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<SEC-DOCUMENT>0001019687-09-001364.txt : 20090414
<SEC-HEADER>0001019687-09-001364.hdr.sgml : 20090414
<ACCEPTANCE-DATETIME>20090414172311
ACCESSION NUMBER:		0001019687-09-001364
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		6
CONFORMED PERIOD OF REPORT:	20090228
FILED AS OF DATE:		20090414
DATE AS OF CHANGE:		20090414

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			BIOMERICA INC
		CENTRAL INDEX KEY:			0000073290
		STANDARD INDUSTRIAL CLASSIFICATION:	DENTAL EQUIPMENT & SUPPLIES [3843]
		IRS NUMBER:				952645573
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			0531

	FILING VALUES:
		FORM TYPE:		10-Q
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-08765
		FILM NUMBER:		09749379

	BUSINESS ADDRESS:	
		STREET 1:		1533 MONROVIA AVENUE
		CITY:			NEWPORT BEACH
		STATE:			CA
		ZIP:			92663
		BUSINESS PHONE:		9496452111

	MAIL ADDRESS:	
		STREET 1:		1533 MONROVIA AVENUE
		CITY:			NEWPORT BEACH
		STATE:			CA
		ZIP:			92663

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	NMS PHARMACEUTICALS INC
		DATE OF NAME CHANGE:	19871130

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	NUCLEAR MEDICAL SYSTEMS INC
		DATE OF NAME CHANGE:	19830216

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	NUCLEAR INSTRUMENTS INC
		DATE OF NAME CHANGE:	19720508
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>biomerica_10q-022809.txt
<TEXT>
<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

(Mark One)

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

FOR THE QUARTERLY PERIOD ENDED February 28, 2009

                                       OR

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

For the transition period from _____________ to ______________

Commission File Number:    0-8765

                                 BIOMERICA, INC.
- --------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

           Delaware                                            95-2645573
- --------------------------------------------------------------------------------
(State or other jurisdiction of                             (I.R.S. Employer
incorporation or organization)                             Identification No.)

1533 Monrovia Avenue, Newport Beach, California                   92663
- --------------------------------------------------------------------------------
(Address of principal executive offices)                       (Zip Code)

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

                                (Not applicable)
- --------------------------------------------------------------------------------
              (Former    name, former address and former fiscal year, if changed
                         since last report.)

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

                          Yes  [X]        No  [_]

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

         Large accelerated filer    [_]     Accelerated filer          [_]

         Non-accelerated filer      [_]     Smaller reporting company  [X]

Indicate by check mark whether the Registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).    Yes  [_]        No  [X]

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: 6,631,039 shares of common
stock as of April 14, 2009.


<PAGE>

                                 BIOMERICA, INC.

                                      INDEX

PART I

Item 1.  Consolidated Financial Statements:

         Consolidated Statements of Operations and Comprehensive
         Income (unaudited) - Nine and Three Months Ended
         February 28, 2009 and February 29, 2008...........................   1

         Consolidated Balance Sheet (unaudited) -
         February 28, 2009 and (audited) May 31, 2008......................  2-3

         Consolidated Statements of Cash Flows (unaudited) -
         Nine Months Ended February 28, 2009 and February 29, 2008.........    4

         Notes to Consolidated Financial Statements (unaudited)............  5-9

Item 2.  Management's Discussion and Analysis of Financial Condition
         and Selected Financial Data.......................................10-12

Item 3.  Quantitative and Qualitative Disclosures about Market Risk........   13

Item 4.  Controls and procedures...........................................   14

PART II  Other Information.................................................   15

Item 1.  Legal Proceedings.................................................   15

Item 1A. Risk Factors......................................................   15

Item 2.  Unregistered Sales of Equity Securities & Use of Proceeds.........   15

Item 3.  Defaults upon Senior Securities...................................   15

Item 4.  Submission of Matters to a Vote of Security Holders...............   15

Item 5.  Other Information.................................................   16

Item 6.  Exhibits..........................................................   16

         Signatures........................................................   17


<PAGE>

<TABLE>
<S> <C>

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

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


                                                                          Nine Months Ended               Three Months Ended
                                                                    February 28,     February 29,     February 28,     February 29,
                                                                       2009             2008              2009            2008
                                                                    -----------      -----------      -----------      -----------

Net sales .....................................................     $ 3,688,524      $ 3,608,408      $ 1,373,604      $ 1,240,809

     Cost of sales ............................................      (2,148,364)      (2,023,022)        (699,387)        (747,690)
                                                                    -----------      -----------      -----------      -----------
     Gross profit .............................................       1,540,160        1,585,386          674,217          493,119
                                                                    -----------      -----------      -----------      -----------

Operating Expenses:
     Selling, general and administrative ......................       1,081,304        1,044,288          371,809          302,368
     Research and development .................................         204,767          200,932           88,307           72,742
                                                                    -----------      -----------      -----------      -----------
                                                                      1,286,071        1,245,220          460,116          375,110
                                                                    -----------      -----------      -----------      -----------

Operating gain from continuing operations .....................         254,089          340,166          214,101          118,009
                                                                    -----------      -----------      -----------      -----------

Other Expense (Income):
     Interest expense .........................................          22,418           38,288            4,964           12,438
     Interest income ..........................................         (22,589)         (26,990)          (3,596)          (7,446)
     Other income .............................................         (34,540)        (697,125)         (34,534)              10
     Other expense ............................................          28,365               --           28,365               --
                                                                    -----------      -----------      -----------      -----------
                                                                         (6,346)        (685,827)          (4,801)           5,002
                                                                    -----------      -----------      -----------      -----------

Income from operations before income taxes ....................         260,435        1,025,993          218,902          113,007

Income tax (benefit) expense ..................................         (54,105)          13,405          (57,842)         (10,837)
                                                                    -----------      -----------      -----------      -----------

Net income ....................................................         314,540        1,012,588          276,744          123,844
                                                                    -----------      -----------      -----------      -----------

Other comprehensive (loss) gain, net of tax:
  Unrealized comprehensive (loss) gain on available
     for sale securities and foreign currency
     translation adjustment ...................................          (1,168)          54,575               44              244
                                                                    -----------      -----------      -----------      -----------

Comprehensive income ..........................................     $   313,372      $ 1,067,163      $   276,788      $   124,088
                                                                    ===========      ===========      ===========      ===========

Basic net income per common share .............................     $       .05      $       .17      $       .04      $       .02
                                                                    ===========      ===========      ===========      ===========

Diluted net income per common share ...........................     $       .05      $       .14      $       .04      $       .02
                                                                    ===========      ===========      ===========      ===========

Weighted average number of common and common equivalent shares:
     Basic ....................................................       6,631,039        6,061,285        6,615,453        6,173,817
                                                                    ===========      ===========      ===========      ===========
     Diluted ..................................................       6,778,294        7,129,887        7,017,611        7,213,837
                                                                    ===========      ===========      ===========      ===========


The accompanying notes are an integral part of these statements.

                                                                 1

<PAGE>

                                             BIOMERICA, INC.
                                        CONSOLIDATED BALANCE SHEET


                                                                               February 28,    May 31,
                                                                                  2009          2008
                                                                               (unaudited)    (audited)
                                                                               ----------     ----------
Assets

Current Assets
    Cash and cash equivalents ............................................     $1,529,073     $2,022,380
    Short-term investment ................................................        100,000             --
    Available for-sale securities ........................................            615            355
    Accounts receivable, less allowance for doubtful accounts of
      $43,342 & $84,206, respectively ....................................        829,798        614,330
    Inventories, net .....................................................      2,081,945      1,764,202
    Prepaid expenses and other ...........................................        122,790        101,867
    Deferred tax asset ...................................................         35,000         35,000
                                                                               ----------     ----------
          Total Current Assets ...........................................      4,699,221      4,538,134

Property and Equipment, net of accumulated depreciation and amortization .        380,864        369,580

Deferred Tax Asset .......................................................        135,000        135,000

Other Assets .............................................................         58,486         64,997
                                                                               ----------     ----------
                                                                               $5,273,571     $5,107,711
                                                                               ==========     ==========


The accompanying notes are an integral part of these statements.


                                                    2

<PAGE>

                                           BIOMERICA, INC.
                                CONSOLIDATED BALANCE SHEET - Continued


                                                                      February 28,        May 31,
                                                                         2009              2008
                                                                       (unaudited)       (audited)
                                                                      ------------      ------------
Liabilities and Shareholders' Equity

Current Liabilities

     Accounts payable and accrued liabilities ...................     $    402,279      $    473,539
     Accrued compensation .......................................          475,673           487,115
     Shareholder loan ...........................................               --            95,936
     Capital lease - short-term portion .........................              435             4,180
     Equipment loan - short-term portion ........................           41,314            48,428
     Line of credit .............................................            2,175                --
                                                                      ------------      ------------
          Total Current Liabilities .............................          921,876         1,109,198

Equipment loan - long-term  portion .............................           90,299           114,565

Shareholders' Equity

     Common stock, $0.08 par value authorized 25,000,000
       shares, issued and outstanding 6,631,039 and 6,489,839
       in February 28, 2009 and May 31, 2008 respectively .......          530,482           519,186
     Additional paid-in-capital .................................       17,462,876        17,407,096
     Accumulated other comprehensive loss .......................           (8,566)           (7,398)
     Common stock subscribed ....................................               --             3,000
     Accumulated deficit ........................................      (13,723,396)      (14,037,936)
                                                                      ------------      ------------

Total Shareholders' Equity ......................................     $  4,261,396      $  3,883,948
                                                                      ------------      ------------
Total Liabilities and Equity ....................................     $  5,273,571      $  5,107,711
                                                                      ============      ============


The accompanying notes are an integral part of these statements.

                                                  3

<PAGE>

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

                                                                             February 28,     February 29,
For the nine months ended                                                       2009             2008
                                                                             -----------      -----------

Cash flows from operating activities:

Net income .............................................................     $   314,540      $ 1,012,588

Adjustments to reconcile net income to net cash (used in) provided by
operating activities:
     Depreciation and amortization .....................................          65,055           47,845
     Common stock, warrants and options issued for services rendered ...          30,690           14,837
     Provision for losses on accounts receivable .......................          17,136           46,268
       Changes in current assets and liabilities:
       Accounts Receivable .............................................        (232,604)        (206,147)
       Inventories .....................................................        (317,743)        (217,519)
       Prepaid expenses and other current assets .......................         (14,412)           9,003
       Accounts payable and other accrued liabilities ..................         (71,260)        (264,511)
       Accrued compensation ............................................         (11,442)         (76,769)
                                                                             -----------      -----------
Net cash (used in) provided by operating activities ....................        (220,040)         365,595
                                                                             -----------      -----------

Cash flows from investing activities:
       Investment in certificate of deposit ............................        (100,000)              --
       Purchases of property and equipment .............................         (76,339)        (226,828)
                                                                             -----------      -----------
Net cash used in investing activities ..................................        (176,339)        (226,828)
                                                                             -----------      -----------

Cash flows from financing activities:
     Repayment of shareholder loan .....................................         (95,936)         (39,086)
     Proceeds from exercise of warrants & stock options ................          36,386           96,545
     Payments on capital lease .........................................          (3,745)          (3,231)
     Borrowings on loan for equipment purchase .........................              --          112,390
     Payments on loan for equipment purchase ...........................         (31,380)              --
     Payment of common stock subscribed ................................          (3,000)              --
     Borrowings on line of credit ......................................           2,175               --
                                                                             -----------      -----------

Net cash (used in) provided by financing activities ....................         (95,500)         166,618
                                                                             -----------      -----------
Effect of exchange rate changes on cash ................................          (1,428)              --
                                                                             -----------      -----------
Net (decrease) increase in cash and cash equivalents ...................        (493,307)         305,385

Cash and cash equivalents at beginning of period .......................       2,022,380          516,900
                                                                             -----------      -----------

Cash and cash equivalents at end of period .............................     $ 1,529,073      $   822,285
                                                                             ===========      ===========

Supplemental Disclosure of Cash Flow Information:

  Cash paid during the period for:

     Interest ..........................................................     $    22,558      $    37,621
                                                                             ===========      ===========
     Income taxes ......................................................     $   122,500      $     3,768
                                                                             ===========      ===========
Supplemental Disclosure on non-cash investing & financing activity:

  Change in unrealized holding gain on available-for-sale securities ...     $       260      $    54,575
                                                                             ===========      ===========


The accompanying notes are an integral part of these statements.

