10-Q

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 FEBRUARY 28, 2015

OR

[ ] 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)
---------------------                   -------------------------------------------
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: 7,554,714 shares of common stock, par value $0.08, as of April 14, 2015.

	BIOMERICA, INC.
	INDEX
PART I	Financial Information
Item 1.	Financial Statements:
	Condensed Consolidated Statements of Operations and Comprehensive Loss (unaudited) – Three and Nine Months Ended February 28, 2015 and 2014	1
	Condensed Consolidated Balance Sheets (unaudited)February 28, 2015 and (audited) May 31, 2014	2
	Condensed Consolidated Statements of Cash Flows (unaudited) - Nine Months Ended February 28, 2015 and 2014	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
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	12
Item 4.	Controls and Procedures	12
PART IIOther 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	14
	Signatures	15

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

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

	Nine Months Ended February 28,				Three Months Ended February 28,
	2015		2014		2015		2014
Net sales	$	3,467,450	$	3,441,299	$	1,299,400	$	1,492,719
Cost of sales		(2,391,464)		(2,346,803)		(840,568)		(914,157)
Gross profit		1,075,986		1,094,496		458,832		578,562
Operating Expenses:
Selling, general and administrative		1,123,073		1,114,872		409,737		405,768
Research and development		562,420		368,222		184,632		140,177
Total operating expenses		1,685,493		1,483,094		594,369		545,945
(Loss) income from operations		(609,507)		(388,598)		(135,537)		32,617
Other Income (Expense):
Dividend and interest income		18,421		13,681		1,724		3,482
Interest expense		(17)		(80)		-		(20)
Total other income		18,404		13,601		1,724		3,462
(Loss) income before income tax		(591,103)		(374,997)		(133,813)		36,079
Credit (provision) for income taxes		16,620		(9,535)		16,620		(9,535)
Net (loss) income	$	(574,483)	$	(384,532)	$	(117,193)	$	26,544
Basic net (loss) income per common share	$	(0.08)	$	(0.05)	$	(0.02)	$	0.00
Diluted net (loss) income per common share	$	(0.08)	$	(0.05)	$	(0.02)	$	0.00
Weighted average number of common and common equivalent shares:
Basic		7,551,447		7,310,872		7,554,603		7,378,403
Diluted		7,551,447		7,310,872		7,554,603		7,731,252
Net (loss) income	$	(574,483)	$	(384,532)	$	(117,193)	$	26,544
Other comprehensive loss, net of tax:
Foreign currency translation		(1,987)		(1,114)		(308)		(1,110)
Comprehensive (loss) income	$	(576,470)	$	(385,646)	$	(117,501)	$	25,434

The accompanying notes are an integral part of these statements.

1

BIOMERICA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)

	February 28,		May 31,
	2015		2014
	(unaudited)		(audited)
Assets
Current Assets:
Cash and cash equivalents	$	1,171,689	$	1,509,125
Accounts receivable, less allowance for doubtful accounts of $17,007 and $30,000 as of February 28, 2015 and May 31, 2014,respectively		931,394		1,447,705
Inventories, net		2,110,798		1,765,772
Prepaid expenses and other		130,093		103,572
Deferred tax assets, current portion		87,000		87,000
Total current assets		4,430,974		4,913,174
Property and Equipment, net of accumulated depreciation and amortization of $1,282,017 and $1,160,934 as of February 28, 2015 and May 31, 2014, respectively .		485,421		614,337
Deferred Tax Assets, net of current portion		359,000		359,000
Investments		165,324		165,324
Intangible Assets, net		339,983		382,181
Other Assets		51,085		36,297
Total Assets	$	5,831,787	$	6,470,313
Liabilities and Shareholders' Equity
Current Liabilities:
Accounts payable and accrued expenses	$	352,945	$	441,681
Accrued compensation		130,425		114,163
Total current liabilities		483,370		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 February 28, 2015 and May 31, 2014		--		--
Common stock, $0.08 par value authorized 25,000,000 shares, issued and outstanding 7,554,714 and 7,543,714 at February 28, 2015 andMay 31, 2014, respectively		604,376		603,496
Additional paid-in-capital		18,318,692		18,309,154
Accumulated other comprehensive loss		(12,136)		(10,149)
Accumulated deficit		(13,562,515)		(12,988,032)
Total Shareholders' Equity		5,348,417		5,914,469
Total Liabilities and Shareholders' Equity	$	5,831,787	$	6,470,313

The accompanying notes are an integral part of these statements.

2

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

	Nine Months Ended
	February 28,
	2015		2014
Cash flows from operating activities:
Net (loss)	$	(574,483)	$	(384,532)
Adjustments to reconcile net (loss) to net cash (used in)operating activities:
Depreciation and amortization		192,670		148,624
Stock option expense		6,063		11,003
Change in provision for losses on accounts receivable		(12,993)		4,675
Gain on disposal of fixed asset		(665)		--
Inventory reserve		7,328		(6,713)
Decrease in deferred rent liability		(14,834)		(10,109)
Changes in assets and liabilities:
Accounts receivable		529,304		(304,783)
Inventories		(352,354)		(360,407)
Prepaid expenses and other assets		(26,521)		55,671
Accounts payable and other accrued expenses		(73,902)		81,323
Other assets		(14,788)		--
Accrued compensation		16,262		(87,654)
Net cash (used in) operating activities		(318,913)		(852,902)
Cash flows from investing activities:
Proceeds from sale of equipment		1,900		--
Increases in intangibles		(14,135)		--
Purchases of property and equipment		(8,656)		(117,365)
Net cash used in investing activities		(20,891)		(117,365)
Cash flows from financing activities:
Proceeds from sale of common stock		--		150,000
Proceeds from exercise of stock options		4,355		17,275
Net cash provided by financing activities		4,355		167,275
Effect of exchange rate changes in cash		(1,987)		(1,114)
Net decrease in cash and cash equivalents		(337,436)		(804,106)
Cash and cash equivalents at beginning of period		1,509,125		2,469,796
Cash and cash equivalents at end of period	$	1,171,689	$	1,665,690
Supplemental Disclosure of Cash-Flow Information:
Cash paid during the period for:
Interest	$	17	$	80
Income taxes	$	800	$	9,535
Non-Cash investment disclosure:
Payment of international regulatory approval fees in Exchange for $100,000 due on agreement to purchase Biomerica restricted stock	$	--	$	100,000

The accompanying notes are an integral part of these statements.

3

BIOMERICA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 1: Basis of Presentation

The information set forth in these condensed consolidated 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 reserved for unless collection is reasonably assured.  Any charge-offs are approved by upper level management prior to charging 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.  At February 28, 2015, one customer accounted for 34.2% of the Company’s outstanding gross receivable balance and one foreign customer accounted for 8.2% and 21.9% of the Company’s net sales for the three and nine months ended February 28, 2015, respectively. Management monitors the payments for these large balances closely and very often requires payment of existing invoices before shipping new sales orders. 

4

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:

	February 28,		May 31,
	2015		2014
Raw materials	$	1,009,000	$	899,000
Work in progress		898,000		635,000
Finished products		204,000		232,000
Total	$	2,111,000	$	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 $46,819 and $45,283 for the three months ended February 28, 2015 and 2014, and $136,337 and $131,514 for the nine months ended February 28, 2015 and 2014, 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 $19,674 and $5,989 for the three months ended February 28, 2015 and 2014, respectively, and $56,333 and $17,110 for the nine months ended February 28, 2015 and 2014, respectively.

5

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 (warrants and 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 and warrants granted, exercised, expired, cancelled and outstanding as of February 28, 2015:

			Exercise
			Price
	Option		Weighted
	Shares		Average
Outstanding May 31, 2014		860,500	$	0.51
Granted		356,000		0.82
Exercised		(11,000)		0.40
Cancelled or expired		(35,500)		0.73
Outstanding February 28, 2015		1,170,000	$	0.60

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 February 2015 options to purchase 331,500 shares of the Company’s common stock were granted at the exercise price of $0.82.

In the nine months ended February 28, 2015, options to acquire 11,000 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 $4,355.

6

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 net sales, and shipping and handling costs are classified as cost of 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 on deferred tax assets of approximately $236,000 as of February 28, 2015 and $0 as of May 31, 2014. The Company did not record any income tax benefit for the nine months ended February 28, 2015, however, the Company did record a tax refund receivable of $17,420 during the three and nine month period ended February 28, 2015.

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.

7

Net Income (Loss) Per Share

Basic earnings (loss) per share are computed as net income (loss) divided by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflect the potential dilution that could occur from common shares issuable through stock options, warrants and other convertible securities. The total amount of anti-dilutive warrants or options not included in the earnings per share calculation for the three and nine months ended February 28, 2015 was 364,319 and 403,524, respectively. The total amount of anti-dilutive warrants or options not included in the earnings per share calculation for the nine months ended February 28, 2014 was 359,013.

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

	Nine Months Ended				Three Months Ended
	February 28,				February 28,
	2015		2014		2015		2014
Numerator:
(Loss)income from continuing operations	$	(574,483)	$	(384,532)	$	(117,193)	$	26,544
Denominator for basic net(loss) income Per common share		7,551,447		7,310,872		7,554,603		7,378,403
Effect of dilutive securities:
Options and warrants		--		--		--		352,849
Denominator for diluted net (loss) income per common share		7,551,447		7,310,872		7,554,603		7,731,252
Basic net (loss) income per common share	$	(0.08)	$	(0.05)	$	(0.02)	$	0.00
Diluted net (loss) income per common share	$	(0.08)	$	(0.05)	$	(0.02)	$	0.00

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.

8

Note 3: Accounts Payable and Accrued Expenses

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

	February 28,		May 31,
	2015		2014
Accounts payable and accrued expenses	$	311,799	$	385,701
Deferred rent		41,146		55,980
Total	$	352,945	$	441,681

Note 4: Geographic Information

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

	Nine Months Ended				Three Months Ended
	February 28,				February 28,
	2015		2014		2015		2014
Revenues from sales to unaffiliated customers:
United States	$	784,000	$	951,000	$	310,000	$	446,000
Asia		494,000		599,000		375,000		383,000
Europe		2,031,000		1,797,000		587,000		598,000
South America		8,000		12,000		3,000		5,000
Middle East		136,000		65,000		23,000		45,000
Other		14,000		17,000		1,000		16,000
	$	3,467,000	$	3,441,000	$	1,299,000	$	1,493,000

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

9

Note 5: Commitments and Contingencies

     In March 2014, the Company renewed the line of credit (the "Line") with its bank with a borrowing limit of $250,000. The line was secured by substantially all of the Company’s assets, bears interest at 2.0% plus the Wall Street Journal Prime West Coast Edition prime rate. At February 28, 2015 the Company had not drawn any funds on the line. On March 21, 2015, the line of credit expired.

