Biomerica Inc 10-Q for FY2023 Q1

Biomerica Inc (BMRA)

10-Q 2022-10-13 For: 2022-08-31

Added on April 07, 2026

About this 10-Q

Biomerica Inc filed this 10-Q on October 13, 2022, covering the quarter ended August 31, 2022 (FY2023 Q1).

Headline figures

Quarter ended August 31, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $1.64M; up 29.8% from $1.26M a year earlier
Net loss: $2.07M; compared with a net loss of $1.54M a year earlier
Diluted EPS: -$0.16; compared with -$0.12 a year earlier

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PART I	Financial Information

Item 1.	Financial Statements:

	Condensed Consolidated Balance Sheets (unaudited) –August 31, 2022 and May 31, 2022	1

	Condensed Consolidated Statements of Operations and Comprehensive Loss (unaudited) – Three Months Ended August 31, 2022 and 2021	2

	Condensed Consolidated Statements of Shareholders’ Equity (unaudited) – Three Months Ended August 31, 2022 and 2021	3

	Condensed Consolidated Statements of Cash Flows (unaudited) – Three Months Ended August 31, 2022 and 2021	4

	Notes to Condensed Consolidated Financial Statements (unaudited)	5 - 13

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	13 - 16

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	17

Item 4.	Controls and Procedures	17

PART II	Other Information

Item 1.	Legal Proceedings	17

Item 1A.	Risks and Uncertainties	17

Item 5.	Other Information	17

Item 6.	Exhibits	18

	Signatures	19

	August 31, 2022		May 31, 2022
	August 31, 2022		May 31, 2022
Assets

Current Assets:
Cash and cash equivalents	$	6,075,037	$	5,916,983
Accounts receivable, less allowance for doubtful accounts of $383,106 and $153,231 as of August 31, 2022 and May 31, 2022, respectively		932,273		773,818
Inventories, net of inventory reserves of $981,814 and $845,549 as of August 31, 2022 and May 31, 2022, respectively		1,921,734		2,416,447
Prepaid expenses and other		238,762		320,283
Total current assets		9,167,806		9,427,531

Property and equipment, net of accumulated depreciation and amortization of $1,325,561 and $1,305,360 as of August 31, 2022 and May 31, 2022, respectively		227,908		214,487

Right of use assets, net of accumulated amortization of $791,859 and $724,802 as of August 31, 2022 and May 31, 2022, respectively		1,234,777		1,301,834

Investments		165,324		165,324

Intangible assets, net of accumulated amortization of $21,271 and $18,994 as of August 31, 2022 and May 31, 2022, respectively		160,750		169,516

Other assets		93,509		95,588
Total Assets	$	11,050,074	$	11,374,280

Liabilities and Shareholders' Equity

Current Liabilities:
Accounts payable and accrued expenses	$	671,240	$	972,372
Accrued compensation		591,948		646,944
Advance from customers		150,523		50,670
Lease liability, current portion		343,889		341,296
Total current liabilities		1,757,600		2,011,282
Lease liability, net of current portion		970,890		1,038,284
Total Liabilities		2,728,490		3,049,566

Commitments and contingencies (Notes 5 and 6)

Shareholders' Equity:

Common stock, $0.08 par value, 25,000,000 shares authorized, 13,406,901 and 12,867,924 issued and outstanding at August 31, 2022 and May 31, 2022, respectively		1,072,550		1,029,432
Additional paid-in-capital		44,484,752		42,446,597
Accumulated other comprehensive loss		(86,463)		(73,936)
Accumulated deficit		(37,149,255)		(35,077,379)
Total Shareholders' Equity		8,321,584		8,324,714
Total Liabilities and Shareholders' Equity	$	11,050,074	$	11,374,280

The accompanying notes are an integral part of these statements.

	Three Months Ended
	August 31, 2022		August 31, 2021
Net sales	$	1,637,435	$	1,261,787
Cost of sales		(1,692,390)		(1,350,757)
Gross loss		(54,955)		(88,970)

Operating expenses:
Selling, general and administrative		1,653,821		1,069,855
Research and development		361,171		381,544
Total operating expenses		2,014,992		1,451,399

Loss from operations		(2,069,947)		(1,540,369)

Other income:
Dividend and interest income		28		6,805
Interest expense		-		-
Total other income		28		6,805

Loss before income taxes		(2,069,919)		(1,533,564)

Provision for income taxes		(1,957)		(9,017)

Net loss	$	(2,071,876)	$	(1,542,581)

Basic net loss per common share	$	(0.16)	$	(0.12)

Diluted net loss per common share	$	(0.16)	$	(0.12)

Weighted average number of common and common equivalent shares:
Basic		13,100,407		12,426,784

Diluted		13,100,407		12,426,784

Net loss	$	(2,071,876)	$	(1,542,581)

Other comprehensive loss, net of tax:
Foreign currency translation		(12,527)		(5,613)

Comprehensive loss	$	(2,084,403)	$	(1,548,194)

The accompanying notes are an integral part of these statements.