                                                     4
</TABLE>


<PAGE>

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

February 28, 2009

(1) Reference is made to Note 2 of the Notes to Consolidated Financial
Statements contained in Biomerica, Inc.'s (the "Company") Annual Report on Form
10-KSB for the fiscal year ended May 31, 2008, for a Summary of significant
accounting policies utilized by the Company.

(2) In December 2004, the Financial Accounting Standards Board ("FASB") Issued
Statement of Financial Accounting Standards No. 123 (revised 2004), Share-Based
Payment (SFAS No. 123R). SFAS No. 123R revised SFAS No. 123, Accounting For
Stock-Based Compensation, and supersedes APB Opinion No. 25, Accounting for
Stock Issued to Employees, and its related implementation guidance. SFAS No.
123R requires compensation costs related to share-based payment transactions to
be recognized in the financial statement (with limited exceptions). The amount
of compensation cost is measured based on the grant-date fair value of the
equity or liability instruments issued. Compensation cost is recognized over the
period that an employee provides service in exchange for the award. As of the
beginning of fiscal 2007, June 1, 2006, the Company began using this method.

The Black Scholes option valuation model was developed for use in estimating the
fair value of traded options which have no vesting restrictions and are fully
transferable. In addition, option valuation models require the input of highly
subjective assumptions including the expected stock price volatility. Because
the Company's employee stock options have characteristics significantly
different from those of traded options, and because changes in the subjective
input assumptions can materially affect the fair value estimate, in management's
opinion, the existing models do not necessarily provide a reliable single
measure of the fair value of its employee stock options.

For the nine months ended February 28, 2009 and February 29, 2008, the Company
expensed $30,690 and $14,837, respectively, of stock option expense due to SFAS
123(R) in its financial statements.

(3) The following summary presents the options granted, exercised, expired,
cancelled and outstanding as of February 28, 2009:

                                                                      Weighted
                                                                      Average
                               Number of Options and Warrants         Exercise
                           Employee    Non-employee      Total          Price
                          ----------    ----------    ----------     ----------
Outstanding
May 31, 2008               1,346,958       155,166     1,502,124     $     0.76

Granted                      268,500            --       268,500           0.56
Exercised                   (129,200)           --      (129,200)          0.26
Cancelled or expired         (32,000)           --       (32,000)          0.75
                          ----------    ----------    ----------     ----------
Outstanding
February 28, 2009          1,454,258       155,166     1,609,424     $     0.77
                          ==========    ==========    ==========     ==========

(4) The information set forth in these condensed consolidated statements is
unaudited. The information 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., 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 flow in conformity with
generally accepted accounting principles. All adjustments that were made are of
normal recurring nature.

(5) The unaudited Consolidated Financial Statements and Notes are presented as
permitted by the requirements for Form 10-Q and do not contain certain
information included in our annual financial statements and notes. The
Consolidated Balance Sheet data as of May 31, 2008 was derived from audited
financial statements. The accompanying interim Consolidated Financial Statements
should be read in conjunction with the financial statements and related notes
included in our Annual Report on Form 10-KSB filed with the Securities and
Exchange Commission (SEC) for the fiscal year ended May 31, 2008.


                                        5

<PAGE>

(6) Aggregate cost exceeded market value of available-for-sale securities by
$7,040 and $7,398 at February 28, 2009 and May 31, 2008, respectively.

(7) Inventories are stated at the lower of cost (first-in, first-out method) or
market and consist primarily of biological chemicals. Cost includes raw
materials, labor, manufacturing overhead and purchased products. Market is
determined by comparison with recent purchases or net realizable value. Such net
realizable value is based on forecasts for sales of the Company products in the
ensuing years. The industry in which the Company operates is characterized by
technological advancement and change. Should demand for the Company's products
prove to be significantly less than anticipated, the ultimate realizable value
of the Company's inventories could be substantially less than the amount shown
on the accompanying consolidated balance sheet.

Inventories approximate the following:

                                                 February 28,          May 31,
                                                    2009                2008
                                                 -----------         -----------
Raw materials                                    $   819,835         $   687,959
Work in progress                                     491,713             570,011
Finished products                                    838,318             506,232
Reserve for obsolete inventory                       (67,921)                 --
                                                 -----------         -----------
Total                                            $ 2,081,945         $ 1,764,202
                                                 ===========         ===========

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

(8) Earnings Per Share

Basic EPS is computed as net income divided by the weighted average number of
common shares outstanding for the period. Diluted EPS reflects the potential
dilution that could occur from common shares issuable through stock options,
warrants and other convertible securities.

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

<TABLE>
<S>     <C>
                                                Nine Months Ended              Three Months Ended
                                         February 28,    February 29,     February 28,   February 29,
                                             2009           2008            2009            2008
- ------------------------------------------------------------------------------------------------------
Numerator:
   Income from continuing operations     $   314,540     $ 1,012,588     $   276,744     $   123,844
- ------------------------------------------------------------------------------------------------------

Numerator for basic and diluted net
   income per common share               $   314,540     $ 1,012,588     $   276,744     $   123,844
======================================================================================================

Denominator for basic net income
    per common share                       6,631,039       6,061,285       6,615,453       6,173,817
Effect of dilutive securities:
   Options and warrants                      147,255       1,068,602         402,158       1,040,020
- ------------------------------------------------------------------------------------------------------

Denominator for diluted net income
    per common share                       6,778,294       7,129,887       7,017,611       7,213,837
======================================================================================================

Basic net income per common share        $       .05     $       .17     $       .04     $       .02
======================================================================================================

Diluted net income per common share      $       .05     $       .14     $       .04     $       .02
======================================================================================================
</TABLE>

(9) In December 2007, the FASB issued SFAS No. 141R, Business Combinations. SFAS
141R establishes a defined measurement period that governs the time period
within which the business combination must be reported. In addition, the revised
standard significantly expands the scope of disclosure requirements. SFAS No.
141R is effective for annual periods beginning after December 15, 2008. The
Company does not believe that the adoption of SFAS No. 141R will have a material
impact on its financial statements.


                                        6

<PAGE>

In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interest in
Consolidated Financial Statements--an amendment of ARB No. 51. This statement
applies to all entities that prepare consolidated financial statements, except
for non-profit organizations, but will affect only those entities that have an
outstanding noncontrolling interest in one or more subsidiaries or that
deconsolidate a subsidiary. SFAS No. 160 was effective for annual periods
beginning after December 15, 2008. The Company does not believe that the
adoption of SFAS No. 160 will have an impact on its financial statements.

In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative
Instruments and Hedging Activities-an Amendment of FASB Statement No. 133. This
Statement requires qualitative disclosures about objectives and strategies for
using derivatives, quantitative disclosures about fair value amounts of and
gains and losses on derivative instruments, and disclosures about
credit-risk-related contingent features in derivative agreements. SFAS No. 161
was effective for financial statements issue years and interim periods beginning
after November 15, 2008. The Company does not believe that the adoption of SFAS
No. 161 has had an impact on its financial statements.

In May 2008, the FASB issued SFAS No. 162, The Hierarchy of Generally Accepted
Accounting Principles. This Statement is intended to improve financial reporting
By identifying a consistent framework, or hierarchy, for selecting accounting
Principles to be used in preparing financial statements that are presented in
Conformity with U.S. generally accepted accounting principles for
nongovernmental Agencies. Statement 162 is effective 60 days following the SEC's
approval of The Public Company Accounting Oversight Board Auditing amendments to
AU Section 411, The Meaning of "Present Fairly in Conformity with Generally
Accepted Accounting Principles". The Company does not believe that Statement 162
will have a material effect on its financial statements.

In May 2008, the FASB issued SFAS No. 163, Accounting for Financial Guarantee
Insurance Contracts. The new standard clarifies how FASB Statement No. 60,
Accounting and Reporting by Insurance Enterprises, applies to financial
guarantee insurance contracts issued by insurance enterprises. The Statement was
effective for financial statements issued for fiscal years beginning after
December 15, 2008, and all interim periods within those fiscal years. The
Company does not believe that the adoption of SFAS No. 163 will have an impact
on its financial statements.

(10) Financial information about foreign and domestic operations and export
sales is as follows:
                                                      For the Nine Months Ended
                                                        2/28/09        2/29/08
                                                      ----------     ----------
   Revenues from sales to unaffiliated customers:
   United States                                      $  807,000     $  945,000
   Asia                                                  739,000        614,000
   Europe                                              2,032,000      1,934,000
   South America                                          73,000         51,000
   Oceania                                                   --           1,000
   Other                                                  38,000         63,000
                                                      ----------     ----------
                                                      $3,689,000     $3,608,000
                                                      ==========     ==========

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

(11) In July 2007 the Board of Directors granted a stock option for 25,000
options to a new Company director. The options vested one half immediately and
then one quarter per year thereafter. The option is at the exercise price of
$.78 per share and expires in five years. Management assigned a value of $11,343
to this option.

In November 2007 the Board of Directors granted stock options for 16,000 options
to employees of the Company. The options vested one quarter immediately and then
will vest one quarter per year thereafter. The options are at the exercise price
of $1.30 and expire in five years. Management assigned a value of $12,589 to
these options.

During the year ended May 31, 2008, 557,625 options and warrants to purchase
Biomerica, Inc., common stock were exercised. The options and warrants were at
prices ranging from $0.20 to $0.73. The total proceeds to the Company were
$162,386.


                                       7
<PAGE>

In October 2008 the Board of Directors granted stock options for 100,000 options
to the outside directors of the Company. The options vested one quarter
immediately and then will vest one quarter per year thereafter. The options are
at the exercise price of $.75 and expire in ten years. Management assigned a
value of $58,834 to these options.

In January 2009 the Board of Directors granted stock options for 168,500 options
to various employees of the Company. The options vested one quarter immediately
and then will vest one quarter per year thereafter. The options are at the
exercise price of $.45 and expire in five years. Management assigned a value of
$38,270 to these options.

During the nine months ended February 28, 2009, 129,200 options and warrants to
purchase Biomerica, Inc., common stock were exercised. The options and warrants
were at prices ranging from $.25 to $.40. Total proceeds to the Company were
$36,386.

Options or warrants granted are assigned values according to current market
value, using the Black-Scholes model for option valuation. The term used in the
calculation of the options or warrants is the expected life of the option,
taking into consideration cancellation, exercises and expirations. A discount
rate equivalent to the expected life of the option is calculated using Treasury
constant maturity interest rates. For the options granted in fiscal 2009
Biomerica used the simplified method (as defined in SAB 107) for calculating the
expected life of an option because estimating the expected life is difficult
based on historical data. The historical volatility of the stock is calculated
using weekly historical closing prices for the length of the vesting period as
reported by Yahoo Finance. For purposes of the SFAS 123R footnote disclosure,
the Black-Scholes Model is also used for calculating employee options and
warrants valuations.

When shares are issued for services or other non-cash consideration, fair value
is measured using the current market value on the day of the Board of Directors
approval of such issuance.

(12) In July 2008, the Company paid off the principal and interest balance owed
on the shareholder note payable.

(13) The Company is actively looking to relocate facilities and as such may
incur additional costs to restore the current facilities to its original
condition. This amount has not been recognized within the interim financial
statements as of February 28, 2009 due to the inability to reasonably estimate
the fair value of such costs.

(14) Under its bylaws, the Company has agreed to indemnify its officers and
directors for certain events or occurrences arising as a result of the officer
or director's serving in such capacity. The term of the indemnification period
is for the officer's or director's lifetime. The maximum potential amount of
future payments the Company could be required to make under these
indemnification agreements is unlimited. However, the Company has a directors
and officer liability insurance policy that limits its exposure and enables it
to recover a portion of any future amounts paid.

As a result of its insurance policy coverage, the Company believes the estimated
fair value of these indemnification agreements is minimal and has no liabilities
recorded for these agreements as of February 28, 2009. The Company enters into
indemnification provisions under (i) its agreements with other companies in its
ordinary course of business, typically with business partners, contractors, and
customers, landlords and (ii) its agreements with investors. Under these
provisions the Company generally indemnifies and hold harmless the indemnified
party for losses suffered or incurred by the indemnified party as a result of
the Company's activities or, in some cases, as a result of the indemnified
party's activities under the agreement. These indemnification provisions often
include indemnifications relating to representations made by the Company with
regard to intellectual property rights. These indemnification provisions
generally survive termination of the underlying agreement. The maximum potential
amount of future payments the Company could be required to make under these
indemnification provisions is unlimited. The Company has not incurred material
costs to defend lawsuits or settle claims related to these indemnification
agreements. As a result, the Company believes the estimated fair value of these
agreements is minimal. Accordingly, the Company has no liabilities recorded for
these agreements as of February 28, 2009.


