BIOMERICA INC
For the period ended Aug 31, 2026. Filed Oct 15, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Aug 31, 2026 · Filed Oct 15, 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 2026-02-28; filed 2026-04-13.
0001493152-26-016388
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-08-31; filed 2026-10-15.
0001493152-26-047271
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 75 previous paragraphs and 78 current paragraphs.
24 unchanged; 13 reworded; 41 added; 36 removed; 2 previous and 0 current paragraphs rearranged.
Tables are not compared: 7 previous and 5 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (41)
Current report
We invest resources in the research and development of new diagnostic products and technologies designed to address a range of medical conditions and unmet clinical needs. Our research and development activities include the development and optimization of immunoassays, enzyme-linked immunosorbent assays (“ELISAs”), rapid diagnostic tests, and related diagnostic technologies. These products are either internally developed or developed under contract for customers.
Current report
Our experienced and highly trained technical personnel, including Ph.D. level scientists and other scientific and technical professionals, are engaged in new product development, product improvement, contract development projects, and technology transfer activities. Many members of our technical staff have extensive experience in diagnostic product development and manufacturing, including prior experience at large diagnostic companies. We also utilize our Scientific Advisory Board, which includes physicians and clinicians with relevant areas of expertise, to provide scientific and clinical input regarding certain product development programs and clinical studies.
Current report
inFoods® IBS COMMERCIALIZATION AND REIMBURSEMENT
Current report
A key outcome from our research and development efforts is our patented diagnostic-guided therapy (“DGT”) product, developed on the inFoods® technology platform. Our commercially available inFoods® IBS product is intended to inform a physician-directed dietary intervention for patients with irritable bowel syndrome (“IBS”). The inFoods® IBS product utilizes a blood test to identify patient-specific foods associated with heightened immunoreactivity. Eliminating the identified foods from the diet may help reduce IBS symptoms such as pain, bloating, diarrhea, cramping, and constipation.
Current report
We continue the phased commercialization of inFoods® IBS through physician-directed and laboratory-based channels, focusing primarily on gastroenterology (“GI”) practices. We have also launched an AI-backed inFoods® IBS Trigger Food Navigator designed to help patients follow their personalized dietary plans through meal suggestions, ingredient substitutions and meal-planning tools.
Current report
Concurrently with the phased commercialization of inFoods® IBS, we are pursuing distribution, partnership, and licensing opportunities with U.S. companies to support broader commercialization of inFoods® IBS. We may also pursue additional commercial relationships domestically and internationally.
Current report
The CMS established a national Medicare payment rate of $300 for inFoods® IBS under the Clinical Laboratory Fee Schedule, applicable to approved claims for dates of service beginning January 1, 2026. The applicable Medicare Administrative Contractor confirmed that claims for inFoods® IBS may be considered on an individual, claim-by-claim basis. Our partner laboratory began submitting Medicare claims after May 31, 2026 under the applicable CPT® Proprietary Laboratory Analyses (“PLA”) code. As of October 15, 2026, all initial valid claims processed had been paid at the full CMS payment rate of $300. We continue to expand Medicare billing availability to physicians who currently use or have previously used inFoods® IBS on a cash-pay basis, which we believe may support increased test utilization over time.
Current report
As of October 15, 2026, 32 customer locations had been set up for Medicare ordering, compared to 25 as of August 31, 2026. Of these locations, 13 had placed Medicare-related orders, including nine locations that had placed multiple orders.
Current report
Following the quarter ended August 31, 2026, Medicare-related test orders increased to 22 in September 2026, compared to 10 in August 2026, representing a 120% increase and the highest monthly order volume recorded through September 2026. These metrics are used by management to monitor the progress of the Company's commercialization efforts. Although these initial results indicate increased ordering activity, future test volumes, reimbursement and revenue remain uncertain.
Current report
Claims are currently considered on an individual basis, and payment of any particular claim is not guaranteed. Establishment of a payment rate and payment of initial claims do not guarantee coverage, utilization, or payment of future claims. Revenue earned by Biomerica per test depends on the applicable commercial arrangements. As Medicare reimbursement progresses, we may pursue reimbursement with private payer insurance companies. We believe reduced out-of-pocket costs could support increased adoption and utilization of inFoods® IBS.
Current report
hp+detect™ AND ESTABLISHED DIAGNOSTIC PRODUCTS
Current report
CONTRACT DEVELOPMENT AND MANUFACTURING
Current report
We continue to pursue contract development and manufacturing (“CDM”) opportunities that leverage our existing manufacturing, quality and technical infrastructure and may provide incremental revenue without requiring significant additional fixed infrastructure.
