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 NOVEMBER 30, 2019

OR

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

Commission File Number:  0-8765

BIOMERICA, INC.

--------------------------------------------------------------------------------------------

(Exact name of registrant as specified in its charter)

    Delaware                                                                95-2645573

--------------------------------------------------------------------------------------------

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

 incorporation or organization)                                             Identification No.)

17571 Von Karman Avenue, Irvine, CA                                   92614

--------------------------------------------------------------------------------------------

 (Address of principal executive offices)                             (Zip Code)

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

--------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------

(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                                NASDAQ Capital Market           

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:  9,889,875 shares of common stock, par value $0.08, as of January 14, 2020.

BIOMERICA, INC.
INDEX
PART I	Financial Information
Item 1.	Financial Statements:
	Condensed Consolidated Statements of Operations and Comprehensive Loss (unaudited) – Three and Six Months Ended November 30, 2019 and 2018	1
	Condensed Consolidated Balance Sheets -(unaudited) November 30, 2019 and (audited) May 31, 2019	2
	Condensed Consolidated Statement of Shareholders’ Equity for the Six Months ended November 30, 2019	3
	Condensed Consolidated Statements of Cash Flows (unaudited) - Six Months Ended November 30, 2019 and 2018	4
	Notes to Condensed Consolidated Financial Statements (unaudited)	5-12
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	13-15
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	15
Item 4.	Controls and Procedures	15
PART II	Other Information
Item 1.	Legal Proceedings	15
Item 1A.	Risk Factors	16
Item 2.	Unregistered Sales of Equity Securities & Use of Proceeds	16
Item 3.	Defaults upon Senior Securities	16
Item 4.	Mine Safety Disclosures	16
Item 5.	Other Information	16
Item 6.	Exhibits	17
	Signatures	18

PART I - FINANCIAL INFORMATION SUMMARIZED FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS
BIOMERICA, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED)
	Six Months Ended November 30,				Three Months Ended November 30,
	2019		2018		2019		2018
Net sales	$	2,790,823	$	2,773,661	$	1,596,408	$	1,500,791
Cost of sales		(1,954,647)		(2,028,378)		(1,127,536)		(1,092,731)
Gross profit		836,176		745,283		468,872		408,060
Operating Expenses:
Selling, general and administrative		1,060,958		912,820		553,761		512,592
Research and development		775,320		773,186		404,854		381,405
Total operating expenses		1,836,278		1,686,006		958,615		893,997
Loss from operations		(1,000,102)		(940,723)		(489,743)		(485,937)
Other Income (Expense):
Dividend and interest income		8,551		11,786		4,488		8,693
Interest expense		(5)		(47)		(5)		--
Total other income		8,546		11,739		4,483		8,693
Net loss	$	(991,556)	$	(928,984)	$	(485,260)	$	(477,244)
Basic net loss per common share	$	(0.10)	$	(0.10)	$	(0.05)	$	(0.05)
Diluted net loss per common share	$	(0.10)	$	(0.10)	$	(0.05)	$	(0.05)
Weighted average number of common and     common equivalent shares:
Basic		9,780,713		8,995,575		9,817,363		9,061,617
Diluted		9,780,713		8,995,575		9,817,363		9,061,617
Net loss	$	(991,556)	$	(928,984)	$	(485,260)	$	(477,244)
Other comprehensive loss, net of tax:
Foreign currency translation		(5,085)		(5,806)		(1,643)		(4,480)
Comprehensive loss	$	(996,641)	$	(934,790)		(486,903)	$	(481,724)
The accompanying notes are an integral part of these statements.

1

BIOMERICA, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS
	November 30, 2019 (unaudited)		May 31, 2019 (audited)
Assets
Current Assets:
Cash and cash equivalents	$	850,989	$	686,785
Accounts receivable, less allowance for doubtful accounts of    $76,681 and $73,110 as of November 30, 2019 and May 31, 2019, respectively		1,282,944		1,454,652
Inventories		2,190,893		2,151,090
Prepaid expenses and other		186,035		202,402
Total Current Assets		4,510,861		4,494,929
Property and Equipment, net of accumulated depreciation and   amortization of $1,813,925 and $1,762,344 as of November 30, 2019   and May 31, 2019, respectively		303,573		351,070
Right of Use Assets, net of amortization		1,823,614		-
Investments		165,324		165,324
Intangible Assets, net		110,490		107,209
Other Assets		124,759		126,832
Total Assets	$	7,038,621	$	5,245,364
Liabilities and Shareholders' Equity
Current Liabilities:
Accounts payable and accrued expenses	$	1,344,791	$	1,037,565
Accrued compensation		239,072		226,829
Equity financing deposit-officer		200,000		-
Lease liability, current portion		200,401		-
Total Current Liabilities		1,984,264		1,264,394
Lease Liability, net of current portion		1,678,436		-
Total Liabilities		3,662,700		1,264,394
Commitments and Contingencies (Notes 6 and 7)
Shareholders' Equity:
Preferred stock, no par value authorized 5,000,000 shares, none issued    and none outstanding at November 30, 2019 and May 31, 2019		-		-
Common stock, $0.08 par value authorized 25,000,000 shares, issued    and outstanding 9,851,090 and 9,677,188 at November 30, 2019 and    May 31, 2019, respectively		788,085		774,173
Additional paid-in-capital		23,223,269		22,830,006
Common stock subscribed		(15,583)		-
Accumulated other comprehensive loss		(41,616)		(36,531)
Accumulated deficit		(20,578,234)		(19,586,678)
Total Shareholders' Equity		3,375,921		3,980,970
Total Liabilities and Shareholders' Equity	$	7,038,621	$	5,245,364
The accompanying notes are an integral part of these statements.

2

BIOMERICA, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (UNAUDITED) Six Months Ended November 30, 2019
								Accumulated Other Comprehensive Loss
				Additional Paid-in Capital
	Common Stock					Subscriptions Receivable				Accumulated Deficit		Total
	Shares	Amount
Balances, May 31, 2019	9,677,188	$	774,173	$	22,830,006	$	--	$	(36,531)	$	(19,586,678)	$	3,980,970
Exercise of stock options	54,125		4,330		44,598		--		--		--		48,928
Net proceeds from ATM	119,777		9,582		313,687		(15,583)		--		--		307,686
Foreign currency translation	--		--		--		--		(5,085)		--		(5,085)
Compensation expense in connection with options granted	--		--		34,978		--		--		--		34,978
Net loss	--		--		--		--		--		(991,556)		(991,556)
Balances, November 30, 2019	9,851,090	$	788,085	$	23,223,269	$	(15,583)	$	(41,616)	$	(20,578,234)	$	3,375,921
The accompanying notes are an integral part of these statements.

3

BIOMERICA, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
	Six Months Ended November 30,
	2019		2018
Cash flows from operating activities:
Net loss	$	(991,556)	$	(928,984)
Adjustments to reconcile net loss to net cash used in     operating activities
Depreciation and amortization		65,545		89,013
Change in provision for allowance on accounts receivable		3,571		13,192
Inventory reserve		6,873		36,467
Stock option expense		34,978		9,126
Reduction (increase) in deferred rent liability		(37,971)		4,351
Amortization of right-of-use asset		157,356		--
Changes in assets and liabilities:
Accounts receivable		168,133		(473,799)
Inventories		(46,675)		27,269
Prepaid expenses and other		18,431		106,706
Reduction in lease liability		(102,133)		--
Accounts payable and accrued expenses		345,211		109,163
Accrued compensation		12,243		6,428
Net cash used in operating activities		(365,994)		(1,001,068)
Cash flows from investing activities:
Increase in intangibles		(15,008)		(31,937)
Purchases of property and equipment		(6,323)		(53,080)
Net cash used in investing activities		(21,331)		(85,017)
Cash flows from financing activities:
Proceeds from sale of common stock, net		307,686		936,702
Proceeds from exercise of stock options		48,928		75,200
Proceeds from equity financing-officer		200,000		--
Net cash provided by financing activities		556,614		1,011,902
Effect of exchange rate changes on cash		(5,085)		(5,806)
Net increase (decrease) in cash and cash equivalents		164,204		(79,989)
Cash and cash equivalents at beginning of period		686,785		1,204,903
Cash and cash equivalents at end of period	$	850,989	$	1,124,914
Supplemental Disclosure of Cash-Flow Information:
Cash paid during the period for:
Interest	$	5	$	47
Income taxes	$	7,844	$	0
Non-cash Investing and Financing Activities:
Establishment of Right-of-Use Asset per ASC 842	$	1,942,999		--
Establishment of Lease Liability per ASC 842	$	1,980,970	$	--
The accompanying notes are an integral part of these statements.

4

BIOMERICA, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 1: Basis of Presentation

Biomerica, Inc. and Subsidiaries (collectively "the Company") are primarily engaged in the development, manufacture and marketing of medical diagnostic products.

      The Company develops, manufactures, and markets medical diagnostic products designed for the early detection and monitoring of chronic diseases and other medical conditions. The Company’s medical diagnostic products are sold worldwide in two markets: 1) clinical laboratories and 2) point of care (physicians' offices and over-the-counter drugstores). The diagnostic test kits are used to analyze blood, urine or fecal samples from patients in the diagnosis of various diseases and other medical complications, by measuring or detecting the existence and/or level of specific bacteria, hormones, antibodies, antigens or other substances, which may exist in a patient’s body, stools, or blood, often in extremely small concentrations.

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 (collectively 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 accounting principles generally accepted in the United States of America. 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, 2019 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, 2019 for the fiscal year ended May 31, 2019. 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 (BioEurope GmbH) and Mexican subsidiary (Biomerica de Mexico). All significant intercompany accounts and transactions have been eliminated in consolidation.

Accounting Estimates

The preparation of the consolidated 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 consolidated financial statements, and the reported amounts of revenues and expenses during the reported period. Estimates that are made include the reserve for bad debt, which is estimated based on current as well as historical history with a customer; stock option forfeiture rates, which are calculated based on historical data; inventory reserves, which are based on projected and historical usage of materials; and lease liability and right-of-use assets, which are calculated based on certain assumptions such as borrowing rate, likelihood of lease extensions to occur, asset valuation, among other things; (and other items that may be necessary to estimate using current, historical and judgment based). Actual results could materially differ from those estimates.

Concentration of Credit Risk

     The Company maintains cash balances at certain financial institutions in excess of amounts insured by federal agencies.  The Company does not believe it is exposed to significant credit risks.

     The Company provides credit in the normal course of business to customers throughout the United States and foreign markets.  At November 30, 2019 and May 31, 2019, the Company had one customer which accounted for 57.7% and two customers which accounted for 68.1%, respectively, of gross accounts receivable. The Company performs ongoing credit evaluations of its customers and requires accelerated prepayment in some circumstances. The Company had one customer which accounted for approximately 50.3% and 44.7% of consolidated sales for the six months ended November 30, 2019 and November 30, 2018, respectively.

5

     For the six months ended November 30, 2019 and 2018, three vendors accounted for approximately 51.4% and two vendors accounted for approximately 33.8% of the purchases of raw materials, respectively. At November 30, 2019 and May 31, 2019 there was one company which accounted for 23.2% and 32.1% of accounts payable, respectively.

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.  Based on various criteria, initial credit levels for individual distributors are approved by designated officers and managers of the company. All increases in credit limits are also approved by designated upper level management. Management evaluates receivables on a quarterly basis and adjusts the allowance for doubtful accounts accordingly.  Balances over ninety days old are usually reserved for unless collection is reasonably assured.  

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

Inventories

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

The approximate balances of inventories are the following at:

	November 30, 2019		May 31, 2019
Raw materials	$	1,209,000	$	1,208,000
Work in progress		835,000		771,000
Finished products		147,000		172,000
Total	$	2,191,000	$	2,151,000

    Reserves for inventory obsolescence are increased as necessary to reduce obsolete inventory to estimated realizable value or to specifically reserve for obsolete inventory that the Company intends to dispose of. As of November 30, 2019 and May 31, 2019, inventory reserves were approximately $56,000 and $49,000, respectively.

Property and Equipment, net

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 $24,321 and $28,387 for the three months ended November 30, 2019 and 2018, and $53,819 and $55,682 for the six months ended November 30, 2019 and 2018, respectively.

6

Intangible Assets, net

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 $5,946 and $16,665 for the three months ended November 30, 2019 and 2018, respectively, and $11,726 and $33,331 for the six months ended November 30, 2019 and 2018, respectively.

Share-Based Compensation

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

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

       The Company has not paid dividends historically and does not expect to pay them in the future.

The following summary presents the options granted, exercised, expired, cancelled and outstanding as of November 30, 2019:

		Exercise Price Weighted Average
	Option Shares
Outstanding May 31, 2019	1,476,209	$	2.07
Granted	--		--
Forfeited	(35,250)		3.26
Exercised	(54,125)		0.92
Outstanding November 30, 2019	1,386,834	$	2.09

     During the six months ended November 30, 2019, options to purchase 54,125 shares of common stock were exercised at the exercise prices ranging from $0.82 to $1.20 per share.  Proceeds to the Company were $48,928.

Revenue Recognition

       The Company has various contracts with customers.  All of the contracts specify that revenues from product sales are recognized at the time the product is shipped, customarily FOB shipping point, at which point title passes. Revenue is recognized only when collectability is reasonably assured.  The Company does not allow for returns except in the event of defective merchandise and therefore does not establish an allowance for returns. 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 as zero sales and recognizes the cost of the product as part of cost of sales. In addition, the Company has contracts with customers wherein they receive purchase discounts for achieving specified sales volumes. The Company evaluated the status of these contracts as of November 30, 2019 and does not believe that any additional discounts will be earned through the end of fiscal 2020 or through the end of the contract periods.

7

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 required to be classified as net sales, and shipping and handling costs are required to be classified as either cost of sales or disclosed in the notes to the consolidated financial statements. The Company included shipping and handling fees billed to customers in net sales. The Company included shipping and handling costs associated with inbound freight and unreimbursed shipping to customers in cost of sales.

Research and Development

Research and development costs are generally expensed as incurred.

Income Taxes

       The Company has provided a valuation allowance on deferred tax assets of approximately $2,663,000 and $2,459,000 as of November 30, 2019 and May 31, 2019, respectively.

Foreign Currency Translation

       The subsidiary located in Mexico operates primarily using the Mexican peso. The subsidiary located in Germany operates primarily using the U.S. dollar, with an immaterial amount of transactions occurring using the Euro. Accordingly, assets and liabilities of these subsidiaries are translated using exchange rates in effect at the end of the quarter, and revenues and costs are translated using average exchange rates for the quarter. The resulting adjustments to assets and liabilities are presented as a separate component of accumulated other comprehensive loss.

Deferred Rent

Incentive payments received from landlords was recorded as deferred lease incentives and were 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 established a deferred rent liability for the difference between the scheduled rent payment and the straight-line rent expense recognized. This deferred rent liability was amortized over the underlying lease term on a straight-line basis as a reduction of rent expense. During the period ended November 30, 2019, the Company adopted ASC 842, Leases. As a result, the existing deferred rent liability was netted against the right-of-use asset which was capitalized at that time.

8

       In February 2016, the Financial Accounting Standards Board issued an accounting standards update which requires lessees to recognize most leases on the balance sheet with a corresponding right-of-use asset.  Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease.  Right-of-use assets and lease liabilities are recognized at the lease commencement date based on the estimated present value of fixed lease payments over the lease term.  Leases will be classified as financing or operating which will drive the expense recognition pattern.  For lessees, the statement of operations presentation and expense recognition pattern for financing and operating leases is similar to the current model for capital and operating leases, respectively.  The Company has elected to exclude short-term leases.  The update also requires additional disclosures that will better enable users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases.  The Company adopted this guidance as of June 1, 2019, the required effective date, using the effective date transition method.  As permitted under the effective date transition method, financial information and disclosure for periods prior to the date of initial application will not be updated. An adjustment to opening accumulated deficit was not required in conjunction with adoption.  The adoption of this statement resulted in a right-of-use asset being recorded in the amount of $1,942,999 and a lease liability being recorded in the amount of $1,980,970. Both will be amortized over the life of the underlying leases. For additional information, see Note 6 – Leases.  The Company has elected not to reassess whether expired or existing contracts contain leases, or reassess the classification of existing leases as of the adoption date. The Company leases office space and copy machines, all of which are operating leases.  Most leases include the option to renew and the exercise of the renewals options is at the Company’s sole discretion. Options to extend or terminate a lease are considered in the lease term to the extent that the option is reasonably certain of exercise.  The leases do not include the options to purchase the leased property.  The depreciable life of assets and leasehold improvements are limited by the expected lease term.

Net Loss Per Share

Basic loss per share is computed as net loss divided by the weighted average number of common shares outstanding for the period. Diluted loss per share reflects the potential dilution that could occur from common shares issuable through stock options using the treasury stock method. The total amount of anti-dilutive options not included in the earnings per share calculation for the three and six months ended November 30, 2019 was 521,782 and 498,040 respectively. The total amount of anti-dilutive options not included in the earnings per share calculation for the three and six months ended November 30, 2018 was 509,101 and 534,551, respectively.

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

	Six Months Ended November 30,				Three Months Ended    November 30,
	2019		2018		2019		2018
Numerator:
Loss from continuing operations	$	(991,556)	$	(928,984)	$	(485,260)	$	(477,244)
Denominator for basic net loss    Per common share		9,780,713		8,995,575		9,817,363		9,061,617
Effect of dilutive securities:
Options		--		--		--		--
Denominator for diluted net loss   per common share		9,780,713		8,995,575		9,817,363		9,061,617
Basic net loss per common share	$	(0.10)	$	(0.10)	$	(0.05)	$	(0.05)
Diluted net loss per common share	$	(0.10)	$	(0.10)	$	(0.05)	$	(0.05)

Recent Accounting Pronouncements

On February 15, 2018, the FASB issued ASU 2018-02, “Reclassification of Certain Tax Effects From Accumulated Comprehensive Income” (“ASU 2018-02”).  ASU 2018-02 will give companies the option to reclassify stranded tax effects caused by the newly-enacted U.S. Tax Cuts and Jobs Act (“TCJA”) from accumulated other comprehensive income (“ASCI”) to retained earnings.  ASU 2018-02 will take effect for all companies for the fiscal years beginning after December 15, 2018, and interim periods within those fiscal years.  Management is evaluating the provisions of this statement and has not determined what impact the adoption of ASU 2018-02 will have on the Company’s financial position or results of operations.

On June 20, 2018, the FASB issued ASU 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”). ASU 2018-07 is intended to reduce cost and complexity and to improve financial reporting for share-based payments to nonemployees (for example, service providers, external legal counsel, suppliers, etc.). ASU 2018-07 was effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. During the six months ended November 30, 2019, the Company adopted the provisions of this statement and is taking them into account in the preparation of the financial statements for the six months ended November 30, 2019. The adoption of this standard has not had a significant impact on the Company’s financial statements.

9

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

Note 3: Accounts Payable and Accrued Expenses

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

	November 30, 2019		May 31,  2019
Accounts payable	$	1,344,791	$	999,593
Deferred rent		--		37,972
Total	$	1,344,791	$	1,037,565

Note 4:  Shareholders’ Equity

As described in the Company’s Form 10Q, filed with the Securities and Exchange Commission on April 15, 2019, the Form 10K report, filed with the Securities and Exchange Commission on August 29, 2019, the Form 10Q filed with the Securities and Exchange Commission on October 14, 2019 and the Form S-3 Registration Statement and Prospectus filed on June 30, 2017 and December 4, 2017, respectively, the Company entered into an At Market Issuance Sales Agreement, whereby, the Company may raise additional working capital and funds for continued development of current research projects.  These funds will be needed to fund current research and development projects and bring them to the next state of completion.  Management expects to raise additional funds throughout the year from the At Market Issuance Agreement to fund operations as necessary. During the quarter ended November 30, 2019, the Company received $195,078 in net proceeds from the sale of its common stock through this Agreement. During the six months ended November 30, 2019, the Company received $307,686 in net proceeds from the sale of its common stock through this Agreement.

Note 5: Geographic Information

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

	Six Months Ended November 30,				Three Months Ended November 30,
	2019		2018		2019		2018
Revenues from sales to unaffiliated customers:
United States	$	224,000	$	282,000	$	109,000	$	140,000
Asia		1,460,000		1,320,000		797,000		672,000
Europe		717,000		914,000		416,000		522,000
South America		71,000		127,000		24,000		56,000
Middle East		309,000		131,000		241,000		111,000
Other		10,000		--		10,000		--
	$	2,791,000	$	2,774,000	$	1,597,000	$	1,501,000

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

      As of November 30, 2019 and May 31, 2019, approximately $685,000 and $665,000 of Biomerica’s gross inventory and approximately $35,000 and $39,000, of Biomerica’s property and equipment, net of accumulated depreciation and amortization, was located in Mexicali, Mexico, respectively.

Note 6: Leases

On June 18, 2009, the Company entered into an agreement to lease a building in Irvine, California. The lease commenced September 1, 2009 and ended 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. In November 2015, the Company signed the First Amendment to Lease to extend the lease until August 31, 2021.  The initial base rent for the lease amendment which started September 1, 2016 was $21,000 per month. As of September 1, 2019, the rent was $22,948 per month.

10

      In November 2016, the Company’s Mexican subsidiary, Biomerica de Mexico, entered into a 10-year lease for approximately 8,100 square feet of manufacturing space with initial base rent of $2,926 per month. The rent is currently set at $3,239 per month as of November 1, 2019. The Company has a one 10-year option to renew at the end of the initial lease period.  Biomerica, Inc. is not a guarantor of such lease. Biomerica de Mexico also leases a smaller unit on a month-to-month basis for use in one manufacturing process.  In addition, the Company leases a small office on a month-to-month basis in Lindau, Germany, as headquarters for BioEurope GmbH, its Germany subsidiary.

      Components of lease expense include fixed lease expense of approximately $171,892 for the six months ended November 30, 2019.  For purposes of determining straight-line rent expense, the lease term is calculated from the date the Company first takes possession of the facility, including any periods of free rent and any renewal options periods that the Company is reasonably certain of exercising. The Company’s office and equipment leases generally have contractually specified minimum rent and annual rent increases are included in the measurement of the right-of-use asset and related lease liability.  Additionally, under these lease arrangements, the Company may be required to pay directly, or reimburse the lessors, for some maintenance and operating costs. Such amounts are generally variable and therefore not included in the measurement of the right-of-use asset and related lease liability but are instead recognized as variable lease expense in the Condensed Consolidated Statements of Operations and Comprehensive Loss when they are incurred. 

Supplemental cash flow information related to leases for the six months ended November 30, 2019:
Operating cash flows from operating leases	$	154,521
Right-of-use assets obtained in exchange for    new operating lease liabilities		--
Weighted average remaining lease term (in years)		6.77
Weighted average discount rate		6.5	%

The maturity of lease liabilities as of November 30, 2019 are as follows:

Years Ending May 31
2020	$	97,494
2021		211,946
2022		236,410
2023		262,830
2024		291,350
Thereafter		778,807
Total	$	1,878,837

Note 7: Commitments and Contingencies

     On December 1, 2017, Biomerica, Inc. (the “Company”) entered into an At Market Issuance Sales Agreement (the “At Market Issuance Sales Agreement”) with an agent (“Agent”), pursuant to which the Company may offer and sell from time to time up to an aggregate of $7,000,000 of shares of the Company’s common stock, par value $0.08 per share (the “Placement Shares”), through the Agent.