                                       8
<PAGE>

(15) In June 2008 the Company incorporated in Mexico under the name of Biomerica
de Mexico for the purpose of establishing its own mequiladora operation in
Mexico at some time in the future.

(16) In November 2008 the Company incorporated under the name of Biomerica
Europe GmbH in Germany for the purpose of operating and distributing some of its
products from that location in the future.

(17) Foreign Currency Translation

Assets and liabilities of the Company's newly created international operations
are translated at period-end exchange rates. Income and expenses are translated
at average exchange rates prevailing during the year. For operations whose
functional currency is the local currency, translation adjustments are recorded
in the accumulated other comprehensive loss component of shareholder's equity.
During the nine months ended February 28, 2009 the Company recorded $1,428 of
translation adjustments.

(18) On December 2, 2008 the Company signed an agreement to perform custom
manufacturing for a large diagnostics company in the amount of $25,000. One-half
of the fee was due to Biomerica thirty days after signing the agreement and is
included within other accrued liabilities as the revenue process is not yet
complete. The remaining $12,500 balance is due upon completion of the project.

(19) On February 13, 2009, the Company entered into a Small Business Banking
Agreement with Union Bank of California for a one year business line (the
"Line") of credit in the amount of $400,000. The interest rate for the line of
credit is the prime rate in effect on the first day of the billing period, as
published in the Wall Street Journal Prime West Coast Edition, plus a spread of
1.00%. Minimum monthly payments will be the sum of (i) the amount of interest
charge for the billing period, plus (ii) any amount past due, plus (iii) any
fees, late charges and/or out-of-pocket expenses assessed. If the Line is not
renewed as of the last day of the term of the Line, the entire unpaid balance of
the Line, including unpaid fees and charges will be due and payable.

Fees associated with establishing the Line were $2,175 and these fees have been
charged to the Line. The Company has granted the bank security interest in the
assets of the Company as collateral.

The Company must maintain for not less than thirty consecutive days in every
calendar year, a period in which all amounts due under the revolving credit
agreements with the Bank are at a zero balance.

On February 13, 2009, the Company entered into a Small Business Bank Agreement
for a Business Loan for $133,000. Loan proceeds were disbursed in one single
funding on March 5, 2009. The loan was used for the purpose of paying off the
business loan, which had been established with Commercial Bank, for the purpose
of financing a significant fixed asset purchase. The fixed asset serves as
collateral for the loan.

The loan is payable in thirty-six monthly payments of $4,082.54. The interest
rate is 6.50% and the payments are to be made by automatic deduction from the
Company's Union Bank account. Initial fees for the loan were $740.

(20)  Subsequent Events

On March 30, 2009 the Board of Directors granted stock options for 110,000
options to certain officers and/or directors. The options vested one quarter
immediately and then will vest one quarter per year thereafter. The options are
at the exercise price of $.60 and expire in five years. Management assigned a
value of $35,938 to these options.

On March 27, 2009 the Company signed an Asset Purchase Agreement with a European
company for the purchase of certain technology related to the manufacture of
certain medical diagnostic tests. Consideration for this purchase was a nominal
deposit upon signing the agreement and a nominal transfer fee upon successful
commencement of production of the products. A royalty shall be paid for five
years beginning on the date of first sale of finished product derived from the
Purchased Assets.

On April 7 2009, the Company received CE approval for our kidney disease
self-test (urinary microalbumin).



                                        9
<PAGE>

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND SELECTED FINANCIAL DATA

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

RESULTS OF OPERATIONS

         Consolidated net sales for Biomerica were $3,688,524 for the first nine
months of fiscal 2009 as compared to $3,608,408 for the same period in the
previous year. This represents an increase of $80,116, or 2.2%. For the quarter
then ended net sales were $1,373,604 as compared to $1,240,809 for the same
period in the previous year. This represents an increase of $132,795, or 10.7%.
The increase in sales for the quarter ended February 28, 2009 as compared to
February 29, 2008 was a result of increased sales to foreign distributors.

         For the nine months ended February 28, 2009 as compared to February 29,
2008, cost of sales increased from $2,023,022, or 56.1% of sales, to $2,148,364,
or 58.2% of sales. For the three month period then ended cost of sales decreased
from $747,690, or 60.3% of sales, to $699,387, or 50.9% of sales. The increase
for the nine months was attributable to a variety of factors which included
higher wages and royalties as compared to the prior fiscal year. The decrease
for the three months was a result of various factors, including the sale of
higher margin products in the third quarter of fiscal 2009 and a larger amount
of labor and overhead being capitalized into inventory. Capitalization of labor
and overhead can vary from quarter to quarter, as the allocation is based on a
rolling average of the value of materials used in production which vary based on
product mix and direct labor which typically remains constant over a six month
time frame.

         For the nine months ended February 28, 2009 compared to February 29,
2008, selling, general and administrative costs increased by $37,016, or 3.5%.
For the three months then ended these expenses increased by $69,441, or 23.0%.
These increases were a result of a variety of factors which included higher
commissions, Sarbanes-Oxley consulting, trade show expense, wages, option
expense and startup costs for Biomerica Europe GmbH.

         For the nine months ended February 28, 2009 compared to February 29,
2008, research and development increased by $3,835, or 1.9% and for the three
months increased by $15,565, or 21.4%. The increase for the nine and three
months was primarily due to higher wages in fiscal 2009.

         For the nine months ended February 28, 2009, other income of $34,540
was realized as compared to $697,125 in the prior year. For the three months
then ended, other income of $34,534 was realized as compared to $10 expense in
the prior fiscal year. The decrease for the nine months was a result of the
non-recurring sale of a marketable security in fiscal 2008 that had been carried
on the Company's books at a value of zero.

         For the nine months interest expense decreased from $38,288 to $22,418.
For the three months interest expense decreased from $12,438 to $4,964 as a
result of lower interest rates and debt balances. For the nine months interest
income decreased from $26,990 to $22,589 and for the three months interest
income decreased from $7,446 to $3,596, primarily due to lower interest rates.


                                       10
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

         As of February 28, 2009, the Company had cash and current
available-for-sale securities in the amount of $1,529,688 and working capital of
$3,777,345. During the quarter ending February 28, 2009, the Company invested in
a Certificate of Deposit for $100,000, which is reflected on the balance sheet
as a short-term investment.

         On February 13, 2009, the Company entered into a Small Business Banking
Agreement with Union Bank of California for a one year business line (the
"Line") of credit in the amount of $400,000. The interest rate for the line of
credit is the prime rate in effect on the first day of the billing period, as
published in the Wall Street Journal Prime West Coast Edition, plus a spread of
1.00%. Minimum monthly payments will be the sum of (i) the amount of interest
charge for the billing period, plus (ii) any amount past due, plus (iii) any
fees, late charges and/or out-of-pocket expenses assessed. If the Line is not
renewed as of the last day of the term of the Line, the entire unpaid balance of
the Line, including unpaid fees and charges will be due and payable.

         The Company must maintain for not less than thirty consecutive days in
every calendar year, a period in which all amounts due under the revolving
credit agreements with the Bank are at a zero balance.

         On February 13, 2009, the Company entered into a Small Business Bank
Agreement for a Business Loan for $133,000. Loan proceeds were disbursed in one
single funding on March 5, 2009. The loan was used for the purpose of paying off
the business loan, which had been established with Commercial Bank, for the
purpose of financing a significant fixed asset purchase. The fixed asset serves
as collateral for the loan.

         During the nine months ended February 28, 2009, the Company operations
used cash in the amount of $220,040 as compared to cash provided by operations
in the amount of $365,595 in the same period in the prior fiscal year. Cash used
in financing activities for the nine months ended February 28, 2009 was $95,500,
primarily due to the repayment of the shareholder loan in the amount of $95,936
as compared to cash provided by financing activities of $166,618 in fiscal 2008,
which was primarily due to $112,390 from the borrowings on the loan for
equipment purchase and $96,545 from the exercise of stock options and warrants.
Net cash used in investing activities during the nine months ended February 28,
2009 was $176,339 as compared to $226,828 in the same period in the prior fiscal
year. Cash used in investing for fiscal 2008 related solely to the purchase of
property and equipment, whereas, cash used in investing for the nine months
ended February 28, 2009 related to investment within a certificate of deposit
and purchases of property and equipment.

CRITICAL ACCOUNTING POLICIES

         The discussion and analysis of our financial condition and results of
operations are based on the consolidated financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States. Note 2 of the Notes to Consolidated Financial Statements
contained in the Company's annual report on Form 10KSB for the period ended May
31, 2008, describes the significant accounting policies essential to the
consolidated financial statements. The preparation of these financial statements
requires estimates and assumptions that affect the reported amounts and
disclosures.

         We believe the following to be critical accounting policies as they
require more significant judgments and estimates used in the preparation of our
consolidated financial statements. Although we believe that our judgments and
estimates are appropriate and correct, actual future results may differ from our
estimates.

         In general the critical accounting policies that may require judgments
or estimates relate specifically to the Allowance for Doubtful Accounts,
Inventory Reserves for Obsolescence and Declines in Market Value, Impairment of
Long-Lived Assets, Stock Based Compensation and Income Tax Accruals.

         Revenues from product sales are recognized at the time the product is
shipped, customarily FOB shipping point, at which point title passes. When
necessary an allowance is established for estimated returns as revenue is
recognized.


                                       11
<PAGE>

         The Allowance for Doubtful Accounts is established for estimated losses
resulting from the inability of our customers to make required payments. The
assessment of specific receivable balances and required reserves is performed by
management and discussed with the audit committee. We have identified specific
customers where collection is not probable and have established specific
reserves, but to the extent collection is made, the allowance will be released.
Additionally, if the financial condition of our customers were to deteriorate,
resulting in an impairment of their ability to make payments, additional
allowances may be required.

         Reserves are provided for excess and obsolete inventory, which are
estimated based on a comparison of the quantity and cost of inventory on hand to
management's forecast of customer demand. Customer demand is dependent on many
factors and requires us to use significant judgment in our forecasting process.
We must also make assumptions regarding the rate at which new products will be
accepted in the marketplace and at which customers will transition from older
products to newer products. Once a reserve is established, it is maintained
until the product to which it relates is sold or otherwise disposed of, even if
in subsequent periods we forecast demand for the product.

         We were in a loss position for tax purposes in prior years, and
established a partial valuation allowance against deferred tax assets, as we may
not be able to generate sufficient taxable income in future periods to realize
the entire benefit of our deferred tax assets. Although the Company has achieved
net income in the last three fiscal years, due to the fact that many factors can
influence profitability, management determined at May 31, 2008 that $170,000 of
the previously allowed for deferred tax assets should be released which resulted
an income tax benefit of $170,000 being recognized during fiscal 2008.
Predicting future taxable income is difficult, and requires the use of
significant judgment. Accruals are made for specific tax exposures and are
generally not material to our operating results or financial position, nor do we
anticipate material changes to these reserves in the near future. Management
re-evaluated this at February 28, 2009, and determined that the deferred tax
asset should remain at $170,000.

         The consolidated financial statements reflect, for all periods
presented, the adoption of the classification or disclosure requirements
pursuant to Emerging Issues Task Force ("EITF") 00-10, "Accounting for Shipping
and Handling Fees and Costs." The Company has historically classified income
from freight charges to customers as sales, which has been offset by shipping
and handling costs. The income from freight for the nine months ended February
28, 2009 and February 29, 2008, respectively, was $87,739 and $84,513 and for
the quarters then ended was $34,560 and $27,722. The financial statements
presented herein show the income from shipping and handling as a component of
sales for both periods and the costs of shipping and handling as a component of
cost of goods sold.

         Please refer to the annual report on Form 10-KSB for the period ended
May 31, 2008 for an in-depth discussion of risk factors.


