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Shareholders` Equity
9 Months Ended
Feb. 29, 2020
Stockholders' Equity Note [Abstract]  
Stockholders' Equity Note Disclosure [Text Block]

Note 4:  Shareholders’ Equity


      As described in the Company’s 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.  During the quarter that ended February 29, 2020, the Company received $58,572 in net proceeds from the sale of its common stock through this Agreement (including $15,583 from a subscription receivable as of November 30, 2019). The Company also recorded a subscription receivable during the quarter in the net amount of $1,156,311 for sales of common stock but which proceeds were not received until after February 29, 2020. During the nine months ended February 29, 2020, the Company received $366,258 in net proceeds from the sale of its common stock through this Agreement as well as a subscription receivable of $1,156,311, as described above.


On February 26,2020, Biomerica, Inc. issued stock under a Stock Purchase Agreement (the “Stock Purchase Agreement”) with Palm Global Small Cap Master Fund LP (“Palm”) pursuant to which the Company issued 571,429 shares of the Company’s Series A 5% Convertible Preferred Stock, for a purchase price of approximately $2 million, or $3.50 per Series A 5% Convertible  Preferred share. The Company incurred approximately $82,000 in issuance costs associated with this stock purchase. The issuance and sale of the Series A 5% Convertible Preferred shares was a private placement exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended, and Regulation D promulgated thereunder. 


The Stock Purchase Agreement contains certain anti-dilutive provisions for Palm until the third anniversary. In addition, the Company entered into a Registration Rights Agreement wherein the Company agreed to register for resale with the Securities and Exchange Commission the shares of common stock, $0.08 par value per share, issuable upon conversion of the Series A 5% Convertible Preferred Shares based on certain conditions.


The Series A 5% Convertible Preferred Shares are convertible at the option of the holder at any time into an equal number of common stock shares (“Conversion Shares”). The conversion price may be adjusted for stock splits or other common stock issuances. The Company may require the conversion of all of the outstanding Series A 5% Convertible Preferred shares if the closing sale price of the Company’s common stock equals or exceeds $9.00 for a period of five consecutive trading days with a minimum average trading volume of 35,000 shares per day over such period; provided, that, on such date, the Conversion Shares are registered for resale.


The Series A 5% Convertible Preferred shares accrue annual preferred dividends at a rate of $0.175 per Series A 5% Convertible Preferred share. The shares of Series A 5% Convertible Preferred shares are also entitled to receive participating dividends. The shares of Series A 5% Convertible Preferred shares have no voting rights.


In the event of a liquidation, dissolution or winding up of the Company, or a deemed liquidation event, the holders of Series A 5% Convertible Preferred shares are eligible to receive the greater of (i) an amount equal to the Series A 5% Convertible Preferred original issue price, plus an amount equal to accrued and unpaid dividends thereon, or (ii) such amount per share as would have been payable had all Series A 5% Convertible Preferred shares been converted into common stock immediately prior to such liquidation, dissolution, winding up or deemed liquidation event.


The Series A 5% Convertible Preferred shares contain certain protective provisions, and require the consent of the holders of a majority of the Series A 5% Convertible Preferred Shares prior to the Company taking certain actions that would impair or reduce the rights of the Series A 5% Convertible Preferred shares, among other things; for a period of three years following the issuance date.


     Please refer to the Form 8-K filed with the Securities and Exchange Commission on February 27, 2020 for further details of the Stock Purchase Agreement and related agreements.


     In November 2019, the Chief Executive Officer (CEO) deposited $200,000 with the Company to be used in a proposed financing where, under the terms being negotiated, the CEO would be co-investing with Palm (and other outside investors). Ultimately, on February 28, 2020, in conjunction with the issuance of the Series A 5% Convertible Preferred shares to Palm, the funds deposited in November 2019 into the Company by the CEO were converted into shares of common stock through the Company’s At Market Issuance Sales Agreement and were included in the common stock subscribed as of February 29, 2020. A total of 78,431 shares were purchased at a purchase price of $2.85 per share, of which 70,175 were paid for from the $200,000 which had been deposited with the Company in November 2019. The additional 8,256 shares were purchased in error through the Company’s ATM broker and were paid for by the CEO.