XML 35 R15.htm IDEA: XBRL DOCUMENT
v3.23.2

COMMITMENTS AND CONTINGENCIES | 12 Months Ended
--- | ---
May 31, 2023
Commitments and Contingencies Disclosure [Abstract] |
COMMITMENTS AND CONTINGENCIES | NOTE 9: COMMITMENTS AND CONTINGENCIES OPERATING LEASES The Company leases facilities in Irvine, California and Mexicali, Mexico. As of May 31, 2023, the Company had approximately 22,000 square feet of floor space at its corporate headquarters at 17571 Von Karman Avenue in Irvine, California. The lease for its headquarters expires in August 2026. The Company has the option to extend the lease for an additional five-year term. The Company made a security deposit of approximately $22,000. In November 2016, the Company’s Mexican subsidiary, Biomerica de Mexico, entered into a 10-year lease for approximately 8,100 square feet of manufacturing space. The Company has one 10-year option to renew at the end of the initial lease period. Biomerica de Mexico also leases a smaller unit on a month-to-month basis for use in the Company’s manufacturing process. In addition, the Company leases a small office in Lindau, Germany on a month-to-month basis, as headquarters for BioEurope GmbH, its Germany subsidiary. For purposes of determining straight-line rent expense, the lease term is calculated from the date the Company first takes possession of the facility, including any periods of free rent and any renewal options periods that the Company is reasonably certain of exercising. The Company’s office and equipment leases generally have contractually specified minimum rent and annual rent increases are included in the measurement of the right-of-use asset and related lease liabilities. Additionally, under these lease arrangements, the Company may be required to pay directly, or reimburse the lessors, for some maintenance and operating costs. Such amounts are generally variable and therefore not included in the measurement of the right-of-use asset and related lease liabilities but are instead recognized as variable lease expense in the consolidated statements of operations and comprehensive loss when they are incurred. The following table presents information on our operating leases for the years ended May 31, 2023 and 2022: SCHEDULE OF OPERATING LEASES
|  | 2023 |  |  | 2022 |
|  | Year Ended May 31, |
|  | 2023 |  |  | 2022 |
Operating lease cost |  | $ | 353,000 |  |  | $ | 352,000 |
Short-term lease cost |  |  | 5,000 |  |  |  | 5,000 |
Total lease cost |  | $ | 358,000 |  |  | $ | 357,000 |
The future minimum lease payments of the Company’s operating lease liabilities by fiscal year are as follows: SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS
Year Ending May 31: |  |  |
|  | Operating Leases |
2024 |  | $ | 356,000 |
2025 |  |  | 366,000 |
2026 |  |  | 376,000 |
2027 |  |  | 101,000 |
Thereafter |  |  | - |
Total minimum future lease payments |  | $ | 1,199,000 |
Less: imputed interest |  |  | 117,000 |
Total operating lease liabilities |  | $ | 1,082,000 |
The following table summarizes the Company’s other supplemental lease information for the years ended May 31, 2023 and 2022: SCHEDULE OF OTHER SUPPLEMENTAL LEASE INFORMATION
|  | 2023 |  |  | 2022 |
|  | Year Ended May 31, |
|  | 2023 |  |  | 2022 |
Cash paid for operating lease liabilities |  | $ | 347,000 |  |  | $ | 338,000 |
Weighted-average remaining lease term (years) |  |  | 3.27 |  |  |  | 4.28 |
Weighted-average discount rate |  |  | 6.50% |  |  |  | 6.50% |
The Company also has various insignificant leases for office equipment. RETIREMENT SAVINGS PLAN Effective September 1, 1986, the Company established a 401(k) plan for the benefit of its employees. The plan permits eligible employees to contribute to the plan up to the maximum percentage of total annual compensation allowable under the limits of IRC Sections 415, 401(k) and 404. The Company, at the discretion of its Board of Directors, may make contributions to the plan in amounts determined by the Board each year. No contributions by the Company have been made since the plan’s inception. LITIGATION The Company is, from time to time, involved in legal proceedings, claims, and litigation arising in the ordinary course of business. While the amounts claimed may be substantial, the ultimate liability cannot presently be determined because of considerable uncertainties that exist. Therefore, it is possible the outcome of such legal proceedings, claims, and litigation could have a material effect on quarterly or annual operating results or cash flows when resolved in a future period. However, based on facts currently available, management believes such matters will not have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows. There were no legal proceedings pending as of May 31, 2023. CONTRACTS Contracts and Licensing Agreements The Company has one royalty agreement in which it has obtained rights to manufacture and market certain products for the life of the products. Royalty expense of approximately $13,000 and $19,000 is included in cost of sales for the agreement for each of the years ended May 31, 2023 and 2022, respectively. Sales of products manufactured under these agreements comprise approximately 2.1% and 1.5% of total sales for the years ended May 31, 2023 and 2022, respectively. The Company may license other products or technology in the future as it deems necessary for conducting business. The Company has other royalty agreements however they are not considered material. Clinical Trial Agreements 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 initial budget was estimated to be approximately $82,000. The work started in October 2017 with charges for work performed being invoiced and paid monthly. This study ended in February 2020. Approximately $17,000 in fees has been accrued for unbilled charges as of May 31, 2022. There are no unbilled charges as of May 31, 2023. The Company entered into a Clinical Trial Agreement with a research institute for the purpose of conducting a clinical trial of the Biomerica InFoods® product. The term of the agreement shall be until completion of the work outlined and the charges will be invoiced monthly for work performed in the previous month. The maximum budgeted costs will be approximately $107,000. This study ended in March 2022. Approximately $28,000 in fees has been accrued for unbilled charges as of May 31, 2022. There are no unbilled charges as of May 31, 2023.

X
- References No definition available. + Details
Name: | us-gaap_CommitmentsAndContingenciesDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for commitments and contingencies. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 440 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 4 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482648/440-10-50-4 Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 450 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//450/tableOfContent Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 954 -SubTopic 440 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480327/954-440-50-1 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 440 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 4 -Subparagraph (c) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482648/440-10-50-4 Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 440 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//440/tableOfContent + Details
Name: | us-gaap_CommitmentsAndContingenciesDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration