bmra_Q2_2015

0001513162-15-000021.txt : 20150114 0001513162-15-000021.hdr.sgml : 20150114 20150114161254 ACCESSION NUMBER: 0001513162-15-000021 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 11 CONFORMED PERIOD OF REPORT: 20141130 FILED AS OF DATE: 20150114 DATE AS OF CHANGE: 20150114 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BIOMERICA INC CENTRAL INDEX KEY: 0000073290 STANDARD INDUSTRIAL CLASSIFICATION: DENTAL EQUIPMENT & SUPPLIES [3843] IRS NUMBER: 952645573 STATE OF INCORPORATION: DE FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-08765 FILM NUMBER: 15527357 BUSINESS ADDRESS: STREET 1: 17571 VON KARMAN AVENUE CITY: IRVINE STATE: CA ZIP: 92614 BUSINESS PHONE: 9496452111 MAIL ADDRESS: STREET 1: 17571 VON KARMAN AVENUE CITY: IRVINE STATE: CA ZIP: 92614 FORMER COMPANY: FORMER CONFORMED NAME: NMS PHARMACEUTICALS INC DATE OF NAME CHANGE: 19871130 FORMER COMPANY: FORMER CONFORMED NAME: NUCLEAR MEDICAL SYSTEMS INC DATE OF NAME CHANGE: 19830216 FORMER COMPANY: FORMER CONFORMED NAME: NUCLEAR INSTRUMENTS INC DATE OF NAME CHANGE: 19720508 10-Q 1 biomerica10q2_2014.htm FORM 10-Q bmra_Q2_2015

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED NOVEMBER 30, 2014

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 0-8765

BIOMERICA, INC.

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(Exact name of registrant as specified in its charter)

Delaware 95-2645573

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(State or other jurisdiction of (I.R.S. Employer

incorporation or organization) Identification No.)

17571 Von Karman Avenue, Irvine, CA 92614

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(Address of principal executive offices) (Zip Code)

Registrant's telephone number including area code: (949) 645-2111

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(Former name, former address and former fiscal year, if changed since last report.)

(TITLE OF EACH CLASS) (NAME OF EACH EXCHANGE ON WHICH REGISTERED)

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Common, par value $.08 OTC-BULLETIN BOARD

Securities registered pursuant to Section 12(g) of the Act:

(TITLE OF EACH CLASS)

COMMON STOCK, PAR VALUE $0.08

Indicate by check whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes [X] No [_]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Date File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (paragraph 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes [X] No [_]

Indicate by check mark whether the registrant is a large accelerated, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of "large accelerated filer", "accelerated filer", and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer [_] Accelerated Filer [_]

Non-Accelerated Filer [_] Smaller Reporting Company [X]

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Act).

Yes [_] No [X]

Indicate the number of shares outstanding of each of the registrant's common stock, as of the latest practicable date: 7,553,464 shares of common stock, par value $0.08, as of January 14, 2015.

BIOMERICA, INC.

INDEX

PART I	Financial Information

Item 1.	Financial Statements:

	Condensed Consolidated Statements of Operations and Comprehensive Loss (unaudited)– Three and Six Months Ended November 30, 2014 and 2013	1

	Condensed Consolidated Balance Sheets (unaudited)- November 30, 2014 and (audited) May 31, 2014	2

	Condensed Consolidated Statements of Cash Flows (unaudited) - Six Months Ended November 30, 2014 and 2013	3

	Notes to Condensed Consolidated Financial Statements (unaudited).	4-10

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	10-12

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	12

Item 4.	Controls and Procedures	12

PART II	Other Information

Item 1.	Legal Proceedings	13

Item 1A.	Risk Factors	13

Item 2.	Unregistered Sales of Equity Securities & Use of Proceeds	13

Item 3.	Defaults upon Senior Securities	13

Item 4.	Mine Safety Disclosures	13

Item 5.	Other Information	13

Item 6.	Exhibits	15

	Signatures	16

PART I - FINANCIAL INFORMATION

SUMMARIZED FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

BIOMERICA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE LOSS (UNAUDITED)

	Six Months Ended November 30,				Three Months Ended November 30,
	Six Months Ended November 30,				Three Months Ended November 30,
	2014		2013		2014		2013
Net Sales	$	2,168,050	$	1,948,580	$	1,133,600	$	934,841
Cost of Sales		(1,550,896)		(1,432,645)		(826,357)		(679,197)
Gross Profit		617,154		515,935		307,243		255,644

Operating Expense:
Selling, general and administrative		713,336		709,160		375,020		366,357
Research and development		377,794		228,046		182,088		136,789
Total operating expenses		1,091,130		937,206		557,108		503,146
Loss from operations		(473,976)		(421,271)		(249,865)		(247,502)

Other Income (Expense):
Dividend and interest income		16,697		10,199		11,837		4,145
Interest expense		(17)		-		-		-
Total other income		16,680		10,199		11,837		4,145
Loss before income tax		(457,296)		(411,072)		(238,028)		(243,357)

Provision for income taxes		-		-		-		-
Net loss	$	(457,296)	$	(411,072)	$	(238,028)	$	(243,357)
Basic net loss per common share	$	(0.06)	$	(0.06)	$	(0.03)	$	(0.03)
Diluted net loss per common share	$	(0.06)	$	(0.06)	$	(0.03)	$	(0.03)

Weighted average number of common and common equivalent shares:
Basic		7,549,894		7,277,659		7,551,972		7,278,967
Diluted		7,549,894		7,277,659		7,551,972		7,278,967

Net loss	$	(457,296)	$	(411,072)	$	(238,028)	$	(243,357)

Other comprehensive loss, net of tax:
Foreign currency translation		(1,678)		(14)		(744)		77
Comprehensive loss	$	(458,974)	$	(411,086)	$	(238,772)	$	(243,280)

The accompanying notes are an integral part of these statements.

BIOMERICA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
	November 30, 2014 (unaudited)		May 31, 2014 (audited)


Assets

Currents Assets:
Cash and cash equivalents	$	1,674,048	$	1,509,125
Accounts receivable, less allowance for doubtful accounts of $13,341 and $30,000 as of November 30, 2014 and May 31, 2014, respectively		563,910		1,447,705
Inventories, net		1,989,950		1,765,772
Prepaid expenses and other		151,638		103,572
Deferred tax assets, current portion		87,000		87,000
Total current assets		4,466,546		4,913,174

Property and Equipment, net of accumulated depreciation and amortization of $1,249,785 and $1,160,934 as of November 30, 2014 and May 31, 2014, respectively		532,240		614,337
Deferred Tax Assets, net of current portion		359,000		359,000
Investments		165,324		165,324
Intangible Assets, net		359,657		382,181
Other Assets		45,018		36,297
Total Assets	$	5,927,785	$	6,470,313

Liabilities and Shareholders' Equity

Current Liabilities:
Accounts payable and accrued expenses	$	344,337	$	441,681
Accrued compensation		122,654		114,163
Total current liabilities		466,991		555,844

Commitments and Contingencies (Note 5)		-		-

Shareholders' Equity:

Preferred stock, no par value authorized 5,000,000 shares, none issued and none outstanding at November 30, 2014 and May 31, 2014		-		-
Common stock, $0.08 par value authorized 25,000,000 shares, issued and outstanding 7,552,714 and 7,543,714 at November 30 and May 31, 2014, respectively		604,216		603,496
Additional paid-in-capital		18,313,733		18,309,154
Accumulated other comprehensive loss		(11,827)		(10,149)
Accumulated deficit		(13,445,328)		(12,988,032)
Total Shareholders' Equity		5,460,794		5,914,469
Total Liabilities and Shareholders' Equity	$	5,927,785	$	6,470,313

The accompanying notes are an integral part of these statements.