Current report
In May 2026, we entered into a Master Services Agreement (“MSA”) with a life sciences company for the development of proprietary in vitro diagnostic assays. The MSA carries an initial contract development target fee of over $1,750,000, to be earned on a milestone completion basis across multiple Statements of Work issued under the MSA over an estimated period of 19 to 25 months. Development work will be performed at our FDA-registered, ISO 13485-certified facility in Irvine, California, utilizing existing personnel, equipment, and infrastructure. The engagement is expected to require minimal incremental costs, and we believe it may improve utilization of our existing manufacturing infrastructure and provide incremental revenue. As of the date of this report, development work under the MSA is progressing in accordance with the applicable Statements of Work.
Current report
Revenue is recognized as the applicable performance obligations are satisfied in accordance with the revenue recognition policies described in the accompanying financial statements. Contractual billing milestones may differ from the timing of revenue recognition.
Current report
OPERATIONS AND CAPITAL RESOURCES
Current report
We continue to manage operating expenses and allocate resources toward activities supporting commercialization, reimbursement, and revenue generation. See “Results of Operations” below for discussion of changes in revenue and operating expenses for the three months ended August 31, 2026 compared with the prior-year period.
Current report
On August 26, 2026, we completed a private placement of 1,393,705 shares of common stock at $1.60 per share, generating gross proceeds of approximately $2,231,000. We did not sell any shares under the 2024 ATM Offering during the three months ended August 31, 2026. We continue to evaluate financing and strategic opportunities to support our operations and business objectives. See “Liquidity, Capital Resources, and Going Concern” below for a discussion of our cash flows, financing activities, funding requirements, and substantial doubt about our ability to continue as a going concern.
Current report
The following is a breakdown of revenues according to markets to which the products are sold:
Current report
For the three months ended August 31, 2026, our net sales were approximately $1,265,000, representing a decrease of $115,000, or 8%, compared to $1,380,000 for the three months ended August 31, 2025. The decrease was primarily attributable to lower clinical laboratory sales, reflecting variability in the timing and periodic nature of customer orders and requested shipment dates. Sales to certain international customers were also affected by delivery difficulties and higher freight costs associated with the ongoing Russia–Ukraine conflict. These decreases were partially offset by higher OTC sales, primarily attributable to sales to a new customer.
Current report
Consolidated cost of sales for the three months ended August 31, 2026 was approximately $1,162,000, or 92% of net sales, compared to $956,000, or 69% of net sales, for the three months ended August 31, 2025, representing an increase of approximately $206,000, or 22%. The increase was primarily attributable to higher contract manufacturing costs associated with project activity and mix, higher OTC product costs associated with increased sales and product mix, and higher other direct costs reflecting production timing and inventory activity, partially offset by lower clinical laboratory product costs. Gross margin decreased compared with the prior-year period, reflecting these factors and lower overall net sales.
Current report
For the three months ended August 31, 2026, consolidated selling, general, and administrative expenses were approximately $1,124,000, compared to $1,330,000 for the three months ended August 31, 2025, representing a decrease of $206,000, or 15%. The decrease was primarily attributable to lower administrative outside-services expenses of approximately $110,000, reflecting the absence of professional service fees related to Employee Retention Credit (“ERC”) filings that were incurred in the same period of the prior year, and lower payroll related expenses across administrative and sales and marketing functions. Lower credit loss expense, share-based compensation expense, and regulatory fees also contributed to the decrease. These decreases were partially offset by an increase in legal expenses of approximately $52,000.
Current report
For the three months ended August 31, 2026, consolidated research and development (“R&D”) expenses were approximately $206,000, compared to $212,000 for the three months ended August 31, 2025, representing a decrease of $6,000, or 3%. The decrease was primarily attributable to a reduction of approximately $16,000 in personnel-related costs allocated to R&D as employees devoted more time to contract manufacturing projects. This decrease was partially offset by higher hp+detect™ expenses associated with inventory transferred for use in R&D activities.
Current report
For the three months ended August 31, 2026, dividend, interest and other income was approximately $1,000, compared to $1,123,000 for the three months ended August 31, 2025, representing a decrease of approximately $1,122,000. The decrease was primarily attributable to the absence of the $1,100,000 ERC benefit recognized in the same period of the prior year in connection with a refund received from the Internal Revenue Service (“IRS”) on July 21, 2025.