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 $18,490per month with scheduled annual increases through the end of the lease term. The rent is currently set at $21,437 per month.

Note 6: Subsequent Events

     On March 21, 2015, the Company’s line of credit in the amount of $250,000 expired.

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 or urine 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 $1,299,400 for the three months ended February 28, 2015 as compared to $1,492,719 for the same period in the previous year. This represents a decrease of $193,319 or 13.0%. The decrease for the three month period was primarily due to decreased domestic sales of the EZ Detect product due to lower screening program sales in fiscal 2015. For the nine month periods ended February 28, 2015 as compared to February 28, 2014, net sales were $3,467,450 as compared to $3,441,299, an increase of $26,151, or 0.8%. Although sales in Europe increased by $234,000 in this period compared to the prior fiscal year, this was offset by lower screening program sales and lower sales to Asia, which declined as a result of restructuring of the Chinese distribution channel in the earlier quarters of fiscal 2015.

       For the three months ended February 28, 2015 as compared to 2014, cost of sales increased as a percentage of sales from 61.2% of sales or $914,157, to 64.7% of sales, or $840,568. For the nine months ended February 28, 2015 as compared to 2014, cost of sales as a percentage of sales increased from 68.2% of sales or $2,346,803, to 69.0% of sales or $2,391,464. The increase in cost of sales as a percentage of sales was primarily a result of the lower sales volume.

         For the three months ended February 28, 2015 compared to 2014, selling, general and administrative costs increased by $3,969, or 1.0%. For the nine month periods ended February 28, 2015 as compared to 2014, general and administrative costs increased by $8,201, or 0.7%.

         For the three months ended February 28, 2015 compared to 2014, research and development expenses increased by $44,455, or 31.7%. For the nine month period ended February 28, 2015 as compared to February 28, 2014, these expenses increased by $194,198, or 52.7%. The increase for both periods was due to research being done related to new products, regulatory approvals and patent application preparation.In April 2015 the Company established a Scientific Advisory Board chaired by Douglas A. Drossman, M.D. and  comprised of 3 other key leaders in the field of Gastroenterology and Irritable Bowel Syndrome. The board’s goal will be to help guide the Company in its endeavors to receive regulatory approvals related toits new test intended to aid in the treatment of irritable bowel syndrome.

         For the three months ended February 28, 2015 as compared to 2014, dividend and interest income and interest expense decreased by $1,738 and for the nine months increased by $4,803.

10

LIQUIDITY AND CAPITAL RESOURCES

       As of February 28, 2015 and May 31, 2014, the Company had cash and cash equivalents in the amount of $1,171,689 and $1,509,125 and working capital of $3,947,604 and $4,357,330, respectively.

       During the nine months ended February 28, 2015, the Company’s operations used cash of $318,915 compared to $852,902 in the same period of the prior fiscal year. Cash used in operations in fiscal 2015 was a result of the net loss of $574,483, increases of $352,354 in inventory, and decreases of accounts payable and other accrued expenses in the amount of $73,902, which was offset by collection of trade accounts receivable of $529,304 and depreciation and amortization of $192,670. Cash used in investing activities in the nine months ended February 28, 2015 was $20,891 compared to the nine months ended February 28, 2014 of $117,365.  The cash used in the period ended February 28, 2014 was due to $117,365 in equipment that was purchased. 

     On March 21, 2015, the Company’s $250,000 line of credit agreement expired.

     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.

11

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.

12

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. None.

13

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

14

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

15

EX-31.1

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 misleadingwith respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information includedin this report, fairly present in all material respects, the financial condition,resultsof operations and cash flows of the registrant as of, and for, the periods presented inthis 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 ensurethat material information relating to the registrant, including its consolidatedsubsidiary, is made known to us by others within those entities, particularlyduring 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 andthe 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 mostrecent evaluation of our internal control over financial reporting, to the registrant'sauditors 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, summarizeand 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: April 14, 2015

/s/ Zackary S. Irani

Zackary S. Irani

Chief Executive Officer

(Principal Executive Officer) 

EX-31.2

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.;

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 registrantand 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 ccepted accounting principles;

      c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness ofthe 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 controlover 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, summarizeand 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: April 14, 2015

/s/ Janet Moore

Janet Moore

Chief Financial Officer

(Principal Financial Officer) 

EX-32.1

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 February 28, 2015 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: April 14, 2015

EX-32.2

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 February 28, 2015 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: April 14, 2015