BIOMERICA,INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
	Six Months Ended November 30,
	Six Months Ended November 30,
	2014		2013
Cash flows from operating activities:
Net loss	$	(457,296)	$	(411,072)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities
Depreciation and amortization		126,176		97,352
Stock option expense		1,804		881
Change in provision for losses on accounts receivable		(16,659)		4,675
Inventory reserve		7,423		(6,713)
Gain on disposal of equipment		(665)		-
Decrease in deferred rent liability		(9,262)		(6,418)
Changes in assets and liabilities:
Accounts receivable		900,454		45,414
Inventories		(231,601)		(321,700)
Prepaid expenses and other assets		(56,787)		10,316
Accounts payable and other accrued expenses		(88,082)		(65,525)
Accrued compensation		8,491		(87,358)

Net cash provided by (used in) operating activities		183,996		(740,148)

Cash flows from investing activities:
Purchases of property and equipment		(8,654)		(83,855)
Proceeds from sales of equipment		1,900		-
Increase in intangibles		(14,136)		-
Net cash used in investing activities		(20,890)		(83,855)


Cash flows from financing activities:
Proceeds from exercise of stock options		3,495		1,780

Net cash provided by financing activities		3,495		1,780
Effect of exchange rate changes in cash		(1,678)		(14)
Net increase in cash and cash equivalents		164,923		(822,237)
Cash and cash equivalents at beginning of period		1,509,125		2,469,796
Cash and cash equivalents at end of period	$	1,674,048	$	1,647,559

Supplemental Disclosure of Cash-Flow Information:

Cash paid during the period for:
Interest	$	17	$	0
Income taxes	$	0	$	3,500

The accompanying notes are an integral part of these statements.

BIOMERICA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 1: Basis of Presentation

The information set forth in these condensed consolidated financial statements is unaudited and reflects all adjustments which, in the opinion of management,are necessary to present a fair statement of the consolidated results of operations of Biomerica, Inc. and subsidiaries (the “Company”),for the periods indicated.It does not include all information and footnotes necessary for a fair presentation of financial position, results of operations, and cash flows in conformity with generally accepted accounting principles. All adjustments that were made are of a normal recurring nature.

The unaudited Condensed Consolidated Financial Statements and Notes are presented as permitted by the requirements for Form 10-Q and do not contain certain information included in our annual financial statements and notes. The condensed consolidated balance sheet data as of May 31, 2014 was derived from audited financial statements. The accompanying interim condensed consolidated financial statements should be read in conjunction with the financial statements and related notes included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) on August 29, 2014 for the fiscal year ended May 31,2014. The results of operations for our interim periods are not necessarily indicative of results to be achieved for our full fiscal year.

Note 2: Significant Accounting Policies

Principles of Consolidation

The condensed consolidated financial statements include the accounts of Biomerica, Inc. as well as the Company’s German subsidiary and Mexican subsidiary which have limited operations. All significant intercompany accounts and transactions have been eliminated in consolidation.

Accounting Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make 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, and the reported amounts of revenues and expenses during the reported period.Actual results could materially differ from those estimates.

Cash and Cash Equivalents

Cash and cash equivalents consist of demand deposits and money market accounts with original maturities of less than three months.

Accounts Receivable

The Company extends unsecured credit to its customers on a regular basis. International accounts are required to prepay until they establish a history with the Company and at that time, they are extended credit at levels based on a number of criteria. Credit levels are approved by designated upper level management.Domestic customers are extended initial credit limits until they establish a history with the Company or submit credit information. All increases in credit limits are also approved by designated upper level management. Management evaluates receivables on a quarterly basis and adjusts the reserve for bad debt accordingly. Balances over ninety days old are usually reserved for unless collection is reasonably assured. Management evaluates quarterly what items to charge off.

Occasionally certain long-standing customers, who routinely place large orders, will have unusually large accounts receivables balances relative to the total gross accounts receivables. Management monitors the payments for these large balances closely and very often requires payment of existing invoices before shipping new sales orders.

Inventories

The Company values inventory at the lower of cost (determined using a combination of specific lot identification and the first-in, first-out methods) or market. Management periodically reviews inventory for excess quantities and obsolescence. Management evaluates quantities on hand, physical condition, and technical functionality as these characteristics may be impacted by anticipated customer demand for current products and new product introductions. The reserve is adjusted based on such evaluation, with a corresponding provision included in cost of sales. Abnormal amounts of idle facility expenses, freight, handling costs and wasted material are recognized as current period charges and the allocation of fixed production overhead is based on the normal capacity of the Company’s production facilities.

The approximate balances of inventories are the following at:

	November 30, 2014		May 31, 2014
	November 30, 2014		May 31, 2014
Raw materials	$	922,000	$	899,000
Work in progress		815,000		635,000
Finished products		253,000		232,000
Total	$	1,990,000	$	1,766,000

Reserves for inventory obsolescence are reduced as necessary to reduce obsolete inventory to estimated realizable value or to specifically reserve for obsolete inventory that the Company intends to dispose of.

Property and Equipment

Property and equipment are stated at cost. Expenditures for additions and major improvements are capitalized. Repairs and maintenance costs are charged to operations as incurred. When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation or amortization is removed from the accounts, and gains or losses from retirements and dispositions are credited or charged to income.

Depreciation and amortization are provided over the estimated useful lives of the related assets, ranging from 5 to 10 years, using the straight-line method. Leasehold improvements are amortized over the lesser of the estimated useful life of the asset or the term of the lease. Depreciation and amortization expense on property and equipment and leasehold improvements amounted to $44,276 and $43,452 for the three months ended November 30, 2014 and 2013, and $89,516 and $86,231 for the six months ended November 30, 2014 and 2013, respectively.

Intangible Assets

Intangible assets include trademarks, product rights, licenses, technology rights and patents, and are accounted for based on Accounting Standards Codification ASC 350 “Intangibles – Goodwill and Other” (ASC 350). In that regard, intangible assets that have indefinite useful lives are not amortized but are tested at least annually for impairment or more frequently if events or changes in circumstances indicate that the asset might be impaired. Intangible assets are being amortized using the straight-line method over the useful life; not to exceed 18 years for marketing and distribution rights, 10 years for purchased technology use rights, licenses, and 17 years for patents. Amortization amounted to $18,479 and $3,665 for the three months ended November 30, 2014 and 2013, respectively, and $36,660 and $11,121 for the six months ended November 30, 2014 and 2013, respectively.

Stock-Based Compensation

The Company follows the guidance of the accounting provisions of ASC 718 “Share-based Compensation” (ASC 718), which requires the use of the fair-value based method to determine compensation for all arrangements under which employees and others receive shares of stock or equity instruments (options). The fair value of each option award is estimated on the date of grant using the Black-Scholes valuation model that uses assumptions for expected volatility, expected dividends, expected forfeiture rate, expected term, and the risk-free interest rate.

Expected volatilities are based on weighted averages of the historical volatility of the Company’s stock and other factors estimated over the expected term of the options. The expected forfeiture rate is based on historical forfeitures experienced. The expected term of options granted is derived using the “simplified method” which computes expected term as the average of the sum of the vesting term plus the contract term as historically the Company had limited activity surrounding its options. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for the period of the expected term.

The following summary presents the options granted, exercised, expired, cancelled and outstanding as of November 30, 2014:

		Exercise Price Weighted Average

	Option Shares
	Option Shares
Options outstanding May 31, 2014	860,500	$	0.51

Granted	24,500	$	0.85

Exercised	(9,000)	$	0.39

Cancelled or expired	(34,500)	$	0.72

Options outstanding November 30, 2014	841,500	$	0.52

In September 2014 options to purchase 24,500 shares of the Company’s common stock were granted at the exercise price of $0.85.

In the six months ended November 30, 2014, options to acquire 9,000 shares of the Company’s common stock were exercised at exercise prices ranging from $0.38 to $0.43 per share. Net proceeds to the Company were $3,495.

Revenue Recognition

Revenues from product sales are recognized at the time the product is shipped, customarily FOB shipping point, at which point title passes. An allowance is established when necessary for estimated returns as revenue is recognized. In conjunction with sales to certain customers, the Company provides free products upon attaining certain levels of purchases by the customer. The Company accounts for these free products in accordance with ASC 605-50 “Revenue Recognition – Customer Payments and Incentives” and recognizes the cost of the product as part of cost of sales.

Investments

From time-to-time, the Company makes investments in privately-held companies. The Company determines whether the fair values of any investments in privately-held entities have declined below their carrying value whenever adverse events or changes in circumstances indicate that recorded values may not be recoverable. If the Company considers any such decline to be other than temporary (based on various factors, including historical financial results, and the overall health of the investee’s industry), a write-down to estimated fair value is recorded. The Company currently has not written down the investment and no events have occurred which could indicate the carrying value to be less than the fair value. Investments represent the Company’s investment in a Polish distributor which is primarily engaged in distributing medical devices. The Company owns approximately 6% of the investee, and accordingly, applies the cost method to account for the investment. Under the cost method, investments are recorded at cost, with gains and losses recognized as of the sale date, and income recorded when received.

Shipping and Handling Fees and Costs

Shipping and handling fees billed to customers are classified as revenues, and shipping and handling costs are classified as cost of sales. The Company included shipping and handling fees billed to customers in net sales. The Company included shipping and handling costs associated with inbound freight and unreimbursed shipping to customers in cost of sales.

Research and Development

Research and development costs are expensed as incurred.

Income Taxes

The Company has provided a valuation allowance of approximately $180,000 as of November 30, 2014 and $0 as of May 31, 2014. The Company did not record any income tax benefit for the six months ended November 30, 2014.

Foreign Currency Translation

The subsidiary located in Germany is accounted for primarily using local functional currency. Accordingly, assets and liabilities of this subsidiary are translated using exchange rates in effect at the end of the period, and revenues and costs are translated using average exchange rates for the period. The resulting adjustments are presented as a separate component of accumulated other comprehensive loss.

Deferred Rent

Incentive payments received from landlords are recorded as deferred lease incentives and are amortized over the underlying lease term on a straight-line basis as a reduction of rent expense. When the terms of an operating lease provide for periods of free rent, rent concessions, and/or rent escalations, the Company establishes a deferred rent liability for the difference between the scheduled rent payment and the straight-line rent expense recognized. This deferred rent liability is amortized over the underlying lease term on a straight-line basis as a reduction of rent expense.

Net Loss Per Share

Basic earnings (loss) per share are computed as net loss or income divided by the weighted average number of common shares outstanding for the period. Diluted (loss) income per share reflects the potential dilution that could occur from common shares issuable through stock options using the treasury stock method. The total amount of anti-dilutive options not included in the earnings per share calculation for the three and six months ended November 30, 2013 was 372,816 and 379,180, respectively. The total amount of anti-dilutive options not included in the earnings per share calculation for the three and six months ended November 30, 2014 was 344,024 and 371,731, respectively.

The following table illustrates the required disclosure of the reconciliation of the numerators and denominators of the basic and diluted earnings per share computations.

	Six Months Ended November 30,				Three Months Ended November 30,

	2014		2013		2014		2013
Numerator:
Loss from continuing operations	$	(457,296)	$	(411,072)	$	(238,028)	$	(243,357)

Denominator for basic net loss Per common share		7,549,894		7,277,659		7,551,972		7,278,967

Effect of dilutive securities:
Options		--		--		--		--

Denominator for diluted net loss per common share		7,549,894		7,277,659		7,551,972		7,278,967

Basic net loss per common share	$	(0.06)	$	(0.06)	$	(0.03)	$	(0.03)

Diluted net loss per common share	$	(0.06)	$	(0.06)	$	(0.03)	$	(0.03)

New Accounting Pronouncements

In May 2014, the FASB issued ASU 2014-09 “Revenue from Contracts with Customers”(ASU 2014-09). ASU 2014-09 is a comprehensive new revenue recognition model requiring a company to recognize revenue to depict the transfer of goods or services to a customer at an amount reflecting the consideration it expects to receive in exchange for those goods or services. In adopting, ASU 2014-09, companies may use either a full retrospective or a modified retrospective approach. ASU 2014-09 is effective for the first interim period within annual reporting periods beginning December 15, 2016, and early adoption is not permitted.Management is evaluating the provisions of this statement and has not determined what impact the adoption of ASU 2014-09 will have on the Company’s financial position or results of operations.

Other recent ASU's issued by the FASB and guidance issued by the Securities and Exchange Commission did not, or are not believed by management to, have a material effect on the Company’s present or future consolidated financial statements.

Note 3: Accounts Payable and Accrued Expenses

The Company’s accounts payable and accrued expense balances consist of the following at:

	November 30, 2014		May 31, 2014
	November 30, 2014		May 31, 2014
Accounts payable	$	249,978	$	385,701
Accrued expenses		47,641		--
Deferred rent		46,718		55,980
Total	$	344,337	$	441,681

Note 4: Geographic Information

Financial information about foreign and domestic operations and export sales is as follows:

	Six Months Ended November 30,				Three Months Ended November 30,
	Six Months Ended November 30,				Three Months Ended November 30,
	2014		2013		2014		2013

Revenues from sales to unaffiliated customers:
United States	$	473,000	$	505,000	$	220,000	$	251,000
Asia		118,000		216,000		102,000		80,000
Europe		1,444,000		1,199,000		693,000		594,000
South America		6,000		7,000		3,000		4,000
Middle East		113,000		20,000		111,000		5,000
Other		14,000		2,000		5,000		1,000
	$	2,168,000	$	1,949,000	$	1,134,000	$	935,000

No other geographic concentrations exist where net sales exceed 10% of total net sales.

Note 5: Commitments and Contingencies

In March 2014, the Company entered into a line of credit (the “Line”) with its bank which has a borrowing limit of $250,000. The line is secured by substantially all of the Company’s assets and bears interest at 2.0% plus the Wall Street Journal Prime West Coast Edition prime rate. At November 30, 2014 the Company had not drawn any funds on the line.

On June 18, 2009, the Company entered into an agreement to lease a building in Irvine, California. The lease commenced September 1, 2009 and ends August 31, 2016. The initial base rent was set at $18,490 per month with scheduled annual increases through the end of the lease term. The rent is currently set at $21,437 per month.

Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

CERTAIN INFORMATION CONTAINED HEREIN (AS WELL AS INFORMATION INCLUDED IN ORAL STATEMENTS OR OTHER WRITTEN STATEMENTS MADE OR TO BE MADE BY BIOMERICA) CONTAINS STATEMENTS THAT ARE FORWARD-LOOKING, SUCH AS STATEMENTS RELATING TO ANTICIPATED FUTURE REVENUES OF THE COMPANY AND SUCCESS OR CURRENT PRODUCT OFFERINGS. SUCH FORWARD-LOOKING INFORMATION INVOLVES IMPORTANT RISKS AND UNCERTAINTIES THAT COULD SIGNIFICANTLY AFFECT ANTICIPATED RESULTS IN THE FUTURE, AND ACCORDINGLY, SUCH RESULTS MAY DIFFER MATERIALLY FROM THOSE EXPRESSED IN ANY FORWARD-LOOKING STATEMENTS MADE BY OR ON BEHALF OF BIOMERICA. THE POTENTIAL RISKS AND UNCERTAINTIES INCLUDE, AMONG OTHERS, FLUCTUATIONS IN THE COMPANY'S OPERATING RESULTS. THESE RISKS AND UNCERTAINTIES ALSO INCLUDE THE SUCCESS OF THE COMPANY IN RAISING NEEDED CAPITAL, THE ABILITY OF THE COMPANY TO MAINTAIN REQUIREMENTS TO BE LISTED ON NASDAQ, THE CONTINUAL DEMAND FOR THE COMPANY'S PRODUCTS, COMPETITIVE AND ECONOMIC FACTORS OF THE MARKETPLACE, AVAILABILITY OF RAW MATERIALS, HEALTH CARE REGULATIONS AND THE STATE OF THE ECONOMY. READERS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE HEREOF, AND THE COMPANY UNDERTAKES NO OBLIGATION TO UPDATE THESE FORWARD-LOOKING STATEMENTS.

OVERVIEW

Biomerica, Inc. and Subsidiaries ("Biomerica", the "Company", "we" or "our") develops, manufactures, and markets medical diagnostic products designed for the early detection and monitoring of chronic diseases and medical conditions. Our medical diagnostic products are sold worldwide in two markets: 1) clinical laboratories and 2) point of care (physicians' offices and over-the-counter drugstores). Our diagnostic test kits are used to analyze blood, urine or stool samples from patients in the diagnosis of various diseases and other medical complications, or to measure the level of specific hormones, antibodies, antigens or other substances, which may exist in the human body in extremely small concentrations.

RESULTS OF OPERATIONS

Consolidated net sales for Biomerica were $1,133,600 for the three months ended November 30, 2014 as compared to $934,841 for the same period in the previous year. This represents an increase of $198,759 or 21.3%. For the six month period ended November 30, 2014 as compared to 2013, net sales were $2,168,050 as compared to $1,948,580. This represents an increase of $219,470 or 11.3%. The increase was primarily due to increased sales in Europe and the Middle East.

For the three months ended November 30, 2014 as compared to November 30, 2013, cost of sales increased as a percentage of sales from 72.7% of sales, or $679,197, to 72.9% of sales, or $826,357. For the six months ended November 30, 2014 as compared to 2013, cost of sales decreased as a percentage of sales from 73.5% of sales, or $1,432,645, to 71.5% of sales, or $1,550,896. The increase in the three month period was primarily due to more costs capitalized into inventory during fiscal 2014 due to inventory levels at that time. The decrease in the cost of goods as a percentage of sales for the six month period was due to a higher sales level without a corresponding increase in expenses due to fixed expenses.

For the three months ended November 30, 2014 compared to 2013, selling, general and administrative costs increased by $8,663, or 2.3%. For the six month period ended November 30, 2014 as compared to 2013, these expenses increased by $4,176, or 0.6%. The overall increase in selling, general and administrative costs, which was not significant, was due to a combination of expense variations.

For the three months ended November 30, 2014 compared to 2013, research and development expenses increased by $45,299 or 33.1%. For the six month period ended November 30, 2014 as compared to 2013, these expenses increased by $149,748, or 65.7%. The increases were primarily due to research being done related to new products, regulatory approvals and patent application preparation.

For the three months ended November 30, 2014 as compared to November 30, 2013, other income increased from $4,145 to $11,837 and for the six month period from $10,199 to $16,680, primarily due to dividends received from the investment in our Polish distributor.

LIQUIDITY AND CAPITAL RESOURCES

As of November 30, 2014 and May 31, 2014, the Company had cash and cash equivalents in the amount of $1,674,048 and $1,509,125 and working capital of $3,999,555 and $4,357,330, respectively.

During the six months ended November 30, 2014 the Company’s operations provided cash of $183,996 as compared to cash used of $740,148 in the same period of the prior fiscal year.Cash provided by operations in fiscal 2014 was a result of collection of $900,454 from accounts receivable, non-cash expenses of depreciation and amortization in the amount of $126,176, which were offset by increases in inventory of $231,601, and a net loss of $457,296. Cash used in operations in the six months ended November 30, 2013 resulted from $321,700 in increased inventories, payout of accrued compensation of $87,358 and a net loss of $411,072. Cash used in investing activities in the six months ended November 30, 2014 was $20,890 as compared to cash used of $83,855 in the six months ended November 30, 2013. The difference was a result of a larger investment in property and equipment in fiscal 2014 as compared to 2015 and $14,136 in increased intangibles in fiscal 2015. Cash provided by financing activities for the six months ended November 30, 2014 and 2013, respectively, was a result of the exercise of stock options of $3,495 and $1,780.

The Company has been working on a new product for the gastroenterology market. Patent applications for the new product have already been filed and additional patent costs are expected. In addition, the Company is investigating the possibility of U.S. regulatory approval. Should the company decide to seek such regulatory approval in the U.S., the costs could be substantial.

OFF BALANCE SHEET ARRANGEMENTS - None.

CRITICAL ACCOUNTING POLICIES

The preparation of condensed 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 affect the reported amounts of revenues and expenses during the reporting period. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. We continue to monitor significant estimates made during the preparation of our financial statements. On an ongoing basis, we evaluate estimates and assumptions based upon historical experience and various other factors and circumstances. We believe our estimates and assumptions are reasonable in the circumstances; however, actual results may differ from these estimates under different future conditions.

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, bad debts, inventory overhead application, and inventory reserve. 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. 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.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

Item 4. CONTROLS AND PROCEDURES

Our management evaluated the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, as of the end of the period covered by this report. Our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. The disclosure controls and procedures have been designed to provide reasonable assurance of achieving their objectives and the Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures are effective at the "reasonable assurance" level. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were effective to ensure that information required to be disclosed in the reports that we file and submit under the Exchange Act is (1) recorded, processed, summarized and reported within the time periods specified in the Commission's rules and forms; and (2) accumulated and communicated to the Company's management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In making this assessment, the Company used the framework established in Internal Control – Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

There have been no changes in our internal control over financial reporting identified in connection with the evaluation that occurred during our last fiscal quarter that has materially affected, or that is reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS. None.

Item 1A. RISKS FACTORS.

You should read the following factors in conjunction with the factors discussed elsewhere in this and our other filings with the Securities and Exchange Commission and in materials incorporated by reference in these filings. The following is intended to highlight certain factors that may affect the financial condition and results of operations of Biomerica, Inc. and are not meant to be an exhaustive discussion of risks that apply to companies such as Biomerica, Inc. Like other businesses, Biomerica, Inc. is susceptible to macroeconomic downturns in the United States or abroad, as were experienced in recent history that may affect the general economic climate and performance of Biomerica, Inc. or its customers.

Aside from general macroeconomic downturns, the additional material factors that could affect future financial results include, but are not limited to: Terrorist attacks and the impact of such events; diminished access to raw materials that directly enter into our manufacturing process; shipping labor disruption or other major degradation of the ability to ship out products to end users; inability to successfully control our margins which are affected by many factors including competition and product mix; protracted shutdown of the U.S. border due to an escalation of terrorist or counter terrorist activity; any changes in our business relationships with international distributors or the economic climate they operate in; any event that has a material adverse impact on our foreign manufacturing operations may adversely affect our operations as a whole; failure to manage the future expansion of our business could have a material adverse effect on our revenues and profitability; possible costs or difficulty in complying with government regulations and the delays in receiving required regulatory approvals or the enactment of new adverse regulations or regulatory requirements; numerous competitors, some of which have substantially greater financial and other resources than we do; potential claims and litigation brought by patients or medical professionals alleging harm caused by the use of or exposure to our products; quarterly variations in operating results caused by a number of factors, including business and industry conditions; concentrations of sales with certain distributors, which have been increasing, could adversely affect the results of the Company if the Company were to lose the sales of that distributor and other factors beyond our control; high balances carried on accounts receivables from concentrated customers; and the costs of recalls, should such occasion arise. All these factors make it difficult to predict operating results for any particular period.

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS. None.

Item 3. DEFAULTS UPON SENIOR SECURITIES. None.

Item 4. MINE SAFETY DISCLOSURES. None.

Item 5. OTHER INFORMATION.

We held our Annual Meeting of Stockholders on December 15, 2014, to consider and vote on the matters listed below. The proposals are described in detail in the Proxy Statement filed with the Securities and Exchange Commission on September 28, 2014. The final voting results from the meeting are set forth below.

Proposal 1: Election of Directors

Based on the following votes, the individuals named below were each elected to serve as our directors until our next Annual Meeting of Stockholders.

Name	Votes For	Votes Withheld

Zackary Irani	3,994,622	86,252
Janet Moore	3,995,665	85,409
Allen Barbieri	3,995,572	85,302
Dr. Francis Cano	3,992,572	88,302
Dr. Jane Emerson	3,978,422	102,452

Proposal 2: To Consider and Act Upon a proposal to ratify and approve the Company’s 2014 Stock Incentive Plan

Based on the following votes, the Company’s 2014 Stock Incentive Plan was approved.

Votes For Votes Against Votes Abstained

3,415,489 644,718 20,667

Proposal 3: Ratification of Selection of Independent Auditors

Based on the following votes, the selection of PKF Certified Public Accountants, A Professional Corporation as our independent registered public accounting firm for the 2015 fiscal year was ratified.

Votes For Votes Against Abstentions Broker Non-Votes

6,429,465 10,849 20,888 860,966

In addition, the following proposals were voted on at the meeting:

RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the compensation tables and narrative discussion contained in the proxy statement, is hereby approved. The votes received were 2,265,042 to approve and zero against.

The recommendation, on an advisory basis, for the frequency with which the Company should conduct future stockholder advisory votes on named executive officer compensation received 1,893,057 votes in favor of every three years and 371,985 votes in favor of every one year.

Even though every three years was the advised frequency voted upon, the Company may decide to include the vote more frequently than that. The Company plans to hold a vote concerning compensation to named executive officers again at its next annual stockholders meeting.

Item 6. EXHIBITS.

The following exhibits are filed or furnished as part of this quarterly report on Form 10-Q:


	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 — Janet Moore

	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 — Janet Moore
	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


*	Filed herewith

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has fully caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	BIOMERICA, INC.


Date: January 14, 2015
	By:	/S/ Zackary S. Irani
		Zackary S. Irani
		Chief Executive Officer
		(Principal Executive Officer)
Date: January 14, 2015
	By:	/S/ Janet Moore
		Janet Moore
		Chief Executive Officer
		(Principal Financial Officer)

EX-31.1 2 exhibit31_1.htm EXHIBIT 31.1 exhibit31_1

Exhibit 31.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Zackary S. Irani, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Biomerica, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects, the financial condition,results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiary, is made known to us by others within those entities,particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision,to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness

of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of our internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or other persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process,summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: January 14, 2015

/s/ Zackary S. Irani

Zackary S. Irani

Chief Executive Officer

(Principal Executive Officer)

EX-31.2 3 exhibit31_2.htm EXHIBIT 31.2 exhibit31_2

EXHIBIT 31.2

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Janet Moore, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Biomerica, Inc.;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects,the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financialreporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including itsconsolidated subsidiary, is made known to us by others within those entities,particularly during the period in which this report is being prepared;

c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: January 14, 2015

/s/ Janet Moore

Janet Moore

Chief Financial Officer

(Principal Financial Officer)

EX-32.1 4 exhibit32_1.htm EXHIBIT 32.1 exhibit32_1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Biomerica, Inc.(the "Company") on Form 10-Q for the period ending November 30, 2014, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Zackary Irani,Chief Executive Officer of the Company, certify, to the best of my knowledge,Pursuant to Exchange Act Rule 15d-14(b) and 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes Oxley Act of 2002,

i. The Report fully complies with the requirements of Sections 13(a) or 15(d)of the Securities Exchange Act of 1934, and

ii. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Zackary S. Irani

Zackary S. Irani

Chief Executive Officer

Date: January 14, 2015

EX-32.2 5 exhibit32_2.htm EXHIBIT 32.2 exhibit32_2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Biomerica, Inc. (the "Company") on Form 10-Q for the period ending November 30, 2014, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Janet Moore, Chief Financial Officer of the Company, certify, to the best of my knowledge,Pursuant to Exchange Act Rule 15d-14(b) and 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes Oxley Act of 2002,

i. The Report fully complies with the requirements of Sections 13(a) or 15(d) of the Securities Exchange Act of 1934, and

ii. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Janet Moore

Janet Moore

Chief Financial Officer

Date: January 14, 2015

BIOMERICA INC. 10-Q --05-31 7553464 false 0000073290 Yes No Smaller Reporting Company No 2015 Q2 2014-11-30

<div> Note 1: Basis of Presentation  </div> <div style="text-indent: 36.0pt;"> The information set forth in these condensed consolidated financial statements is unaudited and reflects all adjustments which, in the opinion of management, are necessary to present a fair statement of the consolidated results of operations of Biomerica, Inc. and subsidiaries (the “Company”), for the periods indicated. It does not include all information and footnotes necessary for a fair presentation of financial position, results of operations, and cash flows in conformity with generally accepted accounting principles. All adjustments that were made are of a normal recurring nature. </div> <div style="text-indent: 36.0pt;"> The unaudited Condensed Consolidated Financial Statements and Notes are presented as permitted by the requirements for Form 10-Q and do not contain certain information included in our annual financial statements and notes. The condensed consolidated balance sheet data as of May 31, 2014 was derived from audited financial statements. The accompanying interim condensed consolidated financial statements should be read in conjunction with the financial statements and related notes included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) on August 29, 2014 for the fiscal year ended May 31, 2014. The results of operations for our interim periods are not necessarily indicative of results to be achieved for our full fiscal year. </div>

<div>Principles of Consolidation </div> <div style="text-indent: 36.0pt;"> The condensed consolidated financial statements include the accounts of Biomerica, Inc. as well as the Company’s German subsidiary and Mexican subsidiary which have limited operations. All significant intercompany accounts and transactions have been eliminated in consolidation.</div>

<div>Accounting Estimates </div> <div style="text-indent: 36.0pt;"> The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make 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, and the reported amounts of revenues and expenses during the reported period. Actual results could materially differ from those estimates.</div>

<div>Cash and Cash Equivalents </div> <div style="text-indent: 36.0pt;"> Cash and cash equivalents consist of demand deposits and money market accounts with original maturities of less than three months.</div>

<div>Accounts Receivable </div> <div style="text-indent: 36.0pt;"> The Company extends unsecured credit to its customers on a regular basis.  International accounts are required to prepay until they establish a history with the Company and at that time, they are extended credit at levels based on a number of criteria.  Credit levels are approved by designated upper level management.  Domestic customers are extended initial credit limits until they establish a history with the Company or submit credit information.  All increases in credit limits are also approved by designated upper level management.  Management evaluates receivables on a quarterly basis and adjusts the reserve for bad debt accordingly.  Balances over ninety days old are usually reserved for unless collection is reasonably assured.  Management evaluates quarterly what items to charge off.   </div> <div style="text-indent: 36.0pt;"> Occasionally certain long-standing customers, who routinely place large orders, will have unusually large accounts receivables balances relative to the total gross accounts receivables. Management monitors the payments for these large balances closely and very often requires payment of existing invoices before shipping new sales orders.</div>

<div>Property and Equipment </div> <div style="margin-right: 13.55pt; text-indent: 36.0pt;"> Property and equipment are stated at cost. Expenditures for additions and major improvements are capitalized. Repairs and maintenance costs are charged to operations as incurred. When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation or amortization is removed from the accounts, and gains or losses from retirements and dispositions are credited or charged to income.   </div> <div style="margin-right: 13.55pt; text-indent: 36.0pt;"> Depreciation and amortization are provided over the estimated useful lives of the related assets, ranging from 5 to 10 years, using the straight-line method. Leasehold improvements are amortized over the lesser of the estimated useful life of the asset or the term of the lease. Depreciation and amortization expense on property and equipment and leasehold improvements amounted to $44,276 and $43,452 for the three months ended November 30, 2014 and 2013, and $89,516 and $86,231 for the six months ended November 30, 2014 and 2013, respectively.</div>

<div>Intangible Assets </div> <div style="margin-right: 13.55pt; text-indent: 36.0pt;"> Intangible assets include trademarks, product rights, licenses, technology rights and patents, and are accounted for based on Accounting Standards Codification ASC 350 “Intangibles – Goodwill and Other” (ASC 350). In that regard, intangible assets that have indefinite useful lives are not amortized but are tested at least annually for impairment or more frequently if events or changes in circumstances indicate that the asset might be impaired. Intangible assets are being amortized using the straight-line method over the useful life; not to exceed 18 years for marketing and distribution rights, 10 years for purchased technology use rights, licenses, and 17 years for patents. Amortization amounted to $18,479 and $3,665 for the three months ended November 30, 2014 and 2013, respectively, and $36,660 and $11,121 for the six months ended November 30, 2014 and 2013, respectively.</div>

<div>Revenue Recognition </div> <div style="margin-right: 13.55pt; text-indent: 36.0pt;"> Revenues from product sales are recognized at the time the product is shipped, customarily FOB shipping point, at which point title passes. An allowance is established when necessary for estimated returns as revenue is recognized. In conjunction with sales to certain customers, the Company provides free products upon attaining certain levels of purchases by the customer. The Company accounts for these free products in accordance with ASC 605-50 “Revenue Recognition – Customer Payments and Incentives” and recognizes the cost of the product as part of cost of sales.</div>

<div>Investments  </div> <div style="margin-right: 13.55pt; text-indent: 36.0pt;"> From time-to-time, the Company makes investments in privately-held companies.  The Company determines whether the fair values of any investments in privately-held entities have declined below their carrying value whenever adverse events or changes in circumstances indicate that recorded values may not be recoverable.  If the Company considers any such decline to be other than temporary (based on various factors, including historical financial results, and the overall health of the investee’s industry), a write-down to estimated fair value is recorded.  The Company currently has not written down the investment and no events have occurred which could indicate the carrying value to be less than the fair value. Investments represent the Company’s investment in a Polish distributor which is primarily engaged in distributing medical devices.  The Company owns approximately 6% of the investee, and accordingly, applies the cost method to account for the investment.  Under the cost method, investments are recorded at cost, with gains and losses recognized as of the sale date, and income recorded when received.</div>

0.06

<div>Shipping and Handling Fees and Costs </div> <div style="margin-right: 13.55pt; text-indent: 36.0pt;"> Shipping and handling fees billed to customers are classified as revenues, and shipping and handling costs are classified as cost of sales. The Company included shipping and handling fees billed to customers in net sales. The Company included shipping and handling costs associated with inbound freight and unreimbursed shipping to customers in cost of sales.</div>

<div>Research and Development </div> <div style="text-indent: 36.0pt;"> Research and development costs are expensed as incurred.</div>

<div>Income Taxes </div> <div style="text-indent: 36.0pt;"> The Company has provided a valuation allowance of approximately $180,000 as of November 30, 2014 and $0 as of May 31, 2014.   The Company did not record any income tax benefit for the six months ended November 30, 2014.</div>

180000

<div style="margin-right: 13.55pt;">Foreign Currency Translation </div> <div style="margin-right: 13.55pt; text-indent: 36.0pt;"> The subsidiary located in Germany is accounted for primarily using local functional currency. Accordingly, assets and liabilities of this subsidiary are translated using exchange rates in effect at the end of the period, and revenues and costs are translated using average exchange rates for the period. The resulting adjustments are presented as a separate component of accumulated other comprehensive loss.</div>

<div style="margin-right: 13.55pt;">Deferred Rent </div> <div style="margin-right: 13.55pt; text-indent: 36.0pt;"> Incentive payments received from landlords are recorded as deferred lease incentives and are amortized over the underlying lease term on a straight-line basis as a reduction of rent expense. When the terms of an operating lease provide for periods of free rent, rent concessions, and/or rent escalations, the Company establishes a deferred rent liability for the difference between the scheduled rent payment and the straight-line rent expense recognized. This deferred rent liability is amortized over the underlying lease term on a straight-line basis as a reduction of rent expense.</div>

<div>New Accounting Pronouncements  </div> <div>   In May 2014, the FASB issued ASU 2014-09 “Revenue from Contracts with Customers” (ASU 2014-09). ASU 2014-09 is a comprehensive new revenue recognition model requiring a company to recognize revenue to depict the transfer of goods or services to a customer at an amount reflecting the consideration it expects to receive in exchange for those goods or services. In adopting, ASU 2014-09, companies may use either a full retrospective or a modified retrospective approach. ASU 2014-09 is effective for the first interim period within annual reporting periods beginning December 15, 2016, and early adoption is not permitted. Management is evaluating the provisions of this statement and has not determined what impact the adoption of ASU 2014-09 will have on the Company’s financial position or results of operations.  </div> <div>  Other recent ASU's issued by the FASB and guidance issued by the Securities and Exchange Commission did not, or are not believed by management to, have a material effect on the Company’s present or future consolidated financial statements.</div>

<div> Note 5: Commitments and Contingencies  </div> <div> In March 2014, the Company entered into a line of credit (the “Line”) with its bank which has a borrowing limit of $250,000. The line is secured by substantially all of the Company’s assets and bears interest at 2.0% plus the Wall Street Journal Prime West Coast Edition prime rate. At November 30, 2014 the Company had not drawn any funds on the line.  </div> <div style="margin-right: 13.55pt; text-indent: 36.0pt;"> On June 18, 2009, the Company entered into an agreement to lease a building in Irvine, California. The lease commenced September 1, 2009 and ends August 31, 2016.  The initial base rent was set at $18,490 per month with scheduled annual increases through the end of the lease term. The rent is currently set at $21,437 per month.  </div>

250000

0.020

2.0% plus the Wall Street Journal Prime West Coast Edition prime rate

2009-06-18 2009-09-01

2016-08-31

18490

21437

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME (UNAUDITED) (USD $)	3 Months Ended	6 Months Ended
Nov. 30, 2014	Nov. 30, 2013	Nov. 30, 2014	Nov. 30, 2013
Net Sales	$ 1,133,600us-gaap_SalesRevenueNet	$ 934,841us-gaap_SalesRevenueNet	$ 2,168,050us-gaap_SalesRevenueNet	$ 1,948,580us-gaap_SalesRevenueNet
Cost of Sales	(826,357)us-gaap_CostOfRevenue	(679,197)us-gaap_CostOfRevenue	(1,550,896)us-gaap_CostOfRevenue	(1,432,645)us-gaap_CostOfRevenue
Gross Profit	307,243us-gaap_GrossProfit	255,644us-gaap_GrossProfit	617,154us-gaap_GrossProfit	515,935us-gaap_GrossProfit
Operating Expense:
Selling, general and administrative	375,020	366,357	713,336	709,160
Research and development	182,088us-gaap_ResearchAndDevelopmentExpense	136,789us-gaap_ResearchAndDevelopmentExpense	377,794us-gaap_ResearchAndDevelopmentExpense	228,046us-gaap_ResearchAndDevelopmentExpense
Total operating expenses	557,108us-gaap_OperatingExpenses	503,146us-gaap_OperatingExpenses	1,091,130us-gaap_OperatingExpenses	937,206us-gaap_OperatingExpenses
Loss from operations	(249,865)us-gaap_OperatingIncomeLoss	(247,502)us-gaap_OperatingIncomeLoss	(473,976)us-gaap_OperatingIncomeLoss	(421,271)us-gaap_OperatingIncomeLoss
Other Income (Expense):
Dividend and interest income	11,837	4,145	16,697	10,199
Interest expense			(17)us-gaap_InterestExpense
Total other income	11,837us-gaap_NonoperatingIncomeExpense	4,145us-gaap_NonoperatingIncomeExpense	16,680us-gaap_NonoperatingIncomeExpense	10,199us-gaap_NonoperatingIncomeExpense
Loss before income tax	(238,028)	(243,357)	(457,296)	(411,072)
Provision for income taxes
Net loss	(238,028)us-gaap_NetIncomeLoss	(243,357)us-gaap_NetIncomeLoss	(457,296)us-gaap_NetIncomeLoss	(411,072)us-gaap_NetIncomeLoss
Basic net loss per common share (in Dollars per share)	$ (0.03)us-gaap_EarningsPerShareBasic	$ (0.03)us-gaap_EarningsPerShareBasic	$ (0.06)us-gaap_EarningsPerShareBasic	$ (0.06)us-gaap_EarningsPerShareBasic
Diluted net loss per common share (in Dollars per share)	$ (0.03)us-gaap_EarningsPerShareDiluted	$ (0.03)us-gaap_EarningsPerShareDiluted	$ (0.06)us-gaap_EarningsPerShareDiluted	$ (0.06)us-gaap_EarningsPerShareDiluted
Weighted average number of common and common equivalent shares:
Basic (in Shares)	7,551,972	7,278,967	7,549,894	7,277,659
Diluted (in Shares)	7,551,972	7,278,967	7,549,894	7,277,659
Net loss	(238,028)us-gaap_NetIncomeLoss	(243,357)us-gaap_NetIncomeLoss	(457,296)us-gaap_NetIncomeLoss	(411,072)us-gaap_NetIncomeLoss
Other comprehensive loss, net of tax:
Foreign currency translation	(744)	77	(1,678)	(14)
Comprehensive loss	$ (238,772)us-gaap_ComprehensiveIncomeNetOfTax	$ (243,280)us-gaap_ComprehensiveIncomeNetOfTax	$ (458,974)us-gaap_ComprehensiveIncomeNetOfTax	$ (411,086)us-gaap_ComprehensiveIncomeNetOfTax

Basis of Presentation	6 Months Ended
Basis of Presentation	Nov. 30, 2014
Disclosure Text Block [Abstract]
Basis of Accounting [Text Block]	Note 1: Basis of Presentation The information set forth in these condensed consolidated financial statements is unaudited and reflects all adjustments which, in the opinion of management, are necessary to present a fair statement of the consolidated results of operations of Biomerica, Inc. and subsidiaries (the “Company”), for the periods indicated. It does not include all information and footnotes necessary for a fair presentation of financial position, results of operations, and cash flows in conformity with generally accepted accounting principles. All adjustments that were made are of a normal recurring nature. The unaudited Condensed Consolidated Financial Statements and Notes are presented as permitted by the requirements for Form 10-Q and do not contain certain information included in our annual financial statements and notes. The condensed consolidated balance sheet data as of May 31, 2014 was derived from audited financial statements. The accompanying interim condensed consolidated financial statements should be read in conjunction with the financial statements and related notes included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) on August 29, 2014 for the fiscal year ended May 31, 2014. The results of operations for our interim periods are not necessarily indicative of results to be achieved for our full fiscal year.

Commitments and Contingencies (Details) (USD $)	6 Months Ended
Commitments and Contingencies (Details) (USD $)	Nov. 30, 2014
Commitments and Contingencies (Details) [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	$ 250,000
Line of Credit Facility, Interest Rate Description	2.0% plus the Wall Street Journal Prime West Coast Edition prime rate
Line of Credit [Member]
Commitments and Contingencies (Details) [Line Items]
Debt Instrument, Basis Spread on Variable Rate	2.00%
Building in Irvine California [Member]
Commitments and Contingencies (Details) [Line Items]
Lease Agreement Date	Jun. 18, 2009
Lease Initiation Date	Sep. 01, 2009
Lease Expiration Date	Aug. 31, 2016
Operating Leases, Rent Expense, Minimum Rentals	18,490
Operating Leases, Rent Expense	$ 21,437

CONDENSED CONSOLIDATED BALANCE SHEETS (USD $)	Nov. 30, 2014	May 31, 2014
Currents Assets:
Cash and cash equivalents	$ 1,674,048	$ 1,509,125
Accounts receivable, less allowance for doubtful accounts of $13,341 and $30,000 as of November 30, 2014 and May 31, 2014, respectively	563,910us-gaap_AccountsReceivableNetCurrent	1,447,705us-gaap_AccountsReceivableNetCurrent
Inventories, net	1,989,950us-gaap_InventoryNet	1,765,772us-gaap_InventoryNet
Prepaid expenses and other	151,638	103,572
Deferred tax assets, current portion	87,000us-gaap_DeferredTaxAssetsNetCurrent	87,000us-gaap_DeferredTaxAssetsNetCurrent
Total current assets	4,466,546us-gaap_AssetsCurrent	4,913,174us-gaap_AssetsCurrent
Property and Equipment, net of accumulated depreciation and amortization of $1,249,785 and $1,160,934 as of November 30, 2014 and May 31, 2014, respectively	532,240us-gaap_PropertyPlantAndEquipmentNet	614,337us-gaap_PropertyPlantAndEquipmentNet
Deferred Tax Assets, net of current portion	359,000us-gaap_DeferredTaxAssetsNetNoncurrent	359,000us-gaap_DeferredTaxAssetsNetNoncurrent
Investments	165,324us-gaap_Investments	165,324us-gaap_Investments
Intangible Assets, net	359,657	382,181
Other Assets	45,018us-gaap_OtherAssetsNoncurrent	36,297us-gaap_OtherAssetsNoncurrent
Total Assets	5,927,785us-gaap_Assets	6,470,313us-gaap_Assets
Current Liabilities:
Accounts payable and accrued expenses	344,337	441,681
Accrued compensation	122,654	114,163
Total current liabilities	466,991us-gaap_LiabilitiesCurrent	555,844us-gaap_LiabilitiesCurrent
Commitments and Contingencies (Note 5)
Shareholders' Equity:
Preferred stock, no par value authorized 5,000,000 shares, none issued and none outstanding at November 30, 2014 and May 31, 2014
Common stock, $0.08 par value authorized 25,000,000 shares, issued and outstanding 7,552,714 and 7,543,714 at November 30 and May 31, 2014, respectively	604,216us-gaap_CommonStockValue	603,496us-gaap_CommonStockValue
Additional paid-in-capital	18,313,733us-gaap_AdditionalPaidInCapital	18,309,154us-gaap_AdditionalPaidInCapital
Accumulated other comprehensive loss	(11,827)	(10,149)
Accumulated deficit	(13,445,328)	(12,988,032)
Total Shareholders' Equity	5,460,794us-gaap_StockholdersEquity	5,914,469us-gaap_StockholdersEquity
Total Liabilities and Shareholders' Equity	$ 5,927,785	$ 6,470,313

Significant Accounting Policies (Details) - Options and warrants (USD $)	6 Months Ended
	Nov. 30, 2014
Options and warrants [Abstract]
Options Outstanding May 31, 2014	860,500
Options Outstanding May 31, 2014	$ 0.51
Granted	24,500
Granted	$ 0.85
Exercised	(9,000)
Exercised	$ 0.39
Cancelled or expired	(34,500)
Cancelled or expired	$ 0.72
Options Outstanding November 30, 2014	841,500
Options Outstanding November 30, 2014	$ 0.52

Document And Entity Information	6 Months Ended
Document And Entity Information	Nov. 30, 2014	Jan. 14, 2015
Document and Entity Information [Abstract]
Entity Registrant Name	BIOMERICA INC.
Document Type	10-Q
Current Fiscal Year End Date	--05-31
Entity Common Stock, Shares Outstanding		7,553,464dei_EntityCommonStockSharesOutstanding
Amendment Flag	false
Entity Central Index Key	0000073290
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Smaller Reporting Company
Entity Well-known Seasoned Issuer	No
Document Period End Date	Nov. 30, 2014
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q2