Current report
Provision for Income Taxes
Current report
For the three months ended August 31, 2026 and 2025, the provision for income taxes was approximately $6,000 and $3,000, respectively. The increase was primarily attributable to foreign income taxes. We continue to maintain a full valuation allowance against our net deferred tax assets.
Current report
LIQUIDITY, CAPITAL RESOURCES, AND GOING CONCERN
Current report
The following table presents selected liquidity measures:
Current report
We continue to use cash in operating activities and depend on external financing to support our operations. The increase in cash during the quarter primarily reflected proceeds from the Private Placement.
Current report
During fiscal 2026, we entered into an MSA for CDM services. The parties currently contemplate a multi-phase development program with initial target fees of approximately $1,750,000. Revenue and cash collections depend on performance under the applicable Statements of Work and related contractual terms.
Current report
On August 26, 2026, we completed a private placement with accredited investors, issuing 1,393,705 shares of common stock at $1.60 per share and generating gross proceeds of approximately $2,231,000 and net proceeds of approximately $2,120,000 after deducting approximately $111,000 of legal fees and other offering costs. These offering costs were accrued and unpaid as of August 31, 2026. The gross proceeds from the Private Placement are reflected in our August 31, 2026 cash balance.
Current report
Management believes the Private Placement, together with our other strategic initiatives, may support near-term liquidity; however, there can be no assurance that these efforts will be sufficient to meet our capital requirements. We expect the proceeds of the Private Placement to strengthen our balance sheet, fund operations, and support our Board of Directors’ ongoing evaluation of potential strategic opportunities, including partnerships and business combinations. There can be no assurance that any such strategic opportunity will be completed.
Current report
On September 24, 2026, subsequent to quarter-end, we filed a replacement shelf registration statement on Form S-3 registering up to $250,000,000 of common stock, preferred stock, debt securities and warrants, including unsold common stock carried forward from the Shelf Registration Statement pursuant to Rule 415(a)(6). The replacement shelf registration statement was declared effective by the SEC on October 7, 2026. The replacement shelf registration statement does not represent committed financing. Our ability to raise capital under it is subject to applicable Form S-3 eligibility requirements and offering limitations, including General Instruction I.B.6, and market conditions.
Current report
In addition, on May 29, 2026, we entered into a Securities Purchase Agreement to sell our investment in Diagnosis S.A. for an aggregate purchase price of $500,000 in a related-party transaction involving our Chief Executive Officer and other purchasers. Pending completion of the applicable share transfers and required procedures under Polish law, the purchasers advanced the $500,000 purchase price to us in exchange for a secured promissory term note to our Chief Executive Officer. The note bears interest at 8% per annum, matures twelve months from May 29, 2026, and is secured by our rights and interests in the Diagnosis S.A. shares. The arrangement is intended to facilitate the monetization of this non-core investment while the applicable share-transfer process is completed. The share transfer remains in process, subject to completion of the applicable procedures required under Polish law.
Current report
In connection with the Private Placement, we entered into a Registration Rights Agreement with the investors (the “RRA”), pursuant to which we agreed to file with the SEC a registration statement covering the resale of the shares issued in the Private Placement and to use commercially reasonable efforts to cause the registration statement to become effective and remain effective for the periods specified therein. On September 24, 2026, we filed a resale registration statement registering 1,403,705 shares of our common stock, consisting of 1,393,705 shares issued in the Private Placement and 10,000 shares issued pursuant to a consulting agreement. We will not receive any proceeds from sales of these shares by the selling stockholders.
Current report
During the three months ended August 31, 2026, net cash used in operating activities was approximately $802,000, primarily reflecting a net loss of $1,232,000, a $114,000 increase in accounts receivable, a $57,000 reduction in operating lease liabilities, and a $36,000 decrease in customer advances. These amounts were partially offset by net noncash adjustments of $191,000, a $216,000 increase in accounts payable and accrued expenses, a $60,000 increase in accrued compensation, and decreases of $97,000 in inventories, $71,000 in prepaid expenses and other current assets, and $2,000 in other assets. Net noncash adjustments included depreciation and amortization, provision for expected credit losses, share-based compensation, and amortization of operating lease right-of-use assets, partially offset by a $24,000 reversal of inventory reserves.
Current report
During the three months ended August 31, 2026 and 2025, there were no cash flows from investing activities.
