BMRA US Equity☆

ITEM 1A. RISK FACTORS 9

ITEM 1B. UNRESOLVED STAFF COMMENTS 18

ITEM 1C. CYBERSECURITY 18

ITEM 2. PROPERTIES 19

ITEM 3. LEGAL PROCEEDINGS 19

ITEM 4. MINE SAFETY DISCLOSURES 19

PART II

ITEM 6. RESERVED 20

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 26

ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 26

INDEX TO FINANCIAL STATEMENTS 26

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FS-2

ITEM 9A. CONTROLS AND PROCEDURES 27

ITEM 9B. OTHER INFORMATION 28

ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS 28

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE 28

ITEM 11. EXECUTIVE COMPENSATION 28

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES 28

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES 28

SIGNATURES 30

ii

PART

I

ITEM

1. BUSINESS

BUSINESS

OVERVIEW

THE

COMPANY

We

are a global biomedical technology company that develops, patents, manufactures and markets advanced diagnostic and therapeutic products.

Our diagnostic test kits are used to analyze blood, urine, nasal, or fecal material from patients in the diagnosis of various diseases,

food intolerances, and other medical complications. They can also be used to measure or detect the presence and levels of specific bacteria,

hormones, antibodies, antigens and other substances, which may exist in the human body in extremely small concentrations. Our products

are designed to enhance the health and well-being of people, while reducing total healthcare cost.

Our

extensive range of medical diagnostic products is sold worldwide, primarily in two markets: clinical laboratories and point-of-care

settings. Most of our products are Conformite Europeenne (“CE”) marked and/or registered with regulatory agencies in various

countries for diagnostic use, with several also cleared by the U.S. Food and Drug Administration (“FDA”) for sale in the

United States.

TECHNOLOGICAL

ADVANCEMENTS AND PRODUCT DEVELOPMENT

Technological

advances in medical diagnostics have enabled diagnostic tests to be performed not only in clinical laboratories but also at home and

at the point-of-care in physicians’ offices. One of our key objectives has been to develop and market rapid diagnostic tests that

are accurate, utilize easily obtained patient specimens, and are simple to perform without the need for complex instrumentation. Our

home use (over-the-counter) and professional use (physicians’ office, clinics, etc.) rapid diagnostic test products help manage

existing medical conditions and may save lives through early detection and diagnosis of specific diseases. Traditionally, such tests

required the expertise of medical technologists and sophisticated equipment, with results often not available for days. We believe our

rapid point-of-care tests, when properly used, can be as accurate as laboratory tests. Our products require limited to no instrumentation,

deliver reliable results in minutes, and can be performed with confidence at home or in a physician’s office.

RESEARCH

AND DEVELOPMENT

We

invest resources in the research and development of new products designed to diagnose and, in some cases, treat several major medical

diseases. These products are either internally developed or licensed from others. Our experienced and highly trained technical personnel,

including Ph.D. holders and other scientists, are dedicated to developing new products and managing technology transfer activities. Our

technical staff, many of whom, have extensive experience from previous employment at large diagnostic manufacturing companies, bring

a wealth of industry knowledge. Additionally, we rely on our Scientific Advisory Board, comprised of leading medical doctors and clinicians,

to guide our clinical studies and product development efforts.

For

the fiscal years ended May 31, 2025 and 2024, consolidated research and development expenses totaled approximately $1,023,000 and $1,491,000,

respectively. The decrease reflects our transition from intensive product development to the commercialization phase of inFoods®

IBS and hp+detectTM, as well as our broader efforts to manage costs and preserve cash.

Beyond

IBS, we are pursuing additional applications for the inFoods® technology for other disease states, including Functional Dyspepsia,

Crohn’s Disease, Ulcerative Colitis, Gastroesophageal Reflux Disease (“GERD”), Migraine Headaches, Depression, and

Osteoarthritis. We have filed patents globally to protect the use of inFoods® diagnostic technology for these indications, with patents

issued in the United States and multiple foreign jurisdictions, and others in review or prosecution.

Our

research and development efforts have also led to the FDA 510(k) clearance of hp+detectTM, a proprietary diagnostic test for detecting

Helicobacter pylori (H. pylori) and monitoring treatment. H. pylori is a leading cause of peptic ulcers and a significant risk factor

for gastric cancer. While commercialization activities for hp+detectTM are at an early stage, we continue to position the product

as a reliable diagnostic option for laboratories and physicians.

KEY

PRODUCT LAUNCHES

A

key outcome from our research and development efforts is our patented diagnostic-guided therapy (“DGT”) product, developed

on the inFoods® technology platform. This innovative technology is designed to aid in the management of gastrointestinal conditions

such as irritable bowel syndrome (“IBS”) and other inflammatory diseases. The DGT product targets chronic inflammatory illnesses

that are widespread and prevalent in large markets. We have launched inFoods® IBS product, which leverages this pateneted technology.

The inFoods® IBS product utilizes a simple blood test to identify patient-specific foods that, when eliminated from the diet, may

help reduce IBS symptoms such as pain, bloating, diarrhea, cramping, and constipation. Unlike broad and difficult to manage dietary restrictions,

the inFoods® IBS product pinpoints a patient’s heightened immunoreactivity to specific foods known to frequently trigger IBS

symptoms. By removing the foods identified as problematic, patients can achieve relief from IBS symptoms.

We

have introduced our inFoods® product to gastroenterology (“GI”) physician groups in multiple states and regions,

including collaboration with one of the largest GI groups in the U.S. The initial phase was focused on gathering real world

feedback, optimizing physician engagement, and validating operational processes. GI physician feedback has been generally positive,

and we are continuing to expand our presence in the GI segment while exploring opportunities to bring the inFoods® technology to

other medical specialties. The outcome of our clinical study was published in the June 2025 issue of Gastroenteroloy. We are also

assessing distribution, partnership, and licensing opportunities with large U.S. distributors to support broader

availability and sale/marketing. We are actively pursuing insurance reimbursement for the InFoods IBS product in conjunction with

our CLIA laboratory partner.

As

we continue pursue commercial opportunities in both U.S. and international markets, we remain attentive to evolving global economic conditions,

including uncertainties related to international trade policies, tariffs, and supply chain dynamics. Although these factors have not

had a material impact on our operations to date, future changes in trade regulations, tariff structures, or logistical constraints could

influence the cost, availability, or timing of materials and components used in our manufacturing processes. We continue to monitor these

developments closely and are actively implementing contingency plans, including alternative sourcing strategies and supplier diversification,

to support supply chain continuity, maintain operational efficiency, and help mitigate potential future impacts. We are also focusing

on alternative manufacturing and shipping strategies of our products through our European subsidiary (BioEurope), and our Mexican subsidiary

(BioMexico), to mitigate some of the risk these policies may have on our revenues and operations.

In

addition, in December 2023 we received FDA clearance for hp+detectTM, a diagnostic test designed to detect Helicobacter pylori (H.

pylori) bacteria in the gastrointestinal tract. H. pylori is a prevalent infection, affecting approximately 35% of the U.S. population

and 45% of the population in Europe’s largest countries. This bacterium is recognized as the strongest known risk factor for gastric

cancer, which remains one of the leading causes of cancer-related deaths globally. The hp+detectTM test is marketed directly to

laboratories and is intended to provide physicians and medical centers with a reliable tool for diagnosing H. pylori infections and monitoring

treatment effectiveness. We are currently in

discussions with large end-customer laboratories for our hp+detectTM to position it for commercial adoption.

STRATEGIC

INITIATIVES AND COST MANAGEMENT

As

part of our ongoing commitment to operational efficiency and disciplined capital management, we have taken proactive steps to optimize

our cost structure and extend our cash runway. These actions, which include a workforce reduction of approximately 15% during this fiscal

year, which incurred costs such as severance, impacting typical cost trends and margins. Additionally, we raised $2,015,000 in net proceeds

from the ATM offering filed in May 2024,

providing additional liquidity to support our operations. We are actively exploring strategic opportunities to enhance and create shareholder

value.

OPERATIONS

AND GLOBAL PRESENCE

Biomerica

is headquartered in Irvine, California, where it centralizes administration, finance, regulatory compliance, product development, sales,

marketing, customer service, and primary manufacturing operations. To enhance global competitiveness, the Company maintains manufacturing

and assembly operations in Mexicali, Mexico, aiming to reduce production costs. Additionally, Biomerica operates BioEurope GmbH in Europe,

facilitating the international sales of specific products.

