Biomerica Inc 10-Q for FY2022 Q2

Biomerica Inc (BMRA)

10-Q 2022-01-12 For: 2021-11-30

Added on April 07, 2026

About this 10-Q

Biomerica Inc filed this 10-Q on January 12, 2022, covering the quarter ended November 30, 2021 (FY2022 Q2).

Headline figures

Quarter ended November 30, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $4.65M; up 238.6% from $1.37M a year earlier
Net loss: $1.13M; compared with a net loss of $1.72M a year earlier
Diluted EPS: -$0.09; compared with -$0.15 a year earlier

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(TITLE OF EACH CLASS)	(TICKER SYMBOL)	(NAME OF EACH EXCHANGE ON WHICH REGISTERED)
-----------------------------------	-----------------------------------	-------------------------------------------------------------------------------
Common, par value $.08	BMRA	NASDAQ Capital Market

Large Accelerated Filer [ ]		Accelerated Filer [ ]
Non-Accelerated Filer [X]		Smaller Reporting Company [X]
		Emerging Growth Company [ ]

BIOMERICA, INC.

INDEX

PART I	Financial Information

Item 1.	Financial Statements:

	Condensed Consolidated Balance Sheets (unaudited) – November 30, 2021 and May 31, 2021	1

	Condensed Consolidated Statements of Operations and Comprehensive Loss (unaudited) – Three and Six Months Ended November 30, 2021 and 2020 (restated)	2

	Condensed Consolidated Statements of Shareholders’ Equity (unaudited) – Six Months Ended November 30, 2021 and 2020 (restated)	3

	Condensed Consolidated Statements of Cash Flows (unaudited) – Six Months Ended November 30, 2021 and 2020 (restated)	4

	Notes to Condensed Consolidated Financial Statements (unaudited)	5 - 14

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	14 - 18

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	18

Item 4.	Controls and Procedures	18

PART II	Other Information

Item 1.	Legal Proceedings	18 - 19

Item 1A.	Risk and Uncertainties	19

Item 5.	Other Information	19

Item 6.	Exhibits	20

	Signatures	21

PART I - FINANCIAL INFORMATION SUMMARIZED FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS

BIOMERICA, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS

	November 30, 2021 (Unaudited)
			May 31, 2021
			May 31, 2021
Assets

Current Assets:
Cash and cash equivalents	$	7,199,172	$	4,199,311
Accounts receivable, less allowance for doubtful accounts of $27,777 and $837,415 as of November 30, 2021 and May 31, 2021, respectively		1,125,239		1,455,051
Inventories, net		2,982,201		3,206,255
Prepaid expenses and other		1,096,750		370,290
Total current assets		12,403,362		9,230,907

Property and equipment, net of accumulated depreciation and amortization of $2,026,764 and $1,972,357 as of November 30, 2021 and May 31, 2021, respectively		274,325		310,520

Right of use assets, net of accumulated amortization of $595,116 and $469,077 as of November 30, 2021 and May 31, 2021, respectively		1,427,042		1,553,081

Investments		165,324		165,324

Intangible assets, net of accumulated amortization of $91,030 and $126,769 as of November 30, 2021 and May 31, 2021, respectively		389,486		294,830

Other assets		149,581		264,151
Total Assets	$	14,809,120	$	11,818,813

Liabilities and Shareholders' Equity

Current Liabilities:
Accounts payable and accrued expenses	$	1,580,707	$	583,380
Accrued compensation		674,327		388,896
Advance from customers		2,150,466		-
Lease liability, current portion		335,385		327,944
Total current liabilities		4,740,885		1,300,220
Lease liability, net of current portion		1,166,808		1,291,570
Total Liabilities		5,907,693		2,591,790

Commitments and contingencies (Notes 1 and 6)

Shareholders' Equity:

Preferred stock, Series A 5% convertible, $0.08 par value, 571,429 shares authorized, none issued and outstanding as of November 30, 2021 and May 31, 2021		-		-
Preferred stock, undesignated, no par value, 4,428,571 shares authorized, none issued and outstanding as of November 30, 2021 and May 31, 2021		-		-
Common stock, $0.08 par value, 25,000,000 shares authorized, 12,692,327 and 12,307,157 issued and outstanding at November 30, 2021 and May 31, 2021, respectively		1,015,385		984,571
Additional paid-in-capital		41,158,551		38,836,743
Accumulated other comprehensive loss		(58,319)		(47,956)
Accumulated deficit		(33,214,190)		(30,546,335)
Total Shareholders' Equity		8,901,427		9,227,023
Total Liabilities and Shareholders' Equity	$	14,809,120	$	11,818,813

The accompanying notes are an integral part of these statements.