                                       12

<PAGE>

FACTORS THAT MAY AFFECT FUTURE RESULTS

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

         You should read the following factors in conjunction with the factors
discussed elsewhere in this and our other filings with the SEC and in materials
incorporated by reference in these filings. The following is intended to
highlight certain factors that may affect the financial condition and results of
operations of Biomerica and are not meant to be an exhaustive discussion of
risks that apply to companies such as Biomerica. Like other businesses,
Biomerica is susceptible to macroeconomic downturns in the United States or
abroad, that may affect the general economic climate and performance of
Biomerica or its' customers. Aside from general macroeconomic downturns, the
additional material factors that could affect future financial results include,
but are not limited to: Terrorist attacks and the impact of such events;
diminished access to raw materials that directly enter into our manufacturing
process; shipping labor disruption or other major degradation of the ability to
ship our products to end users; inability to successfully control our margins
which are affected by many factors including competition and product mix;
protracted shutdown of the U.S. Border due to an escalation of terrorist or
counter terrorist activity; any changes in our business relationships with
international distributors or the economic climate they operate in; any event
that has a material adverse impact on our foreign manufacturing operations may
adversely affect our operation as a whole; failure to manage the future
expansion of our business could have an adverse affect on our revenues and
profitability; possible costs in complying with government regulations and the
delays in receiving required regulatory approvals or the enactment of new
adverse regulations or regulatory requirements; numerous competitors, most of
which have substantially greater financial and other resources than we do;
potential claims and litigation brought by patients or medical professionals
alleging harm caused by the use of or exposure to our products; quarterly
variations in operating results caused by a number of factors, including
business and industry conditions and other factors beyond our control. All of
these factors make it difficult to predict operating results for any particular
period.


                                       13

<PAGE>

Item 4.  CONTROLS AND PROCEDURES

DISCLOSURE CONTROLS AND PROCEDURES

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

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




                                       14


<PAGE>

                           PART II. OTHER INFORMATION

Item 1.  LEGAL PROCEEDINGS.  Inapplicable.

Item 1A. RISKS AND UNCERTAINTIES.

         You should read the following factors in conjunction with the factors
discussed elsewhere in this and our other filings with the Securities and
Exchange Commission and in materials incorporated by reference in these filings.
The following is intended to highlight certain factors that may affect the
financial condition and results of operations of Biomerica, Inc. and are not
meant to be an exhaustive discussion of risks that apply to companies such as
Biomerica, Inc. Like other businesses, Biomerica, Inc. is susceptible to
macroeconomic downturns in the United States or abroad, as were experienced in
fiscal year 2002, that may affect the general economic climate and performance
of Biomerica, Inc. or its customers.

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

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

Item 3.  DEFAULTS UPON SENIOR SECURITIES.  None.

Item 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

         The 2008 Annual Meeting of the Company's stockholders was held on
December 3, 2008. Two matters were voted upon at the meeting, as set forth in
the proxy statement dated September 29, 2008, as filed with the Securities and
Exchange Commission pursuant to Rule 14 under the Securities Act of 1934 and
described below.

Proposal No. 1:  Election of Directors

Name              For             Votes Withheld

Barbieri          5,504,358         146,688
Cano              5,503,658         147,388
Emerson           5,502,108         148,938
Irani             5,483,538         167,508
Moore             5,502,008         149,038
Roehm             5,503,508         147,488

All directors nominated were elected.

Proposal No. 2:  Approval of the Company's 2008 Stock Incentive Plan

For  2,392,837          Against  282,235        Abstain  34,612

The Company's 2008 Stock Incentive Plan was not approved by a plurality of
votes.


                                       15
<PAGE>

Item 5.  OTHER INFORMATION.  None.

Item 6. EXHIBITS.

10.1     Union Bank Business Line of Credit and Business Loan

31.1     Certification Pursuant to Section 302 of the Sarbanes-Oxley Act
         - Zackary S. Irani.

31.2     Certification Pursuant to Section 302 of the Sarbanes-Oxley Act
         - Janet Moore.

32.1     Certification Pursuant to Section 906 of the Sarbanes-Oxley Act
         - Zackary S. Irani.

32.2     Certification Pursuant to section 906 of the Sarbanes-Oxley Act
         - Janet Moore.


                                       16


<PAGE>

                                   SIGNATURES

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

Date:  April 14, 2009

                                        BIOMERICA, INC.

                                        By: /S/ Zackary S. Irani
                                            -----------------------
                                            Zackary S. Irani
                                            Chief Executive Officer


                                       17


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>2
<FILENAME>bio_exhibit.txt
<DESCRIPTION>UNION BANK AGREEMENT
<TEXT>
<PAGE>
EXHIBIT 10.1

UNION BANK OF CALIFORNIA
                                                Small Business Banking Agreement
                                                                     UCC SECURED
                                                 BUSINESS LOAN NUMBER 0366422020


Date February 13, 2009

Borrower Name: BIOMERICA. INC.



IMPORTANT INFORMATION ABOUT OPENING AN ACCOUNT:

To help the government fight the funding of terrorism and money laundering
activities, federal law requires all financial institutions to obtain, verify
and record information that identifies each person and/or entity who opens an
account. What this means to you: When you open an account, we will ask for your
name, address, date of birth (for individuals) and other information that will
allow us to identify you. We may also ask to see your driver's license or other
identifying documents.

1. PROMISE TO PAY. At the times indicated below, you ("Borrower") promise to pay
to Union Bank of California, N.A. ("Bank"), or order, the principal sum of ONE
HUNDRED THIRTY-THREE THOUSAND AND 00/100 Dollars ($133,000.00), or so much
thereof as is actually disbursed (including any amounts disbursed prior to
execution of this Agreement) (hereinafter, the "Loan"), plus any interest and
other charges due under this Agreement, and any license, recording or
registration fees, taxes or other assessments required to establish, perfect,
protect and preserve any security interest relating to any property given as
collateral hereunder. You also promise to pay all collection costs, including
court costs and attorneys' fees, including but not limited to those incurred in
arbitration, trial court, and on any appeal and in bankruptcy court, and the
costs to Bank of the services of its in-house counsel and staff, and any other
costs the Bank may incur in enforcing this Agreement.

2. LOAN AVAILABILITY PERIOD. Loan proceeds shall be available for disbursement
in one single funding to occur upon execution of this Agreement, and shall be
payable in: 36 principal and interest installments of FOUR THOUSAND EIGHTY-TWO
AND 54 /100 ($4,082.54) each on the 23rd day of each month commencing MARCH 23,
2009, through and including FEBRUARY 23, 2012, at which time all principal,
accrued but unpaid interest and other charges shall become immediately due and
payable. Any installment falling due on a Saturday, a Sunday, or a banking
holiday shall be payable on the next succeeding day on which Bank is open for
business. You may make any prepayments of principal or interest at any time,
without premium or penalty. Payments or prepayments, as the case may be, shall
be applied to any outstanding fees, late charges, out-of-pocket expenses,
accrued interest then owing, and principal outstanding, in whichever order Bank
may select.

3. INTEREST RATE. The interest rate for your Loan is 6.50% per annum, calculated
on the basis of a 365-day year. You agree that this interest rate is conditioned
upon payments being made by automatic deduction from your Union Bank of
California checking or savings ("Account") 0670043053. You agree to pay the Bank
a minimum of $100 interest during the term of your Loan.

4. AUTOMATIC DEDUCTION. You agree that each payment of fees, out-of-pocket
expenses incurred by the Bank to activate your Business Loan, late charges,
interest, and principal owing pursuant to this Agreement shall be made by
automatic deduction from your Account. Alternatively, fees and/or out-of-pocket
expenses may be charged to your Business Loan. If you make a payment using a
check, or any method other than automatic deduction from your Account, and the
payment is sufficient to cover your next minimum payment due, and (1) your
account is a Term Loan, THE automatic deduction WILL NOT occur; or (2) your
Account is a Line, THE automatic deduction from your Account for that payment
will occur. If your Account is closed for any reason, or if there are
insufficient funds in the Account to pay the sum due, the Bank may terminate
payments by automatic deduction and increase the interest rate on your Business
Loan by one (1) percentage points. You agree that the Bank may also charge any
other deposit account held in the same legal ownership to recover any sums
owing.


                                       1

<PAGE>

Automatic deduction from account number 0670043053
ACCOUNT NAME BIOMERICA, INC.

<TABLE>
<S>            <C>
5. FEES. You agree to pay Bank the following initial fees:
         Loan Fee equal to.....................        $665.00     o     Appraisal Fee equal to ..............        $ N/A
         Documentation Fee equal to ...........         $75.00     o     Flood Determination Fee equal to ....        $ N/A
         Recording Fee equal to ...............          $ N/A     o     Title Fee equal to ..................        $ N/A
         Insurance Premium equal to ...........          $ N/A     o     Escrow Fee equal to .................        $ N/A
         Cal Cap Fee Paid .....................          $ N/A     o     Reconveyance Fee equal to ...........        $ N/A
         Cal Cap Fee Financed .................          $ N/A     o     Fee equal to ........................        $ N/A
         Processing Fee equal to ..............          $ N/A     o     Fee equal to ........................        $ N/A
         Other Fee equal to ...................          $ N/A
</TABLE>

The foregoing fees may be deducted from the Business Loan proceeds. You agree to
pay other charges as disclosed to you separately. ALL FEES AND CHARGES ARE
NONREFUNDABLE IN THE EVENT OF CANCELLATION OF YOUR BUSINESS LOAN FOR ANY REASON.

6. LATE PAYMENTS. If your BUSINESS LOAN WAS established in California or
Washington, if the Bank receives a payment more than 10 days after the due date
shown on your statement, you agree to pay a fee of 5% of the amount past due, or
$10.00, whichever is greater.

In connection with the granting of such security interest, you hereby make the
following representations, warranties and covenants to Bank: (a) the Collateral
is now and at all times hereafter will be of good and merchantable quality, free
from defects; (b) the Collateral shall be kept in good operating condition and
repair, so that its value and operating efficiency shall at all times be
maintained and preserved; (c) you agree to keep correct and accurate records
itemizing and describing the kind, type, quality and quantity of the Collateral,
and its cost, all of which records shall be available for inspection by the
Bank; and (d) the Collateral is owned by you, and is and shall remain free from
all liens, claims, encumbrances or security interests (except in favor of, or as
approved by, Bank). The Bank additionally has a general lien arising by
operation of law on any of your property in its possession. The Bank does not
waive any other lien it may have through operation of law, nor its right of
setoff against any property you may have with it.

Borrower hereby appoints Bank the true and lawful attorney of Borrower and
authorizes Bank to perform any and all acts which Bank in good faith deems
necessary for the protection and preservation of Collateral or its value or
Bank's security interest therein, including transferring any Collateral into its
own name and receiving the Income thereon as additional security hereunder. Bank
does not assume any of the obligations arising under the Collateral.

7. COVENANTS. For as long as the Business Loan is outstanding, you agree to: (a)
give written notice to Bank within 15 days of the occurrence of any of the
following: (i) any Event of Default or any event which, upon notice or lapse of
time, or both, would become an Event of Default; or (ii) any change in your
name, business structure, state of organization, principal place of business (if
a general partnership or other non-registered entity), or the location of any
collateral for the Business Loan, or the establishment of any new place of
business or the discontinuance of any existing place of business; (b) fumish
Bank upon its request with income statements, balance sheets, statements of
retained earnings, tax returns, and any other financial information requested by
Bank from time to time; (c) maintain adequate books, accounts and records and
permit employees or agents of Bank at any reasonable time to inspect your
properties, and to examine such books, accounts and records and make copies and
memoranda thereof; (d) not create, assume or suffer to exist any lien on any
real or personal property which is the subject of a security interest in favor
of the Bank, or upon the income or profits thereof, except in favor of, or as
approved by, Bank; (e) not engage in any business activities or operations
substantially different from or unrelated to your present business activities
and operations; (f) not create, incur, assume or permit to exist any
indebtedness for borrowed money other than loans from the Bank, except
obligations now existing as shown on any credit application to Bank or the
personal financial statement or data submitted with such application, or sell or
transfer any accounts or notes receivable or any money due or to become due; (g)
not make any loans or advances to any person or other entity other than in the
ordinary and normal course of its business as now conducted; or guarantee or
otherwise become liable upon the obligation of any person or other entity; and
(h) maintain and keep in force insurance with companies acceptable to Bank and
in such amounts and types, including without limitation fire and public
liability insurance, as is usual in the business carried on by you, or as Bank
may reasonably request, such insurance policies to be in form and substance
satisfactory to Bank.