Additional

information about Biomerica is available on our website at www.biomerica.com. The content on any website referred to in this Form 10-K

is not a part of or incorporated by reference in this Form 10-K unless expressly noted. Our Annual Report on Form 10-K, Quarterly Reports

on Forms 10-Q, Current Reports on Forms 8-K, Proxy Statements and all other filings we make with the Securities and Exchange Commission

(“SEC”) are available on our website, free of charge, as soon as reasonably practical after we file them with or furnish

them to the SEC and are also available online at the SEC’s website at www.sec.gov.

PRODUCTION

Our

diagnostic test kits are manufactured and/or assembled at our facilities in Irvine, California, and in Mexicali, Mexico. We established

our manufacturing facility in Mexicali, Mexico, in fiscal 2003 and moved a significant portion of our diagnostic packaging and assembly

to that facility.

Production

of diagnostic tests can involve formulating component antibodies and antigens in specified concentrations, attaching a tracer to the

antigen, filling components into vials, packaging and labeling. We continually engage in quality control procedures to assure the consistency

and quality of our products and to comply with applicable FDA and international regulations.

Our

manufacturing operations and facilities are regulated by the FDA Current Good Manufacturing Practices for medical devices. We have an

internal quality department that monitors and evaluates product quality and output. We also have an internal Quality Systems department

whose goal is to ensure that our operating procedures are in compliance with current FDA, CE Mark and International Organization for

Standardization (“ISO”) regulations. We either produce our own antibodies and antigens or purchase these materials from qualified

vendors. We have alternate, approved sources for most critical raw materials and are working to procure alternate sources for the few

that we do not have.

MARKETS

AND METHODS OF DISTRIBUTION

Biomerica

has approximately 76 current customers for its diagnostic business, of which approximately 34 are foreign distributors, 4 are domestic

distributors and the balance are primarily domestic hospital and clinical laboratories, medical research institutions, medical schools,

pharmaceutical companies, chain drugstores, wholesalers, physicians’ offices, and e-commerce customers.

We

employ a director of sales and marketing for Europe and South America who is headquartered in Germany. She has over 20 years of experience

selling and marketing diagnostic and life science products across multiple diagnostics technologies and disciplines. She possesses broad

international business experience, with communication skills in German, English, Spanish, French, and Portuguese, and scientific and

technical understanding of gastrointestinal diagnostic products. She also has strong relationships with key strategic entities in Europe,

Eastern Europe, Latin America, Canada, and the United States and we expect that she will continue to help us add new distributors

for existing products and add new product-lines for future distribution by us.

We

rely on distributors, advertising in medical and trade journals, exhibitions at trade shows, direct mailings,

and an internal sales staff to market our diagnostic products. We target two main markets: (a) clinical laboratories and (b) point-of-care

testing (physicians’ offices and over-the-counter drug stores).

Our

net sales were approximately $5,311,000 for fiscal year ended May 31, 2025, compared to $5,415,000 for fiscal year ended May 31,

2024. For the fiscal years ended May 31, 2025, and 2024, the Company had one distributor each year that accounted for 31%

and 33% of our net sales, respectively.

Total

gross receivables were approximately $757,000 and $966,000 as of May 31, 2025 and 2024, respectively. As of those dates, four distributors

accounted for approximately 69% and 64% of gross accounts receivable, respectively. Of the 69% concentration as of May 31, 2025, 27%

was attributable to a distributor located in North America.

BACKLOG

As

of May 31, 2025, and 2024, Biomerica’s backlog of unshipped orders was approximately $1,324,000 and $755,000, respectively. As

of May 31, 2025, the majority of this backlog consisted of orders intended for shipment to Asia.

RAW

MATERIALS

Biomerica

utilizes a range of principal raw materials including chemicals, serums, reagents, and packaging supplies. The majority of these materials

are sourced from multiple suppliers, ensuring we are not reliant on any single source. However, for certain critical materials such as

antibodies, where suppliers are limited, there exists a risk of potential supply challenges or increased costs in the future.

Our

inventory includes antibodies, antigens, bottles, boxes, chemicals, and reagents essential for manufacturing our test kits, along with

products in various stages of completion.

For

the fiscal year ended May 31, 2025, purchases from one vendor accounted for approximately 12% of our total raw material procurement,

primarily related to commodity plastic products. For the fiscal year ended May 31, 2024, purchases from one vendor accounted for approximately

16% of our total raw material procurement, also primarily related to commodity plastic products.

