine months ended February 28, 2026, cash used in investing activities was approximately $19,000, consisting of expenditures related to patents.
Previous wording
During the six months ended November 30, 2025, cash used in investing activities was $0.
Current wording
During the nine months ended February 28, 2025, cash used in investing activities was approximately $37,000, consisting of expenditures related to patents.
Previous wording
During the six months ended November 30, 2025, cash provided by financing activities amounted to $1,402,000, primarily resulting from gross proceeds of approximately $1,432,000 from the sale of common stock.
Current wording
During the nine months ended February 28, 2026, net cash provided by financing activities was approximately $1,463,000, primarily attributable to gross proceeds of approximately $1,495,000 from the sale of common stock.
Previous wording
During the six months ended November 30, 2024, cash provided by financing activities amounted to $380,000, primarily resulting from gross proceeds of $392,000 from the sale of common stock.
Current wording
During the nine months ended February 28, 2025, net cash provided by financing activities was approximately $2,116,000, primarily attributable to gross proceeds of approximately $2,143,000 from the sale of common stock.
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, 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.
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, provision for expected credit losses, 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.
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Previous report — wording carried 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 financing, and achieving profitable operations.