BIOMERICA, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED)
	Three Months Ended November 30,				Six Months Ended November 30,
	2021		2020 (As Restated)		2021		2020 (As Restated)
	2021		2020 (As Restated)		2021		2020 (As Restated)
Net sales	$	4,646,900	$	1,372,526	$	5,908,687	$	2,516,332
Cost of sales		(3,875,141)		(1,063,807)		(5,225,898)		(2,089,524)
Gross profit		771,759		308,719		682,789		426,808

Operating expenses:
Selling, general and administrative		1,282,998		1,404,846		2,294,533		2,710,790
Research and development		618,522		616,561		1,058,386		1,328,066
Total operating expense		1,901,520		2,021,407		3,352,919		4,038,856

Loss from operations		(1,129,761)		(1,712,688)		(2,670,130)		(3,612,048)

Other income:
Dividend and interest income		6,916		7,983		13,721		16,074

Loss before income taxes		(1,122,845)		(1,704,705)		(2,656,409)		(3,595,974)

Provision for income taxes		(2,429)		(13,393)		(11,446)		(14,518)

Net loss	$	(1,125,274)	$	(1,718,098)	$	(2,667,855)	$	(3,610,492)

Basic net loss per common share	$	(0.09)	$	(0.15)	$	(0.21)	$	(0.31)

Diluted net loss per common share	$	(0.09)	$	(0.15)	$	(0.21)	$	(0.31)

Weighted average number of common and common equivalent shares:
Basic		12,592,341		11,756,265		12,509,110		11,752,299

Diluted		12,592,341		11,756,265		12,509,110		11,752,299

Net loss	$	(1,125,274)	$	(1,718,098)	$	(2,667,855)	$	(3,610,492)

Other comprehensive loss, net of tax:
Foreign currency translation		(4,750)		(1,530)		(10,363)		(3,250)

Comprehensive loss	$	(1,130,024)	$	(1,719,628)	$	(2,678,218)	$	(3,613,742)

The accompanying notes are an integral part of these statements.

BIOMERICA, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited)

For the Six Months Ended November 30, 2020 (As Restated)

									Accumulated Other Comprehensive Loss
				Series A 5% Convertible Preferred Stock
	Common Stock			Series A 5% Convertible Preferred Stock			Additional Paid-in Capital				Accumulated Deficit
	Shares	Amount		Share	Amount		Additional Paid-in Capital				Accumulated Deficit		Total
Balances, May 31, 2020, restated	11,740,089	$	939,205	321,429	$	25,714	$	36,388,056	$	(39,841)	$	(23,100,081)	$	14,213,053

Exercise of stock options	30,000		2,400	-		-		46,930		-		-		49,330
Foreign currency translation	-		-	-		-		-		(3,250)		-		(3,250)
Compensation expense in connection with options granted	-		-	-		-		500,140		-		-		500,140
Net loss	-		-	-		-		-		-		(3,610,492)		(3,610,492)

Balances, November 30, 2020, restated	11,770,089	$	941,605	321,429	$	25,714	$	36,935,126	$	(43,091)	$	(26,710,573)	$	11,148,781

BIOMERICA, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

	Six Months Ended November 30,
	Six Months Ended November 30,
			2020 (As Restated)
	2021		2020 (As Restated)
Cash flows from operating activities:

Net loss	$	(2,667,855)	$	(3,610,492)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		68,668		64,435
Change in allowance on accounts receivable		(809,638)		410,161
Inventory reserve		181,825		11,943
Stock option expense		634,019		500,140
Amortization of right-of-use asset		126,039		115,025
Changes in assets and liabilities:
Accounts receivable		1,139,450		(256,059)
Inventories		42,229		(1,359,320)
Prepaid expenses and other		(726,460)		1,055,946
Reduction in lease liability		(117,321)		(102,677)
Other assets		114,570		(94,085)
Accounts payable and accrued expenses		997,327		271,386
Accrued compensation		285,431		113,379
Advance from customers		2,150,466		-
Net cash provided by (used in) operating activities		1,418,750		(2,880,218)

Cash flows from investing activities:
Increase in intangibles		(108,917)		(61,536)
Purchases of property and equipment		(18,212)		(61,566)
Net cash used in investing activities		(127,129)		(123,102)

Cash flows from financing activities:
Proceeds from sale of common stock, net		1,684,123		-
Proceeds from exercise of stock options		34,480		49,330
Net cash provided by financing activities		1,718,603		49,330

Effect of exchange rate changes in cash		(10,363)		(3,250)
Net increase (decrease) in cash and cash equivalents		2,999,861		(2,957,240)

Cash and cash equivalents at beginning of period		4,199,311		8,641,027

Cash and cash equivalents at end of period	$	7,199,172	$	5,683,787

Supplemental Disclosure of Cash-Flow Information:
Cash paid during the period for:
Income taxes	$	10,646	$	11,735

The accompanying notes are an integral part of these statements

	November 30, 2021		May 31, 2021
Raw materials	$	1,416,000	$	1,583,000
Work in progress		708,000		1,006,000
Finished products		858,000		617,000
Total	$	2,982,000	$	3,206,000

