Biomerica Inc 10-Q for FY2022 Q3

Biomerica Inc (BMRA)

10-Q 2022-04-14 For: 2022-02-28

Added on April 07, 2026

About this 10-Q

Biomerica Inc filed this 10-Q on April 14, 2022, covering the quarter ended February 28, 2022 (FY2022 Q3).

Headline figures

Quarter ended February 28, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $7.66M; up 111.1% from $3.63M a year earlier
Net loss: $104.17K; compared with a net loss of $2.12M a year earlier
Diluted EPS: -$0.01; compared with -$0.18 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 [ ]

PART I	Financial Information

Item 1.	Financial Statements:

	Condensed Consolidated Balance Sheets (unaudited) – February 28, 2022 and May 31, 2021	1

	Condensed Consolidated Statements of Operations and Comprehensive Loss (unaudited) – Three and Nine Months Ended February 28, 2022 and 2021 (restated)	2

	Condensed Consolidated Statements of Shareholders’ Equity (unaudited) – Nine Months Ended February 28, 2022 and 2021 (restated)	3

	Condensed Consolidated Statements of Cash Flows (unaudited) – Nine Months Ended February 28, 2022 and 2021 (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

Item 1A.	Risk and Uncertainties	19

Item 5.	Other Information	19

Item 6.	Exhibits	20

	Signatures	21

BIOMERICA, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS
	February 28, 2022 (Unaudited)
			May 31, 2021
			May 31, 2021
Assets

Current Assets:
Cash and cash equivalents	$	10,173,808	$	4,199,311
Accounts receivable, less allowance for doubtful accounts of $20,293 and $837,415 as of February 28, 2022 and May 31, 2021, respectively		1,158,738		1,455,051
Inventories, net		3,231,430		3,206,255
Prepaid expenses and other		667,129		370,290
Total current assets		15,231,105		9,230,907

Property and equipment, net of accumulated depreciation and amortization of $2,046,612 and $1,972,357 as of February 28, 2022 and May 31, 2021, respectively		263,048		310,520

Right of use assets, net of accumulated amortization of $658,773 and $469,077 as of February 28, 2022 and May 31, 2021, respectively		1,367,863		1,553,081

Investments		165,324		165,324

Intangible assets, net of accumulated amortization of $49,253 and $126,769 as of February 28, 2022 and May 31, 2021, respectively		386,013		294,830

Other assets		146,980		264,151
Total Assets	$	17,560,333	$	11,818,813

Liabilities and Shareholders' Equity

Current Liabilities:
Accounts payable and accrued expenses	$	2,608,840	$	583,380
Accrued compensation		537,284		388,896
Advances from customers		3,213,052		-
Lease liability, current portion		338,744		327,944
Total current liabilities		6,697,920		1,300,220
Lease liability, net of current portion		1,104,611		1,291,570
Total Liabilities		7,802,531		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 February 28, 2022 and May 31, 2021		-		-
Preferred stock, undesignated, no par value, 4,428,571 shares authorized, none issued and outstanding as of February 28, 2022 and May 31, 2021		-		-
Common stock, $0.08 par value, 25,000,000 shares authorized, 12,851,924 and 12,307,157 issued and outstanding at February 28, 2022 and May 31, 2021, respectively		1,028,152		984,571
Additional paid-in-capital		42,108,865		38,836,743
Accumulated other comprehensive loss		(60,857)		(47,956)
Accumulated deficit		(33,318,358)		(30,546,335)
Total Shareholders' Equity		9,757,802		9,227,023
Total Liabilities and Shareholders' Equity	$	17,560,333	$	11,818,813

BIOMERICA, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED)
	Three Months Ended February 28,				Nine Months Ended February 28,
	Three Months Ended February 28,				Nine Months Ended February 28,
	2022		2021 (As Restated)		2022		2021 (As Restated)
Net sales	$	7,660,501	$	3,628,638	$	13,569,188	$	6,144,970
Cost of sales		(5,987,277)		(3,702,069)		(11,213,175)		(5,791,593)
Gross profit (loss)		1,673,224		(73,431)		2,356,013		353,377

Operating expenses:
Selling, general and administrative		1,323,725		1,527,947		3,618,258		4,238,737
Research and development		456,998		563,967		1,515,384		1,892,033
Total operating expense		1,780,723		2,091,914		5,133,642		6,130,770

Loss from operations		(107,499)		(2,165,345)		(2,777,629)		(5,777,393)

Other income:
Dividend and interest income		6,019		37,687		19,740		53,761

Loss before income taxes		(101,480)		(2,127,658)		(2,757,889)		(5,723,632)

(Provision) benefit for income taxes		(2,688)		3,117		(14,134)		(11,401)

Net loss	$	(104,168)	$	(2,124,541)	$	(2,772,023)	$	(5,735,033)

Basic net loss per common share	$	(0.01)	$	(0.18)	$	(0.22)	$	(0.49)

Diluted net loss per common share	$	(0.01)	$	(0.18)	$	(0.22)	$	(0.49)

Weighted average number of common and common equivalent shares:
Basic		12,820,481		11,905,492		12,611,760		11,802,803

Diluted		12,820,481		11,905,492		12,611,760		11,802,803

Net loss	$	(104,168)	$	(2,124,541)	$	(2,772,023)	$	(5,735,033)

Other comprehensive loss, net of tax:
Foreign currency translation		(2,538)		(5,437)		(12,901)		(8,687)
Comprehensive loss	$	(106,706)	$	(2,129,978)	$	(2,784,924)	$	(5,743,720)