The Placement Shares have been registered under the Securities Act of 1933, as amended (the “Securities Act”), pursuant to the Registration Statement on Form S-3 (File No. 333-219130) (the “Registration Statement”), which was originally filed with the Securities and Exchange Commission (“SEC”) on June 30, 2017 and declared effective by the SEC on July 20, 2017, the base prospectus contained within the Registration Statement, and a prospectus supplement that was filed with the SEC on December 1, 2017. 

Sales of the Placement Shares, if any, pursuant to the At Market Issuance Sales Agreement, may be made in sales deemed to be “at the market offerings” as defined in Rule 415 promulgated under the Securities Act. The Agent will act as sales agent and will use commercially reasonable efforts to sell on the Company’s behalf all of the Placement Shares requested to be sold by the Company, consistent with its normal trading and sales practices, on mutually agreed terms between the Agent and the Company. 

The Company has no obligation to sell any of the Placement Shares under the At Market Issuance Sales Agreement, and may at any time suspend offers under the At Market Issuance Sales Agreement or terminate the At Market Issuance Sales Agreement. The Company intends to use the net proceeds from this offering for general corporate purposes, including, without limitation, sales and marketing activities, clinical studies and product development, making acquisitions of assets, businesses, companies or securities, capital expenditures, and for working capital needs.

11

        On July 22, 2019, the Company entered into a Clinical Trial Agreement with a research institution for the purpose of conducting a clinical trial of the Biomerica Infoods product. The term of the agreement shall be until completion of the work outlined and the charges will be invoiced monthly for work performed in the previous month. The maximum budgeted costs will be approximately $107,000.

In September 2019, the Company agreed to extend MaxHealth Medical International, Limited and MaxHealth Medical Group Co., Ltd.’s option to purchase up to 500,000 shares of Biomerica’s common stock for an additional 90 days at terms described in the agreement signed May 29, 2019. This option expired at the end of December 2019.

     On September 25, 2019 the Company entered into a Clinical Trial Agreement with a large, multi-physician medical group for the purpose of conducting a clinical trial of the Biomerica Infoods product.  The term of the agreement shall be until completion of the work outlined and the charges will be invoiced monthly for work performed in the previous month.  The maximum budgeted costs will be $136,000.    

    In November 2019, the Chief Executive Officer deposited $200,000 with the Company to possibly be used in a future financing.  The Company is currently in discussions with strategic, private investment funds pertaining to a possible investment to support the Company’s new product development and regulatory clearances. 

Note 8: Subsequent Events

      Subsequent to November 30, 2019, options to purchase 26,250 of the Company’s common stock at prices ranging from $1.04 to $1.20 were exercised by the option holders. Net proceeds to the Company were approximately $31,000.

     On January 7, 2020, the Company sold 7,139 shares of common stock under the S-3 registration statement and received net proceeds of $21,282. On January 9, 2020 the Company sold 5,396 shares of common stock under the S-3 registration statement and received net proceeds of approximately $16,058.

     In December 2019, options to purchase 51,000 shares of the Company’s common stock were granted to various employees of the Company.  The purchase price of the options will be $2.68 per share.  The options are exercisable one quarter per year with the first quarter vesting one year from date of grant.  The options expire five years from date of grant.

     In December 2019, the Board of Directors approved the 2020 Stock Option and Incentive Plan.  The plan is for the issuance of 900,000 options to purchase the Company’s common stock from time to time at the discretion of the Board of Directors.  The plan will be submitted for approval by the shareholders in December 2020.

     In December 2019, the Board of Directors approved the grant of 295,000 options to purchase shares of the Company’s common stock to officers and directors.  The options are exercisable by outside board members one year from date of grant and for officers one-quarter per year with the first quarter vesting one year from date of grant. The options will be at the exercise price of $2.81 per share and expire ten years from date of grant.

In December 2019, the Company entered into a Clinical Trial Agreement with a research institution for the purpose of conducting a clinical trial of the Biomerica InFoods product.  The term of the agreement shall be until completion of the work outlined and the charges will be invoiced monthly for work performed in the previous month.  The maximum budgeted costs will be approximately $133,000.

      On December 18, 2019, the Company entered into a Clinical Trial Agreement with a research institution for the purpose of conducting a clinical trial of the Biomerica H. pylori product.  The term of the agreement shall be until completion of the work outlined and the charges will be invoiced monthly for work performed in the previous month. The maximum budgeted costs will be approximately $57,800.

12

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

EXCEPT FOR HISTORICAL INFORMATION CONTAINED HEREIN, THE STATEMENTS IN THIS FORM 10-Q MAY BE FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934 AND SECTION 27A OF THE SECURITIES ACT OF 1933. FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS AND UNCERTAINTIES WHICH MAY CAUSE BIOMERICA'S RESULTS IN FUTURE PERIODS TO DIFFER MATERIALLY FROM FORECASTED RESULTS. THESE RISKS AND UNCERTAINTIES INCLUDE, AMONG OTHER THINGS, THE CONTINUED DEMAND FOR THE COMPANY'S PRODUCTS, AVAILABILITY OF RAW MATERIALS, THE STATE OF THE ECONOMY, RESULTS OF RESEARCH AND DEVELOPMENT ACTIVITIES AND THE CONTINUED ABILITY OF THE COMPANY TO MAINTAIN THE LICENSES AND APPROVALS REQUIRED. THESE AND OTHER RISKS ARE DESCRIBED IN THE COMPANY'S ANNUAL REPORT ON FORM 10-K AND IN THE COMPANY'S OTHER FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION.

EXCEPT AS MAY BE REQUIRED BY APPLICABLE LAW, WE MAY NOT UPDATE OR REVISE OUR FORWARD-LOOKING STATEMENTS AND THE LACK OF SUCH UPDATE DOES NOT IMPLY THAT ACTUAL EVENTS ARE AS ORIGINALLY EXPRESSED BY SUCH FORWARD-LOOKING STATEMENTS. YOU SHOULD READ THE DISCLOSURES IN THIS REPORT AND OTHER REPORTS WHICH WE FILE WITH THE SECURITIES AND EXCHANGE COMMISSION.

OVERVIEW

Biomerica, Inc. and Subsidiaries (which includes wholly owned subsidiaries, Biomerica de Mexico and BioEurope GmbH) develop, manufacture, and market medical diagnostic products designed for the early detection and monitoring of chronic diseases and medical conditions. Our medical diagnostic products are sold worldwide in two markets: 1) clinical laboratories and 2) point of care (physicians' offices and over-the-counter drugstores). Our diagnostic test kits are used to analyze blood, urine or fecal material from patients in the diagnosis of various diseases, food intolerances 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 $1,596,408 for the three months ended November 30, 2019 as compared to $1,500,791 for the same period in the previous year. This represents an increase of $95,617 or 6.4%. For the six-month period ended November 30, 2019 as compared to 2018, net sales were $2,790,823 as compared to $2,773,661.  This represents an increase of $17,162 or 0.6%. The increase for the three and six-month periods was primarily due to increased sales to Asia and several orders to the Middle East. 

     For the three months ended November 30, 2019 as compared to November 30, 2018, cost of sales decreased as a percentage of sales from 72.8% of sales, or $1,092,731, to 70.6% of sales, or $1,127,536. For the six months ended November 30, 2019 as compared to 2018, cost of sales decreased as a percentage of sales from 73.1% of sales, or $2,028,378 to 70.0% of sales, or $1,954,647. Decreases to cost of sales as a percentage of sales for the three and six months were due to lower scrap as well as fixed costs in relationship to higher sales.

       For the three months ended November 30, 2019 compared to 2018, selling, general and administrative expenses increased by $41,169, or 8.0%. For the six-month period ended November 30, 2019 as compared to 2018, these expenses increased by $148,138, or 16.1%. The increase in the three and six-month period was primarily due to increased wages primarily due to increased wages classified as administrative and the addition of a sales manager in Europe.

         For the three months ended November 30, 2019, compared to 2018, research and development expenses increased by $23,449 or 6.1%. For the six-month period ended November 30, 2019 as compared to 2018, these expenses increased by $2,134, or 0.3%. The increase for the three months was primarily a result of higher wages as compared to the same period in prior fiscal year.  The total research and development expense for the six months as compared to the prior fiscal year was relatively constant.

         For the three months ended November 30, 2019 as compared to November 30, 2018, dividend and interest income decreased from $8,693 to $4,488. For the six months ended November 30, 2019 as compared to November 30, 2018, dividend and interest income decreased from $11,786 to $8,551.

13

LIQUIDITY AND CAPITAL RESOURCES

       As of November 30, 2019 and May 31, 2019, the Company had cash and cash equivalents in the amount of $850,989 and $686,785 and working capital of $2,526,597 and $3,230,535, respectively.

       During the six months ended November 30, 2019, the Company’s operations used cash of $365,994 as compared to $1,001,068 in the same period of the prior fiscal year. The cash used by operations for the six months ended November 30, 2019 was primarily a result of a net loss of $991,553, which was offset by a decrease in accounts receivable of $168,133, and increases in accounts payable and accrued expenses of $345,211, depreciation and amortization of $65,545, and amortization of right-of-use asset of $157,356 as compared to cash used by operations for the six months ended November 30, 2018 which resulted from a net loss of $928,984 and increased receivables of $473,799 which were offset by an increase in accounts payable and accrued expenses of $109,163 and depreciation and amortization of $89,013.  Cash used in investing activities in the six months ended November 30, 2019 was $21,331, $6,323 of which was for purchases of property and equipment as compared to the six months ended November 30, 2018 during which cash used for property and equipment was $53,080.  Cash provided by financing activities for the six months ended November 30, 2019 was a result of the exercise of stock options of $48,928, proceeds from the sale of common stock of $307,686 and $200,000 from an equity financing deposit from an officer,  compared to $75,200 from the exercise of stock options and the proceeds from the sale of common stock of $936,702 in the prior fiscal year.  

     We have been working on new products for the gastroenterology and inflammatory disease markets.  Multiple patent applications for the new products have been filed and two patents have been issued (USA and Korea). The Company is working on obtaining additional patents and U.S. regulatory approvals for certain of these products.  The Company has been spending significant funds on the research, development, clinical trials, patents and related costs, and expects this will continue in order to obtain the desired patents and regulatory approvals. These new products address very large addressable markets, and management believes these current expenses will create significant future value for the Company’s shareholders. 

     As described in the Company’s Form 10Q, filed with the Securities and Exchange Commission on April 15, 2019, the Form 10K report, filed with the Securities and Exchange Commission on August 29, 2019, the Form 10Q filed with the Securities and Exchange Commission on October 14, 2019 and the Form S-3 Registration Statement and Prospectus filed on June 30, 2017 and December 4, 2017, respectively, the Company entered into an At Market Issuance Sales Agreement, whereby, the Company may raise additional working capital and funds for continued development of current research projects.  These funds will be needed to fund current research and development projects and bring them to the next state of completion.  Management expects to raise additional funds throughout the year from the At Market Issuance Agreement to fund operations as necessary. During the quarter that ended November 30, 2019, the Company received $195,078 in net proceeds from the sale of its common stock through this Agreement. During the six months that ended November 30, 2019, the Company received $307,686 in net proceeds from the sale of its common stock through this Agreement.

     The Company anticipates raising additional capital through this or other methods in order to continue to fund research and development projects, clinical trials, patent expenses and other operating needs.

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, inventory reserve, lease liabilities and right-of-use assets. 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.  Please refer to Note 2 for information on Significant Accounting Policies.

