BIOMERICA INC
For the period ended May 31, 2026. Filed Aug 31, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2026 · Filed Aug 31, 2026
BMRA$1.610.0%Stored close · as of Nov 6, 2026
What changed in Risk Factors?
Read the current filingPrevious report: 10-K
Period ended 2025-05-31; filed 2025-08-29.
0001641172-25-026041
Item 1A. RISK FACTORSCurrent report: 10-K
Period ended 2026-05-31; filed 2026-08-31.
0001493152-26-040851
Item 1A. RISK FACTORSThe 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 103 previous paragraphs and 108 current paragraphs.
58 unchanged; 42 reworded; 7 added; 2 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 3 previous and 3 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 (7)
Current report
Our revenues have declined, and there is no assurance that we will reverse this trend.
Current report
Our net sales decreased from approximately $5,311,000 in fiscal 2025 to approximately $4,453,000 in fiscal 2026, a decline of approximately 16%. This decline was driven in part by distributor ordering patterns and the timing of international shipments. We cannot assure you that our revenues will stabilize or increase in future periods. Continued revenue declines could increase our operating losses, accelerate our use of cash, and increase our dependence on external financing, any of which could materially adversely affect our business, financial condition, and results of operations.
Current report
Advances in artificial intelligence and competing diagnostic technologies could reduce demand for our products.
Current report
The diagnostic industry is experiencing technological change, including the development of artificial intelligence (“AI”) and machine learning-enabled diagnostic development. The regulatory frameworks for AI-enabled diagnostics are evolving, and competitors with greater resources may be better positioned to navigate these requirements. If we are unable to adapt our product offerings or develop competitive technologies in response to these advances, demand for our products could decline, which could have a material adverse effect on our business, results of operations, and financial condition.
Current report
Nasdaq’s recently adopted minimum Market Value of Listed Securities requirement of $5 million could result in the suspension and delisting of our common stock from Nasdaq.
Current report
On July 22, 2026, the SEC approved a new Nasdaq rule (Listing Rules 5450(a)(3) and 5550(a)(6)) requiring companies listed on the Nasdaq Global Market and Nasdaq Capital Market to maintain a minimum Market Value of Listed Securities (“MVLS”) of at least $5 million. Under the new rule, if a company’s MVLS remains below $5 million for 30 consecutive business days, Nasdaq will issue a Staff Delisting Determination, and trading in the Company’s securities will be immediately suspended without any cure or compliance period. This represents a significant departure from Nasdaq’s traditional approach to continued listing deficiencies, which typically provides issuers with compliance periods to regain compliance while remaining listed. Although a Nasdaq Hearings Panel may, in its discretion, grant an exception of up to 180 calendar days from the Staff Delisting Determination if a company demonstrates that it can satisfy Nasdaq’s initial listing standards, such relief is discretionary, and the suspension from Nasdaq trading is not automatically stayed during any appeal. On July 29, 2026, the new Nasdaq rule was automatically stayed pending further action by the Commission. While the temporary stay delays the rule’s effectiveness, it does not alter the SEC’s approval of the new continued listing standard.
Current report
As of the date of this Annual Report, our MVLS may be at or near levels that could implicate this new requirement. Given our current stock price and the number of shares of our common stock outstanding, a sustained decline in our stock price or other adverse market conditions could cause our MVLS to fall below $5 million for 30 consecutive business days, triggering an immediate suspension and delisting from Nasdaq. A delisting under this rule would have the same adverse consequences described above, including reduced liquidity, limited market quotations, diminished analyst coverage, and impaired ability to raise capital. Moreover, the lack of a cure period under this rule means that we would have limited time and recourse to address any such deficiency, and any appeal to a Hearings Panel would require us to demonstrate compliance with Nasdaq’s more stringent initial listing standards.
Removed paragraphs (2)
Previous report
Failures in our information technology and storage systems, many of which are outsourced to third parties, could significantly disrupt our business and incur excessive costs.
Previous report
In response to the need to reduce ongoing operating costs, we have implemented a substantial reduction in our workforce. This reduction places an increased workload on the remaining employees and may create concerns about job security. These factors could lead to the loss of key employees, who are critical to our future success, and may make it difficult to attract and retain new talent in these roles.
Reworded paragraphs (42)
Current wording
We have a history of operating losses and negative cash flows from operations.
Previous wording
We have a history of operating losses, and there is no guarantee that we will achieve profitability in the future. Our ability to generate net profits and maintain positive cash flows is uncertain. Failure to achieve or sustain profitability could result in a decline in the value of our common stock and may necessitate seeking additional funding under potentially unfavorable conditions.
Current wording
We have a history of operating losses and negative cash flows from operations, and there is no guarantee that we will achieve profitability or positive cash flows in the future. Our ability to generate net profits and maintain positive cash flows is uncertain. Failure to achieve or sustain profitability or positive cash flows could result in a decline in the value of our common stock and may necessitate seeking additional funding under potentially unfavorable conditions.
Previous wording
Although our financial statements have been prepared on a going concern basis, our current level of cash and cash equivalents available to us is not sufficient to meet our operating plans for the next 12 months, raising substantial doubt regarding our ability to continue as a going concern.
Current wording
Although our financial statements have been prepared on a going concern basis, our current level of cash and cash equivalents is not sufficient to meet our operating plans for the next 12 months, raising substantial doubt regarding our ability to continue as a going concern.
Previous wording
Our financial statements as of May 31, 2025, have been prepared under the assumption that we will continue as a going concern for the next twelve months from the date of issuance. However, our independent registered public accounting firm has issued a report that includes an explanatory paragraph highlighting our operational losses and expressing substantial doubt about our ability to continue as a going concern for a period of at least the next twelve months from the date this report is filed.
Current wording
Our financial statements as of May 31, 2026, have been prepared under the assumption that we will continue as a going concern. Despite our financing activities, we continue to experience recurring losses and negative cash flows from operations. Based on our current operating plan, we believe that our existing cash and cash equivalents will be insufficient to fund our operations and meet our obligations for the next twelve months from the issuance date of our financial statements. Our independent registered public accounting firm’s report on our consolidated financial statements includes an explanatory paragraph regarding substantial doubt about our ability to continue as a going concern.
Previous wording
Our ability to continue as a going concern depends on obtaining additional financing, achieving further operating efficiencies, increasing sales, reducing costs, and ultimately generating profitable operations. There is no assurance that we will be able to secure the necessary capital on favorable terms, achieve sufficient revenue growth, or implement adequate cost reductions. Our financial statements do not reflect any adjustments that might result from the resolution of this uncertainty.
Current wording
Our ability to continue as a going concern depends on obtaining additional financing, achieving further operating efficiencies, increasing sales, reducing costs, and ultimately generating profitable operations. There is no assurance that we will be able to secure the necessary capital on favorable terms, achieve sufficient revenue growth, or implement adequate cost reductions. If we are unable to generate sufficient cash flows from operations or obtain additional financing, we may be required to delay or reduce certain operating activities and expenditures. Our financial statements do not reflect any adjustments that might result from the resolution of this uncertainty.
Previous wording
Our operating results may fluctuate adversely as a result of many factors that are outside our control, which may negatively impact our stock price.
Current wording
Our operating results may fluctuate adversely as a result of many factors that are outside our control, which could adversely affect our business and the market price of our common stock.
Previous wording
Our operating results are subject to fluctuations due to factors outside our control, which may adversely affect our business, financial condition, and stock price. Key factors include:
Current wording
Our operating results are subject to fluctuations due to factors outside our control, which may adversely affect our business, financial condition, results of operations and stock price. Key factors include:
Previous wording
Fluctuations in our operating results, for any reason, could cause operating losses as a result of significant fixed expenses.
Current wording
Fluctuations in our operating results, for any reason, could cause increased operating losses as a result of significant fixed expenses.
Previous wording
We base the scope of our operations and related expenses on our estimates of future revenues. A significant portion of our operating expenses are fixed, and we may not be able to rapidly adjust our expenses if our revenues fall short of our expectations. Our revenue estimates for future periods are based, among other factors, on estimated end-user demand for our products. If end-user consumption is less than estimated, revenues from our distribution partners and other distribution channels would be expected to fall short of expectations, and because such a significant portion of our costs are fixed, could result in operating losses.
Current wording
We base the scope of our operations and related expenses on our estimates of future revenues. A significant portion of our operating expenses are fixed, and we may not be able to rapidly adjust our expenses if our revenues fall short of our expectations. Our revenue estimates for future periods are based, among other factors, on estimated end-user demand for our products. If end-user consumption is less than estimated, revenues from our distribution partners and other distribution channels could fall short of expectations, and because such a significant portion of our costs is fixed, such revenue shortfalls could result in operating losses.
Previous wording
To remain competitive, we must continue to develop, obtain, and protect our proprietary technology rights; otherwise, we may lose market share or need to reduce prices as a result of competitors selling technologically superior products that compete with our products, or selling products at lower prices.
Current wording
To remain competitive, we must continue to develop, obtain, and protect our proprietary technologies and intellectual property rights; otherwise, we may lose market share or need to reduce prices as a result of competitors selling technologically superior products that compete with our products or selling products at lower prices.
Previous wording
Our ability to compete successfully in the diagnostic market depends on continued development and introduction of new products, technology, and the improvement of existing technology. If we cannot continue to improve upon or develop, obtain, and protect our technology, our operating results could be adversely affected.
Current wording
Our ability to compete successfully in the diagnostic market depends on the continued development and introduction of new products, technology, and the improvement of existing products and technologies. If we cannot continue to improve upon or develop, obtain, and protect our proprietary technologies and intellectual property rights, our operating results could be adversely affected.
Previous wording
Our operations will be adversely affected if our operating results do not correspondingly increase with our increased expenditures or if our technology, product, and market development efforts are unsuccessful or delayed. Furthermore, our failure to successfully introduce new technologies or products and develop new markets could have a material adverse effect on our business and prospects.
Current wording
Our operations could be adversely affected if our operating results do not correspondingly increase with our increased expenditures or if our technology, product, and market development efforts are unsuccessful or delayed. Furthermore, our failure to successfully introduce new technologies or products and develop new markets could have a material adverse effect on our business and prospects.
Previous wording
The Company is required to obtain government or regulatory certification in many countries and the European community to sell its products in those countries or regions. There is no assurance that the Company will be able to retain its certification in the future. This includes the possibility and risk that the Company’s products do not meet the new EU IVDR testing and documentation requirements in the future as described in the above “Research and Development” section of this document.
Current wording
We are required to obtain and maintain applicable governmental or regulatory clearances, approvals, registrations or certifications in many countries and regions to sell our products in those countries or regions. There is no assurance that we will be able to obtain or maintain such regulatory authorizations in the future. This includes the risk that certain of our products may not satisfy applicable EU IVDR testing and documentation requirements as described in the “Research and Development” section of this Annual Report.
Previous wording
Significant government regulation exists in countries in which we conduct business. A large part of the Company’s sales is to distributors in Europe, China, and other countries, which require us to maintain certain certifications to sell our products. Failure to comply with current governmental regulations and quality assurance guidelines could cause the loss of these certifications, which could materially adversely affect the results of the Company. Loss of certifications could lead to temporary manufacturing shutdowns, product recalls, product shortages, or delays in product manufacturing and a decline in sales. Also, evolving EU IVDR requirements may increase compliance costs and extend certification timelines, which could limit our ability to sell certain IVDD products in the EU.
Current wording
Significant government regulation exists in countries in which we conduct business. A large part of our sales is to distributors in Europe, China, and other countries, which require us to maintain certain certifications or other regulatory authorizations to sell our products. Failure to comply with current governmental regulations and quality assurance guidelines could cause the loss of these certifications, which could materially adversely affect our results of operations. Loss of certifications could lead to temporary manufacturing shutdowns, product recalls, product shortages, or delays in product manufacturing and a decline in sales. Also, evolving EU IVDR requirements may increase compliance costs and extend certification timelines, which could limit or delay our ability to market certain products in the EU.
Previous wording
The Company maintains a manufacturing plant in Mexico which presents risks to the Company including risks associated with doing business outside the United States.
Current wording
We maintain a manufacturing plant in Mexico which presents risks to us including risks associated with doing business outside the United States.
Previous wording
We operate a significant manufacturing facility in Mexico through our subsidiary, Biomerica de Mexico. This international presence introduces a range of risks, including exposure to local economic and political conditions. Factors such as social unrest, potential terrorism, export and import restrictions, and fluctuations in currency exchange rates could impact our operations. Additionally, there is a risk of labor shortages, which could affect our manufacturing capabilities. These factors could lead to unforeseen costs and disruptions, materially impacting our business, financial results, and operational stability.
Current wording
We operate a significant manufacturing facility in Mexico through our subsidiary, Biomerica de Mexico. This international presence introduces a range of risks, including exposure to local economic and political conditions. Factors such as social unrest, potential terrorism, export and import restrictions, and fluctuations in currency exchange rates could impact our operations. Additionally, there is a risk of labor shortages or increased labor costs, which could affect our manufacturing capabilities. These factors could lead to unforeseen costs and disruptions, and could have a material adverse effect our business, financial results, and operational stability.
Previous wording
Our research and production processes involve the use of hazardous materials, which presents inherent risks. Despite rigorous safety protocols, the possibility of accidental contamination or injury cannot be entirely eliminated. In the event of an accident, we could face significant liability for harm or damages, potentially exceeding our financial resources. Compliance with environmental regulations also entails substantial costs.
Current wording
Our research and production processes involve the use of hazardous materials, which present inherent risks. Despite rigorous safety protocols, the possibility of accidental contamination or injury cannot be entirely eliminated. In the event of an accident, we could face significant liability for harm or damage, potentially exceeding our financial resources. Compliance with environmental regulations also entails substantial costs.
Previous wording
Our net sales were approximately $5,311,000 for fiscal year ended May 31, 2025, compared to $5,415,000 for fiscal year eneded May 31, 2024. For the fiscal years ended May 31, 2025 and 2024, the Company had one distributor each year that accounted for 31% and 33% of our net sales, respectively.
Current wording
Our net sales were approximately $4,453,000 for the fiscal year ended May 31, 2026, compared to $5,311,000 for the fiscal year ended May 31, 2025. For each of the fiscal years ended May 31, 2026 and 2025, our largest distributor accounted for 31% of our net sales.
Previous wording
Total gross receivables as of May 31, 2025, and 2024 were approximately $757,000 and $966,000, respectively. As of May 31, 2025 and 2024, the Company had four distributors, respectively, that accounted for a total of 69% and 64% of gross accounts receivable, respectively. Of the 69% as of May 31, 2025, 27% was owed by a distributor in North America. Any adverse changes in our relationships with key distributors, or adverse issues related to their financial condition, performance, or purchasing patterns, could have a significant impact on our sales and overall financial results. The loss of a key distributor, or the failure of our direct distribution efforts, could further exacerbate these challenges and adversely affect our business.
Current wording
Total gross receivables as of May 31, 2026, and 2025 were approximately $823,000 and $757,000, respectively. As of May 31, 2026 and 2025, we had three and four distributors, respectively, that accounted for a total of 59% and 69% of gross accounts receivable, respectively. Of the 59% as of May 31, 2026, 34% was owed by two distributors in North America. Any adverse changes in our relationships with key distributors, or adverse issues related to their financial condition, performance, or purchasing patterns, could have a significant impact on our sales and overall financial results. The loss of a key distributor, or the failure of our direct distribution efforts, could further exacerbate these challenges and adversely affect our business.
Previous wording
A significant amount of our products are sold internationally, with substantial sales to distributors in Asia and Europe. We rely on distributor organizations and sales agents to market and sell our products abroad, which exposes us to various foreign risks, including:
Current wording
A significant amount of our products are sold internationally, with substantial sales to distributors in Asia and Europe. We rely on distributor organizations and sales agents to market and sell our products abroad, which exposes us to various international risks, including:
Previous wording
Most of our international sales are negotiated and paid in U.S. dollars. However, currency risks remain, as fluctuations in foreign exchange rates can make our products comparatively more expensive. These exchange rate changes, along with general economic conditions in international markets, could negatively impact our sales. To maintain competitive pricing, we may need to offer discounts or reduce prices, leading to lower margins on international sales. Continued changes in the values of the Euro, the Mexican peso, and other foreign currencies could adversely affect our business, financial condition, and results of operations.
Current wording
Most of our international sales are negotiated and paid in United States dollars. However, currency risks remain, as fluctuations in foreign exchange rates can make our products comparatively more expensive. These exchange rate changes, along with general economic conditions in international markets, could negatively impact our sales. To maintain competitive pricing, we may need to offer discounts or reduce prices, leading to lower margins on international sales. Continued changes in the values of the Euro, the Mexican peso, and other foreign currencies could adversely affect our business, financial condition, and results of operations.
Previous wording
A significant portion of our revenues comes from sales to our distribution partner in China. Political tensions between the U.S. and China could disrupt or reduce our sales in the Chinese market, posing a substantial risk to our business.
Current wording
A significant portion of our revenues comes from sales to our distribution partner in China. Political tensions between the United States and China, including potential sanctions, export controls, tariff escalations, or retaliatory trade measures, could disrupt or reduce our sales in the Chinese market, posing a substantial risk to our business, financial condition, and results of operations.
Previous wording
In certain markets, tariff changes and related trade uncertainties contributed to extended lead times and rescheduled shipments, which affected the timing of revenue recognition for certain international orders.
Current wording
In certain markets, tariff changes and related trade uncertainties contributed to extended lead times, rescheduled shipments, and cancellation of orders from foreign vendors or end customers, which affected the total revenues and the timing of revenue recognition for certain international orders.
Previous wording
Our business strategy contemplates further growth, including scaling up our operational systems and entering new geographical markets, including those outside the United States. This growth strategy could place additional demands on our limited employee and executive staff, potentially diverting their focus from core business activities. Furthermore, managing growth may strain our operational, financial, and management information systems.
Current wording
Our business strategy contemplates growth in revenues, including scaling up our operational systems and entering new geographical markets, including those outside the United States. This growth strategy could place additional demands on our limited employee and executive staff, potentially diverting their focus from core business activities. Furthermore, managing growth may strain our operational, financial, and management information systems.
Previous wording
We rely on IP for the current products we sell and for the new products in research, development, and in clinical trials. While the Company tries to protect its IP with confidentiality agreements and internal policies, we still face risks that our IP will be stolen or otherwise misappropriated, by parties inside or outside of the United States. Further, we have filed many patents around the world on much of the research and development done by the Company, and the proposed products to come from this research. The majority of these filed patents are still under review and have not yet been allowed or issued. We may not be able to attain patent claims that adequately protect the company from competitors developing similar products or copying our products. Finally, there is a great number of issued patents owned by others that pertain to the product categories in which we operate. While we do not know of any patents with claims that we are violating by manufacturing or selling our current products, there is a risk that certain third-party patents will come to our attention that prohibit us from selling our products or that require us to pay royalty payments. Such third-party claims could have a material negative impact on the Company. Any of these IP-related risks could cause material damage to future revenues and to the long-term enterprise values of the Company.
Current wording
We rely on intellectual property for the current products we sell and for the new products in research, development, and in clinical trials. While we try to protect our intellectual property with confidentiality agreements and internal policies, we still face risks that our intellectual property will be stolen or otherwise misappropriated, by parties inside or outside of the United States. Further, we have filed many patents around the world on much of the research and development done by us, and the proposed products to come from this research. Some of these filed patents are still under review and have not yet been allowed or issued. Our existing patent claims, along with any future issued patent claims may prove to be inadequate to protect us from competitors developing similar products or copying our products. Finally, there are a great number of issued patents owned by others that pertain to the product categories in which we operate. While we do not know of any patents with claims that we are violating by manufacturing or selling our current products, there is a risk that certain third-party patents will come to our attention that prohibit us from selling our products or that require us to pay royalty payments. Such third-party claims could have a material negative impact on us. Any of these intellectual property-related risks could cause material damage to our future revenues and to the long-term value of our enterprise.
Previous wording
Although we currently generate revenue, our company is operating at a loss due to significant commercialization of newly developed products and from a slow launch in revenues from our new products and some investments in research and development and. To sustain and advance our business strategy, we must continue to raise additional funds to meet our capital and operating needs. This often involves seeking public or private debt or issuing equity. Raising funds through equity can dilute the interests of our existing stockholders.
Current wording
Although we currently generate revenue, our company is operating at a loss due to significant costs from the early stage commercialization of our newly developed products along with ongoing investments in research and development. To sustain and advance our business strategy, we must continue to raise additional funds to meet our capital and operating needs. This often involves seeking public or private debt or issuing equity. Raising funds through equity can dilute the interests of our existing stockholders.
Previous wording
The availability of capital, whether through debt or equity, is subject to fluctuations based on our financial condition and general market or industry conditions. There may be periods when private capital markets or public debt and equity markets lack liquidity, or when we are unable to sell our securities at favorable prices. In such scenarios, accessing capital on favorable terms may become challenging.
Current wording
The availability of capital, whether raised through debt or equity, is subject to fluctuations based on our financial condition and general market or industry conditions. There may be periods when private capital markets or public debt and equity markets lack liquidity, or when we are unable to sell our securities at favorable prices. In such scenarios, accessing capital on favorable terms will be challenging.
Previous wording
Failure to secure adequate funding could force us to delay, reduce, or even eliminate certain development programs or commercialization efforts. The costs associated with development projects and regulatory approvals can be unpredictable and may exceed our initial estimates. As our current operations are insufficient to cover these unexpected costs, this could adversely impact our ability to execute our business strategy and achieve our long-term goals.
Current wording
Failure to secure adequate funding could force us to delay, reduce, or even eliminate certain development programs or commercialization efforts. The costs associated with development projects and regulatory approvals can be unpredictable and may exceed our initial estimates. As our current operations are insufficient to cover these unexpected costs, this could adversely impact our ability to execute our business strategy and achieve our long-term goals, and could ultimately require us to curtail or cease operations.
Previous wording
The testing, manufacturing, and sale of our products are subject to regulation by numerous governmental authorities in the United States, principally the FDA, and corresponding state and foreign regulatory agencies. Our future performance depends on, among other matters, if, when, and at what cost we will receive regulatory approval for new products, and if we can continue to comply with the many regulatory requirements that enable us to manufacture and sell medical related products and tests. Regulatory review can be a lengthy, expensive, and uncertain process, making the timing and costs of clearances and approvals difficult to predict. Meeting all regulatory requirements, laws and mandates, and maintaining compliance with such in order to manufacture and sell medical products can be difficult and expensive. Our results of operations would be negatively affected by failures or delays in the receipt of regulatory approvals or clearances, the loss of previously received approvals or clearances, the placement of limits on the marketing and use of our products, and restrictions on our ability to manufacture our products.
Current wording
The testing, manufacturing, and sale of our products are subject to regulation by numerous governmental authorities in the United States, principally the FDA, and corresponding state and foreign regulatory agencies. Our future performance depends on, among other matters, if, when, and at what cost we will receive regulatory approval for certain new products, and if we can continue to comply with the many regulatory requirements that enable us to manufacture and sell medical related products and tests. Regulatory review can be a lengthy, expensive, and uncertain process, making the timing and costs of clearances and approvals difficult to predict. Meeting all regulatory requirements, laws and mandates, and maintaining compliance with such in order to manufacture and sell medical products can be difficult and expensive. Our results of operations and our viability would be negatively affected by failures or delays in the receipt of regulatory approvals or clearances, the loss of previously received approvals or clearances, the placement of limits on the marketing and use of our products, and restrictions on our ability to manufacture our products.
Previous wording
Changes in government policy could have a significant impact on our business by increasing the cost of doing business, affecting our ability to sell our products and negatively impacting our profitability. Such changes could include tariffs, embargos, trade wars, modifications to existing legislation, such as U.S. tax policy, or entirely new legislation, such as the Affordable Healthcare Act in the United States. We cannot predict the many ways that healthcare reform in the United States and internationally, and changing trade legislation and policies could adversely affect our business. It is unclear whether and to what extent, if at all, other anticipated developments, including changes due to new presidential administration priorities, or changes resulting from healthcare reform, such as a change in the number of people with health insurance, may impact us.