COMPETITION

We

offer several proprietary products with notable competitive advantages, including our EZ Detect colon disease home test, Aware Breast

Self-Exam product, inFoods® IBS product, and hp+detectTM for H. pylori detection. These products stand

out due to their unique features and benefits compared to competing tests in the market.

Our

competitors vary greatly in size. Many are divisions or subsidiaries of well-established medical and pharmaceutical companies which are

much larger than Biomerica and expend substantially greater amounts than we do for research and development, manufacturing, advertising,

and marketing.

The

competitive landscape for diagnostic products is shaped by several factors, including product uniqueness, technology, quality, performance,

pricing, and service. Our competitive edge is grounded in the distinctiveness of our offerings, the high quality of our products, and

their rapid test results. Our strong patent portfolio further bolsters our market position despite our limited marketing capabilities.

GOVERNMENT

REGULATION OF OUR DIAGNOSTIC BUSINESS

Our

primary business consists of selling products that are generally legally defined as medical devices and in vitro diagnostic medical devices.

As a result, we are a medical devices and in vitro diagnostic medical devices manufacturer, and as such, we are subject to the regulations

issued and enforced by of numerous governmental entities. These agencies include the FDA, Environmental Protection Agency, Federal Trade

Commission, Occupational Safety and Health Administration, U.S. Department of Agriculture (“USDA”), and Consumer Product

Safety Commission, as well as certain European Government agencies. Our activities are also regulated by various agencies of the states

and localities in which our products are sold. These regulations govern the introduction of new in vitro diagnostic medical devices and

other medical devices, the observance of certain standards with respect to the manufacture and labeling of medical devices, the maintenance

of certain records, the reporting of potential product problems, and other related matters.

The

Food, Drug & Cosmetic Act of 1938 (the “FDCA”) regulates medical devices in the United States by classifying them into

one of three classes based on the extent of regulation believed necessary to ensure safety and effectiveness. Class I devices are those

devices for which safety and effectiveness can reasonably be assured through general controls, such as device listing, adequate labeling,

and adherence to the Quality Management System Regulation (“QMSR”) as well as Medical Device Reporting (“MDR”),

labeling and other regulatory requirements. Some Class I medical devices are exempt from the requirement of Pre-Market Notification or

clearance. Class II devices are those devices for which safety and effectiveness can reasonably be ensured through using special controls,

such as performance standards, post-market surveillance and patient registries, as well as adherence to the general controls’ provisions

applicable to Class I devices. Class III devices are devices that generally must receive clearance by the FDA pursuant to a pre-market

approval prior to marketing to ensure their safety and effectiveness. Generally, Class III devices are limited to life-sustaining, life-supporting,

or implantable devices. However, this classification can also apply to novel technology or new intended uses or applications for existing

devices. Our products are primarily either Class I or Class II medical devices.

Pursuant

to FDA requirements, we have registered our manufacturing facility with the FDA as a medical device manufacturer and listed the medical

devices we manufacture. We are also subject to inspection on a routine basis for compliance with FDA regulations. This includes the Quality

System Regulation (“QSR”), which requires that we manufacture our products and maintain our documents in a prescribed manner

with respect to issues such as design controls, manufacturing, testing, and validation activities. Further, we are required to comply

with other FDA requirements with respect to labeling and MDR regulations which requires that we provide information to the FDA on deaths

or serious injuries alleged to have been associated with the use of our products, as well as any product malfunctions that are likely

to cause or contribute to death or serious injury if the malfunction were to recur. We believe that we are currently in material compliance

with all relevant QSR and MDR requirements.

In

addition, our facility is required to have a California Medical Device Manufacturing License. The license is not transferable and must

be renewed biannually. Our current license is valid until November 19, 2026. Through compliance with FDA and California regulations,

we can market some of our medical devices throughout the United States. International sales of medical devices are also subject to the

regulatory requirements of each country where the product is sold. In Europe, the directives of the European Union (“EU”)

require that a device has a CE Mark in order to be sold in EU countries. We comply with In Vitro Diagnostic Medical Devices Directive

(“IVDD”) 98/79/EC, Medical Devices Regulation (EU) 2017/745 MDR and In Vitro Diagnostic Medical Devices Regulation (EU) 2017/746)

(“IVDR”). We also comply with ISO 13485:2016 Medical Devices Quality Management Systems – Requirements for Regulatory

Purposes and EN ISO 14971:2019.

At

present, outside of the EU, the international regulatory review process varies from country to country. We work with our distributors

and sales representatives in the foreign countries in which we market our products to ensure that we comply with the regulatory laws

of those countries. We believe that our international sales to date have been in compliance with the laws of all foreign countries in

which we have made sales. Exports of most medical devices are also subject to certain FDA regulatory controls.

The

designing, development, manufacturing, marketing, post-market surveillance, distribution, advertising, and labeling of our immunoassay

in vitro diagnostic (“IVD”) medical device products are subject to regulation in the United States by the Center for Devices

and Radiological Health of the FDA and state agencies. FDA regulations require that some new products have pre-marketing clearance or

approval by the FDA and require these products to be manufactured in accordance with the FDA’s current Good Manufacturing Practice

(“cGMP”) regulations, to be extensively tested and to be properly labeled to disclose test results and performance claims

and limitations. After a product that is subject to FDA regulation is placed on the market, numerous regulatory requirements apply, including,

for example, the requirement that we comply with recordkeeping and reporting requirements, such as the FDA’s medical device reporting

regulations and reporting of corrections and removals. The FDA enforces these requirements by inspection and post-market surveillance.

The last FDA-announced inspection was in May 2024 and no observations were noted. We believe that all our products sold in the United

States comply with the FDA and applicable state regulations.

We

are an FDA-regulated and ISO 13485:2016-certified In Vitro Diagnostic Medical Devices company. Our goal is to provide high quality medical

diagnostic products that generally meet or exceed customer requirements and comply with all applicable regulatory requirements: FDA 21

CFR Part 820 Quality Management System, ISO 13485:2016, Medical Devices Quality Management Systems – Requirements for Regulatory

Purposes, In Vitro Diagnostic Medical Devices Directive 98/79/EC, Medical Device Regulation (EU) 2017/745 and In Vitro Diagnostic Medical

Devices Regulation (EU) 2017/746) IVDR, Guidelines related to Medical Devices Directive/Regulation Guidance on CE Marking, among others.

We involve our employees in a continuous improvement process to increase productivity, improve quality and maintain the suitability,

adequacy, and effectiveness of our quality management system.

The

EU In Vitro Diagnostic Medical Device Regulation (“IVDR”EU) 2017/746 was effective on May 26, 2022.

Manufacturers need to update their technical documentation and processes to meet the more stringent regulatory requirements of the European

Union. Notified Bodies can begin certifying devices to the new IVDR requirements once they have been designated under IVDR by their Competent

Authority. Our Notified Body is officially designated under the IVDR and listed in the European Commission NANDO database since August

19, 2021. We are working closely with our Notified Body to update our technical documentation to comply with these more stringent IVDR

requirements.

Per

IVDR 2017/746 Amendment Regulation (EU) 2022/112, and published proposal 2024/0021 (COD), devices with a CE certificate that was issued

in accordance with IVDD may be placed on the market or put into service until December 31, 2027, providing a formal application to the

notified body has been made by May 26, 2025.

In

accordance with the regulation, we submitted a formal application to the notified body by May 26, 2025.

Per

IVDR 2017/746 Amendment Regulation (EU) 2022/112, and published proposal 2024/0021 (COD), devices without a CE certificate that was issued

in accordance with IVDD, for which a declaration of conformity was drawn up prior to May 26, 2022, per IVDD and for which the conformity

assessment procedure pursuant to IVDR requires the involvement of a Notified Body, may be placed on the market, or put into service until

the following dates. We also have until the following dates to update the technical documentation and processes to meet these regulatory

requirements of IVDR 2017/746 providing a formal application to the notified body has been made:

SEASONALITY

OF BUSINESS

Our

business has not been subject to significant seasonal fluctuations.

INTERNATIONAL

BUSINESS

The

following table sets forth the dollar volume of revenue attributable to sales to domestic customers and foreign customers during our

last two fiscal years:

For the Year Ended May 31,

Our

international operations face distinct risks that differ from those encountered in the United States. These risks include economic fluctuations,

regulatory changes, geopolitical instability (such as terrorism and trade disputes), tariffs, embargoes, import/export restrictions,

and potential disruptions in shipping and distribution channels. Such factors can significantly impact our foreign sales and may complicate

our ability to collect accounts receivable in international markets during economic downturns.