                                       2

<PAGE>

8. AGREEMENT TO PROVIDE INSURANCE.
You understand and agree to furnish proof of insurance as requested by Bank, and
not limited to fire and extended coverage insurance, prior to the funding of
this credit. The proof of insurance must be acceptable to Bank, including naming
Bank as loss payee/lien holder, or, if applicable, as additional insured.

Proof of insurance may be given to a Bank branch representative or mailed to:
                                    Union Bank of California, N.A.
                                    P.O. Box 129001
                                    San Diego, CA 92112

Insurance requirements remain in force for the term of the loan.

Unless you provide us with evidence of the insurance coverage as required by our
contract or loan agreement, we may purchase insurance at your expense to protect
our interest. This insurance may, but need not, also protect your interest. If
the collateral becomes damaged, the coverage we purchase may not pay any claim
you make or any claim made against you. You may later cancel this coverage by
providing evidence that you have obtained property coverage elsewhere.

You are responsible for the cost of any insurance purchased by us. The cost of
this insurance may be added to your contract or loan balance. If the cost is
added to your contract or loan balance, the interest rate on the underlying
contract or loan will apply to this added amount. The effective date of coverage
may be the date your prior coverage lapsed or the date you failed to provide
proof of coverage.

The coverage we purchase may be considerably more expensive than insurance you
can obtain on your own and may not satisfy any need for property damage coverage
or any mandatory liability insurance requirements imposed by applicable law.

9.DEFAULT AND ACCELERATION. An Event of Default shall include but not be limited
to the following: (a) using your Business Loan in any manner or amount not
authorized by the Bank; (b) your failure to make any payment required under this
Agreement when due; (c) any breath, misrepresentation or other default by you,
any Guarantor, or any person or entity other than yourself providing financial
support for the Business Loan (each, an "Obligor"); (d) the insolvency of any
Obligor or the failure of any Obligor generally to pay such Obligor's debts as
such debts become due; (e) any deterioration or downgrading of your credit
rating which Bank deems significant; (f) the failure to show a profit; (g) the
closure, suspension, cancellation or termination, whether voluntary or
involuntary, and for whatever reason, or for no reason, of any deposit or credit
account at Bank of any Obligor; (h) the commencement as to any Obligor of any
voluntary or involuntary proceeding under any laws relating to bankruptcy,
insolvency, reorganization, arrangement, debt adjustment or debtor relief; (i)
the assignment by any Obligor for the benefit of such Obligor's creditors; (j)
the appointment, or commencement of any proceedings for the appointment, of a
receiver, trustee, custodian or similar official for all or substantially all of
any Obligor's property; (k) the commencement of any proceeding for the
dissolution or liquidation of any Obligor; (I) the termination or dissolution of
any Obligor such as a business entity or trust, or the death of any individual
Obligor; (m) the revocation of any guaranty given in connection with this
Agreement; (n) the failure of any Obligor to comply with any order, judgment,
injunction, decree, writ or demand of any court or other public authority; (o)
the filing or recording against any Obligor, or the property of any Obligor, of
any notice of levy, notice to withhold, or other legal process for taxes; (p)
the default by any Obligor personally liable for amounts owed hereunder on any
obligation concerning the borrowing of money; (q) any breach of the terms of any
other agreement between Bank and any Obligor, including without limitation any
security agreement, mortgage or deed of trust securing the [Line]; (r) the
issuance against any Obligor, or the property of any Obligor, of any writ of
attachment, execution, or other judicial lien; or (s) the sale or transfer of
all or substantially all of the assets of an Obligor, or a change of ownership
of any business entity Obligor of greater than 10%. Upon the occurrence of any
such Event of Default, Bank, in its discretion, may cease to advance funds
hereunder, may declare all obligations under this Agreement immediately due and
payable, and make a deduction from your Account for any payments which are past
due under this agreement; however, upon the occurrence of an Event of Default
under (h), (i) (j) or (k), all principal, interest, and other fees and charges
shall automatically become immediately due and payable. On or after the
occurrence of an Event of Default, you agree that the Bank may, at its option,
compute the interest rate at a per annum fixed rate equal to one (1) percentage
points in excess of the rate specified above, calculated from the date of
default until all amounts hereunder are paid in full.

10. COPIES OF DOCUMENTS. The Bank will charge a service charge of $30.00, plus
$30.00 per hour, for research and document retrieval if you request copies of
any document hereunder, plus postage, and a photocopy fee of $1.00 per copy.


                                       3

<PAGE>

11. CREDIT INFORMATION. You hereby authorize the Bank to release information
concerning your credit record and Business Loan performance to other creditors,
credit bureaus, credit reporting agencies, credit reporters, Guarantors of the
Business Loan, or pursuant to an order from a governmental agency or court. You
agree that the Bank may furnish or cause to be furnished at any time such
information or material regarding your financial condition. You agree that the
Bank may share information from your credit application or credit file with
other departments of the Bank, and (to the extent permitted under fair credit
reporting laws and regulations, if applicable) with its parent, subsidiaries and
affiliated companies. You hereby further authorize the Bank to obtain credit
reports, copies of your tax returns and other information from the Internal
Revenue Service and other taxing authorities, and to take such other steps as
Bank deems appropriate to verify (and from time to time re-verify) the
information provided in connection with this Business Loan. The Bank will retain
information received in relation to this credit request as long as the Bank
deems necessary to do so.

12. ASSIGNMENT. You agree that you may not assign the Business Loan or your
rights, nor delegate your duties and obligations, under this Agreement, to any
third party. The Bank may assign the Business Loan or any of its rights
hereunder without your consent or notice to you.

13. TELEPHONE MONITORING. The Bank's supervisory personnel may listen to, or
record telephone calls between you, your employees and agents, and the Bank's
employees for the purpose of monitoring and improving the quality of service you
receive.

14. WAIVER. You agree that the Bank may act, fail to act, or delay any action to
enforce its rights hereunder, and that no such action, inaction, or delay shall
constitute or be interpreted as a waiver of its rights under this Agreement.

15. DISPUTES / JUDICIAL REFERENCE (CALIFORNIA) AND JURY TRIAL WAIVER. To the
extent permitted by law, in connection with any dispute arising in connection
with the Loan, Borrower and Bank waive any right to a trial by jury. In the
event that such waiver is not enforceable, Borrower and Bank agree that any such
dispute shall, at the written request of Borrower or Bank, be determined by
judicial reference pursuant to the state law applicable to this Agreement.
Nothing in this paragraph shall limit the right of Borrower or Bank at any time
to exercise self-help remedies. A referee selected for this purpose shall also
determine all issues relating to the applicability, interpretation and
enforceability of this paragraph. Borrower and Bank acknowledge that if a
referee is selected, then such disputes will not be decided by a jury.

16. AMENDMENT. This Agreement contains all the terms and conditions of the
parties hereto pertaining to the subject matter hereof. The Bank may change the
terms of this Agreement by providing you with 30 days' advance notice of such
change. Otherwise, no amendment, alteration or change in any term of this
Agreement shall be effective unless in writing signed by the parties hereto and
expressly providing for the amendment hereof.

17. CHOICE OF LAW. If your business is located in California, Oregon, or
Washington, this Agreement, and all related documents, will be governed by the
laws of the state of your business location. If your business is located
anywhere else, this Agreement, and all related documents, will be governed by
California law.

18. SEVERABILITY. In the event that any provision of this Agreement is found to
be illegal or unenforceable, the remainder of this Agreement shall remain in
full force and effect.

19. STATEMENTS. The Bank will mail, to your most recent address shown on its
records, a year end statement which lists the balance, rate and interest paid
for the calendar year.

20. USE OF PROCEEDS. You agree that all Business Loan proceeds will be used only
for business purposes of the borrowing entity signing this Agreement.

21. DISBURSEMENT. You authorize and direct Bank to disburse the proceeds of your
Business Loan as follows:
COMMERCIAL BANK OF CA                             $128,000.00

BIOMERICA, INC.


/s/ Zackary Irani                            /s/ Janet C. Moore
- ----------------------------------           -----------------------------------
Zackary Irani, Chief Executive Officer       Janet C. Moore, Secretary


                                       4


<PAGE>

UNION BANK OF CALIFORNIA
                                 AUTHORIZATION TO OBTAIN CREDIT, GRANT SECURITY,
                                                        GUARANTEE OR SUBORDINATE


                                    RECITALS

A. BIOMERICA, INC. duly organized and existing under the laws of CALIFORNIA with
its principal place of business at 1533 MONROVIA AVENUE, NEWPORT BEACH, CA.
92663 (the "Business") desires to obtain present or future credit from, grant
security to, or give guaranties or subordinations to Union Bank of California,
N.A. ("Bank").

B. The Business desires that certain person(s) be authorized to act on its
behalf from time to time in obtaining, among other things, such credit from,
granting security to, or giving guaranties or subordinations to, Bank.

NOW, THEREFORE, IT IS RESOLVED THAT:

1.    AUTHORIZATION. Any 1 of the following is/are authorized and directed, in
      the name and on behalf of the Business, from time to time, with or without
      security, to obtain credit and other financial accommodations from Bank,
      or to give guaranties or subordinations to Bank, upon such terms as any
      such person(s) shall approve:

      ZACKARY IRANI, CHIEF EXECUTIVE OFFICER           /s/ Zackary Irani
                                                       -------------------------

      JANET C. MOORE, SECRETARY                        /s/ Janet C. Moore
                                                       -------------------------

2.    SCOPE OF AUTHORITY. Without limiting the generality of the authority
      granted, each person designated in paragraph 1 above is authorized, from
      time to time, in the name and on behalf of the Business, to:

      2.1   Incur Indebtedness To Bank. The word "Indebtedness" as used herein
            means all debts, obligations and liabilities, including without
            limitation obligations and liabilities under guaranties or
            subordinations, currently existing or now or hereafter made,
            incurred or created, whether voluntary or involuntary and however
            arising or evidenced, whether direct or acquired by assignment or
            succession, whether due or not due, absolute or contingent,
            liquidated or unliquidated, determined or undetermined, and whether
            liability is individual or joint with others, all renewals,
            extensions and modifications thereof, and all attorneys' fees and
            costs incurred in connection with the negotiation, preparation,
            workout, collection and enforcement thereof;

      2.2   Execute, deliver and endorse with respect to Indebtedness to Bank,
            promissory notes, loan agreements, drafts, guaranties,
            subordinations, applications and agreements for letters of credit,
            acceptance agreements, foreign exchange documentation, applications
            and agreements pertaining to the payment and collection of
            documents, indemnities, waivers, purchase agreements and other
            financial undertakings, leases and other documents and agreements in
            connection therewith, and all renewals, extensions or modifications
            thereof;

      2.3   Grant security interests in, pledge, assign, transfer, endorse,
            mortgage or hypothecate, and execute security or pledge agreements,
            financing statements and other security interest perfection
            documentation, mortgages and deeds of trust on, and give trust
            receipts for, any or all property of the Business as may be agreed
            upon by any officer as security for any or all Indebtedness of the
            Business or any other individual or entity ("Person"), and grant and
            execute renewals, extensions or modifications thereof;

      2.4   Sell to, or discount or rediscount with, Bank all negotiable
            instruments, including without limitation promissory notes,
            commercial paper, drafts, accounts, acceptances, leases, CHATTEL
            paper, contracts, documents, instruments or evidences of debt at any
            time owned, held or drawn by the Business, and draw, endorse or
            transfer any of such instruments or documents on behalf of the
            Business, guarantee payment or repurchase thereof, and execute and
            deliver to Bank all documents and agreements in connection
            therewith, and all renewals, extensions or modifications thereof;

      2.5   Direct the disposition of the proceeds of any credit extended by
            Bank, and deliver to Bank and accept from Bank delivery of any
            property of the Business at any time held by Bank.

                                       5

<PAGE>

      2.6   Specify in writing to Bank the individuals who are authorized, in
            the name of and on behalf of the Business, to request advances under
            loans or credit lines made available by Bank to the Business,
            subject to the terms thereof.