14

In February 2016, the FASB issued an accounting standards update which requires lessees to recognize most leases on the balance sheet with a corresponding right-of-use asset. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease.  Right-of-use assets and lease liabilities are recognized at the lease commencement date based on the estimated present value of fixed lease payments over the lease term. Leases are classified as financing or operating which will drive the expense recognition pattern. For lessees, the statement of operations presentation and expense recognition pattern for financing and operating leases is similar to the current model for capital and operating leases, respectively. The Company has elected to exclude short-term leases. The update also requires additional disclosures that will better enable users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. The Company adopted this guidance as of June 1, 2019, the required effective date, using the effective date transition method. As permitted under the effective date transition method, financial information and disclosure for periods prior to the date of initial application will not be updated. An adjustment to the opening accumulated deficit was not required in conjunction with our adoption. For additional information, see Note 6 – Leases. We have elected not to reassess whether expired or existing contracts contain leases, nor did we reassess the classification of existing leases as of the adoption date. The Company leases office space and copy machines, all of which are operating leases.  Most leases include the option to renew and the exercise of the renewals options is at the Company’s sole discretion. Options to extend or terminate a lease are considered in the lease term to the extent that the option is reasonably certain of exercise. The leases do not include the options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the expected lease term.

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.  

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

PART II. OTHER INFORMATION

Item 1.  LEGAL PROCEEDINGS.  None.

15

Item 1A. RISKS AND UNCERTAINTIES.

         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 such as the Form S-3 and Prospectus Supplement filed in July and December 2017, respectively. 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. Our results may fluctuate adversely as a result of many factors that are outside our control, which may negatively impact our stock price. Sales of our common stock in the public market could lower the market price for our common stock and the price of our stock could fluctuate unpredictably in response to various factors.  The Company does not anticipate paying dividends in the foreseeable future, which could affect the market price of the stock.

     There is no assurance that we will be able to remain competitive and develop new products and markets for these products. Raising funds to support this development may be difficult and the inability to do so may impact our ability to develop these new products.  Acceptance of these new products by health care providers and physicians could have a negative impact on future sales.

     Our business is subject to regulation by various governmental agencies. Our results of operations could be negatively impacted by failures or delays in approvals or the loss of previously received approvals or changes to existing laws and regulations. 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 could affect results adversely.

     Interruptions in the supply of raw materials could adversely affect our operations and results. Inability to successfully control our margins is affected by many factors including competition and product mix.

     The loss of key personnel and the inability to hire key personnel could affect the business.

         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; 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; additional governmental tariffs or other fees imposed by the U.S. government for the export of goods to China or other countries; 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; 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-the loss of certain of these distributors could lead to significantly reduced sales, which have been increasing. This 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 could result in write-offs of accounts receivable; and the costs of recalls, should such occasion arise.  All these factors make it difficult to predict operating results for any particular period.

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

Item 3.  DEFAULTS UPON SENIOR SECURITIES.  None.

Item 4.  MINE SAFETY DISCLOSURES. None.

Item 5.  OTHER INFORMATION.

     We held our Annual Meeting of Stockholders on December 11, 2019, to consider and vote on the proposals set forth in our proxy statement filed with the Securities and Exchange Commission on September 28, 2019. Please refer to the Form 8-K filed on December 13, 2019 for a description of the results of the meeting.

In November 2019, the Chief Executive Officer deposited $200,000 with the Company to possibly be used in a future financing.  The Company is currently in discussions with strategic, private investment funds pertaining to a possible investment to support the Company’s new product development and regulatory clearances.

16

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

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.

17

	BIOMERICA, INC.
Date:  January 14, 2020
	By:	/S/ Zackary S. Irani
		Zackary S. Irani
		Director, Chief Executive Officer
		(Principal Executive Officer)
Date:  January 14, 2020
	By:	/S/ Janet Moore
		Janet Moore
		Secretary, Director, Chief Financial Officer
		(Principal Financial Officer)

18

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 misleading with respect to the period covered by this report;

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

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

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

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

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

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

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

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

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

Date: January 14, 2020

/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 registrant and have:

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

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

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

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

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

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

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

Date: January 14, 2020

/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 November 30, 2019, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Zackary Irani, Chief Executive Officer of the Company, certify, to the best of my knowledge, Pursuant to Exchange Act Rule 15d-14(b) and 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes Oxley Act of 2002,

i.   

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

ii.  

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

/s/ Zackary S. Irani

Zackary S. Irani

Chief Executive Officer

Date: January 14, 2020

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 November 30, 2019, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Janet Moore, Chief Financial Officer of the Company, certify, to the best of my knowledge, Pursuant to Exchange Act Rule 15d-14(b) and 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes Oxley Act of 2002,

i.   

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

ii.  

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

/s/ Janet Moore

Janet Moore

Chief Financial Officer

Date: January 14, 2020

XML

Commitments and Contingencies

6 Months Ended

Nov. 30, 2019

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure [Text Block]

Note 7: Commitments and Contingencies

     On December 1, 2017, Biomerica, Inc. (the “Company”) entered into an At Market Issuance Sales Agreement (the “At Market Issuance Sales Agreement”) with an agent (“Agent”), pursuant to which the Company may offer and sell from time to time up to an aggregate of $7,000,000 of shares of the Company’s common stock, par value $0.08 per share (the “Placement Shares”), through the Agent.

The Placement Shares have been registered under the Securities Act of 1933, as amended (the “Securities Act”), pursuant to the Registration Statement on Form S-3 (File No. 333-219130) (the “Registration Statement”), which was originally filed with the Securities and Exchange Commission (“SEC”) on June 30, 2017 and declared effective by the SEC on July 20, 2017, the base prospectus contained within the Registration Statement, and a prospectus supplement that was filed with the SEC on December 1, 2017. 

Sales of the Placement Shares, if any, pursuant to the At Market Issuance Sales Agreement, may be made in sales deemed to be “at the market offerings” as defined in Rule 415 promulgated under the Securities Act. The Agent will act as sales agent and will use commercially reasonable efforts to sell on the Company’s behalf all of the Placement Shares requested to be sold by the Company, consistent with its normal trading and sales practices, on mutually agreed terms between the Agent and the Company. 

The Company has no obligation to sell any of the Placement Shares under the At Market Issuance Sales Agreement, and may at any time suspend offers under the At Market Issuance Sales Agreement or terminate the At Market Issuance Sales Agreement. The Company intends to use the net proceeds from this offering for general corporate purposes, including, without limitation, sales and marketing activities, clinical studies and product development, making acquisitions of assets, businesses, companies or securities, capital expenditures, and for working capital needs.

        On July 22, 2019, the Company entered into a Clinical Trial Agreement with a research institution for the purpose of conducting a clinical trial of the Biomerica Infoods product. The term of the agreement shall be until completion of the work outlined and the charges will be invoiced monthly for work performed in the previous month. The maximum budgeted costs will be approximately $107,000.

         In September 2019, the Company agreed to extend MaxHealth Medical International, Limited and MaxHealth Medical Group Co., Ltd.’s option to purchase up to 500,000 shares of Biomerica’s common stock for an additional 90 days at terms described in the agreement signed May 29, 2019. This option expired at the end of December 2019.

     On September 25, 2019 the Company entered into a Clinical Trial Agreement with a large, multi-physician medical group for the purpose of conducting a clinical trial of the Biomerica Infoods product.  The term of the agreement shall be until completion of the work outlined and the charges will be invoiced monthly for work performed in the previous month.  The maximum budgeted costs will be $136,000.    

    In November 2019, the Chief Executive Officer deposited $200,000 with the Company to possibly be used in a future financing.  The Company is currently in discussions with strategic, private investment funds pertaining to a possible investment to support the Company’s new product development and regulatory clearances. 

XML

Accounts Payable and Accrued Expenses (Tables)

6 Months Ended

Nov. 30, 2019

Payables and Accruals [Abstract]

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

	November 30, 2019		May 31,  2019
Accounts payable	$	1,344,791	$	999,593
Deferred rent		--		37,972
Total	$	1,344,791	$	1,037,565

XML

Leases (Details) - The maturity of lease liabilities	Nov. 30, 2019 USD ($)
The maturity of lease liabilities [Abstract]
2020	$ 97,494
2021	211,946
2022	236,410
2023	262,830
2024	291,350
Thereafter	778,807
Total	$ 1,878,837

XML

CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS` EQUITY (Unaudited) - 6 months ended Nov. 30, 2019 - USD ($)	Common Stock [Member]	Additional Paid-in Capital [Member]	Subscriptions Receivable [Member]	AOCI Attributable to Parent [Member]	Retained Earnings [Member]	Total
Balances, at May. 31, 2019	$ 774,173	$ 22,830,006		$ (36,531)	$ (19,586,678)	$ 3,980,970
Balances, (in Shares) at May. 31, 2019	9,677,188
Exercise of stock options	$ 4,330	44,598				48,928
Exercise of stock options (in Shares)	54,125
Net proceeds from ATM	$ 9,582	313,687	(15,583)			307,686
Net proceeds from ATM (in Shares)	119,777
Foreign currency translation				(5,085)		(5,085)
Compensation expense in connection with options granted		34,978				34,978
Net loss					(991,556)	(991,556)
Balances, at Nov. 30, 2019	$ 788,085	$ 23,223,269	$ (15,583)	$ (41,616)	$ (20,578,234)	$ 3,375,921
Balances, (in Shares) at Nov. 30, 2019	9,851,090

XML

Document And Entity Information - shares	6 Months Ended
	Nov. 30, 2019	Jan. 14, 2020
Document Information Line Items
Entity Registrant Name	BIOMERICA INC
Document Type	10-Q
Current Fiscal Year End Date	--05-31
Entity Common Stock, Shares Outstanding		9,889,875
Amendment Flag	false
Entity Central Index Key	0000073290
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Document Period End Date	Nov. 30, 2019
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q2
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Interactive Data Current	Yes

XML

Accounts Payable and Accrued Expenses

6 Months Ended

Nov. 30, 2019

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:

	November 30, 2019		May 31,  2019
Accounts payable	$	1,344,791	$	999,593
Deferred rent		--		37,972
Total	$	1,344,791	$	1,037,565

XML

Leases (Details) - Supplemental cash flow information related to leases	6 Months Ended
	Nov. 30, 2019 USD ($)
Supplemental cash flow information related to leases [Abstract]
Operating cash flows from operating leases	$ 154,521
Right-of-use assets obtained in exchange for new operating lease liabilities
Weighted average remaining lease term (in years)	6 years 281 days
Weighted average discount rate	6.50%

XML

Significant Accounting Policies (Details) - Inventories - USD ($)	Nov. 30, 2019	May 31, 2019
Inventories [Abstract]
Raw materials	$ 1,209,000	$ 1,208,000
Work in progress	835,000	771,000
Finished products	147,000	172,000
Total	$ 2,190,893	$ 2,151,090

XML

Shareholders' Equity (Details) - USD ($)	3 Months Ended	6 Months Ended
	Nov. 30, 2019	Nov. 30, 2019
At Market Issuance Sales Agreement [Member]
Shareholders' Equity (Details) [Line Items]
Proceeds from Issuance of Common Stock	$ 195,078	$ 307,686

XML

Significant Accounting Policies

6 Months Ended

Nov. 30, 2019

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 (BioEurope GmbH) and Mexican subsidiary (Biomerica de Mexico). All significant intercompany accounts and transactions have been eliminated in consolidation.

Accounting Estimates

The preparation of the consolidated 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 consolidated financial statements, and the reported amounts of revenues and expenses during the reported period. Estimates that are made include the reserve for bad debt, which is estimated based on current as well as historical history with a customer; stock option forfeiture rates, which are calculated based on historical data; inventory reserves, which are based on projected and historical usage of materials; and lease liability and right-of-use assets, which are calculated based on certain assumptions such as borrowing rate, likelihood of lease extensions to occur, asset valuation, among other things; (and other items that may be necessary to estimate using current, historical and judgment based). Actual results could materially differ from those estimates.