Current report
During the three months ended August 31, 2026, net cash provided by financing activities was approximately $2,231,000, consisting of gross proceeds from the Private Placement. Offering-related costs of approximately $111,000 were accrued and unpaid as of August 31, 2026 and therefore did not reduce financing cash flows during the quarter. During the three months ended August 31, 2025, net cash provided by financing activities was approximately $920,000.
Current report
CRITICAL ACCOUNTING ESTIMATES
Current report
Our critical accounting estimates primarily relate to revenue recognition, inventory valuation and overhead allocation, expected credit losses on accounts receivable, and share-based compensation. Revenue recognition for certain development arrangements requires estimates of progress toward completion, including technical progress and remaining performance efforts. Inventory valuation requires judgments regarding manufacturing overhead allocation and reserves for excess and obsolete inventory based on production activity, anticipated customer demand, and inventory utilization. Expected credit losses involve estimates of customer collectibility, while share-based compensation involves assumptions regarding expected volatility, expected term, and other valuation inputs. Changes in these assumptions could materially affect our financial condition or results of operations.
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Removed paragraphs (36)
Previous report
We invest resources in the research and development of new products designed to diagnose and, in some cases, treat several major medical diseases. These products are either internally developed or licensed from others. Our experienced and highly trained technical personnel, including Ph.D. holders and other scientists, are dedicated to developing new products and managing technology transfer activities. Our technical staff, many of whom have extensive experience from previous employment at large diagnostic manufacturing companies, bring a wealth of industry knowledge. Additionally, we rely on our Scientific Advisory Board, comprised of leading medical doctors and clinicians, to guide our clinical studies and product development efforts.
Previous report
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 report
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 report
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 report
Concurrently, we are evaluating and working with distribution, partnership, and licensing opportunities with U.S. companies to support a scalable, broad market launch. One such distribution opportunity is the partnership previously announced with Henry Schein who is utilizing their sales force to introduce and sell the inFoods® IBS product to physicians in the U.S. Market. We expect these potential collaborations to significantly enhance the commercialization trajectory of inFoods® IBS products, both domestically and internationally.
Previous report
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 report
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 report
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 report
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 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.
Previous 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.
Previous 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.
Previous 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.
Previous report
Dividend, Interest, and Other Income (Loss)
Previous 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.
Previous report
Nine months ended February 28, 2026
Previous 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.
Previous 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.
Previous report
Operating Expenses
Previous report
Selling, General and Administrative
Previous 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.
Previous report
Research and Development
Previous 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.
Previous report
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 report
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 report
LIQUIDITY AND CAPITAL RESOURCES
Previous report
The following are the principal sources of liquidity:
Previous report
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 report
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 report
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 report
During the nine months ended February 28, 2026, cash used in investing activities was approximately $19,000, consisting of expenditures related to patents.
Previous report
During the nine months ended February 28, 2025, cash used in investing activities was approximately $37,000, consisting of expenditures related to patents.
Previous report
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 report
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 report
CRITICAL ACCOUNTING POLICIES
Previous report
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.
Reworded paragraphs (13)
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 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.
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 and under the section titled “Risk Factors” and elsewhere in our 2026 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, some of which are beyond our control and 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 patient health and well-being while reducing healthcare costs.
Current wording
We are a global biomedical technology company that develops, patents, manufactures, and markets advanced diagnostic and therapeutic products. Our diagnostic test kits are used to analyze blood, urine, nasal, or fecal material from patients to aid in the diagnosis of diseases, food intolerances, and other medical conditions. These tests detect and measure the presence and levels of specific bacteria, hormones, antibodies, antigens, and other substances that may exist in the human body at extremely low concentrations. Our products are designed to enhance patient outcomes and well-being while reducing total healthcare costs.
Previous wording
Our extensive range of medical diagnostic products is sold worldwide, primarily in two markets: clinical laboratories and point-of-care settings. Most of our products are 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.
Current wording
We sell our portfolio of diagnostic products worldwide, primarily to clinical laboratories and in point-of-care settings, including physicians’ offices and OTC channels. We also provide contract development and manufacturing services to third parties that utilize the technology underlying our products. In addition, we are commercializing our inFoods® IBS product through physician-directed and laboratory-based channels, including third-party reimbursement pathways. Most of our products carry Conformité Européenne (“CE”) marking and/or are registered with regulatory agencies in various countries for diagnostic use, with several also cleared by the U.S. Food and Drug Administration (“FDA”) for sale in the United States.
Previous wording
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.