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

For the Nine Months Ended February 28, 2021 (As Restated)

	Common Stock			Series A 5% Convertible Preferred Stock			Additional		Accumulated Other Comprehensive		Accumulated
	Shares	Amount		Shares		Amount	Paid-in Capital		Loss		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	81,750		6,540	-		-		89,915		-		-		96,455
Net proceeds from ATM	158,889		12,711	-		-		998,764		-		-		1,011,475
Foreign currency translation	-		-	-		-		-		(8,687)		-		(8,687)
Conversion of preferred to common stock	321,429		25,714	(321,429)		(25,714)		-		-		-		-
Compensation expense in connection with options granted	-		-	-		-		1,022,320		-		-		1,022,320
Net loss	-		-	-		-		-		-		(5,735,033)		(5,735,033)

Balances, February 28, 2021, restated	12,302,157	$	984,170	-	$	-	$	38,499,055	$	(48,528)	$	(28,835,114)	$	10,599,583

For the Nine Months Ended February 28, 2022

	Common Stock			Series A 5% Convertible Preferred Stock			Additional		Accumulated Other Comprehensive		Accumulated
	Shares	Amount		Shares		Amount	Paid-in Capital		Loss		Deficit		Total
Balances, May 31, 2021	12,307,157	$	984,571	-	$	-	$	38,836,743	$	(47,956)	$	(30,546,335)	$	9,227,023

Exercise of stock options	23,500		1,880	-		-		37,295		-		-		39,175
Net proceeds from ATM	521,267		41,701	-		-		2,275,459		-		-		2,317,160
Foreign currency translation	-		-	-		-		-		(12,901)		-		(12,901)
Compensation expense in connection with options granted	-		-	-		-		959,368		-		-		959,368
Net loss	-		-	-		-		-		-		(2,772,023)		(2,772,023)

Balances, February 28, 2022	12,851,924	$	1,028,152	-	$	-	$	42,108,865	$	(60,857)	$	(33,318,358)	$	9,757,802

	February 28, 2022		May 31, 2021
Raw materials	$	1,360,000	$	1,583,000
Work in progress		714,000		1,006,000
Finished products		1,157,000		617,000
Total	$	3,231,000	$	3,206,000

	Option Shares	Exercise Price Weighted Average
Outstanding May 31, 2021	2,081,366	$	3.59
Granted	307,000		4.44
Exercised	(23,500)		1.71
Cancelled or expired	(28,750)		3.49
Outstanding February 28, 2022	2,336,116	$	3.72

	Three Months Ended February 28,				Nine Months Ended February 28,
	2022		2021		2022		2021
Physician's office	$	6,518,000	$	2,384,000	$	10,134,000	$	2,735,000
Clinical lab		731,000		967,000		2,259,000		2,441,000
Over-the-counter		244,000		148,000		857,000		605,000
Contract manufacturing		167,000		130,000		319,000		364,000
Total	$	7,660,000	$	3,629,000	$	13,569,000	$	6,145,000

Operating cash flows from operating leases	$	252,252
Right-of-use assets obtained in exchange for new operating lease liabilities	$	-
Weighted average remaining lease term (in years)		4.53
Weighted average discount rate		6.50	%

Less than 1 year	$	349,000
1 to 2 years		359,000
2 to 3 years		370,000
3 to 4 years		381,000
4 to 5 years		201,000
Total undiscounted lease payments		1,660,000
Less imputed interest		217,000
Total operating lease liabilities	$	1,443,000

	As Previously Reported		Adjustments		As Restated
Cost of sales	$	3,667,143	$	34,926	$	3,702,069
Gross Profit		(38,505)		(34,926)		(73,431)

Operating Expenses:
Selling, general and administrative		1,278,393		249,554		1,527,947
Research and development		563,216		751		563,967
Total operating expense		1,841,609		250,305		2,091,914

Loss from operations		(1,880,114)		(285,231)		(2,165,345)

Loss before income taxes		(1,842,427)		(285,231)		(2,127,658)

Net loss	$	(1,839,310)	$	(285,231)	$	(2,124,541)

Basic net loss per common share	$	(0.15)	$	(0.03)	$	(0.18)

Diluted net loss per common share	$	(0.15)	$	(0.03)	$	(0.18)

Comprehensive loss	$	(1,844,747)	$	(285,231)	$	(2,129,978)

	Three Months Ended February 28,,				Increase (Decrease)
	2022		2021		$		%
Physician's office	$	6,518,000	$	2,384,000	$	4,134,000		173%
Clinical lab		731,000		967,000		(236,000)		-24%
Over-the-counter		244,000		148,000		96,000		65%
Contract manufacturing		167,000		130,000		37,000		28%
Total	$	7,660,000	$	3,629,000	$	4,031,000		111%


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: April 14, 2022
	By:	/S/ Zackary S. Irani
		Zackary S. Irani
		Chief Executive Officer
		(Principal Executive Officer)

Date: April 14, 2022
	By:	/S/ Steve Sloan
		Steve Sloan
		Chief Financial Officer
		(Principal Financial Officer)

	Three Months Ended February 28,				Nine Months Ended February 28,
	2022		2021		2022		2021
Revenues from sales to unaffiliated customers:
Asia	$	4,877,000	$	756,000	$	8,925,000	$	1,653,000
Europe		2,416,000		2,611,000		3,683,000		3,781,000
North America		286,000		133,000		820,000		374,000
South America		81,000		64,000		87,000		146,000
Middle East		-		65,000		54,000		191,000
	$	7,660,000	$	3,629,000	$	13,569,000	$	6,145,000