Concentration of Credit Risk

     The Company maintains cash balances at certain financial institutions in excess of amounts insured by federal agencies.  The Company does not believe it is exposed to significant credit risks.

     The Company provides credit in the normal course of business to customers throughout the United States and foreign markets.  At November 30, 2019 and May 31, 2019, the Company had one customer which accounted for 57.7% and two customers which accounted for 68.1%, respectively, of gross accounts receivable. The Company performs ongoing credit evaluations of its customers and requires accelerated prepayment in some circumstances. The Company had one customer which accounted for approximately 50.3% and 44.7% of consolidated sales for the six months ended November 30, 2019 and November 30, 2018, respectively.

     For the six months ended November 30, 2019 and 2018, three vendors accounted for approximately 51.4% and two vendors accounted for approximately 33.8% of the purchases of raw materials, respectively. At November 30, 2019 and May 31, 2019 there was one company which accounted for 23.2% and 32.1% of accounts payable, respectively.

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.  Based on various criteria, initial credit levels for individual distributors are approved by designated officers and managers of the company. All increases in credit limits are also approved by designated upper level management. Management evaluates receivables on a quarterly basis and adjusts the allowance for doubtful accounts accordingly.  Balances over ninety days old are usually reserved for unless collection is reasonably assured.  

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

Inventories

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

The approximate balances of inventories are the following at:

	November 30, 2019		May 31, 2019
Raw materials	$	1,209,000	$	1,208,000
Work in progress		835,000		771,000
Finished products		147,000		172,000
Total	$	2,191,000	$	2,151,000

    Reserves for inventory obsolescence are increased as necessary to reduce obsolete inventory to estimated realizable value or to specifically reserve for obsolete inventory that the Company intends to dispose of. As of November 30, 2019 and May 31, 2019, inventory reserves were approximately $56,000 and $49,000, respectively.

Property and Equipment, net

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 $24,321 and $28,387 for the three months ended November 30, 2019 and 2018, and $53,819 and $55,682 for the six months ended November 30, 2019 and 2018, respectively.

Intangible Assets, net

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 $5,946 and $16,665 for the three months ended November 30, 2019 and 2018, respectively, and $11,726 and $33,331 for the six months ended November 30, 2019 and 2018, respectively.

Share-Based Compensation

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

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

       The Company has not paid dividends historically and does not expect to pay them in the future.

The following summary presents the options granted, exercised, expired, cancelled and outstanding as of November 30, 2019:

		Exercise Price Weighted Average
	Option Shares
Outstanding May 31, 2019	1,476,209	$	2.07
Granted	--		--
Forfeited	(35,250)		3.26
Exercised	(54,125)		0.92
Outstanding November 30, 2019	1,386,834	$	2.09

     During the six months ended November 30, 2019, options to purchase 54,125 shares of common stock were exercised at the exercise prices ranging from $0.82 to $1.20 per share.  Proceeds to the Company were $48,928.

Revenue Recognition

       The Company has various contracts with customers.  All of the contracts specify that revenues from product sales are recognized at the time the product is shipped, customarily FOB shipping point, at which point title passes. Revenue is recognized only when collectability is reasonably assured.  The Company does not allow for returns except in the event of defective merchandise and therefore does not establish an allowance for returns. 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 as zero sales and recognizes the cost of the product as part of cost of sales. In addition, the Company has contracts with customers wherein they receive purchase discounts for achieving specified sales volumes. The Company evaluated the status of these contracts as of November 30, 2019 and does not believe that any additional discounts will be earned through the end of fiscal 2020 or through the end of the contract periods.

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 required to be classified as net sales, and shipping and handling costs are required to be classified as either cost of sales or disclosed in the notes to the consolidated financial statements. The Company included shipping and handling fees billed to customers in net sales. The Company included shipping and handling costs associated with inbound freight and unreimbursed shipping to customers in cost of sales.

Research and Development

Research and development costs are generally expensed as incurred.

Income Taxes

       The Company has provided a valuation allowance on deferred tax assets of approximately $2,663,000 and $2,459,000 as of November 30, 2019 and May 31, 2019, respectively.

Foreign Currency Translation

       The subsidiary located in Mexico operates primarily using the Mexican peso. The subsidiary located in Germany operates primarily using the U.S. dollar, with an immaterial amount of transactions occurring using the Euro. Accordingly, assets and liabilities of these subsidiaries are translated using exchange rates in effect at the end of the quarter, and revenues and costs are translated using average exchange rates for the quarter. The resulting adjustments to assets and liabilities are presented as a separate component of accumulated other comprehensive loss.

Deferred Rent

Incentive payments received from landlords was recorded as deferred lease incentives and were 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 established a deferred rent liability for the difference between the scheduled rent payment and the straight-line rent expense recognized. This deferred rent liability was amortized over the underlying lease term on a straight-line basis as a reduction of rent expense. During the period ended November 30, 2019, the Company adopted ASC 842, Leases. As a result, the existing deferred rent liability was netted against the right-of-use asset which was capitalized at that time.

       In February 2016, the Financial Accounting Standards Board issued an accounting standards update which requires lessees to recognize most leases on the balance sheet with a corresponding right-of-use asset.  Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease.  Right-of-use assets and lease liabilities are recognized at the lease commencement date based on the estimated present value of fixed lease payments over the lease term.  Leases will be classified as financing or operating which will drive the expense recognition pattern.  For lessees, the statement of operations presentation and expense recognition pattern for financing and operating leases is similar to the current model for capital and operating leases, respectively.  The Company has elected to exclude short-term leases.  The update also requires additional disclosures that will better enable users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases.  The Company adopted this guidance as of June 1, 2019, the required effective date, using the effective date transition method.  As permitted under the effective date transition method, financial information and disclosure for periods prior to the date of initial application will not be updated. An adjustment to opening accumulated deficit was not required in conjunction with adoption.  The adoption of this statement resulted in a right-of-use asset being recorded in the amount of $1,942,999 and a lease liability being recorded in the amount of $1,980,970. Both will be amortized over the life of the underlying leases. For additional information, see Note 6 – Leases.  The Company has elected not to reassess whether expired or existing contracts contain leases, or reassess the classification of existing leases as of the adoption date. The Company leases office space and copy machines, all of which are operating leases.  Most leases include the option to renew and the exercise of the renewals options is at the Company’s sole discretion. Options to extend or terminate a lease are considered in the lease term to the extent that the option is reasonably certain of exercise.  The leases do not include the options to purchase the leased property.  The depreciable life of assets and leasehold improvements are limited by the expected lease term.

Net Loss Per Share

Basic loss per share is computed as net loss divided by the weighted average number of common shares outstanding for the period. Diluted loss per share reflects the potential dilution that could occur from common shares issuable through stock options using the treasury stock method. The total amount of anti-dilutive options not included in the earnings per share calculation for the three and six months ended November 30, 2019 was 521,782 and 498,040 respectively. The total amount of anti-dilutive options not included in the earnings per share calculation for the three and six months ended November 30, 2018 was 509,101 and 534,551, respectively.

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

	Six Months Ended November 30,				Three Months Ended    November 30,
	2019		2018		2019		2018
Numerator:
Loss from continuing operations	$	(991,556)	$	(928,984)	$	(485,260)	$	(477,244)
Denominator for basic net loss    Per common share		9,780,713		8,995,575		9,817,363		9,061,617
Effect of dilutive securities:
Options		--		--		--		--
Denominator for diluted net loss   per common share		9,780,713		8,995,575		9,817,363		9,061,617
Basic net loss per common share	$	(0.10)	$	(0.10)	$	(0.05)	$	(0.05)
Diluted net loss per common share	$	(0.10)	$	(0.10)	$	(0.05)	$	(0.05)

Recent Accounting Pronouncements

On February 15, 2018, the FASB issued ASU 2018-02, “Reclassification of Certain Tax Effects From Accumulated Comprehensive Income” (“ASU 2018-02”).  ASU 2018-02 will give companies the option to reclassify stranded tax effects caused by the newly-enacted U.S. Tax Cuts and Jobs Act (“TCJA”) from accumulated other comprehensive income (“ASCI”) to retained earnings.  ASU 2018-02 will take effect for all companies for the fiscal years beginning after December 15, 2018, and interim periods within those fiscal years.  Management is evaluating the provisions of this statement and has not determined what impact the adoption of ASU 2018-02 will have on the Company’s financial position or results of operations.

On June 20, 2018, the FASB issued ASU 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”). ASU 2018-07 is intended to reduce cost and complexity and to improve financial reporting for share-based payments to nonemployees (for example, service providers, external legal counsel, suppliers, etc.). ASU 2018-07 was effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. During the six months ended November 30, 2019, the Company adopted the provisions of this statement and is taking them into account in the preparation of the financial statements for the six months ended November 30, 2019. The adoption of this standard has not had a significant impact on the Company’s financial statements.

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.

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Parentheticals) - USD ($)	Nov. 30, 2019	May 31, 2019
Allowance for doubtful accounts (in Dollars)	$ 76,681	$ 73,110
Accumulated depreciation and amortization (in Dollars)	$ 1,813,925	$ 1,762,344
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	9,851,090	9,677,188
Common stock, shares outstanding	9,851,090	9,677,188

XML

Significant Accounting Policies (Details) - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended
	Nov. 30, 2019	Nov. 30, 2018	Nov. 30, 2019	Nov. 30, 2018	May 31, 2019
Significant Accounting Policies (Details) [Line Items]
Threshold Period Past Due for Write-off of Trade Accounts Receivable			90 days
Inventory Valuation Reserves	$ 56,000		$ 56,000		$ 49,000
Depreciation, Depletion and Amortization	24,321	$ 28,387	53,819	$ 55,682
Amortization of Intangible Assets	$ 5,946	$ 16,665	11,726	33,331
Proceeds from Stock Options Exercised			$ 48,928	$ 75,200
Equity Method Investment, Ownership Percentage	6.00%		6.00%
Deferred Tax Assets, Valuation Allowance	$ 2,663,000		$ 2,663,000		2,459,000
Operating Lease, Right-of-Use Asset	$ 1,823,614		$ 1,823,614
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in Shares)	521,782	509,101	498,040	534,551
Distribution Rights [Member]
Significant Accounting Policies (Details) [Line Items]
Finite-Lived Intangible Asset, Useful Life			18 years
Purchased Technology Rights [Member]
Significant Accounting Policies (Details) [Line Items]
Finite-Lived Intangible Asset, Useful Life			10 years
Patents [Member]
Significant Accounting Policies (Details) [Line Items]
Finite-Lived Intangible Asset, Useful Life			17 years
Minimum [Member]
Significant Accounting Policies (Details) [Line Items]
Property, Plant and Equipment, Useful Life			5 years
Maximum [Member]
Significant Accounting Policies (Details) [Line Items]
Property, Plant and Equipment, Useful Life			10 years
Customer Concentration Risk [Member] | Accounts Receivable [Member]
Significant Accounting Policies (Details) [Line Items]
Concentration Risk, Percentage			57.70%		68.10%
Customer Concentration Risk [Member] | Revenue Benchmark [Member]
Significant Accounting Policies (Details) [Line Items]
Concentration Risk, Percentage			50.30%	44.70%
Supplier Concentration Risk [Member] | Cost of Goods and Service, Product and Service Benchmark [Member]
Significant Accounting Policies (Details) [Line Items]
Concentration Risk, Percentage			51.40%	33.80%
Supplier Concentration Risk [Member] | Accounts Payable [Member]
Significant Accounting Policies (Details) [Line Items]
Concentration Risk, Percentage			23.20%		32.10%
Accounting Standards Update 2016-02 [Member]
Significant Accounting Policies (Details) [Line Items]
Operating Lease, Right-of-Use Asset	$ 1,942,999		$ 1,942,999
Operating Lease, Liability	$ 1,980,970		$ 1,980,970
Share-based Payment Arrangement, Option [Member]
Significant Accounting Policies (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period (in Shares)			54,125
Share-based Payment Arrangement, Option, Exercise Price Range, Lower Range Limit (in Dollars per share)			$ 0.82
Share-based Payment Arrangement, Option, Exercise Price Range, Upper Range Limit (in Dollars per share)			$ 1.20
Proceeds from Stock Options Exercised			$ 48,928