CONDENSED CONSOLIDATED BALANCE SHEETS (Parentheticals) (USD $)	Nov. 30, 2014	May 31, 2014
Allowance for doubtful accounts (in Dollars)	$ 13,341	$ 30,000
Accumulated Depreciation and Amortization (in Dollars)	$ 1,249,785	$ 1,160,934
Preferred stock, No Par Value (in Dollars per share)	$ 0us-gaap_PreferredStockNoParValue	$ 0us-gaap_PreferredStockNoParValue
Preferred stock, Shares authorized	5,000,000us-gaap_PreferredStockSharesAuthorized	5,000,000us-gaap_PreferredStockSharesAuthorized
Preferred stock, Shares Issued	0us-gaap_PreferredStockSharesIssued	0us-gaap_PreferredStockSharesIssued
Preferred stock, Shares Outstanding	0us-gaap_PreferredStockSharesOutstanding	0us-gaap_PreferredStockSharesOutstanding
Common stock, Par Value (in Dollars per share)	$ 0.08	$ 0.08
Common stock, Shares Authorized	25,000,000us-gaap_CommonStockSharesAuthorized	25,000,000us-gaap_CommonStockSharesAuthorized
Common stock, Shares Issued	7,552,714us-gaap_CommonStockSharesIssued	7,543,714us-gaap_CommonStockSharesIssued
Common stock, Shares Outstanding	7,552,714us-gaap_CommonStockSharesOutstanding	7,543,714us-gaap_CommonStockSharesOutstanding

Accounts Payable and Accrued Expenses (Details) - Accounts payable and accrued expense balances (USD $)	Nov. 30, 2014	May 31, 2014
Accounts payable and accrued expense balances [Abstract]
Accounts payable	$ 249,978us-gaap_AccountsPayableCurrent	$ 385,701us-gaap_AccountsPayableCurrent
Accrued expenses	47,641us-gaap_AccruedLiabilitiesCurrent
Deferred rent	46,718us-gaap_DeferredRentCreditCurrent	55,980us-gaap_DeferredRentCreditCurrent
Total	$ 344,337	$ 441,681

Significant Accounting Policies (Details) (USD $)	3 Months Ended		6 Months Ended
Significant Accounting Policies (Details) (USD $)	Nov. 30, 2014	Nov. 30, 2013	Nov. 30, 2014	Nov. 30, 2013	May 31, 2014
Significant Accounting Policies (Details) [Line Items]
Amortization of Intangible Assets	$ 18,479us-gaap_AmortizationOfIntangibleAssets	$ 3,665us-gaap_AmortizationOfIntangibleAssets	$ 36,660us-gaap_AmortizationOfIntangibleAssets	$ 11,121us-gaap_AmortizationOfIntangibleAssets
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in Shares)			24,500
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price (in Dollars per share)			$ 0.85
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period (in Shares)			9,000
Share-based Compensation Arrangements by Share-based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price (in Dollars per share)			$ 0.39
Proceeds from Stock Options Exercised			3,495	1,780
Equity Method Investment, Ownership Percentage	6.00%		6.00%
Deferred Tax Assets, Valuation Allowance	180,000		180,000		0
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in Shares)	344,024	372,816	371,731	379,180
Property, Plant And Equipment And Leasehold Improvements [Member]
Significant Accounting Policies (Details) [Line Items]
Depreciation, Depletion and Amortization	$ 44,276	$ 43,452	$ 89,516	$ 86,231
Marketing And Distribution Rights [Member]
Significant Accounting Policies (Details) [Line Items]
Finite-Lived Intangible Asset, Useful Life			18 years
Purchased Technology Use Rights and Licenses [Member]
Significant Accounting Policies (Details) [Line Items]
Finite-Lived Intangible Asset, Useful Life			10 years
Patents [Member]
Significant Accounting Policies (Details) [Line Items]
Finite-Lived Intangible Asset, Useful Life			17 years
Minimum [Member]
Significant Accounting Policies (Details) [Line Items]
Property, Plant and Equipment, Useful Life			5 years
Share-based Compensation Arrangements by Share-based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price (in Dollars per share)			$ 0.38
Maximum [Member]
Significant Accounting Policies (Details) [Line Items]
Property, Plant and Equipment, Useful Life			10 years
Share-based Compensation Arrangements by Share-based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price (in Dollars per share)			$ 0.43

Significant Accounting Policies (Details) - Inventories (USD $)	Nov. 30, 2014	May 31, 2014
Inventories [Abstract]
Raw materials	$ 922,000	$ 899,000
Work in progress	815,000	635,000
Finished products	253,000	232,000
Total	$ 1,989,950us-gaap_InventoryNet	$ 1,765,772us-gaap_InventoryNet

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (USD $)	6 Months Ended
	Nov. 30, 2014	Nov. 30, 2013
Cash flows from operating activities:
Net loss	$ (457,296)us-gaap_NetIncomeLoss	$ (411,072)us-gaap_NetIncomeLoss
Adjustments to reconcile net loss to net cash provided by (used in) operating activities
Depreciation and amortization	126,176us-gaap_DepreciationAndAmortization	97,352us-gaap_DepreciationAndAmortization
Stock option expense	1,804us-gaap_StockOptionPlanExpense	881us-gaap_StockOptionPlanExpense
Change in provision for losses on accounts receivable	(16,659)us-gaap_ProvisionForDoubtfulAccounts	4,675us-gaap_ProvisionForDoubtfulAccounts
Inventory reserve	7,423	(6,713)
Gain on disposal of equipment	(665)
Decrease in deferred rent liability	(9,262)	(6,418)
Changes in assets and liabilities:
Accounts receivable	900,454	45,414
Inventories	(231,601)us-gaap_IncreaseDecreaseInInventories	(321,700)us-gaap_IncreaseDecreaseInInventories
Prepaid expenses and other assets	(56,787)	10,316
Accounts payable and other accrued expenses	(88,082)	(65,525)
Accrued compensation	8,491	(87,358)
Net cash provided by (used in) operating activities	183,996	(740,148)
Cash flows from investing activities:
Purchases of property and equipment	(8,654)us-gaap_RepaymentsOfLinesOfCredit	(83,855)us-gaap_RepaymentsOfLinesOfCredit
Proceeds from sales of equipment	1,900
Increase in intangibles	(14,136)
Net cash used in investing activities	(20,890)	(83,855)
Cash flows from financing activities:
Proceeds from exercise of stock options	3,495	1,780
Net cash provided by financing activities	3,495	1,780
Effect of exchange rate changes in cash	(1,678)	(14)
Net increase in cash and cash equivalents	164,923	(822,237)
Cash and cash equivalents at beginning of period	1,509,125	2,469,796
Cash and cash equivalents at end of period	1,674,048	1,647,559
Cash paid during the period for:
Interest	17us-gaap_InterestPaid	0us-gaap_InterestPaid
Income taxes	$ 0us-gaap_IncomeTaxesPaid	$ 3,500us-gaap_IncomeTaxesPaid

Commitments and Contingencies	6 Months Ended
Commitments and Contingencies	Nov. 30, 2014
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies Disclosure [Text Block]	Note 5: Commitments and Contingencies In March 2014, the Company entered into a line of credit (the “Line”) with its bank which has a borrowing limit of $250,000. The line is secured by substantially all of the Company’s assets and bears interest at 2.0% plus the Wall Street Journal Prime West Coast Edition prime rate. At November 30, 2014 the Company had not drawn any funds on the line. On June 18, 2009, the Company entered into an agreement to lease a building in Irvine, California. The lease commenced September 1, 2009 and ends August 31, 2016. The initial base rent was set at $18,490 per month with scheduled annual increases through the end of the lease term. The rent is currently set at $21,437 per month.

Geographic Information (Details) (Geographic Concentration Risk [Member])	6 Months Ended
	Nov. 30, 2014
Geographic Concentration Risk [Member]
Geographic Information (Details) [Line Items]
Concentration Risk, Percentage	10.00%