	Option Shares	Exercise Price Weighted Average
Outstanding May 31, 2021	2,081,366	$	3.59
Granted	24,000		4.25
Exercised	(21,500)		1.64
Cancelled or expired	(24,750)		3.24
Outstanding November 30, 2021	2,059,116	$	3.62

Operating cash flows from operating leases	$	166,216
Right-of-use assets obtained in exchange for
new operating lease liabilities	$	-
Weighted average remaining lease term (in years)		4.77
Weighted average discount rate		6.50%

Less than 1 year	$	345,000
1 to 2 years		355,000
2 to 3 years		366,000
3 to 4 years		377,000
4 to 5 years		298,000
Total undiscounted lease payments		1,741,000
Less imputed interest		239,000
Total operating lease liabilities	$	1,502,000

	As Previously Reported		Adjustments		As Restated
Cost of sales	$	1,011,030	$	52,777	$	1,063,807
Gross Profit		361,496		(52,777)		308,719

Operating Expenses:
Selling, general and administrative		1,254,847		149,999		1,404,846
Research and development		586,403		30,158		616,561
Total operating expense		1,841,250		180,157		2,021,407

Loss from operations		(1,479,754)		(232,934)		(1,712,688)

Loss before income taxes		(1,471,771)		(232,934)		(1,704,705)

Net loss	$	(1,485,164)	$	(232,934)	$	(1,718,098)

Basic net loss per common share	$	(0.13)	$	(0.02)	$	(0.15)

Diluted net loss per common share	$	(0.13)	$	(0.02)	$	(0.15)

	Three Months Ended November 30,				Increase (Decrease)
	2021		2020		$		%
Physician's office	$	3,359,000	$	153,000	$	3,206,000		2095%
Clinical lab		642,000		893,000		(251,000)		-28%
Over-the-counter		534,000		272,000		262,000		96%
Contract manufacturing		112,000		55,000		57,000		104%
Total	$	4,647,000	$	1,373,000	$	3,274,000		238%

		Three Months Ended November 30,
		Three Months Ended November 30,
	2021			2020			Increase (Decrease)
	Operating Expense		As a % of Total Revenues	Operating Expense		As a % of Total Revenues	$		%
Selling, General and Administrative Expenses	$	1,282,998	28%	$	1,404,846	102%	$	(121,848)	-9%
Research and Development	$	618,522	13%	$	616,561	45%	$	1,961	0%

	November 30, 2021		May 31, 2021
	November 30, 2021		May 31, 2021
Cash and cash equivalents	$	7,199,172	$	4,199,311
Working capital including cash and cash equivalents	$	7,662,477	$	7,930,687

	Three Months Ended November 30,				Six Months Ended November 30,
	2021		2020		2021		2020
Revenues from sales to unaffiliated customers:
Asia	$	3,373,000	$	550,000	$	4,048,000	$	897,000
Europe		796,000		580,000		1,267,000		1,171,000
North America		429,000		107,000		534,000		241,000
Middle East		46,000		96,000		54,000		125,000
South America		3,000		40,000		6,000		82,000
	$	4,647,000	$	1,373,000	$	5,909,000	$	2,516,000

	Six Months Ended November 30,				Increase (Decrease)
	2021		2020		$		%
Physician's office	$	3,616,000	$	351,000	$	3,265,000		930%
Clinical lab		1,528,000		1,475,000		53,000		4%
Over-the-counter		613,000		457,000		156,000		34%
Contract manufacturing		152,000		233,000		(81,000)		-35%
Total	$	5,909,000	$	2,516,000	$	3,393,000		135%


Exhibit No.				Description

	31.1		*	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act — Zackary S. Irani

	31.2		*	Certification Pursuant to Section 302 of the Sarbanes-Oxley Act — Steve Sloan

	32.1		*	Certification Pursuant to Section 906 of the Sarbanes-Oxley Act — Zackary S. Irani

	32.2		*	Certification Pursuant to Section 906 of the Sarbanes-Oxley Act — Steve Sloan


		101 Interactive data files pursuant to Rule 405 Regulation S-T, as follows:
101.INS-XBRL Instance Document
101.SCH-XBRL Taxonomy Extension Schema Document 101.CAL-XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF–XBRL Taxonomy Extension Definition Linkbase Document 101.LAB-XBRL Taxonomy Extension Label Linkbase Document 101.PRE-XBRL Taxonomy Extension Presentation Linkbase Document

	BIOMERICA, INC.

Date: January 12, 2022
	By:	/S/ Zackary S. Irani
		Zackary S. Irani
		Chief Executive Officer
		(Principal Executive Officer)

Date: January 12, 2022
	By:	/S/ Steve Sloan
		Steve Sloan
		Chief Financial Officer
		(Principal Financial Officer)