XML

Subsequent Events (Details) (USD $)	9 Months Ended
	Feb. 28, 2015	Mar. 31, 2014	Mar. 21, 2015
Subsequent Events (Details) [Line Items]
Line of Credit Facility, Expiration Date	Mar. 21, 2015
Line of Credit Facility, Maximum Borrowing Capacity		$ 250,000
Expiry Of Line Of Credit [Member]
Subsequent Events (Details) [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity			$ 250,000

XML

Accounts Payable and Accrued Expenses

9 Months Ended

Feb. 28, 2015

Payables and Accruals [Abstract]

Accounts Payable and Accrued Liabilities Disclosure [Text Block]

Note 3: Accounts Payable and Accrued Expenses

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

		February 28,		May 31,
		2015		2014
Accounts payable and accrued expenses	$	311,799	$	385,701
Deferred rent		41,146		55,980
Total	$	352,945	$	441,681

XML

Summary of Significant Accounting Policies

9 Months Ended

Feb. 28, 2015

Accounting Policies [Abstract]

Significant Accounting Policies [Text Block]

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 reserved for unless collection is reasonably assured.  Any charge-offs are approved by upper level management prior to charging 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.  At February 28, 2015, one customer accounted for 34.2% of the Company’s outstanding gross receivable balance and one foreign customer accounted for 8.2% and 21.9% of the Company’s net sales for the three and nine months ended February 28, 2015, respectively. 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:

		February 28,		May 31,
		2015		2014
Raw materials	$	1,009,000	$	899,000
Work in progress		898,000		635,000
Finished products		204,000		232,000
Total	$	2,111,000	$	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 $46,819 and $45,283 for the three months ended February 28, 2015 and 2014, and $136,337 and $131,514 for the nine months ended February 28, 2015 and 2014, 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 $19,674 and $5,989 for the three months ended February 28, 2015 and 2014, respectively, and $56,333 and $17,110 for the nine months ended February 28, 2015 and 2014, 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 (warrants and 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 and warrants granted, exercised, expired, cancelled and outstanding as of February 28, 2015:

			Exercise
			Price
	Option		Weighted
	Shares		Average
Outstanding May 31, 2014	860,500	$	0.51
Granted	356,000		0.82
Exercised	(11,000)		0.40
Cancelled or expired	(35,500)		0.73
Outstanding February 28, 2015	1,170,000	$	0.60

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 February 2015 options to purchase 331,500 shares of the Company’s common stock were granted at the exercise price of $0.82.

In the nine months ended February 28, 2015, options to acquire 11,000 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 $4,355.

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 net sales, and shipping and handling costs are classified as cost of 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 on deferred tax assets of approximately $236,000 as of February 28, 2015 and $0 as of May 31, 2014. The Company did not record any income tax benefit for the nine months ended February 28, 2015, however, the Company did record a tax refund receivable of $17,420 during the three and nine month period ended February 28, 2015.

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 Income (Loss) Per Share

Basic earnings (loss) per share are computed as net income (loss) divided by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflect the potential dilution that could occur from common shares issuable through stock options, warrants and other convertible securities. The total amount of anti-dilutive warrants or options not included in the earnings per share calculation for the three and nine months ended February 28, 2015 was 364,319 and 403,524, respectively. The total amount of anti-dilutive warrants or options not included in the earnings per share calculation for the nine months ended February 28, 2014 was 359,013.

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

	Nine Months				Three Months
	Ended				Ended
	February 28,				February 28,
	2015		2014		2015		2014
Numerator:
(Loss)income from continuing operations	$	(574,483)	$	(384,532)	$	(117,193)	$	26,544
Denominator for basic net(loss) income Per common share		7,551,447		7,310,872		7,554,603		7,378,403
Effect of dilutive securities:
Options and warrants		--		--		--		352,849
Denominator for diluted net (loss)income per common share		7,551,447		7,310,872		7,554,603		7,731,252
Basic net (loss) income per common share	$	(0.08)	$	(0.05)	$	(0.02)	$	0.00
Diluted net (loss) income per common share	$	(0.08)	$	(0.05)	$	(0.02)	$	0.00

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.

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME (UNAUDITED) (USD $)	3 Months Ended		9 Months Ended
	Feb. 28, 2015	Feb. 28, 2014	Feb. 28, 2015	Feb. 28, 2014
Net sales	$ 1,299,400	$ 1,492,719	$ 3,467,450	$ 3,441,299
Cost of sales	(840,568)	(914,157)	(2,391,464)	(2,346,803)
Gross profit	458,832	578,562	1,075,986	1,094,496
Operating Expenses:
Selling, general and administrative	409,737	405,768	1,123,073	1,114,872
Research and development	184,632	140,177	562,420	368,222
Total operating expenses	594,369	545,945	1,685,493	1,483,094
(Loss) income from operations	(135,537)	32,617	(609,507)	(388,598)
Other Income (Expense):
Dividend and interest income	1,724	3,482	18,421	13,681
Interest expense		(20)	(17)	(80)
Total other income	1,724	3,462	18,404	13,601
(Loss) income before income tax	(133,813)	36,079	(591,103)	(374,997)
Credit (provision) for income taxes	16,620	(9,535)	16,620	(9,535)
Net (loss) income	(117,193)	26,544	(574,483)	(384,532)
Basic net (loss) income per common share (in Dollars per share)	$ (0.02)	$ 0.00	$ (0.08)	$ (0.05)
Diluted net (loss) income per common share (in Dollars per share)	$ (0.02)	$ 0.00	$ (0.08)	$ (0.05)
Weighted average number of common and common equivalent shares:
Basic (in Shares)	7,554,603	7,378,403	7,551,447	7,310,872
Diluted (in Shares)	7,554,603	7,731,252	7,551,447	7,310,872
Net (loss) income	(117,193)	26,544	(574,483)	(384,532)
Other comprehensive loss, net of tax:
Foreign currency translation	(308)	(1,110)	(1,987)	(1,114)
Comprehensive (loss) income	$ (117,501)	$ 25,434	$ (576,470)	$ (385,646)