For the Three Months Ended August 31, 2021

						Accumulated Other Comprehensive Loss
	Common Stock			Additional Paid-in Capital				Accumulated Deficit
	Shares	Amount		Additional Paid-in Capital				Accumulated Deficit		Total

Balances, May 31, 2021, restated	12,307,157	$	984,571	$	38,836,743	$	(47,956)	$	(30,546,335)	$	9,227,023
Exercise of stock options	1,500		120		3,775		-		-		3,895
Net proceeds from ATM	201,553		16,124		784,586		-		-		800,710
Foreign currency translation	-		-		-		(5,613)		-		(5,613)
Stock option expense	-		-		319,622		-		-		319,622
Net loss	-		-		-		-		(1,542,581)		(1,542,581)
Balances, August 31, 2021	12,510,210	$	1,000,815	$	39,944,726	$	(53,569)	$	(32,088,916)	$	8,803,056

For the Three Months Ended August 31, 2022

						Accumulated Other Comprehensive Loss
	Common Stock			Additional Paid-in Capital				Accumulated Deficit
	Shares	Amount		Additional Paid-in Capital				Accumulated Deficit		Total

Balances, May 31, 2022	12,867,924	$	1,029,432	$	42,446,597	$	(73,936)	$	(35,077,379)	$	8,324,714
Exercise of stock options	15,000		1,200		12,750		-		-		13,950
Net proceeds from ATM	523,977		41,918		1,721,650		-		-		1,763,568
Foreign currency translation	-		-		-		(12,527)		-		(12,527)
Stock option expense	-		-		303,755		-		-		303,755
Net loss	-		-		-		-		(2,071,876)		(2,071,876)
Balances, August 31, 2022	13,406,901	$	1,072,550	$	44,484,752	$	(86,463)	$	(37,149,255)	$	8,321,584

The accompanying notes are an integral part of these statements.

	August 31, 2022		May 31, 2022
Raw materials	$	1,732,000	$	1,717,000
Work in progress		723,000		763,000
Finished products		449,000		782,000
Total gross inventory	$	2,904,000	$	3,262,000
Inventory reserves		(982,000)		(846,000)
Net inventory	$	1,922,000	$	2,416,000

	Option Shares	Exercise Price Weighted Average
Outstanding May 31, 2022	2,321,616	$	3.72
Granted	146,000		3.37
Exercised	(15,000)		0.95
Cancelled or expired	(64,000)		4.78
Outstanding August 31, 2022	2,388,616	$	3.69

	Three Months Ended August 31,
	2022		2021
Clinical lab	$	1,146,000	$	886,000
Over-the-counter		213,000		79,000
Physician's office		183,000		257,000
Contract manufacturing		95,000		40,000
Total	$	1,637,000	$	1,262,000

Operating cash flows from operating leases	$	86,000
Right-of-use assets obtained in exchange for new operating lease liabilities	$	-
Weighted average remaining lease term (in years)		4.02
Weighted average discount rate		6.50%

Less than 1 year	$	354,000
1 to 2 years		364,000
2 to 3 years		375,000
3 to 4 years		387,000
4 to 5 years		8,000
Total undiscounted lease payments		1,488,000
Less imputed interest		173,000
Total operating lease liabilities	$	1,315,000

	Three Months Ended August 31,				Increase (Decrease)
	2022		2021		$		%
Clinical lab	$	1,146,000	$	886,000	$	260,000		29%
Over-the-counter		213,000		79,000		134,000		170%
Physician's office		183,000		257,000		(74,000)		-29%
Contract Manufacturing		95,000		40,000		55,000		138%
Total	$	1,637,000	$	1,262,000	$	375,000		30%

	Three Months Ended August 31,
	2023			2022			Increase (Decrease)
	Operating Expense		As a % of Total Revenues	Operating Expense		As a % of Total Revenues	$		%
Selling, General and Administrative Expenses	$	1,654,000	101%	$	1,070,000	85%	$	584,000	55%
Research and Development	$	361,000	22%	$	381,000	30%	$	(20,000)	-5%

Exhibit No.				Description

	3.1		*	Amended and Restated Bylaws of the Company

	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 104 Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibits 101) * Filed herein.

	BIOMERICA, INC.

Date: October 13, 2022
	By:	/S/ Zackary S. Irani
		Zackary S. Irani
		Chief Executive Officer
		(Principal Executive Officer)

Date: October 13, 2022
	By:	/S/ Steve Sloan
		Steve Sloan
		Chief Financial Officer
		(Principal Financial Officer)

	Three Months Ended August 31,
	2022		2021
Revenues from sales to unaffiliated customers:
Asia	$	814,000	$	675,000
Europe		552,000		471,000
North America		268,000		105,000
South America		3,000		3,000
Middle East		-		8,000
	$	1,637,000	$	1,262,000