3.    WRITINGS. Any instruments, documents, agreements or other writings
      executed under or pursuant to these resolutions (collectively, the
      "Authorization") may be in such form and contain such terms and conditions
      as may be required by Bank in its sole discretion, and execution thereof
      by any officer authorized under the Authorization shall be conclusive
      evidence of such officer's and the Business's approval of the terms and
      conditions thereof.

4.    CERTIFICATION. The Secretary or any Assistant Secretary of the Business is
      hereby authorized and directed from time to time to certify to Bank a copy
      of this Authorization, the names and specimen signatures of persons
      designated in paragraph 1 above, and any modification thereof.

5.    RATIFICATION/AMENDMENT. The authority given under this Authorization shall
      be retroactive and any and all acts so authorized that are performed prior
      to the formal adoption are hereby approved and ratified. In the event two
      or more resolutions of this Business are concurrently in effect, the
      provisions of each shall be cumulative, unless the latest shall
      specifically provide otherwise. The authority given hereby shall remain in
      full force and effect, and Bank is authorized and requested to rely and
      act thereon, until Bank shall have received a certified copy of a further
      resolution of the Business amending, rescinding or revoking the
      Authorization.

6.    REQUESTS FOR CREDIT. Credit may be requested by the Business from Bank in
      writing, by telephone, or by other telecommunication method acceptable to
      Bank. The Business recognizes and agrees that Bank cannot effectively
      determine whether a specific request purportedly made by or on behalf of
      the Business is actually authorized or authentic. As it is in the
      Business's best interest that Bank extend credit in response to these
      forms of request, the Business assumes all risks regarding the validity,
      authenticity and due authorization of any request purporting to be made by
      or on behalf of the Business. The Business is hereby authorized and
      directed to repay any credit that is extended by Bank pursuant to any
      request which Bank in good faith believes to be authorized, or when the
      proceeds of any credit are deposited to the account of the Business with
      Bank, regardless of whether any individual or entity other than the
      Business may have authority to draw against such account.

7.    NO LIMITATION BY THIS AUTHORIZATION. Nothing contained in this
      Authorization shall limit or modify the authority of any person to act on
      behalf of the Business as provided by law, any agreement or authorization
      relating to the Business or otherwise.

                    CERTIFICATE OF SECRETARY OF THE BUSINESS

I hereby certify to Union Bank of California, N.A., ("Bank") that the above
Authorization is true copy of the resolution(s) of BIOMERICA, INC. a corporation
duly organized and existing under the laws of CALIFORNIA (the "Business") duly
adopted by the Board of Directors of the Business and duly entered in the
records of the Business, and that the Authorization is in conformity with
applicable law and regulation, the Articles of Incorporation and the By-Laws of
the Business and is now in full force and effect.

I also certify that the above are the names and genuine specimen signatures of
the officers of the Business authorized in paragraph 1 of the Authorization.

I agree to notify Bank in writing of any aspect of the Authorization or of any
individual holding any office set forth in this certificate immediately upon the
occurrence of any such change, and to provide Bank with a copy of modified
resolution(s) and the genuine specimen signature of any such new officer.

The authority provided for in the Authorization shall remain in full force and
effect, and Bank is authorized and requested to rely and act thereon until Bank
shall receive either a certified copy of a further resolution of this Business's
Board of Directors amending the Authorization, or a certification of a change in
the authorized officer(s).

Date: Feb 20, 2009

    SEAL


/s/ Janet C. Moore
- --------------------------------             [SEAL HERE]
Secretary of BIOMERICA, INC.

/s/ Francis E. Capitano
- --------------------------------
*President of BIOMERICA, INC.


* When the Secretary is among those authorized, the President should also sign
this Certificate.

                                       6


<PAGE>

UNION BANK OF CALIFORNIA
                                                SMALL BUSINESS BANKING AGREEMENT
                                                                     UCC SECURED
                                       BUSINESS LINE OF CREDIT NUMBER 0366422012


Date: February 13, 2009

Borrower Name: BIOMERICA, INC.


IMPORTANT INFORMATION ABOUT OPENING AN ACCOUNT:

To help the government fight the funding of terrorism and money laundering
activities, federal law requires all financial institutions to obtain, verify
and record information that identifies each person and/or entity who opens an
account. What this means to you: When you open an account, we will ask for your
name, address, date of birth (for individuals) and other information that will
allow us to identify you. We may also ask to see your driver's license or other
identifying documents.

1. PROMISE TO PAY. At the times indicated below, you ("Borrower") promise to pay
to Union Bank of California, N.A., or order, the principal sum of: FOUR HUNDRED
THOUSAND AND 00/100 Dollars ( $400,000.00 ), or the credit limit amount
reflected from time to time on your line of credit account statement, or so much
thereof as is actually disbursed (including any amounts disbursed prior to
execution of this Agreement) (hereinafter, the "Line"), plus any interest and
other charges due under this Agreement, and any license, recording or
registration fees, taxes or other assessments required to establish, perfect,
protect and preserve any security interest relating to any property given as
collateral hereunder. You also promise to pay all collection costs, including
court costs and attorneys' fees, including but not limited to those incurred in
arbitration, trial court, and on any appeal and in bankruptcy court, and the
costs to Bank of the services of its in-house counsel and staff, and any other
costs the Bank may incur in enforcing this Agreement.

2. CREDIT LINE. The amount of your Line is established by the Bank and shown on
your monthly statement. The amount of credit available on your Line is reduced
by the amount of the principal balance. The Bank may, in its sole discretion
(but is not required to) approve transactions that exceed your available line
limit. You promise not to borrow more than the amount of your Line. In that
event, you agree to repay such amount immediately. You will be able to access
your Line for one year from the date the Line IS opened. One year from the date
the line IS MADE available for drawing, all principal, accrued but unpaid
interest and other charges shall become immediately due and payable. The Bank
may, at its sole option, permit the renewal of your Line for a period of time
determined by Bank at each Line maturity date. You agree to provide or cause to
be provided current financial and credit information should the Bank request
such information for renewal of your Line. In no event is Bank required to renew
your Line, however.

LINE ACCESS:
CHECK ACCESS. After your Line is opened, the Bank will provide you with Line of
Credit Checks ("Checks"). You promise that you will not permit any person not
authorized to sign on your Line to use your Checks. Only one signature of the
Borrower shall be required on any Check. Checks are not returned to you;
however, you may obtain copies of Checks subject to payment of a service charge,
as permitted by applicable law. You may place a stop payment on a Check issued
by you under the Line in accordance with the terms, and subject to the
restrictions and fees, described in the "All About Business Accounts Si
Services" previously sent to you. In some cases, the Bank may pay a Check even
if a stop payment is in effect. The Bank has no responsibility for failure of
any merchant, financial institution or any other party to accept Checks drawn by
you. If your Checks become lost or stolen, you agree to notify the Bank at once
at the address or telephone number shown on your monthly billing statement.

TELEPHONE OR PC ACCESS. You may sign up to permit advances from your Line to
your Union Bank of California checking or savings ("Account") using the
telephone or through software in a personal computer. The Bank will issue a
Personal Identification Number (PIN) and these transactions will be governed by
the terms of this Agreement, your Online Service Agreement, and/or Teleservices
Service Agreement. You agree to indemnify, defend and hold harmless the Bank
from and against all liability, loss and costs in connection with any act
resulting from telephone instructions, which Bank reasonably believes are made
by any individual authorized by the Borrower to give such instructions. This
indemnity shall survive termination of this Agreement.


                                       7

<PAGE>

MINIMUM ADVANCES. You agree that all Line advances will be in an amount of at
least $500. The Bank may charge a fee for any advance for a lesser amount.

STATEMENTS. The Bank will mail, to your most recent address shown on its
records, a statement for each monthly billing period in which your Line has a
balance. If YOU HAVE any DISPUTE CONCERNING THE STATEMENT, YOU MUST NOTIFY THE
BANK IN WRITING AT THE ADDRESS SHOWN ON YOUR MONTHLY STATEMENT WITHIN 30 DAYS OF
THE STATEMENT MAILING DATE, AFTER WHICH TIME THE STATEMENT WILL BE CONSIDERED
CORRECT.

3. INTEREST RATE, DAILY PERIODIC INTEREST RATE. The interest rate for your Line
is the prime rate in effect on the first day of your billing period, as
published in the Wall Street Journal Prime West Coast Edition, plus a spread of
1.00% ("Spread"). If more than one prime rate is published, the Bank may choose
the highest rate. If the Wall Street Journal Prime West Coast Edition ceases to
publish, or ceases to publish a West Coast Edition, or to publish a prime rate,
the Bank may use the prime rate published in any other newspaper of general
circulation, or may substitute a similar reference rate at its sole discretion.
The Bank will provide notice to you in such event. The daily periodic interest
rate is the interest rate of your Line divided by 100, divided by 365. You agree
this interest rate is conditioned upon payments being made by monthly automatic
deduction from your Account. All advances and other debits to your Line,
excluding any periodic interest charges or late payment service charges on prior
balances, are subject to interest charges from the date posted to your Line
until paid. Your periodic interest charge is computed by multiplying the
outstanding balance of your Line each day of the billing period by the daily
periodic interest rate described above, and adding the amounts so determined for
all days in the billing period. The outstanding balance for each day is
determined by deducting from the beginning balance for that day all payments and
other credits, and adding thereto all advances and other debits, exclusive of
periodic interest charges or late charges on prior balances. Your monthly
periodic interest charge is the sum of the daily periodic interest charges
assessed during the monthly billing period.

PAYMENTS. You agree to pay your balance in the manner herein described. If there
are any outstanding balances under the Line, you agree to pay at least the
minimum payment shown on your statement. Your minimum monthly payment will be
the sum of (i) the amount of interest charge for the billing period, plus (ii)
any amount past due, plus (iii) any fees, late charges and/or out-of-pocket
expenses assessed hereunder. If the sum of (i), (ii) and (iii) is less than $100
(the "Shortfall"), the minimum payment shall be $100, and the difference between
$100 and the Shortfall will be applied against principal outstanding. IF YOUR
LINE IS NOT RENEWED AS OF THE LAST DAY OF THE TERM OF YOUR LINE, YOU AGREE THAT
THE ENTIRE UNPAID BALANCE OF YOUR LINE, INCLUDING UNPAID FEES AND CHARGES, (I)
WILL BE DUE AND PAYABLE; AND (II) THE ACCRUED INTEREST WILL CONTINUE TO ACCRUE
AND BE DEDUCTED FROM YOUR DEPOSIT ACCOUNT UNTIL SUCH TIME AS THE BANK DEDUCTS
THE FULL PRINCIPAL AMOUNT OWED. You may make any prepayments of principal or
interest at any time, without premium or penalty. Payments or prepayments, as
the case may be, shall be applied to any outstanding fees, late charges,
out-of-pocket expenses, accrued interest then owing, and principal outstanding,
in whichever order Bank may select. The Bank may place a hold in the amount of
your payment against your Line's available credit. The hold may be placed for
any period of time (to be selected by Bank) not to exceed nine (9) business days
(Monday through Friday, excluding Bank designated holidays) ("Business Days").
You promise not to use any proceeds of the Line to pay any amount due hereunder.
Payments may not be made via a third party check.

4. AUTOMATIC DEDUCTION. You agree that each payment of fees, out-of-pocket
expenses incurred by the Bank to activate your Business Line of Credit, late
charges, interest, and principal owing pursuant to this Agreement shall be made
by automatic deduction from your Account. Alternatively, fees and/or
out-of-pocket expenses may be charged to your Business Line of Credit. If you
make a payment using a check, or any method other than automatic deduction from
your Account, and the payment is sufficient to cover your next minimum payment
due, and (1) your account is a Term Loan, the automatic deduction will not
occur; or (2) your Account is a Line, the automatic deduction from your Account
for that payment will occur. If your Account is closed for any reason, or if
there are insufficient funds in the Account to pay the sum due, the Bank may
terminate payments by automatic deduction and increase the interest rate on your
Business Line of Credit by one (1) percentage points. You agree that the Bank
may also charge any other deposit account held in the same legal ownership to
recover any sums owing.


                                       8

<PAGE>

Automatic deduction from account number 0670043053
Account Name BIOMERICA, INC.

<TABLE>
<S>            <C>
5. FEES. You agree to pay Bank the following initial fees:
        o    Loan Fee equal to....................       $2,000.00    o     Appraisal Fee equal to ..............         $ N/A
        o    Documentation Fee equal to ..........          $75.00    o     Flood Determination Fee equal to ....         $ N/A
        o    Recording Fee equal to ..............          $ N/A     o     Title Fee equal to...................         $ N/A
        o    Insurance Premium equal to ..........          $ N/A     o     Escrow Fee equal to .................         $ N/A
        o    Cal Cap Fee Paid ....................          $ N/A     o     Reconveyance Fee equal to ...........         $ N/A
        0    Cal Cap Fee Financed ................          $ N/A     o     Fee equal to ........................         $ N/A
        o    Processing Fee equal to .............         $100.00    o     Fee equal to ........................         $ N/A
        o    Other Fee equal to ..................          $ N/A
</TABLE>


The foregoing fees may be treated as a principal advance from the Line. You
agree to pay other charges as disclosed to you separately. If the Bank agrees to
renew your Line, you agree as a condition of renewal to pay an annual fee equal
to the above loan fee, or as otherwise disclosed by Bank at that time. The Bank
may charge an annual fee before a renewal decision has been made. If the Line
subsequently is not renewed, the fee will be returned to you. ALL FEES AND
CHARGES ARE NONREFUNDABLE IN THE EVENT OF CANCELLATION OF YOUR BUSINESS LINE OF
CREDIT FOR ANY REASON.

6. LATE PAYMENTS. If your BUSINESS LINE OF CREDIT was established in California
or Washington, if the Bank receives a payment more than 10 days after the due
date shown on your statement, you agree to pay a fee of 5% of the amount past
due, or $10.00, whichever is greater.

7. COLLATERAL. To secure the payment of your debt and the performance of your
obligations under this Agreement, you hereby grant the Bank a security interest
under the Uniform Commercial Code adopted in the state in which your Business
Line of Credit was established in the assets described below (the "Collateral"),
and you further agree to execute such documents or provide collateral detail as
Bank may require to perfect or protect such security interest.

For value received and in consideration of advances, present and future, and
other obligations, Debtor hereby grants a continuing security interest in, and
assigns and transfers to Bank the following personal property, whether or not
delivered to or in the possession or control of Bank or its agents, and whether
now or hereafter owned or in existence, and all proceeds thereof (hereinafter
called "Collateral"):

All present and hereafter acquired personal property including but not limited
to all accounts, chattel paper, instruments, contract rights, general
intangibles, goods, equipment, inventory, documents, certificates of title,
deposit accounts, returned or repossessed goods, fixtures, commercial tort
claims, insurance claims, rights and policies, letter of credit rights,
investment property, supporting obligations, and the proceeds, products, parts,
accessories, attachments, accessions, replacements, substitutions, additions,
and improvements of or to each of the foregoing.

If Borrower is a registered entity -- Borrower is organized under the laws of
California, and Borrower will not change the state of its organization without
Banks prior written consent.

If Borrower is a general partnership or other non-registered entity -- Borrower
has its principal place of business in California, and Borrower will not change
the state of its principal place of business without Banks prior written
consent.

In connection with the granting of such security interest, you hereby make the
following representations, warranties and covenants to Bank: (a) the Collateral
is now and at all times hereafter will be of good and merchantable quality, free
from defects; (b) the Collateral shall be kept in good operating condition and
repair, so that its value and operating efficiency shall at all times be
maintained and preserved; (c) you agree to keep correct and accurate records
itemizing and describing the kind, type, quality and quantity of the Collateral,
and its cost, all of which records shall be available for inspection by the
Bank; and (d) the Collateral is owned by you, and is and shall remain free from
all liens, claims, encumbrances or security interests (except in favor of, or as
approved by, Bank). The Bank additionally has a general lien arising by
operation of law on any of your property in its possession. The Bank does not
waive any other lien it may have through operation of law, nor its right of
setoff against any property you may have with it.


                                       9

<PAGE>

Borrower hereby appoints Bank the true and lawful attorney of Borrower and
authorizes Bank to perform any and all acts which Bank in good faith deems
necessary for the protection and preservation of Collateral or its value or
Bank's security interest therein, including transferring any Collateral into its
own name and receiving the Income thereon as additional security hereunder. Bank
does not assume any of the obligations arising under the Collateral.

8. COVENANTS. For as long as the Business Line of Credit is outstanding, you
agree to: (a) give written notice to Bank within 15 days of the occurrence of
any of the following: (i) any Event of Default or any event which, upon notice
or lapse of time, or both, would become an Event of Default; or (ii) any change
in your name, business structure, state of organization, principal place of
business (if a general partnership or other non-registered entity), or the
location of any collateral for the Business Line of Credit, or the establishment
of any new place of business or the discontinuance of any existing place of
business; (b) furnish Bank upon its request with income statements, balance
sheets, statements of retained earnings, tax returns, and any other financial
information requested by Bank from time to time; (c) maintain adequate books,
accounts and records and permit employees or agents of Bank at any reasonable
time to inspect your properties, and to examine such books, accounts and records
and make copies and memoranda thereof; (d) not create, assume or suffer to exist
any lien on any real or personal property which is the subject of a security
interest in favor of the Bank, or upon the income or profits thereof, except in
favor of, or as approved by, Bank; (e) not engage in any business activities or
operations substantially different from or unrelated to your present business
activities and operations; (f) not create, incur, assume or permit to exist any
indebtedness for borrowed money other than loans from the Bank, except
obligations now existing as shown on any credit application to Bank or the
personal financial statement or data submitted with such application, or sell or
transfer any accounts or notes receivable or any money due or to become due; (g)
not make any loans or advances to any person or other entity other than in the
ordinary and normal course of its business as now conducted; or guarantee or
otherwise become liable upon the obligation of any person or other entity; and
(h) maintain and keep in force insurance with companies acceptable to Bank and
in such amounts and types, including without limitation fire and public
liability insurance, as is usual in the business carried on by you, or as Bank
may reasonably request, such insurance policies to be in form and substance
satisfactory to Bank.

9. OUT OF DEBT PROVISION. Maintain for not less than 30 (thirty) consecutive
days in every calendar year, a period in which all amounts due under revolving
credit agreements with Bank are at a zero balance.

10. AGREEMENT TO PROVIDE INSURANCE. You understand and agree to furnish proof of
insurance as requested by Bank, and not limited to fire and extended coverage
insurance, prior to the funding of this credit. The proof of insurance must be
acceptable to Bank, including naming Bank as loss payee/lien holder, or, if
applicable, as additional insured.

Proof of insurance may be given to a Bank branch representative or mailed to:
                           Union Bank of California, N.A.
                           P.O. Box 129001
                           San Diego, CA 92112

Insurance requirements remain in force for the term of the loan.

Unless you provide us with evidence of the insurance coverage as required by our
contract or loan agreement, we may purchase insurance at your expense to protect
our interest. This insurance may, but need not, also protect your interest. If
the collateral becomes damaged, the coverage we purchase may not pay any claim
you make or any claim made against you. You may later cancel this coverage by
providing evidence that you have obtained property coverage elsewhere.

You are responsible for the cost of any insurance purchased by us. The cost of
this insurance may be added to your contract or loan balance. If the cost is
added to your contract or loan balance, the interest rate on the underlying
contract or loan will apply to this added amount. The effective date of coverage
may be the date your prior coverage lapsed or the date you failed to provide
proof of coverage.

The coverage we purchase may be considerably more expensive than insurance you
can obtain on your own and may not satisfy any need for property damage coverage
or any mandatory liability insurance requirements imposed by applicable law.


                                       10

<PAGE>

11. CANCELLATION AND SUSPENSION. The Bank may cancel your Line by giving you
written notice at the address shown for you on the Bank's records. If fraud is
suspected, no advance notice of cancellation need be given to you, however, the
Bank will contact you following such cancellation. Anyone obligated on the Line
may also cancel the Line by writing to the Bank at the address shown on your
monthly statement. If your Line is canceled, the entire balance, including
accrued and unpaid interest, and all fees and charges, and all amounts for
Checks not yet billed, shall become immediately due and payable upon the Bank's
demand. Checks written on your Line and received by the Bank after your Line is
canceled will not be paid by the Bank.

12. DEFAULT AND ACCELERATION. An Event of Default shall include but not be
limited to the following: (a) using your Business Line of Credit in any manner
or amount not authorized by the Bank; (b) your failure to make any payment
required under this Agreement when due; (c) any breach, misrepresentation or
other default by you, any Guarantor, or any person or entity other than yourself
providing financial support for the Business Line of Credit (each, an
"Obligor"); (d) the insolvency of any Obligor or the failure of any Obligor
generally to pay such Obligor's debts as such debts become due; (e) any
deterioration or downgrading of your credit rating which Bank deems significant;
(f) the failure to show a profit; (g) the closure, suspension, cancellation or
termination, whether voluntary or involuntary, and for whatever reason, or for
no reason, of any deposit or credit account at Bank of any Obligor; (h) the
commencement as to any Obligor of any voluntary or involuntary proceeding under
any laws relating to bankruptcy, insolvency, reorganization, arrangement, debt
adjustment or debtor relief; (i) the assignment by any Obligor for the benefit
of such Obligor's creditors; (j) the appointment, or commencement of any
proceedings for the appointment, of a receiver, trustee, custodian or similar
official for all or substantially all of any Obligor's property; (k) the
commencement of any proceeding for the dissolution or liquidation of any
Obligor; (I) the termination or dissolution of any Obligor such as a business
entity or trust, or the death of any individual Obligor; (m) the revocation of
any guaranty given in connection with this Agreement; (n) the failure of any
Obligor to comply with any order, judgment, injunction, decree, writ or demand
of any court or other public authority; (o) the filing or recording against any
Obligor, or the property of any Obligor, of any notice of levy, notice to
withhold, or other legal process for taxes; (p) the default by any Obligor
personally liable for amounts owed hereunder on any obligation concerning the
borrowing of money; (q) any breach of the terms of any other agreement between
Bank and any Obligor, including without limitation any security agreement,
mortgage or deed of trust securing the [Line); (r) the issuance against any
Obligor, or the property of any Obligor, of any writ of attachment, execution,
or other judicial lien; or (s) the sale or transfer of all or substantially all
of the assets of an Obligor, or a change of ownership of any business entity
Obligor of greater than 10%. Upon the occurrence of any such Event of Default,
Bank, in its discretion, may cease to advance funds hereunder, may declare all
obligations under this Agreement immediately due and payable, and make a
deduction from your Account for any payments which are past due under this
agreement; however, upon the occurrence of an Event of Default under (h), (i)
(j) or (k), all principal, interest, and other fees and charges shall
automatically become immediately due and payable. On or after the occurrence of
an Event of Default, you agree that the Bank may, at its option, compute the
interest rate at a per annum fixed rate equal to one (1) percentage points in
excess of the rate specified above, calculated from the date of default until
all amounts hereunder are paid in full.

13. COPIES OF DOCUMENTS. The Bank will charge a service charge of $30.00, plus
$30.00 per hour, for research and document retrieval if you request copies of
any document hereunder, plus postage, and a photocopy fee of $1,00 per copy.

14. CREDIT INFORMATION. You hereby authorize the Bank to release information
concerning your credit record and Business Line of Credit performance to other
creditors, credit bureaus, credit reporting agencies, credit reporters,
Guarantors of the Business Line of Credit, or pursuant to an order from a
governmental agency or court. You agree that the Bank may furnish or cause to be
furnished at any time such information or material regarding your financial
condition. You agree that the Bank may share information from your credit
application or credit file with other departments of the Bank, and (to the
extent permitted under fair credit reporting laws and regulations, if
applicable) with its parent, subsidiaries and affiliated companies. You hereby
further authorize the Bank to obtain credit reports, copies of your tax returns
and other information from the Internal Revenue Service and other taxing
authorities, and to take such other steps as Bank deems appropriate to verify
(and from time to time re-verify) the information provided in connection with
this Business Line of Credit. The Bank will retain information received in
relation to this credit request as long as the Bank deems necessary to do so.


                                       11

<PAGE>

15. ASSIGNMENT. You agree that you may not assign the Business Line of Credit or
your rights, nor delegate your duties and obligations, under this Agreement, to
any third party. The Bank may assign the Business Line of Credit or any of its
rights hereunder without your consent or notice to you.

16. TELEPHONE MONITORING. The Bank's supervisory personnel may listen to, or
record telephone calls between you, your employees and agents, and the Bank's
employees for the purpose of monitoring and improving the quality of service you
receive.

17. WAIVER. You agree that the Bank may act, fail to act, or delay any action to
enforce its rights hereunder, and that no such action, inaction, or delay shall
constitute or be interpreted as a waiver of its rights under this Agreement.

18. DISPUTES / JUDICIAL REFERENCE (CALIFORNIA) AND JURY TRIAL WAIVER. To the
extent permitted by law, in connection with any dispute arising in connection
with the Loan, Borrower and Bank waive any right to a trial by jury. In the
event that such waiver is not enforceable, Borrower and Bank agree that any such
dispute shall, at the written request of Borrower or Bank, be determined by
judicial reference pursuant to the state law applicable to this Agreement.
Nothing in this paragraph shall limit the right of Borrower or Bank at any time
to exercise self-help remedies. A referee selected for this purpose shall also
determine all issues relating to the applicability, interpretation and
enforceability of this paragraph. Borrower and Bank acknowledge that if a
referee is selected, then such disputes will not be decided by a jury.

19. AMENDMENT. This Agreement contains all the terms and conditions of the
parties hereto pertaining to the subject matter hereof. The Bank may change the
terms of this Agreement by providing you with 30 days' advance notice of such
change. Otherwise, no amendment, alteration or change in any term of this
Agreement shall be effective unless in writing signed by the parties hereto and
expressly providing for the amendment hereof.

20. CHOICE OF LAW. If your business is located in California, Oregon, or
Washington, this Agreement, and all related documents, will be governed by the
laws of the state of your business location. If your business is located
anywhere else, this Agreement, and all related documents, will be governed by
California law.

21. SEVERABILITY. In the event that any provision of this Agreement is found to
be illegal or unenforceable, the remainder of this Agreement shall remain in
full force and effect.

22. USE OF PROCEEDS. You agree that all Business Line of Credit proceeds will be
used only for business purposes of the borrowing entity signing this Agreement.

BIOMERICA, INC.


/s/ Zackary Irani                            /s/ Janet C. Moore
- -----------------------------------          -----------------------------------
Zackary Irani, Chief Executive Officer       Janet C. Moore, Secretary

                                       12


<PAGE>
UNION BANK OF CALIFORNIA

                                 AUTHORIZATION TO OBTAIN CREDIT, GRANT SECURITY,
                                                        GUARANTEE OR SUBORDINATE


                                    RECITALS


A. BIOMERICA, INC. duly organized and existing under the laws of California with
its principal place of business at 1533 MONROVIA AVENUE, NEWPORT BEACH, CA.
92663 (the "Business") desires to obtain present or future credit from, grant
security to, or give guaranties or subordinations to Union Bank of California,
N.A. ("Bank").

B. The Business desires that certain person(s) be authorized to act on its
behalf from time to time in obtaining, among other things, such credit from,
granting security to, or giving guaranties or subordinations to, Bank.

NOW, THEREFORE, IT IS RESOLVED THAT:

1.    AUTHORIZATION. Any 1 of the following is/are authorized and directed, in
      the name and on behalf of the Business, from time to time, with or without
      security, to obtain credit and other financial accommodations from Bank,
      or to give guaranties or subordinations to Bank, upon such terms as any
      such person(s) shall approve:

      ZACKARY IRANI, CHIEF EXECUTIVE OFFICER           /s/ Zackary Irani
                                                       -------------------------

      JANET C. MOORE, SECRETARY                        /s/ Janet C. Moore
                                                       -------------------------


2.    SCOPE OF AUTHORITY. Without limiting the generality of the authority
      granted, each person designated in paragraph 1 above is authorized, from
      time to time, in the name and on behalf of the Business, to:

      2.1   Incur Indebtedness To Bank. The word "Indebtedness" as used herein
            means all debts, obligations and liabilities, including without
            limitation obligations and liabilities under guaranties or
            subordinations, currently existing or now or hereafter made,
            incurred or created, whether voluntary or involuntary and however
            arising or evidenced, whether direct or acquired by assignment or
            succession, whether due or not due, absolute or contingent,
            liquidated or unliquidated, determined or undetermined, and whether
            liability is individual or joint with others, all renewals,
            extensions and modifications thereof, and all attorneys' fees and
            costs incurred in connection with the negotiation, preparation,
            workout, collection and enforcement thereof;

      2.2   Execute, deliver and endorse with respect to Indebtedness to Bank,
            promissory notes, loan agreements, drafts, guaranties,
            subordinations, applications and agreements for letters of credit,
            acceptance agreements, foreign exchange documentation, applications
            and agreements pertaining to the payment and collection of
            documents, indemnities, waivers, purchase agreements and other
            FINANCIAL undertakings, leases and other documents and agreements in
            connection therewith, and all renewals, extensions or modifications
            thereof;

      2.3   Grant security interests in, pledge, assign, transfer, endorse,
            mortgage or hypothecate, and execute security or pledge agreements,
            financing statements and other security interest perfection
            documentation, mortgages and deeds of trust on, and give trust
            receipts for, any or all property of the Business as may be agreed
            upon by any officer as security for any or all Indebtedness of the
            Business or any other individual or entity ("Person"), and grant and
            execute renewals, extensions or modifications thereof;

      2.4   Sell to, or discount or rediscount with, Bank all negotiable
            instruments, including without limitation promissory notes,
            commercial paper, drafts, accounts, acceptances, leases, chattel
            paper, contracts, documents, instruments or evidences of debt at any
            time owned, held or drawn by the Business, and draw, endorse or
            transfer any of such instruments or documents on behalf of the
            Business, guarantee payment or repurchase thereof, and execute and
            deliver to Bank all documents and agreements in connection
            therewith, and all renewals, extensions or modifications thereof;

      2.5   Direct the disposition of the proceeds of any credit extended by
            Bank, and deliver to Bank and accept from Bank delivery of any
            property of the Business at any time held by Bank.


                                       12

<PAGE>

      2.6   Specify in writing to Bank the individuals who are authorized, in
            the name of and on behalf of the Business, to request advances under
            loans or credit lines made available by Bank to the Business,
            subject to the terms thereof.

3.    WRITINGS. Any instruments, documents, agreements or other writings
      executed under or pursuant to these resolutions (collectively, the
      "Authorization") may be in such form and contain such terms and conditions
      as may be required by Bank in its sole discretion, and execution thereof
      by any officer authorized under the Authorization shall be conclusive
      evidence of such officer's and the Business's approval of the terms and
      conditions thereof.

4.    CERTIFICATION. The Secretary or any Assistant Secretary of the Business is
      hereby authorized and directed from time to time to certify to Bank a copy
      of this Authorization, the names and specimen signatures of persons
      designated in paragraph 1 above, and any modification thereof.

5.    Ratification/Amendment. The authority given under this Authorization shall
      be retroactive and any and all acts so authorized that are performed prior
      to the formal adoption are hereby approved and ratified. In the event two
      or more resolutions of this Business are concurrently in effect, the
      provisions of each shall be cumulative, unless the latest shall
      specifically provide otherwise. The authority given hereby shall remain in
      full force and effect, and Bank is authorized and requested to rely and
      act thereon, until Bank shall have received a certified copy of a further
      resolution of the Business amending, rescinding or revoking the
      Authorization.

6.    REQUESTS FOR CREDIT. Credit may be requested by the Business from Bank in
      writing, by telephone, or by other telecommunication method acceptable to
      Bank. The Business recognizes and agrees that Bank cannot effectively
      determine whether a specific request purportedly made by or on behalf of
      the Business is actually authorized or authentic. As it is in the
      Business's best interest that Bank extend credit in response to these
      forms of request, the Business assumes all risks regarding the validity,
      authenticity and due authorization of any request purporting to be made by
      or on behalf of the Business. The Business is hereby authorized and
      directed to repay any credit that is extended by Bank pursuant to any
      request which Bank in good faith believes to be authorized, or when the
      proceeds of any credit are deposited to the account of the Business with
      Bank, regardless of whether any individual or entity other than the
      Business may have authority to draw against such account.

7.    NO LIMITATION BY THIS AUTHORIZATION. Nothing contained in this
      Authorization shall limit or modify the authority of any person to act on
      behalf of the Business as provided by law, any agreement or authorization
      relating to the Business or otherwise.

                    CERTIFICATE OF SECRETARY OF THE BUSINESS

I hereby certify to Union Bank of California, N.A., ("Bank") that the above
Authorization is true copy of the resolution(s) of BIOMERICA, INC. a corporation
duly organized and existing under the laws of CALIFORNIA (the "Business") duly
adopted by the Board of Directors of the Business and duly entered in the
records of the Business, and that the Authorization is in conformity with
applicable law and regulation, the Articles of Incorporation and the By-Laws of
the Business and is now in full force and effect.

I also certify that the above are the names and genuine specimen signatures of
the officers of the Business authorized in paragraph 1 of the Authorization.

I agree to notify Bank in writing of any aspect of the Authorization or of any
individual holding any office set forth in this certificate immediately upon the
occurrence of any such change, and to provide Bank with a copy of modified
resolution(s) and the genuine specimen signature of any such new officer.

The authority provided for in the Authorization shall remain in full force and
effect, and Bank is authorized and requested to rely and act thereon until Bank
shall receive either a certified copy of a further resolution of this Business's
Board of Directors amending the Authorization, or a certification of a change in
the authorized officer(s).

Date: Feb 20, 2009

    SEAL


/s/ Janet C. Moore
- --------------------------------             [SEAL HERE]
Secretary of BIOMERICA, INC.

/s/ Francis E. Capitano
- --------------------------------
*President of BIOMERICA, INC.

* When the Secretary is among those authorized, the President should also sign
this Certificate.


                                       13

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.1
<SEQUENCE>3
<FILENAME>bio-ex3101.txt
<DESCRIPTION>CERTIFICATION
<TEXT>
<PAGE>

EXHIBIT 31.1

                    CERTIFICATION OF CHIEF EXECUTIVE OFFICER
                                   PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Zackary S. Irani, certify that:

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

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

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

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

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

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

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

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

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

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

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

Date: April 14, 2009

/s/ Zackary S. Irani
- -----------------------
Zackary S. Irani
Chief Executive Officer


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.2
<SEQUENCE>4
<FILENAME>bio-ex3102.txt
<DESCRIPTION>CERTIFICATION
<TEXT>
<PAGE>

EXHIBIT 31.2

                    CERTIFICATION OF CHIEF FINANCIAL OFFICER
                                   PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Janet Moore, certify that:

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

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

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

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

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

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

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

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

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

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

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

Date: April 14, 2009

/s/ Janet Moore
- -----------------------
Janet Moore
Chief Financial Officer



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.1
<SEQUENCE>5
<FILENAME>bio-ex3201.txt
<DESCRIPTION>CERTIFICATION
<TEXT>
<PAGE>

EXHIBIT 32.1

                    CERTIFICATION OF CHIEF EXECUTIVE OFFICER
                                   PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Biomerica, Inc. (the "Company") on
Form 10-Q for the period ending February 28, 2009 as filed with the Securities
and Exchange Commission on the date hereof (the "Report"), I, Zackary Irani,
Chief Executive Officer of the Company, certify, to the best of my knowledge,
Pursuant to Exchange Act Rule 15d-14(b) and 18 U.S.C. Section 1350, as adopted
Pursuant to Section 906 of the Sarbanes Oxley Act of 2002,

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

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


/s/ Zackary S. Irani
- -----------------------
Zackary S. Irani
Chief Executive Officer

Date: April 14, 2009

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.2
<SEQUENCE>6
<FILENAME>bio-ex3202.txt
<DESCRIPTION>CERTIFICATION
<TEXT>
<PAGE>

EXHIBIT 32.2

                    CERTIFICATION OF CHIEF FINANCIAL OFFICER
                                   PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Biomerica, Inc. (the "Company") on
Form 10-Q for the period ending February 28, 2009 as filed with the Securities
and Exchange Commission on the date hereof (the "Report"), I, Janet Moore, Chief
Financial Officer of the Company, certify, to the best of my knowledge, Pursuant
to Exchange Act Rule 15d-14(b) and 18 U.S.C. Section 1350, as adopted Pursuant
to Section 906 of the Sarbanes Oxley Act of 2002,

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

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


/s/ Janet Moore
- -----------------------
Janet Moore
Chief Financial Officer

Date: April 14, 2009



</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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