XML

Accounts Payable and Accrued Expenses (Details) - Accounts payable and accrued expense - USD ($)	Nov. 30, 2019	May 31, 2019
Accounts payable and accrued expense [Abstract]
Accounts payable	$ 1,344,791	$ 999,593
Deferred rent		37,972
Total	$ 1,344,791	$ 1,037,565

XML

Leases (Details) - USD ($)				1 Months Ended	6 Months Ended
	Nov. 01, 2019	Sep. 01, 2019	Jun. 18, 2009	Nov. 30, 2016	Nov. 30, 2019
Leases (Details) [Line Items]
Operating Leases, Rent Expense					$ 171,892
Building In Irvine California [Member]
Leases (Details) [Line Items]
Operating Lease Initiation Date			Sep. 01, 2009
Lease Expiration Date			Aug. 31, 2016
Operating Leases, Rent Expense, Minimum Rentals			$ 18,490
Operating Leases, Rent Expense		$ 22,948
Building In Irvine California [Member] | First Amendment To Lease [Member]
Leases (Details) [Line Items]
Operating Lease Initiation Date			Sep. 01, 2016
Lease Expiration Date			Aug. 31, 2021
Operating Leases, Rent Expense, Minimum Rentals			$ 21,000
MEXICO | Property Available for Operating Lease [Member]
Leases (Details) [Line Items]
Operating Leases, Rent Expense, Minimum Rentals				$ 2,926
Operating Leases, Rent Expense	$ 3,239
Lease Expiration Period				10 years

XML

Leases

6 Months Ended

Nov. 30, 2019

Disclosure Text Block [Abstract]

Lessee, Operating Leases [Text Block]

Note 6: Leases

On June 18, 2009, the Company entered into an agreement to lease a building in Irvine, California. The lease commenced September 1, 2009 and ended 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. In November 2015, the Company signed the First Amendment to Lease to extend the lease until August 31, 2021.  The initial base rent for the lease amendment which started September 1, 2016 was $21,000 per month. As of September 1, 2019, the rent was $22,948 per month.

      In November 2016, the Company’s Mexican subsidiary, Biomerica de Mexico, entered into a 10-year lease for approximately 8,100 square feet of manufacturing space with initial base rent of $2,926 per month. The rent is currently set at $3,239 per month as of November 1, 2019. The Company has a one 10-year option to renew at the end of the initial lease period.  Biomerica, Inc. is not a guarantor of such lease. Biomerica de Mexico also leases a smaller unit on a month-to-month basis for use in one manufacturing process.  In addition, the Company leases a small office on a month-to-month basis in Lindau, Germany, as headquarters for BioEurope GmbH, its Germany subsidiary.

      Components of lease expense include fixed lease expense of approximately $171,892 for the six months ended November 30, 2019.  For purposes of determining straight-line rent expense, the lease term is calculated from the date the Company first takes possession of the facility, including any periods of free rent and any renewal options periods that the Company is reasonably certain of exercising. The Company’s office and equipment leases generally have contractually specified minimum rent and annual rent increases are included in the measurement of the right-of-use asset and related lease liability.  Additionally, under these lease arrangements, the Company may be required to pay directly, or reimburse the lessors, for some maintenance and operating costs. Such amounts are generally variable and therefore not included in the measurement of the right-of-use asset and related lease liability but are instead recognized as variable lease expense in the Condensed Consolidated Statements of Operations and Comprehensive Loss when they are incurred. 

Supplemental cash flow information related to leases for the six months ended November 30, 2019:
Operating cash flows from operating leases	$	154,521
Right-of-use assets obtained in exchange for    new operating lease liabilities		--
Weighted average remaining lease term (in years)		6.77
Weighted average discount rate		6.5	%

The maturity of lease liabilities as of November 30, 2019 are as follows:

Years Ending May 31
2020	$	97,494
2021		211,946
2022		236,410
2023		262,830
2024		291,350
Thereafter		778,807
Total	$	1,878,837

XML

Significant Accounting Policies (Tables)

6 Months Ended

Nov. 30, 2019

Accounting Policies [Abstract]

Schedule of Inventory, Current [Table Text Block]

	November 30, 2019		May 31, 2019
Raw materials	$	1,209,000	$	1,208,000
Work in progress		835,000		771,000
Finished products		147,000		172,000
Total	$	2,191,000	$	2,151,000

Share-based Payment Arrangement, Option, Activity [Table Text Block]

		Exercise Price Weighted Average
	Option Shares
Outstanding May 31, 2019	1,476,209	$	2.07
Granted	--		--
Forfeited	(35,250)		3.26
Exercised	(54,125)		0.92
Outstanding November 30, 2019	1,386,834	$	2.09

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

	Six Months Ended November 30,				Three Months Ended    November 30,
	2019		2018		2019		2018
Numerator:
Loss from continuing operations	$	(991,556)	$	(928,984)	$	(485,260)	$	(477,244)
Denominator for basic net loss    Per common share		9,780,713		8,995,575		9,817,363		9,061,617
Effect of dilutive securities:
Options		--		--		--		--
Denominator for diluted net loss   per common share		9,780,713		8,995,575		9,817,363		9,061,617
Basic net loss per common share	$	(0.10)	$	(0.10)	$	(0.05)	$	(0.05)
Diluted net loss per common share	$	(0.10)	$	(0.10)	$	(0.05)	$	(0.05)

XML

Commitments and Contingencies (Details) - USD ($)		1 Months Ended
	Dec. 01, 2017	Sep. 30, 2019	Nov. 30, 2019	Sep. 25, 2019	Jul. 22, 2019	May 31, 2019
Commitments and Contingencies (Details) [Line Items]
Market Issuance Sales Agreement Aggregate Amount	$ 7,000,000
Common Stock, Par or Stated Value Per Share (in Dollars per share)			$ 0.08			$ 0.08
Clinical Trial Agreement Maximum Budgeted Costs					$ 107,000
Related Party Deposit Liabilities			$ 200,000
Multi Physician Medical Group [Member]
Commitments and Contingencies (Details) [Line Items]
Clinical Trial Agreement Maximum Budgeted Costs				$ 136,000
Chief Executive Officer [Member]
Commitments and Contingencies (Details) [Line Items]
Related Party Deposit Liabilities			$ 200,000
Common Stock [Member] | Max Health Medical International Limited [Member]
Commitments and Contingencies (Details) [Line Items]
Shares Offer To Purchase (in Shares)		500,000
Placement Shares [Member]
Commitments and Contingencies (Details) [Line Items]
Common Stock, Par or Stated Value Per Share (in Dollars per share)	$ 0.08

XML

Significant Accounting Policies (Details) - Options Activity - Share-based Payment Arrangement, Option [Member]	6 Months Ended
	Nov. 30, 2019 $ / shares shares
Significant Accounting Policies (Details) - Options Activity [Line Items]
Options Outstanding, Shares | shares	1,476,209
Option Outstanding, Exercise Price Weighted Average | $ / shares	$ 2.07
Option Granted, Shares | shares
Option Granted, Exercise Price Weighted Average | $ / shares
Option Forfeited, Shares | shares	(35,250)
Option Forfeited, Exercise Price Weighted Average | $ / shares	$ 3.26
Option Exercised, Shares | shares	(54,125)
Option Exercised, Exercise Price Weighted Average | $ / shares	$ 0.92
Options Outstanding, Shares | shares	1,386,834
Option Outstanding, Exercise Price Weighted Average | $ / shares	$ 2.09

XML

Geographic Information (Details) - USD ($)	6 Months Ended
	Nov. 30, 2019	May 31, 2019
Geographic Information (Details) [Line Items]
Property, Plant and Equipment, Net	$ 303,573	$ 351,070
Geographic Concentration Risk [Member]
Geographic Information (Details) [Line Items]
Concentration Risk, Percentage	10.00%
MEXICO
Geographic Information (Details) [Line Items]
Inventory, Gross	$ 685,000	665,000
Property, Plant and Equipment, Net	$ 35,000	$ 39,000

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($)	6 Months Ended
	Nov. 30, 2019	Nov. 30, 2018
Cash flows from operating activities:
Net loss	$ (991,556)	$ (928,984)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization	65,545	89,013
Change in provision for allowance on accounts receivable	3,571	13,192
Inventory reserve	6,873	36,467
Stock option expense	34,978	9,126
Reduction (increase) in deferred rent liability	(37,971)	4,351
Amortization of right-of-use asset	157,356
Changes in assets and liabilities:
Accounts receivable	168,133	(473,799)
Inventories	(46,675)	27,269
Prepaid expenses and other	18,431	106,706
Reduction in lease liability	(102,133)
Accounts payable and accrued expenses	345,211	109,163
Accrued compensation	12,243	6,428
Net cash used in operating activities	(365,994)	(1,001,068)
Cash flows from investing activities:
Increase in intangibles	(15,008)	(31,937)
Purchases of property and equipment	(6,323)	(53,080)
Net cash used in investing activities	(21,331)	(85,017)
Cash flows from financing activities:
Proceeds from sale of common stock, net	307,686	936,702
Proceeds from exercise of stock options	48,928	75,200
Proceeds from equity financing-officer	200,000
Net cash provided by financing activities	556,614	1,011,902
Effect of exchange rate changes on cash	(5,085)	(5,806)
Net increase (decrease) in cash and cash equivalents	164,204	(79,989)
Cash and cash equivalents at beginning of period	686,785	1,204,903
Cash and cash equivalents at end of period	850,989	1,124,914
Cash paid during the period for:
Interest	5	47
Income taxes	7,844	0
Non-cash Investing and Financing Activities:
Establishment of Right-of-Use Asset per ASC 842	1,942,999
Establishment of Lease Liability per ASC 842	$ 1,980,970

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED) - USD ($)	3 Months Ended		6 Months Ended
	Nov. 30, 2019	Nov. 30, 2018	Nov. 30, 2019	Nov. 30, 2018
Net sales	$ 1,596,408	$ 1,500,791	$ 2,790,823	$ 2,773,661
Cost of sales	(1,127,536)	(1,092,731)	(1,954,647)	(2,028,378)
Gross profit	468,872	408,060	836,176	745,283
Operating Expenses:
Selling, general and administrative	553,761	512,592	1,060,958	912,820
Research and development	404,854	381,405	775,320	773,186
Total operating expenses	958,615	893,997	1,836,278	1,686,006
Loss from operations	(489,743)	(485,937)	(1,000,102)	(940,723)
Other Income (Expense):
Dividend and interest income	4,488	8,693	8,551	11,786
Interest expense	(5)		(5)	(47)
Total other income	4,483	8,693	8,546	11,739
Net loss	$ (485,260)	$ (477,244)	$ (991,556)	$ (928,984)
Basic net loss per common share (in Dollars per share)	$ (0.05)	$ (0.05)	$ (0.10)	$ (0.10)
Diluted net loss per common share (in Dollars per share)	$ (0.05)	$ (0.05)	$ (0.10)	$ (0.10)
Weighted average number of common and common equivalent shares:
Basic (in Shares)	9,817,363	9,061,617	9,780,713	8,995,575
Diluted (in Shares)	9,817,363	9,061,617	9,780,713	8,995,575
Net loss	$ (485,260)	$ (477,244)	$ (991,556)	$ (928,984)
Other comprehensive loss, net of tax:
Foreign currency translation	(1,643)	(4,480)	(5,085)	(5,806)
Comprehensive loss	$ (486,903)	$ (481,724)	$ (996,641)	$ (934,790)