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Parentheticals) (USD $)	9 Months Ended
	Feb. 28, 2015	Feb. 28, 2014
Amount due on agreement to purchase restricted stock		$ 100,000

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Geographic Information (Details) (Geographic Concentration Risk [Member])	9 Months Ended
	Feb. 28, 2015
Geographic Concentration Risk [Member]
Geographic Information (Details) [Line Items]
Concentration Risk, Percentage	10.00%

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Commitments and Contingencies (Details) (USD $)	1 Months Ended	9 Months Ended	0 Months Ended
	Mar. 31, 2014	Feb. 28, 2015	Jun. 18, 2009
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 Facility, Expiration Date		Mar. 21, 2015
Buildingin Irvine California [Member]
Commitments and Contingencies (Details) [Line Items]
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
Line of Credit [Member]
Commitments and Contingencies (Details) [Line Items]
Debt Instrument, Basis Spread on Variable Rate	2.00%
Debt Instrument, Description of Variable Rate Basis	Wall Street Journal Prime West Coast Edition prime rate

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Basis of Presentation

9 Months Ended

Feb. 28, 2015

Disclosure Text Block [Abstract]

Basis of Accounting [Text Block]

Note 1: Basis of Presentation

The information set forth in these condensed consolidated 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.

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CONDENSED CONSOLIDATED BALANCE SHEETS (USD $)	Feb. 28, 2015	May 31, 2014
Current Assets:
Cash and cash equivalents	$ 1,171,689	$ 1,509,125
Accounts receivable, less allowance for doubtful accounts of $17,007 and $30,000 as of February 28, 2015 and May 31, 2014,respectively	931,394	1,447,705
Inventories, net	2,110,798	1,765,772
Prepaid expenses and other	130,093	103,572
Deferred tax assets, current portion	87,000	87,000
Total current assets	4,430,974	4,913,174
Property and Equipment, net of accumulated depreciation and amortization of $1,282,017 and $1,160,934 as of February 28, 2015 and May 31, 2014, respectively .	485,421	614,337
Deferred Tax Assets, net of current portion	359,000	359,000
Investments	165,324	165,324
Intangible Assets, net	339,983	382,181
Other Assets	51,085	36,297
Total Assets	5,831,787	6,470,313
Current Liabilities:
Accounts payable and accrued expenses	352,945	441,681
Accrued compensation	130,425	114,163
Total current liabilities	483,370	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 February 28, 2015 and May 31, 2014
Common stock, $0.08 par value authorized 25,000,000 shares, issued and outstanding 7,554,714 and 7,543,714 at February 28, 2015 and May 31, 2014, respectively	604,376	603,496
Additional paid-in-capital	18,318,692	18,309,154
Accumulated other comprehensive loss	(12,136)	(10,149)
Accumulated deficit	(13,562,515)	(12,988,032)
Total Shareholders' Equity	5,348,417	5,914,469
Total Liabilities and Shareholders' Equity	$ 5,831,787	$ 6,470,313

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Summary of Significant Accounting Policies (Details) (USD $)	3 Months Ended		9 Months Ended		0 Months Ended
	Feb. 28, 2015	Feb. 28, 2014	Feb. 28, 2015	Feb. 28, 2014	Feb. 28, 2015	Sep. 30, 2014	May 31, 2014
Summary of Significant Accounting Policies (Details) [Line Items]
Depreciation, Depletion and Amortization	$ 46,819	$ 45,283	$ 136,337	$ 131,514
Amortization of Intangible Assets	19,674	5,989	56,333	17,110
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in Shares)			356,000
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price (in Dollars per share)			$ 0.82
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period (in Shares)			11,000
Share-based Compensation Arrangements by Share-based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price (in Dollars per share)			$ 0.40
Proceeds from Stock Options Exercised			4,355	17,275
Deferred Tax Assets, Valuation Allowance	236,000		236,000		236,000		0
Income Taxes Receivable	$ 17,420		$ 17,420		17,420
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in Shares)	364,319		403,524	359,013
Investment In Polish Distributor [Member]
Summary of Significant Accounting Policies (Details) [Line Items]
Equity Method Investment, Ownership Percentage	6.00%		6.00%		6.00%
One Customers [Member] | Customer Concentration Risk [Member] | Accounts Receivable [Member]
Summary of Significant Accounting Policies (Details) [Line Items]
Concentration Risk, Percentage					34.20%
One Foreign Customer [Member] | Customer Concentration Risk [Member] | Accounts Receivable [Member]
Summary of Significant Accounting Policies (Details) [Line Items]
Concentration Risk, Percentage	8.20%		21.90%
Employee Stock Option [Member]
Summary of Significant Accounting Policies (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in Shares)					331,500	24,500
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price (in Dollars per share)					0.82	$ 0.85
Minimum [Member]
Summary of 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]
Summary of 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
Marketing And Distribution Rights [Member]
Summary of Significant Accounting Policies (Details) [Line Items]
Finite-Lived Intangible Asset, Useful Life			18 years
Purchased Technology Use Rightsand Licenses [Member]
Summary of Significant Accounting Policies (Details) [Line Items]
Finite-Lived Intangible Asset, Useful Life			10 years
Patents [Member]
Summary of Significant Accounting Policies (Details) [Line Items]
Finite-Lived Intangible Asset, Useful Life			17 years

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Document And Entity Information	9 Months Ended
	Feb. 28, 2015	Apr. 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		7,554,714
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	Feb. 28, 2015
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q3

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Summary of Significant Accounting Policies (Details) - Inventories (USD $)	Feb. 28, 2015	May 31, 2014
Inventories [Abstract]
Raw materials	$ 1,009,000	$ 899,000
Work in progress	898,000	635,000
Finished products	204,000	232,000
Total	$ 2,110,798	$ 1,765,772

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CONDENSED CONSOLIDATED BALANCE SHEETS (Parentheticals) (USD $)	Feb. 28, 2015	May 31, 2014
Allowance for doubtful accounts (in Dollars)	$ 17,007	$ 30,000
Accumulated Depreciation and Amortization (in Dollars)	$ 1,282,017	$ 1,160,934
Preferred stock, No Par Value (in Dollars per share)	$ 0	$ 0
Preferred stock, Shares authorized	5,000,000	5,000,000
Preferred stock, Shares Issued	0	0
Preferred stock, Shares Outstanding	0	0
Common stock, Par Value (in Dollars per share)	$ 0.08	$ 0.08
Common stock, Shares Authorized	25,000,000	25,000,000
Common stock, Shares Issued	7,554,714	7,543,714
Common stock, Shares Outstanding	7,554,714	7,543,714

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Subsequent Events

9 Months Ended

Feb. 28, 2015

Subsequent Events [Abstract]

Subsequent Events [Text Block]

Note 6: Subsequent Events

     On March 21, 2015, the Company’s line of credit in the amount of $250,000 expired.

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Commitments and Contingencies

9 Months Ended

Feb. 28, 2015

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure [Text Block]

Note 5: Commitments and Contingencies

     In March 2014, the Company renewed the line of credit (the "Line") with its bank with a borrowing limit of $250,000. The line was secured by substantially all of the Company’s assets, bears interest at 2.0% plus the Wall Street Journal Prime West Coast Edition prime rate. At February 28, 2015 the Company had not drawn any funds on the line. On March 21, 2015, the line of credit expired.

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.

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Geographic Information (Details) - Financial information about foreign and domestic operations and export sales (USD $)	3 Months Ended		9 Months Ended
	Feb. 28, 2015	Feb. 28, 2014	Feb. 28, 2015	Feb. 28, 2014
Revenues from sales to unaffiliated customers:
Net sales	$ 1,299,400	$ 1,492,719	$ 3,467,450	$ 3,441,299
UNITED STATES
Revenues from sales to unaffiliated customers:
Net sales	310,000	446,000	784,000	951,000
Asia [Member]
Revenues from sales to unaffiliated customers:
Net sales	375,000	383,000	494,000	599,000
Europe [Member]
Revenues from sales to unaffiliated customers:
Net sales	587,000	598,000	2,031,000	1,797,000
South America [Member]
Revenues from sales to unaffiliated customers:
Net sales	3,000	5,000	8,000	12,000
Middle East [Member]
Revenues from sales to unaffiliated customers:
Net sales	23,000	45,000	136,000	65,000
Other Foreign [Member]
Revenues from sales to unaffiliated customers:
Net sales	$ 1,000	$ 16,000	$ 14,000	$ 17,000

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Summary of Significant Accounting Policies (Details) - Options and warrants (USD $)	9 Months Ended
	Feb. 28, 2015
Options and warrants [Abstract]
Outstanding May 31, 2014	860,500
Outstanding May 31, 2014	$ 0.51
Granted	356,000
Granted	$ 0.82
Exercised	(11,000)
Exercised	$ 0.40
Cancelled or expired	(35,500)
Cancelled or expired	$ 0.73
Outstanding February 28, 2015	1,170,000
Outstanding February 28, 2015	$ 0.60

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Accounts Payable and Accrued Expenses (Tables)

9 Months Ended

Feb. 28, 2015

Payables and Accruals [Abstract]

Schedule of Accounts Payable and Accrued Liabilities [Table Text Block]

		February 28,		May 31,
		2015		2014
Accounts payable and accrued expenses	$	311,799	$	385,701
Deferred rent		41,146		55,980
Total	$	352,945	$	441,681

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Accounting Policies, by Policy (Policies)

9 Months Ended

Feb. 28, 2015

Accounting Policies [Abstract]

Consolidation, Policy [Policy Text Block]

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.

Use of Estimates, Policy [Policy Text Block]

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, Policy [Policy Text Block]

Cash and Cash Equivalents

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

Trade and Other Accounts Receivable, Policy [Policy Text Block]

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 reserved for unless collection is reasonably assured.  Any charge-offs are approved by upper level management prior to charging 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.  At February 28, 2015, one customer accounted for 34.2% of the Company’s outstanding gross receivable balance and one foreign customer accounted for 8.2% and 21.9% of the Company’s net sales for the three and nine months ended February 28, 2015, respectively. Management monitors the payments for these large balances closely and very often requires payment of existing invoices before shipping new sales orders.

Inventory, Policy [Policy Text Block]

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:

		February 28,		May 31,
		2015		2014
Raw materials	$	1,009,000	$	899,000
Work in progress		898,000		635,000
Finished products		204,000		232,000
Total	$	2,111,000	$	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, Plant and Equipment, Policy [Policy Text Block]

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 $46,819 and $45,283 for the three months ended February 28, 2015 and 2014, and $136,337 and $131,514 for the nine months ended February 28, 2015 and 2014, respectively.

Intangible Assets, Finite-Lived, Policy [Policy Text Block]

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 $19,674 and $5,989 for the three months ended February 28, 2015 and 2014, respectively, and $56,333 and $17,110 for the nine months ended February 28, 2015 and 2014, respectively.

Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block]

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 (warrants and 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 and warrants granted, exercised, expired, cancelled and outstanding as of February 28, 2015:

			Exercise
			Price
	Option		Weighted
	Shares		Average
Outstanding May 31, 2014	860,500	$	0.51
Granted	356,000		0.82
Exercised	(11,000)		0.40
Cancelled or expired	(35,500)		0.73
Outstanding February 28, 2015	1,170,000	$	0.60

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 February 2015 options to purchase 331,500 shares of the Company’s common stock were granted at the exercise price of $0.82.

In the nine months ended February 28, 2015, options to acquire 11,000 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 $4,355.

Revenue Recognition, Policy [Policy Text Block]

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.

Investment, Policy [Policy Text Block]

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 Cost, Policy [Policy Text Block]

Shipping and Handling Fees and Costs

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

Research and Development Expense, Policy [Policy Text Block]

Research and Development

Research and development costs are expensed as incurred.

Income Tax, Policy [Policy Text Block]

Income Taxes

       The Company has provided a valuation allowance on deferred tax assets of approximately $236,000 as of February 28, 2015 and $0 as of May 31, 2014. The Company did not record any income tax benefit for the nine months ended February 28, 2015, however, the Company did record a tax refund receivable of $17,420 during the three and nine month period ended February 28, 2015.

Foreign Currency Transactions and Translations Policy [Policy Text Block]

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 Charges, Policy [Policy Text Block]

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.

Earnings Per Share, Policy [Policy Text Block]

Net Income (Loss) Per Share

Basic earnings (loss) per share are computed as net income (loss) divided by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflect the potential dilution that could occur from common shares issuable through stock options, warrants and other convertible securities. The total amount of anti-dilutive warrants or options not included in the earnings per share calculation for the three and nine months ended February 28, 2015 was 364,319 and 403,524, respectively. The total amount of anti-dilutive warrants or options not included in the earnings per share calculation for the nine months ended February 28, 2014 was 359,013.

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

	Nine Months				Three Months
	Ended				Ended
	February 28,				February 28,
	2015		2014		2015		2014
Numerator:
(Loss)income from continuing operations	$	(574,483)	$	(384,532)	$	(117,193)	$	26,544
Denominator for basic net(loss) income Per common share		7,551,447		7,310,872		7,554,603		7,378,403
Effect of dilutive securities:
Options and warrants		--		--		--		352,849
Denominator for diluted net (loss)income per common share		7,551,447		7,310,872		7,554,603		7,731,252
Basic net (loss) income per common share	$	(0.08)	$	(0.05)	$	(0.02)	$	0.00
Diluted net (loss) income per common share	$	(0.08)	$	(0.05)	$	(0.02)	$	0.00

New Accounting Pronouncements, Policy [Policy Text Block]

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.

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Summary of Significant Accounting Policies (Tables)

9 Months Ended

Feb. 28, 2015

Accounting Policies [Abstract]

Schedule of Inventory, Current [Table Text Block]

		February 28,		May 31,
		2015		2014
Raw materials	$	1,009,000	$	899,000
Work in progress		898,000		635,000
Finished products		204,000		232,000
Total	$	2,111,000	$	1,766,000

Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]

			Exercise
			Price
	Option		Weighted
	Shares		Average
Outstanding May 31, 2014	860,500	$	0.51
Granted	356,000		0.82
Exercised	(11,000)		0.40
Cancelled or expired	(35,500)		0.73
Outstanding February 28, 2015	1,170,000	$	0.60

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	Nine Months				Three Months
	Ended				Ended
	February 28,				February 28,
	2015		2014		2015		2014
Numerator:
(Loss)income from continuing operations	$	(574,483)	$	(384,532)	$	(117,193)	$	26,544
Denominator for basic net(loss) income Per common share		7,551,447		7,310,872		7,554,603		7,378,403
Effect of dilutive securities:
Options and warrants		--		--		--		352,849
Denominator for diluted net (loss)income per common share		7,551,447		7,310,872		7,554,603		7,731,252
Basic net (loss) income per common share	$	(0.08)	$	(0.05)	$	(0.02)	$	0.00
Diluted net (loss) income per common share	$	(0.08)	$	(0.05)	$	(0.02)	$	0.00

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Geographic Information (Tables)

9 Months Ended

Feb. 28, 2015

Geographic Information Disclosure [Abstract]

Revenue from External Customers by Geographic Areas [Table Text Block]

	Nine Months Ended				Three Months Ended
	February 28,				February 28,
	2015		2014		2015		2014
Revenues from sales to unaffiliated customers:
United States	$	784,000	$	951,000	$	310,000	$	446,000
Asia		494,000		599,000		375,000		383,000
Europe		2,031,000		1,797,000		587,000		598,000
South America		8,000		12,000		3,000		5,000
Middle East		136,000		65,000		23,000		45,000
Other		14,000		17,000		1,000		16,000
	$	3,467,000	$	3,441,000	$	1,299,000	$	1,493,000

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Accounts Payable and Accrued Expenses (Details) - Accounts payable and accrued expense balances (USD $)	Feb. 28, 2015	May 31, 2014
Accounts payable and accrued expense balances [Abstract]
Accounts payable and accrued expenses	$ 311,799	$ 385,701
Deferred rent	41,146	55,980
Total	$ 352,945	$ 441,681

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (USD $)	9 Months Ended
	Feb. 28, 2015	Feb. 28, 2014
Cash flows from operating activities:
Net (loss)	$ (574,483)	$ (384,532)
Adjustments to reconcile net (loss) to net cash (used in)operating activities:
Depreciation and amortization	192,670	148,624
Stock option expense	6,063	11,003
Change in provision for losses on accounts receivable	(12,993)	4,675
Gain on disposal of fixed asset	(665)
Inventory reserve	7,328	(6,713)
Decrease in deferred rent liability	(14,834)	(10,109)
Changes in assets and liabilities:
Accounts receivable	529,304	(304,783)
Inventories	(352,354)	(360,407)
Prepaid expenses and other assets	(26,521)	55,671
Accounts payable and other accrued expenses	(73,902)	81,323
Other assets	(14,788)
Accrued compensation	16,262	(87,654)
Net cash (used in) operating activities	(318,913)	(852,902)
Cash flows from investing activities:
Proceeds from sale of equipment	1,900
Increases in intangibles	(14,135)
Purchases of property and equipment	(8,656)	(117,365)
Net cash used in investing activities	(20,891)	(117,365)
Cash flows from financing activities:
Proceeds from sale of common stock		150,000
Proceeds from exercise of stock options	4,355	17,275
Net cash provided by financing activities	4,355	167,275
Effect of exchange rate changes in cash	(1,987)	(1,114)
Net decrease in cash and cash equivalents	(337,436)	(804,106)
Cash and cash equivalents at beginning of period	1,509,125	2,469,796
Cash and cash equivalents at end of period	1,171,689	1,665,690
Cash paid during the period for:
Interest	17	80
Income taxes	800	9,535
Non-Cash investment disclosure:
Payment of international regulatory approval fees in Exchange for $100,000 due on agreement to purchase Biomerica restricted stock		$ 100,000

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Geographic Information

9 Months Ended

Feb. 28, 2015

Geographic Information Disclosure [Abstract]

Geographic Information Disclosure [Text Block]

Note 4: Geographic Information

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

	Nine Months Ended				Three Months Ended
	February 28,				February 28,
	2015		2014		2015		2014
Revenues from sales to unaffiliated customers:
United States	$	784,000	$	951,000	$	310,000	$	446,000
Asia		494,000		599,000		375,000		383,000
Europe		2,031,000		1,797,000		587,000		598,000
South America		8,000		12,000		3,000		5,000
Middle East		136,000		65,000		23,000		45,000
Other		14,000		17,000		1,000		16,000
	$	3,467,000	$	3,441,000	$	1,299,000	$	1,493,000

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

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Summary of Significant Accounting Policies (Details) - Reconciliation of the numerators and denominators of the basic and diluted earnings per share (USD $)	3 Months Ended		9 Months Ended
	Feb. 28, 2015	Feb. 28, 2014	Feb. 28, 2015	Feb. 28, 2014
Numerator:
(Loss)income from continuing operations (in Dollars)	$ (117,193)	$ 26,544	$ (574,483)	$ (384,532)
Denominator for basic net(loss) income Per common share	7,554,603	7,378,403	7,551,447	7,310,872
Effect of dilutive securities:
Options and warrants		352,849
Denominator for diluted net (loss)income per common share	7,554,603	7,731,252	7,551,447	7,310,872
Basic net (loss) income per common share (in Dollars per share)	$ (0.02)	$ 0.00	$ (0.08)	$ (0.05)
Diluted net (loss) income per common share (in Dollars per share)	$ (0.02)	$ 0.00	$ (0.08)	$ (0.05)