BIOMERICA INC, 10-Q filed on 4/14/2022
Quarterly Report
v3.22.1
Document And Entity Information - shares
 9 Months Ended
Feb. 28, 2022
Apr. 14, 2022
Document Information Line Items    
Entity Registrant Name BIOMERICA, INC.  
Trading Symbol BMRA  
Document Type 10-Q  
Current Fiscal Year End Date --05-31  
Entity Common Stock, Shares Outstanding   12,851,924
Amendment Flag false  
Entity Central Index Key 0000073290  
Entity Current Reporting Status Yes  
Entity Filer Category Non-accelerated Filer  
Document Period End Date Feb. 28, 2022  
Document Fiscal Year Focus 2022  
Document Fiscal Period Focus Q3  
Entity Small Business true  
Entity Emerging Growth Company false  
Entity Shell Company false  
Document Quarterly Report true  
Document Transition Report false  
Entity File Number 001-37863  
Entity Incorporation, State or Country Code DE  
Entity Tax Identification Number 95-2645573  
Entity Address, Address Line One 17571 Von Karman Avenue  
Entity Address, City or Town Irvine  
Entity Address, State or Province CA  
Entity Address, Postal Zip Code 92614  
City Area Code 949  
Local Phone Number 645-2111  
Title of 12(b) Security Common, par value $.08  
Security Exchange Name NASDAQ  
Entity Interactive Data Current Yes  
v3.22.1
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)
Feb. 28, 2022
May 31, 2021
Current Assets:    
Cash and cash equivalents $ 10,173,808 $ 4,199,311
Accounts receivable, less allowance for doubtful accounts of $20,293 and $837,415 as of February 28, 2022 and May 31, 2021, respectively 1,158,738 1,455,051
Inventories, net 3,231,430 3,206,255
Prepaid expenses and other 667,129 370,290
Total current assets 15,231,105 9,230,907
Property and equipment, net of accumulated depreciation and amortization of $2,046,612 and $1,972,357 as of February 28, 2022 and May 31, 2021, respectively 263,048 310,520
Right of use assets, net of accumulated amortization of $658,773 and $469,077 as of February 28, 2022 and May 31, 2021, respectively 1,367,863 1,553,081
Investments 165,324 165,324
Intangible assets, net of accumulated amortization of $49,253 and $126,769 as of February 28, 2022 and May 31, 2021, respectively 386,013 294,830
Other assets 146,980 264,151
Total Assets 17,560,333 11,818,813
Current Liabilities:    
Accounts payable and accrued expenses 2,608,840 583,380
Accrued compensation 537,284 388,896
Advances from customers 3,213,052
Lease liability, current portion 338,744 327,944
Total current liabilities 6,697,920 1,300,220
Lease liability, net of current portion 1,104,611 1,291,570
Total Liabilities 7,802,531 2,591,790
Commitments and contingencies (Notes 1 and 6)
Shareholders' Equity:    
Preferred stock, Series A 5% convertible, $0.08 par value, 571,429 shares authorized, none issued and outstanding as of February 28, 2022 and May 31, 2021
Preferred stock, undesignated, no par value, 4,428,571 shares authorized, none issued and outstanding as of February 28, 2022 and May 31, 2021
Common stock, $0.08 par value, 25,000,000 shares authorized, 12,851,924 and 12,307,157 issued and outstanding at February 28, 2022 and May 31, 2021, respectively 1,028,152 984,571
Additional paid-in-capital 42,108,865 38,836,743
Accumulated other comprehensive loss (60,857) (47,956)
Accumulated deficit (33,318,358) (30,546,335)
Total Shareholders' Equity 9,757,802 9,227,023
Total Liabilities and Shareholders' Equity 17,560,333 11,818,813
5% Convertible Preferred Stock [Member] | Series A Preferred Stock [Member]    
Shareholders' Equity:    
Preferred stock, Series A 5% convertible, $0.08 par value, 571,429 shares authorized, none issued and outstanding as of February 28, 2022 and May 31, 2021
Preferred stock, undesignated, no par value, 4,428,571 shares authorized, none issued and outstanding as of February 28, 2022 and May 31, 2021
v3.22.1
CONDENSED CONSOLIDATED BALANCE SHEETS (Parentheticals) - USD ($)
Feb. 28, 2022
May 31, 2021
Allowance for doubtful accounts (in Dollars) $ 20,293 $ 837,415
Accumulated depreciation and amortization (in Dollars) 2,046,612 1,972,357
Accumulated amortization, Right of Use Assets (in Dollars) 658,773 469,077
Accumulated amortization, Intangible Assets (in Dollars) $ 49,253 $ 126,769
Preferred Stock, shares issued 0 0
Preferred Stock, shares outstanding 0 0
Preferred Stock, No Par Value (in Dollars per share) $ 0 $ 0
Preferred Stock, undesignated shares 4,428,571 4,428,571
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 12,851,924 12,307,157
Common stock, shares outstanding 12,851,924 12,307,157
5% Convertible Preferred Stock [Member] | Series A Preferred Stock [Member]    
Preferred Stock, Par Value (in Dollars per share) $ 0.08 $ 0.08
Preferred Stock, shares authorized 571,429 571,429
Preferred Stock, shares issued 0 0
Preferred Stock, shares outstanding 0 0
v3.22.1
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED) - USD ($)
 3 Months Ended 9 Months Ended
Feb. 28, 2022
Feb. 28, 2021
Feb. 28, 2022
Feb. 28, 2021
Income Statement [Abstract]        
Net sales $ 7,660,501 $ 3,628,638 $ 13,569,188 $ 6,144,970
Cost of sales (5,987,277) (3,702,069) (11,213,175) (5,791,593)
Gross profit (loss) 1,673,224 (73,431) 2,356,013 353,377
Operating expenses:        
Selling, general and administrative 1,323,725 1,527,947 3,618,258 4,238,737
Research and development 456,998 563,967 1,515,384 1,892,033
Total operating expense 1,780,723 2,091,914 5,133,642 6,130,770
Loss from operations (107,499) (2,165,345) (2,777,629) (5,777,393)
Other income:        
Dividend and interest income 6,019 37,687 19,740 53,761
Loss before income taxes (101,480) (2,127,658) (2,757,889) (5,723,632)
(Provision) benefit for income taxes (2,688) 3,117 (14,134) (11,401)
Net loss $ (104,168) $ (2,124,541) $ (2,772,023) $ (5,735,033)
Basic net loss per common share (in Dollars per share) $ (0.01) $ (0.18) $ (0.22) $ (0.49)
Diluted net loss per common share (in Dollars per share) $ (0.01) $ (0.18) $ (0.22) $ (0.49)
Weighted average number of common and common equivalent shares:        
Basic (in Shares) 12,820,481 11,905,492 12,611,760 11,802,803
Diluted (in Shares) 12,820,481 11,905,492 12,611,760 11,802,803
Net loss $ (104,168) $ (2,124,541) $ (2,772,023) $ (5,735,033)
Other comprehensive loss, net of tax:        
Foreign currency translation (2,538) (5,437) (12,901) (8,687)
Comprehensive loss $ (106,706) $ (2,129,978) $ (2,784,924) $ (5,743,720)
v3.22.1
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS` EQUITY (Unaudited) - USD ($)
Common Stock [Member]
5% Convertible Preferred Stock [Member]
Additional Paid-in Capital [Member]
AOCI Attributable to Parent [Member]
Retained Earnings [Member]
Total
Balances at May. 31, 2020 $ 939,205 $ 25,714 $ 36,388,056 $ (39,841) $ (23,100,081) $ 14,213,053
Balances (in Shares) at May. 31, 2020 11,740,089 321,429        
Exercise of stock options $ 6,540   89,915     96,455
Exercise of stock options (in Shares) 81,750          
Net proceeds from ATM $ 12,711   998,764     1,011,475
Net proceeds from ATM (in Shares) 158,889          
Foreign currency translation       (8,687)   (8,687)
Conversion of preferred to common stock $ 25,714 $ (25,714)        
Conversion of preferred to common stock (in Shares) 321,429 (321,429)        
Compensation expense in connection with options granted     1,022,320     1,022,320
Net loss         (5,735,033) (5,735,033)
Balances at Feb. 28, 2021 $ 984,170   38,499,055 (48,528) (28,835,114) 10,599,583
Balances (in Shares) at Feb. 28, 2021 12,302,157          
Balances at May. 31, 2021 $ 984,571   38,836,743 (47,956) (30,546,335) 9,227,023
Balances (in Shares) at May. 31, 2021 12,307,157          
Exercise of stock options $ 1,880   37,295     $ 39,175
Exercise of stock options (in Shares) 23,500         23,500
Net proceeds from ATM $ 41,701   2,275,459     $ 2,317,160
Net proceeds from ATM (in Shares) 521,267          
Foreign currency translation       (12,901)   (12,901)
Compensation expense in connection with options granted     959,368     959,368
Net loss         (2,772,023) (2,772,023)
Balances at Feb. 28, 2022 $ 1,028,152   $ 42,108,865 $ (60,857) $ (33,318,358) $ 9,757,802
Balances (in Shares) at Feb. 28, 2022 12,851,924          
v3.22.1
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($)
 9 Months Ended
Feb. 28, 2022
Feb. 28, 2021
Cash flows from operating activities:    
Net loss $ (2,772,023) $ (5,735,033)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:    
Depreciation and amortization 102,272 94,550
Change in allowance on accounts receivable (817,122) 578,438
Inventory reserve 270,805 1,437,547
Stock option expense 959,368 1,022,320
Amortization of right-of-use asset 189,696 173,919
Changes in assets and liabilities:    
Accounts receivable 1,113,435 (690,691)
Inventories (295,980) (1,446,766)
Prepaid expenses and other (296,839) 734,966
Reduction in lease liability (180,637) (156,384)
Other assets 117,171 (114,664)
Accounts payable and accrued expenses 2,025,460 (230,575)
Accrued compensation 148,388 88,309
Advances from customers 3,213,052
Net cash provided by (used in) operating activities 3,777,046 (4,244,064)
Cash flows from investing activities:    
Increase in intangibles (113,436) (116,881)
Purchases of property and equipment (32,547) (106,760)
Net cash used in investing activities (145,983) (223,641)
Cash flows from financing activities:    
Proceeds from sale of common stock, net 2,317,160 1,011,475
Proceeds from exercise of stock options 39,175 96,455
Net cash provided by financing activities 2,356,335 1,107,930
Effect of exchange rate changes in cash (12,901) (8,687)
Net increase (decrease) in cash and cash equivalents 5,974,497 (3,368,462)
Cash and cash equivalents at beginning of period 4,199,311 8,641,027
Cash and cash equivalents at end of period 10,173,808 5,272,565
Cash paid during the period for:    
Income taxes 13,334 13,730
Non-cash investing and financing activities:    
Increase in right-of-use asset due to lease extension or establishment 4,478
Increase in lease liability due to lease extension or establishment $ 4,478
v3.22.1
BASIS OF PRESENTATION
 9 Months Ended
Feb. 28, 2022
Accounting Policies [Abstract]  
Basis of Accounting [Text Block]

NOTE 1:  BASIS OF PRESENTATION

 

Biomerica Inc. and subsidiaries (collectively the “Company”, “Biomerica”, “we”, “us”, or “our”) develops, patents, manufactures and markets advanced diagnostic and therapeutic products used at the point-of-care (in home and physicians' offices) and in hospital/clinical laboratories for detection and/or treatment of medical conditions and diseases. The Company's products are designed to enhance the health and well-being of people, while reducing total healthcare costs.

 

Our primary focus is the research, development, and regulatory approval of patented, diagnostic-guided therapy (“DGT”) products to treat gastrointestinal diseases, such as irritable bowel syndrome, and other inflammatory diseases. These products are directed at chronic inflammatory illnesses that are widespread and common, and as such address very large markets.

 

Our existing medical diagnostic products that are in the market are sold worldwide primarily in two markets: 1) clinical laboratories and 2) point-of-care (physicians' offices and drugstores like Walmart and Walgreens). Our diagnostic test kits are used to analyze blood, urine, nasal or fecal specimens from patients in the diagnosis of various diseases, food intolerances 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.

 

Due to the global 2019 SARS-CoV-2 novel coronavirus pandemic, in March 2020 we began developing COVID-19 products to indicate if a person has been infected by COVID-19, or is currently infected. While the Company does offer a COVID-19 antibody diagnostic test, all of our COVID-19 revenues in fiscal 2022 have come from international sales of our COVID-19 antigen tests that use a patient’s nasal fluid sample to detect if the patient is currently infected with the virus.

 

The other products we sell are primarily focused on gastrointestinal diseases, food intolerances, and certain esoteric tests. These diagnostic test products utilize immunoassay technology. Most of our commercial products are CE marked and/or sold for diagnostic use where they are registered by each country’s regulatory agency. In addition, some products are cleared for sale in the U.S. by the FDA.

 

The information set forth in these condensed consolidated financial statements is unaudited and reflects all adjustments which, in the opinion of management, are necessary to present a fair statement of the consolidated results of operations of Biomerica, Inc. and subsidiaries, 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 the annual financial statements and notes. The condensed consolidated balance sheet data as of May 31, 2021 was derived from restated, audited financial statements. The accompanying interim condensed consolidated financial statements should be read in conjunction with the financial statements and related notes included in the Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on August 27, 2021 for the fiscal year ended May 31, 2021, which have been restated as described in our Form 10-K/A as filed on October 14, 2021. The results of operations for the interim periods are not necessarily indicative of results to be achieved for the full fiscal year.

 

CORRECTION OF AN ERROR

 

As disclosed in our Form 10-K/A for the year ended May 31, 2021, filed on October 14, 2021, during the process of preparing our financial statements for the quarter ended August 31, 2021, we determined that our calculation of non-cash stock-based compensation expense related to issued stock options in previously issued financial statements was incorrect. Our calculation applied forfeiture adjustments to both vested and unvested outstanding options, including those for which the employee had provided the requisite service, which resulted in an understatement of stock compensation expense. Additionally, our calculation expensed the option at vesting dates versus pro-rata over the period the requisite service was provided. As a result of these errors, certain previously reported amounts in the condensed consolidated statement of operations, condensed consolidated statement of stockholders’ equity and condensed consolidated statement of cash flows for the periods ended February 28, 2021, were materially misstated; accordingly, we have restated the prior period financial statements. See Note 8 to these Financial Statements.

v3.22.1
SIGNIFICANT ACCOUNTING POLICIES
 9 Months Ended
Feb. 28, 2022
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 its 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 condensed 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 condensed consolidated financial statements, and the reported amounts of revenues and expenses during the reported period. Estimates that are made include the allowance for doubtful accounts, which is estimated based on current as well as historical past practices with a customer; stock option forfeiture rates, which are calculated based on historical data; inventory obsolescence, which is 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, the 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 information. Actual results could materially differ from those estimates.

 

MARKETS AND METHODS OF DISTRIBUTION

 

Due to the Coronavirus global pandemic, the Company’s operations have been negatively impacted. The Company has faced disruptions in certain of the following areas, and may face further challenges from supply chain disruptions, loss of contracts and/or customers, closure of the Company’s manufacturing or distribution facilities or of the facilities of the Company’s suppliers, partners and customers, travel, shipping and logistical disruptions, government responses of all types, international business risks in countries where the Company makes and/or sells its products, loss of human capital or personnel at the Company, its partners and its customers, interruptions of production, customer credit risk, and general economic calamities. These ongoing pandemic related disruptions have materially negatively impacted the Company’s operations and financial performance and may continue to have significant material negative impacts on the Company.

 

LIQUIDITY

 

The Company has incurred net losses and negative cash flows from operations and has an accumulated deficit of approximately $33.3 million as of February 28, 2022. Management expects to continue to incur significant costs as it advances its clinical trials and product development activities.

 

On January 22, 2021, the Company filed a prospectus supplement for purposes of raising up to $15,000,000 to the base prospectus filed with the SEC on July 21, 2020 and included in the registration statement on Form S-3 (File No. 333-239980) that was declared effective by the SEC on September 30, 2020. The shares included in the prospectus supplement may be sold pursuant to the terms of an At-The- Market Issuance Sales Agreement between the Company and B. Riley Securities, Inc., as sales agent, the ATM Agreement.

 

The Company intends to use the net proceeds from such 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.

 

Under an ATM Agreement, sales of shares are deemed to be sold “at the market offerings” as defined in Rule 415 promulgated under the Securities Act. The sales agent under the ATM Agreement agrees to use commercially reasonable efforts to sell on the Company’s behalf all of the shares requested to be sold from time to time by the Company, consistent with its normal trading and sales practices, on mutually agreed terms between the sales agent and the Company. The Company has no obligation to sell any of the shares under the ATM Agreement, and may at any time suspend offers under, or terminate the ATM Agreement.

As a result of cash and cash equivalents on hand at February 28, 2022, and the ability to raise additional funds through the ATM Agreement noted above, management believes the Company has sufficient funds to operate through May 2023.

 

CONCENTRATION OF CREDIT RISK

 

The Company maintains cash balances at certain financial institutions in excess of amounts insured by federal agencies. As of February 28, 2022, the Company had approximately $9,765,000 of uninsured cash. The Company does not believe it is exposed to any significant credit risks.

 

For the nine months ended February 28, 2022 and 2021, the Company had three and two key customers who are located in foreign countries which accounted for 75% and 66% of net consolidated sales, respectively. At February 28, 2022 and May 31, 2021, the Company had one and two key customers who are located in foreign countries which accounted for a total of 67% and 73%, respectively, of gross accounts receivable.

 

For the nine months ended February 28, 2022 and 2021, the Company had one key vendor which accounted for 85% and 62% of the purchases of raw materials, respectively. As of February 28, 2022 and May 31, 2021, the Company had one key vendor which accounted for 80% and 17%, respectively, of accounts payable.

 

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 usually 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 receivables balances relative to the total gross receivables. Management monitors the payments for these large balances closely and very often requires payment of existing invoices before shipping new sales orders.

 

The Company has established a reserve of approximately $20,000 for doubtful accounts as of February 28, 2022.

 

PREPAID EXPENSES AND OTHER

 

The Company occasionally prepays for items such as inventory, insurance and other items.  These items are reported as prepaid expenses and other, until either the inventory is physically received or the insurance and other items are expensed.

 

As of February 28, 2022 and May 31, 2021, the prepaid expenses and other were approximately $667,000 and $370,000, respectively. The prepaid expenses and other balance were composed of prepayments to raw materials suppliers, insurance and various other suppliers.   

 

INVENTORIES, NET

 

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 inventory reserve (as described below) 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 production facilities.

 

Net inventories are approximately the following:

 

February 28,
2022

May 31,
2021

Raw materials

 

$

1,360,000

 

$

1,583,000

Work in progress

714,000

1,006,000

Finished products

 

 

1,157,000

 

 

617,000

Total

$

3,231,000

$

3,206,000

Reserves for inventory obsolescence are recorded as necessary to reduce obsolete inventory carrying value to estimated realizable value or to specifically reserve for obsolete inventory that the Company intends to dispose of. As of February 28, 2022 and May 31, 2021, inventory reserves were approximately $1,888,000 and $1,617,000, respectively. Of the inventory reserve as of February 28, 2022, approximately $1,686,000 was related to a market downturn in our COVID-19 antibody test and materials, as the market shifted to COVID-19 PCR viral tests and antigen tests.

 

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 sold, retired or otherwise disposed of, the related cost and accumulated depreciation or amortization are removed from the accounts, and gains or losses from sales, 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 were approximately $26,000 for the three months ended February 28, 2022 and 2021, and approximately $80,000 and $78,000 for the nine months ended February 28, 2022 and 2021, respectively.

 

INTANGIBLE ASSETS, NET

 

Intangible assets include trademarks, product rights, technology rights and patents, and are accounted for based on Accounting Standards Codification, ASC 350 Intangibles – Goodwill and Other. 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, and 20 years for patents. Amortization was approximately $8,000 and $4,000 for the three months ended February 28, 2022 and 2021 and approximately $22,000 and $16,000 for the nine months ended February 28, 2022 and 2021, respectively.

 

The Company assesses the recoverability of these intangible assets by determining whether the amortization of the asset’s balance over its remaining life can be recovered through projected undiscounted future cash flows. The Company uses a qualitative assessment to determine whether there was any impairment. No impairment adjustment was required as of February 28, 2022 or 2021.

 

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. Investments represent the Company’s equity investment in a Polish-based distribution company which is primarily engaged in distributing medical products and devices, including those manufactured by the Company, and in certain cases, manufacturing the products they sell.  The Company currently has not written down the investment and has no information that would indicate the carrying value is greater than the fair value.  The Company owns approximately 6% of the Polish distribution company, 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.

 

SHARE-BASED COMPENSATION

 

The Company follows the guidance of the accounting provisions of Accounting Standards Codification 718, Share-based Compensation, which requires the use of the fair-value based method to determine compensation expense for all arrangements under which employees, directors and others are granted shares of the Company’s common stock or equity instruments (stock options). The fair value of each option award is estimated on the date of grant using the Black-Scholes option pricing model that uses assumptions for expected volatility, expected dividends, expected forfeiture rate, expected term, and the risk-free interest rate. The Company has not paid dividends historically and does not expect to pay them in the future. Expected volatilities are based on weighted averages of the historical volatility of the Company’s common stock estimated over the expected term of the options. The expected forfeiture rate is based on historical forfeitures experienced. The expected term of options granted is derived using the “simplified method” which computes expected term as the average of the sum of the vesting term plus the contract term as historically the Company had limited activity surrounding its options. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for the period of the expected term.

 

The following summary presents the options and warrants granted, exercised, expired, canceled and outstanding for the nine months ended February 28, 2022:

 

Option Shares

Exercise Price Weighted Average

Outstanding May 31, 2021

 

2,081,366

 

$

3.59

Granted

307,000

4.44

Exercised

 

(23,500)

 

 

1.71

Cancelled or expired

(28,750)

3.49

Outstanding February 28, 2022

 

2,336,116

 

$

3.72

During the nine months ended February 28, 2022, options to purchase 23,500 shares of common stock were exercised at prices ranging from $1.20 to $3.62. Total net proceeds to the Company were $39,175.

 

During the nine months ended February 28, 2022, the Company granted 307,000 options to purchase common stock at an average purchase price of $4.44.

 

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, which is when the transfer of control of goods has occurred and at which point title passes.

 

The Company does not typically allow for returns from international customers except in the event of defective merchandise and therefore does not establish an allowance for returns. The Company does allow for a return merchandise allowance of approximately one percent of sales to certain domestic retailers. This allowance reduces revenue recognition by approximately one percent, and is included in sales discounts. 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 February 28, 2022 and 2021, and does not believe that any additional discounts will be given through the end of the contract periods.

 

Services for contract works performed by the Company for others are invoiced and recognized as work that has been performed as the project progresses. The Company sells clinical lab products to domestic and international distributors, including hospitals and clinical laboratories, medical research institutions, medical schools and pharmaceutical companies. OTC products are sold directly to drug stores and e-commerce customers as well as to distributors.  Physicians’ office products are sold to physicians and distributors, all of whom are categorized below according to the type of products sold to them. We also manufacture certain components on a contract basis for domestic and international manufacturers.

 

During the quarter ended February 28, 2022, the Company had approximately $3,213,000 of advances from certain foreign customers. The majority of these advances are prepayments on orders that are expected to ship during our fourth quarter ended May 31, 2022.

 

Disaggregation of revenue:

 

The following is a breakdown of revenues according to markets to which the products are sold:

               

Three Months Ended
February 28,

Nine Months Ended
February 28,

2022 

 

2021

 

2022 

 

2021

Physician's office

 

$

6,518,000

 

$

2,384,000

 

$

10,134,000

 

$

2,735,000

Clinical lab

731,000

967,000

2,259,000

2,441,000

Over-the-counter

 

 

244,000

 

 

148,000

 

 

857,000

 

 

605,000

Contract manufacturing

 

 

167,000

 

 

130,000

 

 

319,000

 

 

364,000

Total

$

7,660,000

$

3,629,000

$

13,569,000

$

6,145,000

See Note 4 for additional information regarding revenue concentrations.

 

SHIPPING AND HANDLING FEES

 

The Company includes shipping and handling fees billed to customers in net sales.

 

RESEARCH AND DEVELOPMENT

 

Research and development costs are expensed as incurred. The Company expensed approximately $457,000 and $564,000 of research and development costs during the three months ended February 28, 2022 and 2021 and approximately $1,515,000 and $1,892,000 during the nine months ended February 28, 2022 and 2021, respectively.

 

INCOME TAXES

 

The Company has provided a valuation allowance on deferred income tax assets of approximately $6,479,000 and $5,904,000 as of February 28, 2022 and May 31, 2021, 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 period, and revenues and costs are translated using average exchange rates for the period. The resulting adjustments to assets and liabilities are presented as a separate component of accumulated other comprehensive loss. There are no adjustments to foreign currency loss that are included in the consolidated statements of operations for the three and nine months ended February 28, 2022 and 2021.

 

RIGHT-OF-USE ASSETS AND LEASE LIABILITY

 

The Company follows the guidance of ASC 842, Leases, 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 the obligation to make lease payments arising from the lease. The Company leases office space and copy machines, all of which are operating leases. The Company has elected to exclude short-term leases. Most leases include the option to renew and the exercise of the renewal 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, warrants and other convertible securities using the treasury stock method. The total amount of anti-dilutive stock options not included in the loss per share calculation at February 28, 2022 and 2021 was 2,336,116 and 1,360,192, respectively.

 

RECENT ACCOUNTING PRONOUNCEMENTS

 

Recent ASUs issued by the Financial Accounting Standards Board and guidance issued by the Securities and Exchange Commission (“SEC”) did not, or are not believed by management to, have a material effect on the Company’s present or future consolidated financial statements.

v3.22.1
SHAREHOLDERS' EQUITY
 9 Months Ended
Feb. 28, 2022
Stockholders' Equity Note [Abstract]  
Stockholders' Equity Note Disclosure [Text Block]

NOTE 3:  SHAREHOLDERS’ EQUITY

 

Stock option expense during the nine months ended February 28, 2022 and 2021 was approximately $959,000 and $1,022,000 (as restated, see Note 8 to these Financial Statements), respectively.

During the nine months ended February 28, 2022, the Company sold 521,267 shares of its common stock at prices ranging from $4.02 to $5.63 under its January 22, 2021 prospectus supplement and the ATM Agreement (see Note 2 to these Financial Statements) which resulted in gross proceeds of approximately $2,402,000 and net proceeds to the Company of approximately $2,317,000 after deducting commissions for each sale and legal, accounting and other fees related to the filing of the Form S-3.
v3.22.1
GEOGRAPHIC INFORMATION
 9 Months Ended
Feb. 28, 2022
Geographic Information Disclosure [Abstract]  
Geographic Information Disclosure [Text Block]

NOTE 4:  GEOGRAPHIC INFORMATION

 

The Company operates as one segment. Geographic information regarding net sales is approximately as follows:

 

   

Three Months Ended
February 28,

  

Nine Months Ended
February 28,
   

2022

  

2021

  

2022

  

2021

Revenues from sales to unaffiliated customers:

      

 

    

 

    

 

    

Asia

 

$

4,877,000

 

$

756,000

 

$

8,925,000

 

$

1,653,000

Europe

 

 

2,416,000

 

 

2,611,000

 

 

3,683,000

 

 

3,781,000

North America

    

286,000

    

133,000

    

820,000

    

374,000

South America

 

 

81,000

 

 

64,000

 

 

87,000

 

 

146,000

Middle East

  

 

-

  

 

65,000

  

 

54,000

  

 

191,000
   

$

7,660,000

  

$

3,629,000

  

$

13,569,000

  

$

6,145,000

As of February 28, 2022 and May 31, 2021, approximately $142,000 and $803,000 of Biomerica’s gross inventory was located in Mexicali, Mexico, respectively. As of February 28, 2022 and May 31, 2021, approximately $19,000 and $25,000 of Biomerica’s property and equipment, net of accumulated depreciation and amortization, was located in Mexicali, Mexico, respectively.
v3.22.1
LEASES
 9 Months Ended
Feb. 28, 2022
Disclosure Text Block [Abstract]  
Lessee, Operating Leases [Text Block]

NOTE 5:  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.  On November 30, 2015, the Company entered into the First Amendment to Lease wherein it exercised its option to extend its lease until August 31, 2021. The initial base rent for the lease extension was $21,000 per month, increasing to $23,637 through August 31, 2021. On April 9, 2021, the Company exercised its second option to extend its lease for an additional five years through August 2026.  The Company was also granted an additional five years lease extension option through August 2031. The rent is currently $25,588 per month. The security deposit of $22,078 remains the same. 

 

In November 2016, the Company’s subsidiary, Biomerica de Mexico, entered into a ten-year lease for approximately 8,104 square feet at a monthly rent of $2,926. The Company has one 10-year option to renew at the end of the initial lease period. The yearly rate is subject to an annual adjustment for inflation according to the United States Bureau of Labor Statistics Consumer Price Index for All Urban Consumers. The monthly rate is currently $3,438.  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 in Lindau, Germany on a month-to-month basis, as headquarters for BioEurope GmbH, its Germany subsidiary.

 

Rent expense in the U.S. for the nine months ended February 28, 2022 and 2021 was approximately $230,000 and $227,000, respectively.  Rent expense for the Mexico facility for the nine months ended February 28, 2022 and 2021 was approximately $31,000.

 

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 option 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 Consolidated Statements of Operations and Comprehensive Loss when they are incurred.

 

Supplemental cash flow information related to leases for the nine months ended February 28, 2022:  

 

Operating cash flows from operating leases     

 

$

252,252

 

Right-of-use assets obtained in exchange for
    new operating lease liabilities

  

$

-

  

Weighted average remaining lease term (in years)

 

 

4.53

 

Weighted average discount rate

    

6.50

%

The approximate maturity of lease liabilities as of February 28, 2022 are as follows:

 

Less than 1 year

 

$

349,000

1 to 2 years

359,000

2 to 3 years

 

 

370,000

3 to 4 years

381,000

4 to 5 years

 

 

201,000

Total undiscounted lease payments

 

 

1,660,000

Less imputed interest

217,000

Total operating lease liabilities

 

$

1,443,000

According to the terms of the lease in Irvine, the Company is also responsible for routine repairs of the building and for certain increases in property tax.

 

The Company also has various insignificant leases for office equipment.
v3.22.1
COMMITMENTS AND CONTINGENCIES
 9 Months Ended
Feb. 28, 2022
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies Disclosure [Text Block]

NOTE 6:  COMMITMENTS AND CONTINGENCIES

 

LITIGATION

 

The Company is, from time to time, involved in legal proceedings, claims and litigation arising in the ordinary course of business. While the amounts claimed may be substantial, the ultimate liability cannot presently be determined because of considerable uncertainties that exist. Therefore, it is possible the outcome of such legal proceedings, claims and litigation could have a material effect on quarterly or annual operating results or cash flows when resolved in a future period. However, based on facts currently available, management believes such matters will not have a material adverse effect on the Company's consolidated financial position, results of operations or cash flows. There were no legal proceedings pending as of February 28, 2022.

 

CONTRACTS AND LICENSING AGREEMENTS

 

None
v3.22.1
SUBSEQUENT EVENTS
 9 Months Ended
Feb. 28, 2022
Subsequent Events [Abstract]  
Subsequent Events [Text Block]

NOTE 7:  SUBSEQUENT EVENTS

 

None.
v3.22.1
RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS
 9 Months Ended
Feb. 28, 2022
Prior Period Adjustment [Abstract]  
Error Correction [Text Block]

NOTE 8:  RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

 

During September 2021, the Company determined that errors were included in the previously issued financial statements as described below. As a result, we restated our financial statements for the periods ended February 28, 2021.

 

The Company discovered the errors listed below. The restatement corrects these errors.

 

Our non-cash stock-based compensation expenses calculation applied forfeiture adjustments to both vested and unvested outstanding options, including those for which the employee had provided the requisite service and vesting had occurred, which resulted in an understatement of stock compensation expense. Additionally, our calculation expensed all issued options at vesting dates versus pro- rata over the period the requisite service was provided.

 

Stock-based compensation expense shown on the statement of operations is a non-cash expense, and impacts accumulated deficit and additional paid-in capital on the balance sheet. However, this does not impact the Company’s cash, revenues or other aspects of ongoing operations.

 

The restatement for the quarter ended February 28, 2021 resulted in no changes in the provision for income taxes.

 

The effect of the restatement on the consolidated statement of operations for the three months ended February 28, 2021 is as follows:

 

 

As Previously Reported

 

Adjustments

 

As Restated

Cost of sales

$

3,667,143

 

$

34,926

 

$

3,702,069

Gross Profit

 

(38,505)

 

 

(34,926)

 

 

(73,431)

 

 

 

 

 

 

 

 

 

Operating Expenses:

 

 

 

 

 

 

 

 

Selling, general and administrative

 

1,278,393

 

 

249,554

 

 

1,527,947

Research and development

 

563,216

 

 

751

 

 

563,967

Total operating expense

 

1,841,609

 

 

250,305

 

 

2,091,914

 

 

 

 

 

 

 

 

 

Loss from operations

 

(1,880,114)

 

 

(285,231)

 

 

(2,165,345)

 

 

 

 

 

 

 

 

 

Loss before income taxes

 

(1,842,427)

 

 

(285,231)

 

 

(2,127,658)

 

 

 

 

 

 

 

 

 

Net loss

$

(1,839,310)

 

$

(285,231)

 

$

(2,124,541)

 

 

 

 

 

 

 

 

 

Basic net loss per common share

$

(0.15)

 

$

(0.03)

 

$

(0.18)

 

 

 

 

 

 

 

 

 

Diluted net loss per common share

$

(0.15)

 

$

(0.03)

 

$

(0.18)

 

 

 

 

 

 

 

 

 

Comprehensive loss

$

(1,844,747)

 

$

(285,231)

 

$

(2,129,978)

The effect of the restatement on the consolidated statement of operations for the nine months ended February 28, 2021 is as follows:

 

 

As Previously Reported

 

Adjustments

 

As Restated

Cost of sales

$

5,639,103

 

$

152,490

 

$

5,791,593

Gross Profit

 

505,867

 

 

(152,490)

 

 

353,377

 

 

 

 

 

 

 

 

 

Operating Expenses:

 

 

 

 

 

 

 

 

Selling, general and administrative

 

3,697,804

 

 

540,933

 

 

4,238,737

Research and development

 

1,824,312

 

 

67,721

 

 

1,892,033

Total operating expense

 

5,522,116

 

 

608,654

 

 

6,130,770

 

 

 

 

 

 

 

 

 

Loss from operations

 

(5,016,249)

 

 

(761,144)

 

 

(5,777,393)

 

 

 

 

 

 

 

 

 

Loss before income taxes

 

(4,962,488)

 

 

(761,144)

 

 

(5,723,632)

 

 

 

 

 

 

 

 

 

Net loss

$

(4,973,889)

 

$

(761,144)

 

$

(5,735,033)

 

 

 

 

 

 

 

 

 

Basic net loss per common share

$

(0.42)

 

$

(0.07)

 

$

(0.49)

 

 

 

 

 

 

 

 

 

Diluted net loss per common share

$

(0.42)

 

$

(0.07)

 

$

(0.49)

 

 

 

 

 

 

 

 

 

Comprehensive loss

$

(4,982,576)

 

$

(761,144)

 

$

(5,743,720)

The effect of the restatement on the consolidated statement of cash flows for the period ended February 28, 2021 is as follows:

 

 

As Previously Reported

 

Adjustments

 

As Restated

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

$

(4,973,889)

 

$

(761,144)

 

$

(5,735,033)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

 

Stock option expense

 

261,176

 

 

761,144

 

 

1,022,320

Net cash used in operating activities

 

(4,244,064)

 

 

 -

 

 

(4,244,064)

 

 

 

 

 

 

 

 

 

Cash and cash equivalents at end of period

$

5,272,565

 

$

 -

 

$

5,272,565
v3.22.1
Accounting Policies, by Policy (Policies)
 9 Months Ended
Feb. 28, 2022
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 its 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 condensed 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 condensed consolidated financial statements, and the reported amounts of revenues and expenses during the reported period. Estimates that are made include the allowance for doubtful accounts, which is estimated based on current as well as historical past practices with a customer; stock option forfeiture rates, which are calculated based on historical data; inventory obsolescence, which is 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, the 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 information. Actual results could materially differ from those estimates.

 
Markets And Methods of Distribution Policy [Text Block]

MARKETS AND METHODS OF DISTRIBUTION

 

Due to the Coronavirus global pandemic, the Company’s operations have been negatively impacted. The Company has faced disruptions in certain of the following areas, and may face further challenges from supply chain disruptions, loss of contracts and/or customers, closure of the Company’s manufacturing or distribution facilities or of the facilities of the Company’s suppliers, partners and customers, travel, shipping and logistical disruptions, government responses of all types, international business risks in countries where the Company makes and/or sells its products, loss of human capital or personnel at the Company, its partners and its customers, interruptions of production, customer credit risk, and general economic calamities. These ongoing pandemic related disruptions have materially negatively impacted the Company’s operations and financial performance and may continue to have significant material negative impacts on the Company
Liquidity Policy [Text Block]

LIQUIDITY

 

The Company has incurred net losses and negative cash flows from operations and has an accumulated deficit of approximately $33.3 million as of February 28, 2022. Management expects to continue to incur significant costs as it advances its clinical trials and product development activities.

 

On January 22, 2021, the Company filed a prospectus supplement for purposes of raising up to $15,000,000 to the base prospectus filed with the SEC on July 21, 2020 and included in the registration statement on Form S-3 (File No. 333-239980) that was declared effective by the SEC on September 30, 2020. The shares included in the prospectus supplement may be sold pursuant to the terms of an At-The- Market Issuance Sales Agreement between the Company and B. Riley Securities, Inc., as sales agent, the ATM Agreement.

 

The Company intends to use the net proceeds from such 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.

 

Under an ATM Agreement, sales of shares are deemed to be sold “at the market offerings” as defined in Rule 415 promulgated under the Securities Act. The sales agent under the ATM Agreement agrees to use commercially reasonable efforts to sell on the Company’s behalf all of the shares requested to be sold from time to time by the Company, consistent with its normal trading and sales practices, on mutually agreed terms between the sales agent and the Company. The Company has no obligation to sell any of the shares under the ATM Agreement, and may at any time suspend offers under, or terminate the ATM Agreement.

As a result of cash and cash equivalents on hand at February 28, 2022, and the ability to raise additional funds through the ATM Agreement noted above, management believes the Company has sufficient funds to operate through May 2023.

 
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. As of February 28, 2022, the Company had approximately $9,765,000 of uninsured cash. The Company does not believe it is exposed to any significant credit risks.

 

For the nine months ended February 28, 2022 and 2021, the Company had three and two key customers who are located in foreign countries which accounted for 75% and 66% of net consolidated sales, respectively. At February 28, 2022 and May 31, 2021, the Company had one and two key customers who are located in foreign countries which accounted for a total of 67% and 73%, respectively, of gross accounts receivable.

 

For the nine months ended February 28, 2022 and 2021, the Company had one key vendor which accounted for 85% and 62% of the purchases of raw materials, respectively. As of February 28, 2022 and May 31, 2021, the Company had one key vendor which accounted for 80% and 17%, respectively, of accounts payable.

 
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 usually 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 receivables balances relative to the total gross receivables. Management monitors the payments for these large balances closely and very often requires payment of existing invoices before shipping new sales orders.

 

The Company has established a reserve of approximately $20,000 for doubtful accounts as of February 28, 2022.

 
Prepaids Policy [Policy Text Block]

PREPAID EXPENSES AND OTHER

 

The Company occasionally prepays for items such as inventory, insurance and other items.  These items are reported as prepaid expenses and other, until either the inventory is physically received or the insurance and other items are expensed.

 

As of February 28, 2022 and May 31, 2021, the prepaid expenses and other were approximately $667,000 and $370,000, respectively. The prepaid expenses and other balance were composed of prepayments to raw materials suppliers, insurance and various other suppliers.   

 
Inventory, Policy [Policy Text Block]

INVENTORIES, NET

 

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 inventory reserve (as described below) 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 production facilities.

 

Net inventories are approximately the following:

 

February 28,
2022

May 31,
2021

Raw materials

 

$

1,360,000

 

$

1,583,000

Work in progress

714,000

1,006,000

Finished products

 

 

1,157,000

 

 

617,000

Total

$

3,231,000

$

3,206,000

Reserves for inventory obsolescence are recorded as necessary to reduce obsolete inventory carrying value to estimated realizable value or to specifically reserve for obsolete inventory that the Company intends to dispose of. As of February 28, 2022 and May 31, 2021, inventory reserves were approximately $1,888,000 and $1,617,000, respectively. Of the inventory reserve as of February 28, 2022, approximately $1,686,000 was related to a market downturn in our COVID-19 antibody test and materials, as the market shifted to COVID-19 PCR viral tests and antigen tests.

 
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 sold, retired or otherwise disposed of, the related cost and accumulated depreciation or amortization are removed from the accounts, and gains or losses from sales, 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 were approximately $26,000 for the three months ended February 28, 2022 and 2021, and approximately $80,000 and $78,000 for the nine months ended February 28, 2022 and 2021, respectively.

 

Goodwill and Intangible Assets, Policy [Policy Text Block]

INTANGIBLE ASSETS, NET

 

Intangible assets include trademarks, product rights, technology rights and patents, and are accounted for based on Accounting Standards Codification, ASC 350 Intangibles – Goodwill and Other. 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, and 20 years for patents. Amortization was approximately $8,000 and $4,000 for the three months ended February 28, 2022 and 2021 and approximately $22,000 and $16,000 for the nine months ended February 28, 2022 and 2021, respectively.

 

The Company assesses the recoverability of these intangible assets by determining whether the amortization of the asset’s balance over its remaining life can be recovered through projected undiscounted future cash flows. The Company uses a qualitative assessment to determine whether there was any impairment. No impairment adjustment was required as of February 28, 2022 or 2021.

 
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. Investments represent the Company’s equity investment in a Polish-based distribution company which is primarily engaged in distributing medical products and devices, including those manufactured by the Company, and in certain cases, manufacturing the products they sell.  The Company currently has not written down the investment and has no information that would indicate the carrying value is greater than the fair value.  The Company owns approximately 6% of the Polish distribution company, 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.

 
Share-Based Payment Arrangement [Policy Text Block]

SHARE-BASED COMPENSATION

 

The Company follows the guidance of the accounting provisions of Accounting Standards Codification 718, Share-based Compensation, which requires the use of the fair-value based method to determine compensation expense for all arrangements under which employees, directors and others are granted shares of the Company’s common stock or equity instruments (stock options). The fair value of each option award is estimated on the date of grant using the Black-Scholes option pricing model that uses assumptions for expected volatility, expected dividends, expected forfeiture rate, expected term, and the risk-free interest rate. The Company has not paid dividends historically and does not expect to pay them in the future. Expected volatilities are based on weighted averages of the historical volatility of the Company’s common stock estimated over the expected term of the options. The expected forfeiture rate is based on historical forfeitures experienced. The expected term of options granted is derived using the “simplified method” which computes expected term as the average of the sum of the vesting term plus the contract term as historically the Company had limited activity surrounding its options. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for the period of the expected term.

 

The following summary presents the options and warrants granted, exercised, expired, canceled and outstanding for the nine months ended February 28, 2022:

 

Option Shares

Exercise Price Weighted Average

Outstanding May 31, 2021

 

2,081,366

 

$

3.59

Granted

307,000

4.44

Exercised

 

(23,500)

 

 

1.71

Cancelled or expired

(28,750)

3.49

Outstanding February 28, 2022

 

2,336,116

 

$

3.72

During the nine months ended February 28, 2022, options to purchase 23,500 shares of common stock were exercised at prices ranging from $1.20 to $3.62. Total net proceeds to the Company were $39,175.

 

During the nine months ended February 28, 2022, the Company granted 307,000 options to purchase common stock at an average purchase price of $4.44.

 
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, which is when the transfer of control of goods has occurred and at which point title passes.

 

The Company does not typically allow for returns from international customers except in the event of defective merchandise and therefore does not establish an allowance for returns. The Company does allow for a return merchandise allowance of approximately one percent of sales to certain domestic retailers. This allowance reduces revenue recognition by approximately one percent, and is included in sales discounts. 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 February 28, 2022 and 2021, and does not believe that any additional discounts will be given through the end of the contract periods.

 

Services for contract works performed by the Company for others are invoiced and recognized as work that has been performed as the project progresses. The Company sells clinical lab products to domestic and international distributors, including hospitals and clinical laboratories, medical research institutions, medical schools and pharmaceutical companies. OTC products are sold directly to drug stores and e-commerce customers as well as to distributors.  Physicians’ office products are sold to physicians and distributors, all of whom are categorized below according to the type of products sold to them. We also manufacture certain components on a contract basis for domestic and international manufacturers.

 

During the quarter ended February 28, 2022, the Company had approximately $3,213,000 of advances from certain foreign customers. The majority of these advances are prepayments on orders that are expected to ship during our fourth quarter ended May 31, 2022.

 

Disaggregation of revenue:

 

The following is a breakdown of revenues according to markets to which the products are sold:

               

Three Months Ended
February 28,

Nine Months Ended
February 28,

2022 

 

2021

 

2022 

 

2021

Physician's office

 

$

6,518,000

 

$

2,384,000

 

$

10,134,000

 

$

2,735,000

Clinical lab

731,000

967,000

2,259,000

2,441,000

Over-the-counter

 

 

244,000

 

 

148,000

 

 

857,000

 

 

605,000

Contract manufacturing

 

 

167,000

 

 

130,000

 

 

319,000

 

 

364,000

Total

$

7,660,000

$

3,629,000

$

13,569,000

$

6,145,000

See Note 4 for additional information regarding revenue concentrations.

 
Cost of Goods and Service [Policy Text Block]

SHIPPING AND HANDLING FEES

 

The Company includes shipping and handling fees billed to customers in net sales.

 
Research and Development Expense, Policy [Policy Text Block]

RESEARCH AND DEVELOPMENT

 

Research and development costs are expensed as incurred. The Company expensed approximately $457,000 and $564,000 of research and development costs during the three months ended February 28, 2022 and 2021 and approximately $1,515,000 and $1,892,000 during the nine months ended February 28, 2022 and 2021, respectively.

 
Income Tax, Policy [Policy Text Block]

INCOME TAXES

 

The Company has provided a valuation allowance on deferred income tax assets of approximately $6,479,000 and $5,904,000 as of February 28, 2022 and May 31, 2021, 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 period, and revenues and costs are translated using average exchange rates for the period. The resulting adjustments to assets and liabilities are presented as a separate component of accumulated other comprehensive loss. There are no adjustments to foreign currency loss that are included in the consolidated statements of operations for the three and nine months ended February 28, 2022 and 2021.

 
Lessee, Leases [Policy Text Block]

RIGHT-OF-USE ASSETS AND LEASE LIABILITY

 

The Company follows the guidance of ASC 842, Leases, 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 the obligation to make lease payments arising from the lease. The Company leases office space and copy machines, all of which are operating leases. The Company has elected to exclude short-term leases. Most leases include the option to renew and the exercise of the renewal 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, warrants and other convertible securities using the treasury stock method. The total amount of anti-dilutive stock options not included in the loss per share calculation at February 28, 2022 and 2021 was 2,336,116 and 1,360,192, respectively.

 
New Accounting Pronouncements, Policy [Policy Text Block]

RECENT ACCOUNTING PRONOUNCEMENTS

 

Recent ASUs issued by the Financial Accounting Standards Board and guidance issued by the Securities and Exchange Commission (“SEC”) did not, or are not believed by management to, have a material effect on the Company’s present or future consolidated financial statements.

v3.22.1
SIGNIFICANT ACCOUNTING POLICIES (Tables)
 9 Months Ended
Feb. 28, 2022
Accounting Policies [Abstract]  
Schedule of Inventory, Current [Table Text Block]

February 28,
2022

May 31,
2021

Raw materials

 

$

1,360,000

 

$

1,583,000

Work in progress

714,000

1,006,000

Finished products

 

 

1,157,000

 

 

617,000

Total

$

3,231,000

$

3,206,000
Share-Based Payment Arrangement, Option, Activity [Table Text Block]

Option Shares

Exercise Price Weighted Average

Outstanding May 31, 2021

 

2,081,366

 

$

3.59

Granted

307,000

4.44

Exercised

 

(23,500)

 

 

1.71

Cancelled or expired

(28,750)

3.49

Outstanding February 28, 2022

 

2,336,116

 

$

3.72
Disaggregation of Revenue [Table Text Block]

Three Months Ended
February 28,

Nine Months Ended
February 28,

2022 

 

2021

 

2022 

 

2021

Physician's office

 

$

6,518,000

 

$

2,384,000

 

$

10,134,000

 

$

2,735,000

Clinical lab

731,000

967,000

2,259,000

2,441,000

Over-the-counter

 

 

244,000

 

 

148,000

 

 

857,000

 

 

605,000

Contract manufacturing

 

 

167,000

 

 

130,000

 

 

319,000

 

 

364,000

Total

$

7,660,000

$

3,629,000

$

13,569,000

$

6,145,000
v3.22.1
GEOGRAPHIC INFORMATION (Tables)
 9 Months Ended
Feb. 28, 2022
Geographic Information Disclosure [Abstract]  
Revenue from External Customers by Geographic Areas [Table Text Block]
   

Three Months Ended
February 28,

  

Nine Months Ended
February 28,
   

2022

  

2021

  

2022

  

2021

Revenues from sales to unaffiliated customers:

      

 

    

 

    

 

    

Asia

 

$

4,877,000

 

$

756,000

 

$

8,925,000

 

$

1,653,000

Europe

 

 

2,416,000

 

 

2,611,000

 

 

3,683,000

 

 

3,781,000

North America

    

286,000

    

133,000

    

820,000

    

374,000

South America

 

 

81,000

 

 

64,000

 

 

87,000

 

 

146,000

Middle East

  

 

-

  

 

65,000

  

 

54,000

  

 

191,000
   

$

7,660,000

  

$

3,629,000

  

$

13,569,000

  

$

6,145,000
v3.22.1
LEASES (Tables)
 9 Months Ended
Feb. 28, 2022
Disclosure Text Block [Abstract]  
Schedule Of Cash Flow Supplemental Disclosures Related To Lease [Table Text Block]

Operating cash flows from operating leases     

 

$

252,252

 

Right-of-use assets obtained in exchange for
    new operating lease liabilities

  

$

-

  

Weighted average remaining lease term (in years)

 

 

4.53

 

Weighted average discount rate

    

6.50

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

Less than 1 year

 

$

349,000

1 to 2 years

359,000

2 to 3 years

 

 

370,000

3 to 4 years

381,000

4 to 5 years

 

 

201,000

Total undiscounted lease payments

 

 

1,660,000

Less imputed interest

217,000

Total operating lease liabilities

 

$

1,443,000
v3.22.1
RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS (Tables)
 9 Months Ended
Feb. 28, 2022
Prior Period Adjustment [Abstract]  
Schedule of Error Corrections and Prior Period Adjustments [Table Text Block]

 

As Previously Reported

 

Adjustments

 

As Restated

Cost of sales

$

3,667,143

 

$

34,926

 

$

3,702,069

Gross Profit

 

(38,505)

 

 

(34,926)

 

 

(73,431)

 

 

 

 

 

 

 

 

 

Operating Expenses:

 

 

 

 

 

 

 

 

Selling, general and administrative

 

1,278,393

 

 

249,554

 

 

1,527,947

Research and development

 

563,216

 

 

751

 

 

563,967

Total operating expense

 

1,841,609

 

 

250,305

 

 

2,091,914

 

 

 

 

 

 

 

 

 

Loss from operations

 

(1,880,114)

 

 

(285,231)

 

 

(2,165,345)

 

 

 

 

 

 

 

 

 

Loss before income taxes

 

(1,842,427)

 

 

(285,231)

 

 

(2,127,658)

 

 

 

 

 

 

 

 

 

Net loss

$

(1,839,310)

 

$

(285,231)

 

$

(2,124,541)

 

 

 

 

 

 

 

 

 

Basic net loss per common share

$

(0.15)

 

$

(0.03)

 

$

(0.18)

 

 

 

 

 

 

 

 

 

Diluted net loss per common share

$

(0.15)

 

$

(0.03)

 

$

(0.18)

 

 

 

 

 

 

 

 

 

Comprehensive loss

$

(1,844,747)

 

$

(285,231)

 

$

(2,129,978)

 

As Previously Reported

 

Adjustments

 

As Restated

Cost of sales

$

5,639,103

 

$

152,490

 

$

5,791,593

Gross Profit

 

505,867

 

 

(152,490)

 

 

353,377

 

 

 

 

 

 

 

 

 

Operating Expenses:

 

 

 

 

 

 

 

 

Selling, general and administrative

 

3,697,804

 

 

540,933

 

 

4,238,737

Research and development

 

1,824,312

 

 

67,721

 

 

1,892,033

Total operating expense

 

5,522,116

 

 

608,654

 

 

6,130,770

 

 

 

 

 

 

 

 

 

Loss from operations

 

(5,016,249)

 

 

(761,144)

 

 

(5,777,393)

 

 

 

 

 

 

 

 

 

Loss before income taxes

 

(4,962,488)

 

 

(761,144)

 

 

(5,723,632)

 

 

 

 

 

 

 

 

 

Net loss

$

(4,973,889)

 

$

(761,144)

 

$

(5,735,033)

 

 

 

 

 

 

 

 

 

Basic net loss per common share

$

(0.42)

 

$

(0.07)

 

$

(0.49)

 

 

 

 

 

 

 

 

 

Diluted net loss per common share

$

(0.42)

 

$

(0.07)

 

$

(0.49)

 

 

 

 

 

 

 

 

 

Comprehensive loss

$

(4,982,576)

 

$

(761,144)

 

$

(5,743,720)

 

As Previously Reported

 

Adjustments

 

As Restated

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

$

(4,973,889)

 

$

(761,144)

 

$

(5,735,033)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

 

Stock option expense

 

261,176

 

 

761,144

 

 

1,022,320

Net cash used in operating activities

 

(4,244,064)

 

 

 -

 

 

(4,244,064)

 

 

 

 

 

 

 

 

 

Cash and cash equivalents at end of period

$

5,272,565

 

$

 -

 

$

5,272,565
v3.22.1
SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($)
 3 Months Ended 9 Months Ended 12 Months Ended
Feb. 28, 2022
Feb. 28, 2021
Feb. 28, 2022
Feb. 28, 2021
May 31, 2021
Jan. 22, 2021
SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items]            
Retained Earnings (Accumulated Deficit) $ (33,318,358)   $ (33,318,358)   $ (30,546,335)  
Shelf Registration Statement Maximum Authorized Common Stock Issuance Value           $ 15,000,000
Cash, Uninsured Amount 9,765,000   9,765,000      
Allowance for Credit Loss, Receivable, Other, Current 20,000   20,000      
Prepaid Expense and Other Assets 667,000   667,000   370,000  
Inventory Valuation Reserves 1,888,000   1,888,000   1,617,000  
Inventory, LIFO Reserve 1,686,000   1,686,000      
Depreciation, Depletion and Amortization 26,000 $ 26,000 80,000 $ 78,000    
Amortization of Intangible Assets $ 8,000 4,000 $ 22,000 16,000    
Equity Method Investment, Ownership Percentage 6.00%   6.00%      
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercises in Period (in Shares)     23,500      
Proceeds from Stock Options Exercised     $ 39,175 96,455    
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross (in Shares)     307,000      
Share-Based Compensation Arrangements by Share-Based Payment Award, Options, Grants in Period, Weighted Average Exercise Price (in Dollars per share)     $ 4.44      
Proceeds from Customers $ 3,213,000          
Research and Development Expense 456,998 $ 563,967 $ 1,515,384 $ 1,892,033    
Deferred Tax Assets, Valuation Allowance $ 6,479,000   $ 6,479,000   $ 5,904,000  
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in Shares)     2,336,116 1,360,192    
Minimum [Member]            
SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items]            
Property, Plant and Equipment, Estimated Useful Lives     5      
Maximum [Member]            
SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items]            
Property, Plant and Equipment, Estimated Useful Lives     10 years      
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     20 years      
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)     23,500      
Proceeds from Stock Options Exercised     $ 39,175      
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross (in Shares)     307,000      
Share-Based Compensation Arrangements by Share-Based Payment Award, Options, Grants in Period, Weighted Average Exercise Price (in Dollars per share)     $ 4.44      
Share-Based Payment Arrangement, Option [Member] | Minimum [Member]            
SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items]            
Share-Based Payment Arrangement, Option, Exercise Price Range, Exercisable, Weighted Average Exercise Price (in Dollars per share) $ 1.2   1.2      
Share-Based Payment Arrangement, Option [Member] | Maximum [Member]            
SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items]            
Share-Based Payment Arrangement, Option, Exercise Price Range, Exercisable, Weighted Average Exercise Price (in Dollars per share) $ 3.62   $ 3.62      
Three Customers [Member] | Revenue from Contract with Customer Benchmark [Member] | Customer Concentration Risk [Member]            
SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items]            
Concentration Risk, Percentage     75.00%      
Two Customers [Member] | Revenue from Contract with Customer Benchmark [Member] | Customer Concentration Risk [Member]            
SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items]            
Concentration Risk, Percentage       66.00%    
Two Customers [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member]            
SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items]            
Concentration Risk, Percentage         73.00%  
One Customer [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member]            
SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items]            
Concentration Risk, Percentage     67.00%      
One Vendor [Member] | Accounts Payable [Member] | Customer Concentration Risk [Member]            
SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items]            
Concentration Risk, Percentage     85.00% 62.00%    
One Vendor [Member] | Accounts Payable [Member] | Supplier Concentration Risk [Member]            
SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items]            
Concentration Risk, Percentage     80.00%   17.00%  
v3.22.1
SIGNIFICANT ACCOUNTING POLICIES (Details) - Inventories - USD ($)
Feb. 28, 2022
May 31, 2021
Inventories [Abstract]    
Raw materials $ 1,360,000 $ 1,583,000
Work in progress 714,000 1,006,000
Finished products 1,157,000 617,000
Total $ 3,231,430 $ 3,206,255
v3.22.1
SIGNIFICANT ACCOUNTING POLICIES (Details) - Options Activity
 9 Months Ended
Feb. 28, 2022
$ / shares
shares
Options Activity [Abstract]  
Options Outstanding, Shares | shares 2,081,366
Option Outstanding, Exercise Price Weighted Average | $ / shares $ 3.59
Option Granted, Shares | shares 307,000
Option Granted, Exercise Price Weighted Average | $ / shares $ 4.44
Option Exercised, Shares | shares (23,500)
Option Exercised, Exercise Price Weighted Average | $ / shares $ 1.71
Option Cancelled or expired, Shares | shares (28,750)
Option Cancelled or expired, Exercise Price Weighted Average | $ / shares $ 3.49
Options Outstanding, Shares | shares 2,336,116
Option Outstanding, Exercise Price Weighted Average | $ / shares $ 3.72
v3.22.1
SIGNIFICANT ACCOUNTING POLICIES (Details) - Revenue from contracts with customers - USD ($)
 3 Months Ended 9 Months Ended
Feb. 28, 2022
Feb. 28, 2021
Feb. 28, 2022
Feb. 28, 2021
Disaggregation of Revenue [Line Items]        
Revenue From Customers $ 7,660,000 $ 3,629,000 $ 13,569,000 $ 6,145,000
Physicians Office [Member]        
Disaggregation of Revenue [Line Items]        
Revenue From Customers 6,518,000 2,384,000 10,134,000 2,735,000
Clinical Lab [Member]        
Disaggregation of Revenue [Line Items]        
Revenue From Customers 731,000 967,000 2,259,000 2,441,000
Over the counter [Member]        
Disaggregation of Revenue [Line Items]        
Revenue From Customers 244,000 148,000 857,000 605,000
Contract Manufacturing [Member]        
Disaggregation of Revenue [Line Items]        
Revenue From Customers $ 167,000 $ 130,000 $ 319,000 $ 364,000
v3.22.1
SHAREHOLDERS' EQUITY (Details) - USD ($)
 9 Months Ended
Feb. 28, 2022
Feb. 28, 2021
SHAREHOLDERS' EQUITY (Details) [Line Items]    
Proceeds from Issuance of Common Stock $ 2,317,160 $ 1,011,475
Common Stock [Member]    
SHAREHOLDERS' EQUITY (Details) [Line Items]    
Sale of Stock, Number of Shares Issued in Transaction (in Shares) 521,267  
Sale of Stock, Consideration Received on Transaction $ 2,402,000  
Proceeds from Issuance of Common Stock $ 2,317,000  
Common Stock [Member] | Minimum [Member]    
SHAREHOLDERS' EQUITY (Details) [Line Items]    
Sale of Stock, Price Per Share (in Dollars per share) $ 4.02  
Common Stock [Member] | Maximum [Member]    
SHAREHOLDERS' EQUITY (Details) [Line Items]    
Sale of Stock, Price Per Share (in Dollars per share) $ 5.63  
Share-Based Payment Arrangement, Option [Member]    
SHAREHOLDERS' EQUITY (Details) [Line Items]    
Share-Based Payment Arrangement, Expense $ 959,000 $ 1,022,000
v3.22.1
GEOGRAPHIC INFORMATION (Details) - MEXICO
 9 Months Ended
Feb. 28, 2022
USD ($)
May 31, 2021
USD ($)
GEOGRAPHIC INFORMATION (Details) [Line Items]    
Number of Reportable Segments 1  
Inventory, Gross $ 142,000 $ 803,000
Property, Plant and Equipment, Net $ 19,000 $ 25,000
v3.22.1
GEOGRAPHIC INFORMATION (Details) - Geographic information regarding net sales - USD ($)
 3 Months Ended 9 Months Ended
Feb. 28, 2022
Feb. 28, 2021
Feb. 28, 2022
Feb. 28, 2021
GEOGRAPHIC INFORMATION (Details) - Geographic information regarding net sales [Line Items]        
Net Sales $ 7,660,501 $ 3,628,638 $ 13,569,188 $ 6,144,970
Asia [Member]        
GEOGRAPHIC INFORMATION (Details) - Geographic information regarding net sales [Line Items]        
Net Sales 4,877,000 756,000 8,925,000 1,653,000
Europe [Member]        
GEOGRAPHIC INFORMATION (Details) - Geographic information regarding net sales [Line Items]        
Net Sales 2,416,000 2,611,000 3,683,000 3,781,000
North America [Member]        
GEOGRAPHIC INFORMATION (Details) - Geographic information regarding net sales [Line Items]        
Net Sales 286,000 133,000 820,000 374,000
South America [Member]        
GEOGRAPHIC INFORMATION (Details) - Geographic information regarding net sales [Line Items]        
Net Sales 81,000 64,000 87,000 146,000
Middle East [Member]        
GEOGRAPHIC INFORMATION (Details) - Geographic information regarding net sales [Line Items]        
Net Sales $ 65,000 $ 54,000 $ 191,000
v3.22.1
LEASES (Details) - USD ($)
 3 Months Ended 9 Months Ended
Nov. 01, 2016
Jun. 18, 2009
Feb. 28, 2022
Feb. 28, 2022
Feb. 28, 2021
LEASES (Details) [Line Items]          
Payments for Rent       $ 230,000 $ 227,000
Security Deposit   $ 22,078      
MEXICO          
LEASES (Details) [Line Items]          
Payments for Rent       $ 31,000 $ 31,000
Building In Irvine California [Member]          
LEASES (Details) [Line Items]          
Operating Lease Initiation Date   Sep. 01, 2009      
Lease Expiration Date   Aug. 31, 2016      
Payments for Rent   $ 21,000      
Operating Lease, Expense     $ 25,588    
Building In Irvine California [Member] | First Amendment To Lease [Member]          
LEASES (Details) [Line Items]          
Lease Expiration Date   Aug. 31, 2021      
Property Available for Operating Lease [Member]          
LEASES (Details) [Line Items]          
Operating Leases, Rent Expense   $ 23,637      
Property Available for Operating Lease [Member] | MEXICO          
LEASES (Details) [Line Items]          
Operating Leases, Rent Expense $ 3,438        
Operating Leases, Rent Expense, Minimum Rentals   $ 2,926      
v3.22.1
LEASES (Details) - Supplemental cash flow information related to leases
 3 Months Ended
Feb. 28, 2022
USD ($)
Supplemental cash flow information related to leases [Abstract]  
Operating cash flows from operating leases $ 252,252
Right-of-use assets obtained in exchange for new operating lease liabilities
Weighted average remaining lease term (in years) 4 years 6 months 10 days
Weighted average discount rate 6.50%
v3.22.1
LEASES (Details) - The maturity of lease liabilities
Feb. 28, 2022
USD ($)
The maturity of lease liabilities [Abstract]  
Less than 1 year $ 349,000
1 to 2 years 359,000
2 to 3 years 370,000
3 to 4 years 381,000
4 to 5 years 201,000
Total undiscounted lease payments 1,660,000
Less imputed interest 217,000
Total operating lease liabilities $ 1,443,000
v3.22.1
RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS (Details) - Restatement on the consolidated statement of operations and the consolidated statement of cash flows
 3 Months Ended 9 Months Ended
Feb. 28, 2022
USD ($)
$ / shares
Feb. 28, 2022
USD ($)
$ / shares
Previously Reported [Member]    
Error Corrections and Prior Period Adjustments Restatement [Line Items]    
Cost of sales $ 3,667,143 $ 5,639,103
Gross Profit (38,505) 505,867
Operating Expenses:    
Selling, general and administrative 1,278,393 3,697,804
Research and development 563,216 1,824,312
Total operating expense 1,841,609 5,522,116
Loss from operations (1,880,114) (5,016,249)
Loss before income taxes (1,842,427) (4,962,488)
Net loss $ (1,839,310) $ (4,973,889)
Basic net loss per common share (in Dollars per share) | $ / shares $ (0.15) $ (0.42)
Diluted net loss per common share (in Dollars per share) | $ / shares $ (0.15) $ (0.42)
Comprehensive loss $ (1,844,747) $ (4,982,576)
Adjustments to reconcile net loss to net cash used in operating activities:    
Stock option expense   261,176
Net cash used in operating activities   (4,244,064)
Cash and cash equivalents at end of period 5,272,565 5,272,565
Revision of Prior Period, Adjustment [Member]    
Error Corrections and Prior Period Adjustments Restatement [Line Items]    
Cost of sales 34,926 152,490
Gross Profit (34,926) (152,490)
Operating Expenses:    
Selling, general and administrative 249,554 540,933
Research and development 751 67,721
Total operating expense 250,305 608,654
Loss from operations (285,231) (761,144)
Loss before income taxes (285,231) (761,144)
Net loss $ (285,231) $ (761,144)
Basic net loss per common share (in Dollars per share) | $ / shares $ (0.03) $ (0.07)
Diluted net loss per common share (in Dollars per share) | $ / shares $ (0.03) $ (0.07)
Comprehensive loss $ (285,231) $ (761,144)
Adjustments to reconcile net loss to net cash used in operating activities:    
Stock option expense   761,144
Restatement Of Companys Financial Statements [Member]    
Error Corrections and Prior Period Adjustments Restatement [Line Items]    
Cost of sales 3,702,069 5,791,593
Gross Profit (73,431) 353,377
Operating Expenses:    
Selling, general and administrative 1,527,947 4,238,737
Research and development 563,967 1,892,033
Total operating expense 2,091,914 6,130,770
Loss from operations (2,165,345) (5,777,393)
Loss before income taxes (2,127,658) (5,723,632)
Net loss $ (2,124,541) $ (5,735,033)
Basic net loss per common share (in Dollars per share) | $ / shares $ (0.18) $ (0.49)
Diluted net loss per common share (in Dollars per share) | $ / shares $ (0.18) $ (0.49)
Comprehensive loss $ (2,129,978) $ (5,743,720)
Adjustments to reconcile net loss to net cash used in operating activities:    
Stock option expense   1,022,320
Net cash used in operating activities   (4,244,064)
Cash and cash equivalents at end of period $ 5,272,565 $ 5,272,565