XML

Geographic Information (Tables)

6 Months Ended

Nov. 30, 2019

Geographic Information Disclosure [Abstract]

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

	Six Months Ended November 30,				Three Months Ended November 30,
	2019		2018		2019		2018
Revenues from sales to unaffiliated customers:
United States	$	224,000	$	282,000	$	109,000	$	140,000
Asia		1,460,000		1,320,000		797,000		672,000
Europe		717,000		914,000		416,000		522,000
South America		71,000		127,000		24,000		56,000
Middle East		309,000		131,000		241,000		111,000
Other		10,000		--		10,000		--
	$	2,791,000	$	2,774,000	$	1,597,000	$	1,501,000

XML

Shareholders' Equity

6 Months Ended

Nov. 30, 2019

Stockholders' Equity Note [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

Note 4:  Shareholders’ Equity

As described in the Company’s Form 10Q, filed with the Securities and Exchange Commission on April 15, 2019, the Form 10K report, filed with the Securities and Exchange Commission on August 29, 2019, the Form 10Q filed with the Securities and Exchange Commission on October 14, 2019 and the Form S-3 Registration Statement and Prospectus filed on June 30, 2017 and December 4, 2017, respectively, the Company entered into an At Market Issuance Sales Agreement, whereby, the Company may raise additional working capital and funds for continued development of current research projects.  These funds will be needed to fund current research and development projects and bring them to the next state of completion.  Management expects to raise additional funds throughout the year from the At Market Issuance Agreement to fund operations as necessary. During the quarter ended November 30, 2019, the Company received $195,078 in net proceeds from the sale of its common stock through this Agreement. During the six months ended November 30, 2019, the Company received $307,686 in net proceeds from the sale of its common stock through this Agreement.

XML

Subsequent Events

6 Months Ended

Nov. 30, 2019

Subsequent Events [Abstract]

Subsequent Events [Text Block]

Note 8: Subsequent Events

      Subsequent to November 30, 2019, options to purchase 26,250 of the Company’s common stock at prices ranging from $1.04 to $1.20 were exercised by the option holders. Net proceeds to the Company were approximately $31,000.

     On January 7, 2020, the Company sold 7,139 shares of common stock under the S-3 registration statement and received net proceeds of $21,282. On January 9, 2020 the Company sold 5,396 shares of common stock under the S-3 registration statement and received net proceeds of approximately $16,058.

     In December 2019, options to purchase 51,000 shares of the Company’s common stock were granted to various employees of the Company.  The purchase price of the options will be $2.68 per share.  The options are exercisable one quarter per year with the first quarter vesting one year from date of grant.  The options expire five years from date of grant.

     In December 2019, the Board of Directors approved the 2020 Stock Option and Incentive Plan.  The plan is for the issuance of 900,000 options to purchase the Company’s common stock from time to time at the discretion of the Board of Directors.  The plan will be submitted for approval by the shareholders in December 2020.

     In December 2019, the Board of Directors approved the grant of 295,000 options to purchase shares of the Company’s common stock to officers and directors.  The options are exercisable by outside board members one year from date of grant and for officers one-quarter per year with the first quarter vesting one year from date of grant. The options will be at the exercise price of $2.81 per share and expire ten years from date of grant.

     In December 2019, the Company entered into a Clinical Trial Agreement with a research institution for the purpose of conducting a clinical trial of the Biomerica InFoods product.  The term of the agreement shall be until completion of the work outlined and the charges will be invoiced monthly for work performed in the previous month.  The maximum budgeted costs will be approximately $133,000.

      On December 18, 2019, the Company entered into a Clinical Trial Agreement with a research institution for the purpose of conducting a clinical trial of the Biomerica H. pylori product.  The term of the agreement shall be until completion of the work outlined and the charges will be invoiced monthly for work performed in the previous month. The maximum budgeted costs will be approximately $57,800.

XML

Subsequent Events (Details) - Subsequent Event [Member] - USD ($)			1 Months Ended
	Jan. 09, 2020	Jan. 07, 2020	Jan. 14, 2020	Dec. 31, 2019	Dec. 18, 2019
Subsequent Events (Details) [Line Items]
Stock Issued During Period, Shares, New Issues	5,396	7,139
Proceeds from Issuance of Common Stock (in Dollars)	$ 16,058	$ 21,282
Clinical Trial Agreement Maximum Budgeted Costs (in Dollars)				$ 133,000	$ 57,800
Share-based Payment Arrangement, Option [Member]
Subsequent Events (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period			26,250
Proceeds from Stock Options Exercised (in Dollars)			$ 31,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross				51,000
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price (in Dollars per share)				$ 2.68
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period				1 year
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period				5 years
Share-based Payment Arrangement, Option [Member] | Officers And Directors [Member]
Subsequent Events (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross				295,000
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period				1 year
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period				10 years
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price (in Dollars per share)				$ 2.81
Share-based Payment Arrangement, Option [Member] | Outside Board Members [Member]
Subsequent Events (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term				1 year
Minimum [Member] | Share-based Payment Arrangement, Option [Member]
Subsequent Events (Details) [Line Items]
Share-based Compensation Arrangements by Share-based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price (in Dollars per share)			$ 1.04
Maximum [Member] | Share-based Payment Arrangement, Option [Member]
Subsequent Events (Details) [Line Items]
Share-based Compensation Arrangements by Share-based Payment Award, Options, Exercises in Period, Weighted Average Exercise Price (in Dollars per share)			$ 1.20
2020 Stock Option And Incentive Plan [Member] | Share-based Payment Arrangement, Option [Member]
Subsequent Events (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Shares Issued in Period				900,000

XML

Geographic Information

6 Months Ended

Nov. 30, 2019

Geographic Information Disclosure [Abstract]

Geographic Information Disclosure [Text Block]

Note 5: Geographic Information

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

	Six Months Ended November 30,				Three Months Ended November 30,
	2019		2018		2019		2018
Revenues from sales to unaffiliated customers:
United States	$	224,000	$	282,000	$	109,000	$	140,000
Asia		1,460,000		1,320,000		797,000		672,000
Europe		717,000		914,000		416,000		522,000
South America		71,000		127,000		24,000		56,000
Middle East		309,000		131,000		241,000		111,000
Other		10,000		--		10,000		--
	$	2,791,000	$	2,774,000	$	1,597,000	$	1,501,000

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

      As of November 30, 2019 and May 31, 2019, approximately $685,000 and $665,000 of Biomerica’s gross inventory and approximately $35,000 and $39,000, of Biomerica’s property and equipment, net of accumulated depreciation and amortization, was located in Mexicali, Mexico, respectively.

XML

Accounting Policies, by Policy (Policies)

6 Months Ended

Nov. 30, 2019

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 (BioEurope GmbH) and Mexican subsidiary (Biomerica de Mexico). All significant intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates, Policy [Policy Text Block]

Accounting Estimates

The preparation of the consolidated 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 consolidated financial statements, and the reported amounts of revenues and expenses during the reported period. Estimates that are made include the reserve for bad debt, which is estimated based on current as well as historical history with a customer; stock option forfeiture rates, which are calculated based on historical data; inventory reserves, which are based on projected and historical usage of materials; and lease liability and right-of-use assets, which are calculated based on certain assumptions such as borrowing rate, likelihood of lease extensions to occur, asset valuation, among other things; (and other items that may be necessary to estimate using current, historical and judgment based). Actual results could materially differ from those estimates.

Concentration Risk, Credit Risk, Policy [Policy Text Block]

Concentration of Credit Risk

     The Company maintains cash balances at certain financial institutions in excess of amounts insured by federal agencies.  The Company does not believe it is exposed to significant credit risks.

     The Company provides credit in the normal course of business to customers throughout the United States and foreign markets.  At November 30, 2019 and May 31, 2019, the Company had one customer which accounted for 57.7% and two customers which accounted for 68.1%, respectively, of gross accounts receivable. The Company performs ongoing credit evaluations of its customers and requires accelerated prepayment in some circumstances. The Company had one customer which accounted for approximately 50.3% and 44.7% of consolidated sales for the six months ended November 30, 2019 and November 30, 2018, respectively.

     For the six months ended November 30, 2019 and 2018, three vendors accounted for approximately 51.4% and two vendors accounted for approximately 33.8% of the purchases of raw materials, respectively. At November 30, 2019 and May 31, 2019 there was one company which accounted for 23.2% and 32.1% of accounts payable, respectively.

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.

Accounts Receivable [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.  Based on various criteria, initial credit levels for individual distributors are approved by designated officers and managers of the company. All increases in credit limits are also approved by designated upper level management. Management evaluates receivables on a quarterly basis and adjusts the allowance for doubtful accounts accordingly.  Balances over ninety days old are usually reserved for unless collection is reasonably assured.  

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

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 net realizable value. Management periodically reviews inventory for excess quantities and obsolescence. Management evaluates quantities on hand, physical condition, and technical functionality as these characteristics may be impacted by anticipated customer demand for current products and new product introductions. The reserve is adjusted based on such evaluation, with a corresponding provision included in cost of sales. Abnormal amounts of idle facility expenses, freight, handling costs and wasted material are recognized as current period charges and the allocation of fixed production overhead is based on the normal capacity of the Company’s production facilities.

The approximate balances of inventories are the following at:

	November 30, 2019		May 31, 2019
Raw materials	$	1,209,000	$	1,208,000
Work in progress		835,000		771,000
Finished products		147,000		172,000
Total	$	2,191,000	$	2,151,000

    Reserves for inventory obsolescence are increased as necessary to reduce obsolete inventory to estimated realizable value or to specifically reserve for obsolete inventory that the Company intends to dispose of. As of November 30, 2019 and May 31, 2019, inventory reserves were approximately $56,000 and $49,000, respectively.

Property, Plant and Equipment, Policy [Policy Text Block]

Property and Equipment, net

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 $24,321 and $28,387 for the three months ended November 30, 2019 and 2018, and $53,819 and $55,682 for the six months ended November 30, 2019 and 2018, respectively.

Goodwill and Intangible Assets, Intangible Assets, Policy [Policy Text Block]

Intangible Assets, net

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 $5,946 and $16,665 for the three months ended November 30, 2019 and 2018, respectively, and $11,726 and $33,331 for the six months ended November 30, 2019 and 2018, respectively.

Share-based Payment Arrangement [Policy Text Block]

Share-Based Compensation

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

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

       The Company has not paid dividends historically and does not expect to pay them in the future.

The following summary presents the options granted, exercised, expired, cancelled and outstanding as of November 30, 2019:

		Exercise Price Weighted Average
	Option Shares
Outstanding May 31, 2019	1,476,209	$	2.07
Granted	--		--
Forfeited	(35,250)		3.26
Exercised	(54,125)		0.92
Outstanding November 30, 2019	1,386,834	$	2.09

     During the six months ended November 30, 2019, options to purchase 54,125 shares of common stock were exercised at the exercise prices ranging from $0.82 to $1.20 per share.  Proceeds to the Company were $48,928.

Revenue [Policy Text Block]

Revenue Recognition

       The Company has various contracts with customers.  All of the contracts specify that revenues from product sales are recognized at the time the product is shipped, customarily FOB shipping point, at which point title passes. Revenue is recognized only when collectability is reasonably assured.  The Company does not allow for returns except in the event of defective merchandise and therefore does not establish an allowance for returns. 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 as zero sales and recognizes the cost of the product as part of cost of sales. In addition, the Company has contracts with customers wherein they receive purchase discounts for achieving specified sales volumes. The Company evaluated the status of these contracts as of November 30, 2019 and does not believe that any additional discounts will be earned through the end of fiscal 2020 or through the end of the contract periods.

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 required to be classified as net sales, and shipping and handling costs are required to be classified as either cost of sales or disclosed in the notes to the consolidated financial statements. The Company included shipping and handling fees billed to customers in net sales. The Company included shipping and handling costs associated with inbound freight and unreimbursed shipping to customers in cost of sales.

Research and Development Expense, Policy [Policy Text Block]

Research and Development

Research and development costs are generally expensed as incurred.

Income Tax, Policy [Policy Text Block]

Income Taxes

       The Company has provided a valuation allowance on deferred tax assets of approximately $2,663,000 and $2,459,000 as of November 30, 2019 and May 31, 2019, respectively.

Foreign Currency Transactions and Translations Policy [Policy Text Block]

Foreign Currency Translation

       The subsidiary located in Mexico operates primarily using the Mexican peso. The subsidiary located in Germany operates primarily using the U.S. dollar, with an immaterial amount of transactions occurring using the Euro. Accordingly, assets and liabilities of these subsidiaries are translated using exchange rates in effect at the end of the quarter, and revenues and costs are translated using average exchange rates for the quarter. The resulting adjustments to assets and liabilities are presented as a separate component of accumulated other comprehensive loss.

Deferred Charges, Policy [Policy Text Block]

Deferred Rent

Incentive payments received from landlords was recorded as deferred lease incentives and were 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 established a deferred rent liability for the difference between the scheduled rent payment and the straight-line rent expense recognized. This deferred rent liability was amortized over the underlying lease term on a straight-line basis as a reduction of rent expense. During the period ended November 30, 2019, the Company adopted ASC 842, Leases. As a result, the existing deferred rent liability was netted against the right-of-use asset which was capitalized at that time.

       In February 2016, the Financial Accounting Standards Board issued an accounting standards update which requires lessees to recognize most leases on the balance sheet with a corresponding right-of-use asset.  Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease.  Right-of-use assets and lease liabilities are recognized at the lease commencement date based on the estimated present value of fixed lease payments over the lease term.  Leases will be classified as financing or operating which will drive the expense recognition pattern.  For lessees, the statement of operations presentation and expense recognition pattern for financing and operating leases is similar to the current model for capital and operating leases, respectively.  The Company has elected to exclude short-term leases.  The update also requires additional disclosures that will better enable users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases.  The Company adopted this guidance as of June 1, 2019, the required effective date, using the effective date transition method.  As permitted under the effective date transition method, financial information and disclosure for periods prior to the date of initial application will not be updated. An adjustment to opening accumulated deficit was not required in conjunction with adoption.  The adoption of this statement resulted in a right-of-use asset being recorded in the amount of $1,942,999 and a lease liability being recorded in the amount of $1,980,970. Both will be amortized over the life of the underlying leases. For additional information, see Note 6 – Leases.  The Company has elected not to reassess whether expired or existing contracts contain leases, or reassess the classification of existing leases as of the adoption date. The Company leases office space and copy machines, all of which are operating leases.  Most leases include the option to renew and the exercise of the renewals options is at the Company’s sole discretion. Options to extend or terminate a lease are considered in the lease term to the extent that the option is reasonably certain of exercise.  The leases do not include the options to purchase the leased property.  The depreciable life of assets and leasehold improvements are limited by the expected lease term.

Earnings Per Share, Policy [Policy Text Block]

Net Loss Per Share

Basic loss per share is computed as net loss divided by the weighted average number of common shares outstanding for the period. Diluted loss per share reflects the potential dilution that could occur from common shares issuable through stock options using the treasury stock method. The total amount of anti-dilutive options not included in the earnings per share calculation for the three and six months ended November 30, 2019 was 521,782 and 498,040 respectively. The total amount of anti-dilutive options not included in the earnings per share calculation for the three and six months ended November 30, 2018 was 509,101 and 534,551, respectively.

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

	Six Months Ended November 30,				Three Months Ended    November 30,
	2019		2018		2019		2018
Numerator:
Loss from continuing operations	$	(991,556)	$	(928,984)	$	(485,260)	$	(477,244)
Denominator for basic net loss    Per common share		9,780,713		8,995,575		9,817,363		9,061,617
Effect of dilutive securities:
Options		--		--		--		--
Denominator for diluted net loss   per common share		9,780,713		8,995,575		9,817,363		9,061,617
Basic net loss per common share	$	(0.10)	$	(0.10)	$	(0.05)	$	(0.05)
Diluted net loss per common share	$	(0.10)	$	(0.10)	$	(0.05)	$	(0.05)

New Accounting Pronouncements, Policy [Policy Text Block]

Recent Accounting Pronouncements

On February 15, 2018, the FASB issued ASU 2018-02, “Reclassification of Certain Tax Effects From Accumulated Comprehensive Income” (“ASU 2018-02”).  ASU 2018-02 will give companies the option to reclassify stranded tax effects caused by the newly-enacted U.S. Tax Cuts and Jobs Act (“TCJA”) from accumulated other comprehensive income (“ASCI”) to retained earnings.  ASU 2018-02 will take effect for all companies for the fiscal years beginning after December 15, 2018, and interim periods within those fiscal years.  Management is evaluating the provisions of this statement and has not determined what impact the adoption of ASU 2018-02 will have on the Company’s financial position or results of operations.

On June 20, 2018, the FASB issued ASU 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”). ASU 2018-07 is intended to reduce cost and complexity and to improve financial reporting for share-based payments to nonemployees (for example, service providers, external legal counsel, suppliers, etc.). ASU 2018-07 was effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. During the six months ended November 30, 2019, the Company adopted the provisions of this statement and is taking them into account in the preparation of the financial statements for the six months ended November 30, 2019. The adoption of this standard has not had a significant impact on the Company’s financial statements.

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.

XML

Leases (Tables)

6 Months Ended

Nov. 30, 2019

Disclosure Text Block [Abstract]

Schedule Of Cash Flow Supplemental Disclosures Related To Lease [Table Text Block]

Supplemental cash flow information related to leases for the six months ended November 30, 2019:
Operating cash flows from operating leases	$	154,521
Right-of-use assets obtained in exchange for    new operating lease liabilities		--
Weighted average remaining lease term (in years)		6.77
Weighted average discount rate		6.5	%

Lessee, Operating Lease, Liability, Maturity [Table Text Block]

Years Ending May 31
2020	$	97,494
2021		211,946
2022		236,410
2023		262,830
2024		291,350
Thereafter		778,807
Total	$	1,878,837

XML

Significant Accounting Policies (Details) - Reconciliation of the numerators and denominators of the basic and diluted earnings per share computations - USD ($)	3 Months Ended		6 Months Ended
	Nov. 30, 2019	Nov. 30, 2018	Nov. 30, 2019	Nov. 30, 2018
Numerator:
Loss from continuing operations (in Dollars)	$ (485,260)	$ (477,244)	$ (991,556)	$ (928,984)
Denominator for basic net loss Per common share	9,817,363	9,061,617	9,780,713	8,995,575
Effect of dilutive securities:
Options
Denominator for diluted net loss per common share	9,817,363	9,061,617	9,780,713	8,995,575
Basic net loss per common share (in Dollars per share)	$ (0.05)	$ (0.05)	$ (0.10)	$ (0.10)
Diluted net loss per common share (in Dollars per share)	$ (0.05)	$ (0.05)	$ (0.10)	$ (0.10)

XML

Geographic Information (Details) - Financial information about foreign and domestic operations and export sales - USD ($)	3 Months Ended		6 Months Ended
	Nov. 30, 2019	Nov. 30, 2018	Nov. 30, 2019	Nov. 30, 2018
Geographic Information (Details) - Financial information about foreign and domestic operations and export sales [Line Items]
Net Sales	$ 1,596,408	$ 1,500,791	$ 2,790,823	$ 2,773,661
UNITED STATES
Geographic Information (Details) - Financial information about foreign and domestic operations and export sales [Line Items]
Net Sales	109,000	140,000	224,000	282,000
Asia [Member]
Geographic Information (Details) - Financial information about foreign and domestic operations and export sales [Line Items]
Net Sales	797,000	672,000	1,460,000	1,320,000
Europe [Member]
Geographic Information (Details) - Financial information about foreign and domestic operations and export sales [Line Items]
Net Sales	416,000	522,000	717,000	914,000
South America [Member]
Geographic Information (Details) - Financial information about foreign and domestic operations and export sales [Line Items]
Net Sales	24,000	56,000	71,000	127,000
Middle East [Member]
Geographic Information (Details) - Financial information about foreign and domestic operations and export sales [Line Items]
Net Sales	241,000	111,000	309,000	131,000
Other [Member]
Geographic Information (Details) - Financial information about foreign and domestic operations and export sales [Line Items]
Net Sales	$ 10,000		$ 10,000

XML

Basis of Presentation

6 Months Ended

Nov. 30, 2019

Disclosure Text Block [Abstract]

Basis of Accounting [Text Block]

Note 1: Basis of Presentation

Biomerica, Inc. and Subsidiaries (collectively "the Company") are primarily engaged in the development, manufacture and marketing of medical diagnostic products.

      The Company develops, manufactures, and markets medical diagnostic products designed for the early detection and monitoring of chronic diseases and other medical conditions. The Company’s medical diagnostic products are sold worldwide in two markets: 1) clinical laboratories and 2) point of care (physicians' offices and over-the-counter drugstores). The diagnostic test kits are used to analyze blood, urine or fecal samples from patients in the diagnosis of various diseases and other medical complications, by measuring or detecting the existence and/or level of specific bacteria, hormones, antibodies, antigens or other substances, which may exist in a patient’s body, stools, or blood, often in extremely small concentrations.

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 (collectively 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 accounting principles generally accepted in the United States of America. 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, 2019 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, 2019 for the fiscal year ended May 31, 2019. The results of operations for our interim periods are not necessarily indicative of results to be achieved for our full fiscal year.

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)	Nov. 30, 2019	May 31, 2019
Current Assets:
Cash and cash equivalents	$ 850,989	$ 686,785
Accounts receivable, less allowance for doubtful accounts of $76,681 and $73,110 as of November 30, 2019 and May 31, 2019, respectively	1,282,944	1,454,652
Inventories	2,190,893	2,151,090
Prepaid expenses and other	186,035	202,402
Total Current Assets	4,510,861	4,494,929
Property and Equipment, net of accumulated depreciation and amortization of $1,813,925 and $1,762,344 as of November 30, 2019 and May 31, 2019, respectively	303,573	351,070
Right of Use Assets, net of amortization	1,823,614
Investments	165,324	165,324
Intangible Assets, net	110,490	107,209
Other Assets	124,759	126,832
Total Assets	7,038,621	5,245,364
Current Liabilities:
Accounts payable and accrued expenses	1,344,791	1,037,565
Accrued compensation	239,072	226,829
Equity financing deposit-officer	200,000
Lease liability, current portion	200,401
Total Current Liabilities	1,984,264	1,264,394
Lease Liability, net of current portion	1,678,436
Total Liabilities	3,662,700	1,264,394
Commitments and Contingencies (Notes 6 and 7)
Shareholders' Equity:
Preferred stock, no par value authorized 5,000,000 shares, none issued and none outstanding at November 30, 2019 and May 31, 2019
Common stock, $0.08 par value authorized 25,000,000 shares, issued and outstanding 9,851,090 and 9,677,188 at November 30, 2019 and May 31, 2019, respectively	788,085	774,173
Additional paid-in-capital	23,223,269	22,830,006
Common stock subscribed	(15,583)
Accumulated other comprehensive loss	(41,616)	(36,531)
Accumulated deficit	(20,578,234)	(19,586,678)
Total Shareholders' Equity	3,375,921	3,980,970
Total Liabilities and Shareholders' Equity	$ 7,038,621	$ 5,245,364