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. We strive to develop and market diagnostic products that are accurate, utilize easily obtained patient specimens and, where appropriate, can be performed without complex instrumentation. Our rapid diagnostic test products for home use (over-the-counter) and professional use, including physicians’ offices and clinics, help manage existing medical conditions and support 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.
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. 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.
Current wording
In December 2023 we received FDA 510(k) clearance for hp+detect™, a diagnostic test designed to detect Helicobacter pylori (“H. pylori”) bacteria in the gastrointestinal tract. The hp+detect™ test is marketed directly to laboratories and is intended to provide physicians and medical centers with a tool for diagnosing H. pylori infections and monitoring treatment effectiveness. In February 2026, hp+detect™ received registration from the United Kingdom Medicines and Healthcare products Regulatory Agency (“MHRA”). During fiscal 2026, we received our first commercial order for hp+detect™ from a large European clinical laboratory chain for the United Kingdom market. We subsequently received several reorders from that customer**.** We continue to market hp+detect™ to laboratories in the United States and Europe and pursue opportunities for broader commercial adoption.
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 needs 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 products, including inFoods® IBS and hp+detect™.
Previous wording
Our ability to continue as a going concern over the next twelve months is influenced by several factors, including:
Current wording
Our ability to continue as a going concern within twelve months following the issuance date of these financial statements is influenced by several factors, including:
Previous wording
These factors raise substantial doubt about our ability to continue as a going concern. Our future viability depends on the successful execution of our strategic plans, securing additional near-term financing, and achieving profitable operations.
Current wording
These factors raise substantial doubt about our ability to continue as a going concern within twelve months following the issuance date of these financial statements. Our future viability depends on the successful execution of our strategic plans, securing additional near-term financing, and achieving profitable operations.
Previous 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.
Current wording
To address our capital needs and sustain operations through the next twelve months and beyond, 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. 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.
Previous wording
As part of our financing plan, on September 28, 2023, we filed the Shelf Registration Statement allowing us to issue up to $20,000,000 in shares of our common stock. On May 10, 2024, the Company filed a prospectus supplement to the Shelf Registration Statement on Form S-3. This prospectus supplement was intended to facilitate the sale of up to $5,500,000 in common stock through the 2024 ATM Offering. As part of this transaction, we incurred $81,000 in deferred offering costs during the year ended May 31, 2024.
Current wording
As part of our financing plan, on September 28, 2023, we filed the Shelf Registration Statement allowing us to issue up to $20,000,000 in shares of our common stock. On May 10, 2024, the Company filed a prospectus supplement to the Shelf Registration Statement on Form S-3. This prospectus supplement was intended to facilitate the sale of up to $5,500,000 in common stock through the 2024 ATM Offering. We did not sell any shares under the 2024 ATM Offering during the three months ended August 31, 2026.
Previous wording
We intend to use the net proceeds from the 2024 ATM Offering for general corporate purposes, including, but not limited to, sales and marketing activities, clinical studies and product development, acquisitions of assets, businesses, companies, or securities, capital expenditures, and working capital needs.
Current wording
We intend to use the net proceeds from any funds raised through the Private Placement and any future sales under the 2024 ATM Offering for general corporate purposes, including, but not limited to, sales and marketing activities, clinical studies and product development, acquisitions of assets, businesses, companies, or securities, capital expenditures, and working capital needs.
Previous wording
During the nine months ended February 28, 2025, cash used in operating activities 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.
Current wording
During the three months ended August 31, 2025, cash used in operating activities was approximately $268,000. The primary drivers of this cash outflow included an increase in accounts receivable of $512,000, a decrease in accrued compensation of $63,000, and a decrease in lease liability of $86,000. These were partially offset by a decrease in inventories of $10,000, a decrease in prepaid expenses of $87,000, and non-cash expenses of $280,000.
Previous wording
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make a number of estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Such estimates and assumptions may affect the reported amounts of revenues and expenses during the reporting period. We evaluate and base our estimates and assumptions on historical experience and various other factors and circumstances that we believe to be reasonable. Different assumptions or conditions may cause actual results to differ materially from these estimates. We continue to monitor significant estimates made during the preparation of our financial statements. We believe our estimates and assumptions are reasonable under the current conditions; however, actual results may differ from these estimates under different future conditions.
Current wording
The preparation of our consolidated financial statements in accordance with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses. We base our estimates on historical experience and other assumptions that we believe are reasonable under the circumstances. Actual results may differ materially from these estimates.
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Previous report — wording carried elsewhere
Net Sales and Cost of Sales
Previous report — wording carried elsewhere
The following is a summary of operating expenses: