XML 21 R10.htm IDEA: XBRL DOCUMENT v3.8.0.1
Commitments and Contingencies
9 Months Ended
Feb. 28, 2018
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies Disclosure [Text Block]

Note 5: Commitments and Contingencies


     On June 18, 2009, the Company entered into an agreement to lease a building in Irvine, California. The lease commenced September 1, 2009 and ended August 31, 2016.  The initial base rent was set at $18,490 per month with scheduled annual increases through the end of the lease term the rent was $22,080.In November 2015, the Company entered into a First Amendment to Lease whereby the lease for the above referenced property is extended until August 31, 2021.  The initial rent for the period of the extension commencing September 1, 2016 was set at $21,000 per month with scheduled annual increases through the end of the lease term. September 1, 2017 the rent increased to $21,849 per month.


     In November 2016, the Company’s subsidiary, Biomerica de Mexico, entered into a ten year lease for approximately 8,100 square feet at a monthly rent of $2,926.  On November 1, 2017 the monthly rent increased to $3,017. The yearly rate is subject to an annual adjustment for inflation according to the United States Bureau of Labor Statistics Consumer Price Index For All Urban Consumers.  Biomerica, Inc. is not a guarantor of such lease.


     In September 2017, the Company signed a Clinical Samples Agreement with the University of Southern California for the purpose of providing clinical samples for use by the Company in conducting future clinical trials for one of the products which the Company is developing. The work started in October 2017 with charges for work performed being invoiced and paid monthly. In November, 2017, Biomerica announced the enrollment of its first patient at the University of Southern California for the Company's Helicobacter Pylori test.


     On November 1, 2017 the Company signed a Clinical Trial Agreement with the University of Michigan to perform clinical trials using its InFoods IBS Foods Test on patients with diagnosed Irritable Bowel Syndrome. The initial start-up costs for this agreement were $12,500. Costs for the clinical trials as patients are enrolled and the trials are conducted are to be paid for work performed on a monthly basis.


     On November 7, 2017, Biomerica announced that it has extended its exclusive license agreement with Celtis Pharm Co. Ltd of South Korea.  Celtis has changed its name to Telcon Pharmaceuticals (“Telcon”).   The License Agreement grants Telcon an exclusive license to market and sell Biomerica’s InFoods® IBS (Irritable Bowel Syndrome) products in Korea for five years. The amended agreement may be cancelled if Biomerica has not obtained final clearance for sale of the Products in the United States from the United States FDA on or before December 31, 2019.


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


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


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


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


        During the quarter ended February 28, 2018 the Company sold 86,631 shares of common stock under the S-3 registration statement and received gross proceeds of approximately $390,000, with net proceeds totaling approximately $318,000, of which approximately $286,000 in cash was received by February 28, 2018 and approximately $32,000 was received in March 2018. Deducted from the gross proceeds were one-time legal, accounting and regulatory expenses related to this registration statement of approximately $60,000 as well as broker fees of approximately $12,000. 


       On January 8, 2018, Biomerica announced that the Company signed definitive agreements with two leading research institutes to perform the clinical trials needed to validate the performance of its InFoods® product to alleviate Irritable Bowel Syndrome (IBS) symptoms. The clinical studies will be conducted at Beth Israel Deaconess Medical Center Inc., a Harvard Medical School Teaching Hospital, and the University of Michigan. The agreement with Beth Israel Deaconess Medical Center has one-time start-up costs of $17,000. Costs for the clinical trials as patients are enrolled and the trials are conducted are to be paid for work performed on a monthly basis.