Current wording
Changes in government policy could have a significant impact on our business by increasing the cost of doing business, affecting our ability to sell our products and negatively impacting our profitability. Such changes could include tariffs, embargos, trade wars, modifications to existing legislation, such as United States tax policy, or entirely new legislation, such as the Affordable Care Act in the United States. We cannot predict the many ways that healthcare reform in the United States and internationally, and changing trade legislation and policies could adversely affect our business. It is unclear whether and to what extent, if at all, other anticipated developments, including changes due to new presidential administration priorities, or changes resulting from healthcare reform, such as a change in the number of people with health insurance, may impact us.
Previous wording
In addition to FDA and other regulations referred to above, numerous laws relating to such matters as safe working conditions, manufacturing practices, data privacy, environmental protection, fire hazard control, and disposal of hazardous or potentially hazardous substances impact our business operations. If these laws or their interpretation change or new laws regulating any of our businesses are adopted, the costs of compliance with these laws could substantially increase our overall costs. Failure to comply with any laws, including laws regulating the manufacture and marketing of our products, could result in substantial costs and loss of sales or customers. Because of the number and extent of the laws and regulations affecting our industry, and the number of governmental agencies whose actions could affect our operations, it is impossible to reliably predict the full nature and impact of future legislation or regulatory developments relating to our industry and our products. To the extent the costs and procedures associated with meeting new or changing requirements are substantial, our business, results of operations and financial condition could be adversely affected.
Current wording
In addition to FDA and other regulations referred to above, numerous laws relating to such matters as safe working conditions, manufacturing practices, data privacy, environmental protection, fire hazard control, and disposal of hazardous or potentially hazardous substances impact our business operations. If these laws or their interpretation change or new laws regulating any of our businesses are adopted, the costs of compliance with these laws could substantially increase our overall costs. Failure to comply with any new or existing laws, including laws regulating the manufacture and marketing of our products, could result in substantial costs and loss of sales or customers. Because of the number and extent of the laws and regulations affecting our industry, and the number of governmental agencies whose actions could affect our operations, it is impossible to reliably predict the full nature and impact of future legislation or regulatory developments relating to our industry and our products. To the extent the costs and procedures associated with meeting existing, new, or changing requirements are substantial, our business, results of operations and financial condition could be adversely affected.
Previous wording
The end-users of our products are physicians, labs, other healthcare providers and direct consumers. In the United States, healthcare providers such as hospitals and physicians who purchase diagnostic products generally rely on third-party payers, principally private health insurance plans, federal Medicare, and state Medicaid, to reimburse all or part of the cost of the procedure. The growth needed in the sales of our products would be adversely impacted if physicians and other healthcare providers do not receive adequate reimbursement for the cost of our products by their patients’ third-party payers both in the United States and in foreign markets. Our total revenue could also be adversely affected by changes or trends in reimbursement policies of governmental or private healthcare payers. We believe that the overall escalating cost of medical products and services has led to, and will continue to lead to, increased pressures on the healthcare industry, both foreign and domestic, to reduce the cost of products and services. Given the efforts to control and reduce healthcare costs in recent years, currently available levels of reimbursement may not continue to be available in the future for our existing products or products under development. Third-party reimbursement and coverage may not be available or adequate in either the United States or foreign markets, current reimbursement amounts may be decreased in the future and future legislation, regulation, or reimbursement policies of third-party payers may reduce the demand for our products or adversely impact our ability to sell our products on a profitable basis. Finally, we are in the process of applying for Government payer reimbursement for our inFoods IBS® product in the US market. If we are unsuccessful in attaining reimbursement for this product, we will likely fall well short of our future revenue projections.
Current wording
The end users of our products are physicians, labs, other healthcare providers and direct consumers. In the United States, healthcare providers, such as hospitals and physicians, that purchase diagnostic products generally rely on third-party payers, principally private health insurance plans, Medicare, and Medicaid, to reimburse all or part of the cost of the procedure. The growth needed in the sales of our products would be adversely impacted if physicians and other healthcare providers do not receive adequate reimbursement for the cost of our products by their patients’ third-party payers both in the United States and in foreign markets. Our total revenue could also be adversely affected by changes or trends in reimbursement policies of governmental or private healthcare payers. We believe that the overall escalating cost of medical products and services has led to, and will continue to lead to, increased pressures on the healthcare industry, both foreign and domestic, to reduce the cost of products and services. Given the efforts to control and reduce healthcare costs in recent years, currently available levels of reimbursement may not continue to be available in the future for our existing products or products under development. Third-party reimbursement and coverage may not be available or adequate in either the United States or foreign markets, current reimbursement amounts may be decreased in the future and future legislation, regulation, or reimbursement policies of third-party payers may reduce the demand for our products or adversely impact our ability to sell our products on a profitable basis. With respect to our inFoods® IBS product, the Centers for Medicare & Medicaid Services has established a national Medicare payment rate of $300 under the Clinical Laboratory Fee Schedule for claims with dates of service beginning January 1, 2026. Medicare payment rates under the Clinical Laboratory Fee Schedule are subject to future adjustment. Further, the establishment of a payment rate does not guarantee coverage, utilization, or payment. If we are unable to obtain or maintain adequate Medicare or other third-party payer coverage and reimbursement for, adoption and utilization of the inFoods® IBS product, future projected revenues from this product could be adversely affected, which would have a material adverse effect on our operations and our viability.
Previous wording
A claim of a defect in the design or manufacture of our products could have a material adverse effect on our reputation in the industry and subject us to claims of liability for injuries and otherwise. Further, a claim that one of our products is defective or does not actually meet the performance criteria we claim in our marketing materials, could require a product recall or otherwise have a substantial impact on our revenues and financial performance. Any substantial underinsured loss resulting from such a claim or defect would have a material adverse effect on our operating results and financial conditions and the damage to our reputation or product lines in the industry could have a material adverse effect on our business.
Current wording
A claim of a defect in the design or manufacture of our products could have a material adverse effect on our reputation in the industry and subject us to claims of liability for injuries and otherwise, which could result in substantial legal and settlement costs. Further, a claim that one of our products is defective or does not actually meet the performance criteria we claim in our marketing materials, could require a product recall or otherwise have a substantial impact on our revenues and financial performance. Any substantial underinsured cost or loss resulting from such a claim or defect would have a material adverse effect on our operating results and financial condition and the damage to our reputation or product lines in the industry could have a material adverse effect on our business.
Previous wording
We face a number of business risks, including exposure to product liability claims, employment law claims, claims that the Company or its officers, directors or employees have engaged in illegal or wrongful acts, claims of violation of environmental laws, and many other possible claims. Although we maintain insurance for a number of these risks, we may face claims for types of damages, or for amounts of damages, that are not covered by our insurance. For example, although we currently carry product liability insurance for liability losses, there is a risk that product liability or other claims may exceed the amount of our insurance coverage or may be excluded from coverage under the terms of our policy. Also, our existing insurance may not be renewed at the same cost and level of coverage as currently in effect or may not be renewed at all. Further, we do not currently have insurance against many environmental risks we confront in our business. If we are held liable for a claim against which we are not insured or for damages exceeding the limits of our insurance coverage, that claim could have a material adverse effect on our results of operations.
Current wording
We face a number of business risks, including exposure to product liability claims, employment law claims, claims that we or our officers, directors or employees have engaged in illegal or wrongful acts, claims of violation of environmental laws, and many other possible claims. Although we maintain insurance for a number of these risks, we may face claims for types of damages, or for amounts of damages, that are not covered by our insurance. For example, although we currently carry product liability insurance for liability losses, there is a risk that product liability or other claims may exceed the amount of our insurance coverage or may be excluded from coverage under the terms of our policy. Also, our existing insurance may not be renewed at the same cost and level of coverage as currently in effect or may not be renewed at all. Further, we do not currently have insurance against many environmental and other risks we confront in our business. If we are held liable for a claim against which we are not insured or for damages exceeding the limits of our insurance coverage, that claim could have a material adverse effect on our results of operations.
Previous wording
We rely on third-party contract research organizations (“CROs”), universities or/clinical sites collectively, (“Clinical Research Partners”), to coordinate, monitor and conduct of our clinical trials and to manage, analyze, and interpret data for our clinical programs. We, and our Clinical Research Partners, are required to comply with current Good Clinical Practices (“GCPs”), regulations, and guidelines issued by the FDA and by similar governmental authorities in other countries where we are conducting clinical trials. We have an ongoing obligation to monitor the activities conducted by our Clinical Research Partners and at our clinical sites to confirm compliance with these requirements. In the future, if we, our Clinical Research Partnersor our clinical sites fail to comply with applicable GCPs, the clinical data generated in our clinical trials may be deemed unreliable and the FDA may require us to perform additional clinical trials before approving our marketing applications. If our Clinical Research Partners do not successfully carry out their contractual duties or obligations or meet expected deadlines, if they need to be replaced, or if the quality or accuracy of the clinical data they obtain is compromised due to their failure to adhere to our clinical protocols, regulatory requirements or for other reasons, our clinical trials may be extended, delayed or terminated, and we may not be able to obtain regulatory approval for or successfully commercialize our product candidates. As a result, our financial results and the commercial prospects for our product candidates would be harmed, our costs could increase, and our ability to generate revenue could be delayed.
Current wording
We rely on third-party contract research organizations (“CROs”), universities or/clinical sites collectively, (“Clinical Research Partners”), to coordinate, monitor and conduct of our clinical trials and to manage, analyze, and interpret data for our clinical programs. We, and our Clinical Research Partners, are required to comply with current Good Clinical Practices (“GCPs”), regulations, and guidelines issued by the FDA and by similar governmental authorities in other countries where we are conducting clinical trials. We have an ongoing obligation to monitor the activities conducted by our Clinical Research Partners and at our clinical sites to confirm compliance with these requirements. In the future, if we, our Clinical Research Partners or our clinical sites fail to comply with applicable GCPs, the clinical data generated in our clinical trials may be deemed unreliable and the FDA may require us to perform additional clinical trials before approving our marketing applications. If our Clinical Research Partners do not successfully carry out their contractual duties or obligations or meet expected deadlines, if they need to be replaced, or if the quality or accuracy of the clinical data they obtain is compromised due to their failure to adhere to our clinical protocols, regulatory requirements or for other reasons, our clinical trials may be extended, delayed or terminated, and we may not be able to obtain regulatory approval for or successfully commercialize our product candidates. As a result, our financial results and the commercial prospects for our product candidates would be harmed, our costs could increase, and our ability to generate revenue could be delayed.
Previous wording
Despite our and our Clinical Research Partners’ implementation of security measures, information technology systems remain vulnerable to damage from various sources, including computer viruses, unauthorized access, telecommunications or network failures, malicious human acts, terrorism, and natural disasters. Moreover, despite network security and backup measures, some of our servers and those of our Clinical Research Partners may still be susceptible to physical or electronic break-ins, computer viruses, and similar disruptive issues. Cybersecurity risks are escalating and pose significant threats to our operations. Cyber-attacks could result in the loss of vital company documentation and data, or confidential third-party documents held by the company, essential for our operations.
Current wording
Despite our and our third party partners’ implementation of security measures, information technology systems remain vulnerable to damage from various sources, including computer viruses, unauthorized access, telecommunications or network failures, malicious human acts, terrorism, and natural disasters. Moreover, despite network security and backup measures, some of our servers and those of our third party partners may still be susceptible to physical or electronic break-ins, computer viruses, and similar disruptive issues. Cyber-attacks could result in the loss of vital company documentation and data, disclosure of confidential client and customer information or disclosure of other confidential third-party documents held by us, essential for our operations.
Previous wording
There is also a risk that our measures and those of our third-party vendors to protect our systems from cyber-attacks may not be sufficient to prevent attacks by new sources and methods.
Current wording
There is also a risk that our measures and those of our third-party vendors and partners to protect our systems from cyber-attacks may not be sufficient to prevent attacks by new sources and methods.
Previous wording
Future sales by the Company of a substantial number of shares of our common stock in the public market to raise needed capital, or the perception that such sales may occur, could adversely affect the then prevailing market price of our common stock and could make it more difficult for us to raise funds in the future through a public offering of our securities.
Current wording
Future sales by us of a substantial number of shares of our common stock in the public market to raise needed capital, or the perception that such sales may occur, could adversely affect the then prevailing market price of our common stock and could make it more difficult for us to raise funds in the future through a public offering of our securities.
Previous wording
On September 28, 2023, we filed a “shelf” registration statement on Form S-3 with the SEC, allowing the Company 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, as part of the registration statement filed on September 28, 2023, which was declared effective on September 29, 2023. This supplement was intended to facilitate the sale of up to $5,500,000 in common stock through an At The Market (ATM) offerings, as defined in Rule 415 under the Securities Act.
Current wording
On May 10, 2024, we filed a prospectus supplement to the Shelf Registration Statement 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 (the “2024 ATM Offering”). We have sold shares under the 2024 ATM Offering and may continue to do so the extent the applicable registration statement and prospectus supplement remain effective and available for use.
Previous wording
The issuance of additional shares of our common stock, or other securities, could dilute our existing stockholders’ ownership interests, potentially depress the market price of our common stock, and impair our ability to raise capital through future equity sales. The size and impact of future issuances on the market price of our common stock cannot be predicted.
Current wording
The issuance of additional shares of our common stock, or other securities, could dilute our existing stockholders’ ownership interests, potentially depress the market price of our common stock, and impair our ability to raise capital through future equity sales. In June 2026, our certificate of incorporation was amended to increase the number of authorized shares of common stock from 25,000,000 to 300,000,000, significantly increasing the number of shares that may be available for future issuance. The size and impact of future issuances on the market price of our common stock cannot be predicted. Future issuances could result in substantial dilution to existing stockholders.
Showing the first 40 of 42 pairs. Open the source sections for the rest.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
On September 28, 2023, we filed a “shelf” registration statement on Form S-3 with the SEC, (the “Shelf Registration Statement”), which was declared effective on September 29, 2023, to replace the expiring “shelf” registration statement on Form S-3 that was filed on July 21, 2020, as amended on September 20, 2020, allowing us to issue up to $20,000,000 in shares of our common stock from time to time.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
We face risks relating to our international sales, including economic, political, and regulatory challenges, which could impact our financial performance, disrupt our business operations, and hinder our growth strategy.