Each

country has its own licensing requirements for diagnostic products, which can differ considerably from U.S. regulations and may change

unexpectedly. Currently, our international sales rely on approximately 38 independent distributors across around 30 countries. These

diverse factors contribute to the complexities and uncertainties associated with our international business operations.

INTELLECTUAL

PROPERTY

We

consider the protection of our methodologies, designs, product formulations, manufacturing processes, diagnostic procedures, copyrights,

service marks, trademarks, and trade secrets essential for our future success. To safeguard our proprietary rights in products and services,

we utilize copyright, trademark, patent, service mark, and trade secret laws, alongside contractual restrictions. Our efforts include

confidentiality and invention assignment agreements with employees and contractors, as well as nondisclosure agreements with most fulfilment

and strategic partners to restrict access to and disclosure of proprietary information. However, these measures may not entirely prevent

unauthorized use or disclosure of our technology.

In

the past, we have licensed and may continue to license certain proprietary rights, such as trademarks, patents, trade secrets, or copyrighted

material, to third parties. While we strive to maintain the quality of our product brands through these license agreements, we cannot

guarantee that licensees will always act in a manner that preserves the value of our proprietary rights or reputation.

LICENSE

OF THIRD-PARTY INTELLECTUAL PROPERTY

On

occasion, we in-licensed both exclusive and non-exclusive rights to intellectual property and patents owned by third parties. These license

agreements typically require royalties and other payments.

We

have a royalty agreement in which we obtained rights to manufacture and market an Adrenocorticotropic Hormone test (“ACTH test”) (used to detect chronic metabolic conditions).

Royalty expenses of approximately $7,000 and $10,000, respectively, are included in cost of sales for this agreement for the fiscal years

ended May 31, 2025 and 2024. Sales of products manufactured under this agreement are not material to total sales for the fiscal years

ended May 31, 2025 and 2024, respectively. We may license other products or technology in the future as it is deemed necessary or opportunistic

for conducting business.

Some

of the products that we manufacture, sell, or use may be covered by claims in issued patents held by other persons or entities, and as

such, upon notice from such persons or entity we may be required to pay a license fee or may be required to cease all manufacture, sale

or use of such products, which could negatively impact us. While we have not been notified of any such claims by third parties, we cannot

guarantee that such claims will not be made in the future.

BRANDS

AND TRADEMARKS

We

occasionally register our tradenames with the United States Patent and Trademark Office (“USPTO”). Of note, we registered

the tradename “InFoods” on December 24, 2016. Our unregistered tradenames are “EZ Detect,” “EZ-H.P.,”

and “EZ-PSA”. A trademark for “Aware” was issued and assigned in 2001, renewed in 2011 and 2021. On January 11,

2020, the USPTO renewed our “FORTEL” trademark for another ten years.

The

laws of some foreign countries do not protect our proprietary rights to the same extent as do the laws of the United States. Effective

copyright, trademark, and trade secret protection may not be available in such jurisdictions.

PATENTS

AND INFOODS TECHNOLOGY

We

have filed dozens of international and Patent Corporation Treaty patents (“PCT”) and have multiple provisional and non-provisional

patents currently filed with the USPTO. Substantially 15 of our patents that are pending or registered pertain to the inFoods®

technology platform.

Our

most important family of patent applications pertains to our inFoods® technology platform, which is a method of diagnosing

and treating symptoms of many different inflammatory diseases. Our first product launch using this technology is the inFoods®

IBS product which is designed to diagnose and treat IBS. Using a patient blood sample, a physician or lab can run our test to identify

specific foods (e.g., pork, milk, onions, sugar, chickpeas) that, if eliminated from an IBS patient’s diet, can alleviate or reduce

the individual’s IBS symptoms, including, but not limited to, constipation, diarrhea, bloating, cramping, severe pain, and indigestion.

We have filed many patent applications with the USPTO and with other such similar agencies in other countries outside of the United States

pertaining to this inFoods® technology. These patent applications include claims that address the diagnosis and treatment

of several disease states including IBS, functional dyspepsia, Crohn’s disease, ulcerative colitis, gastroesophageal reflux disease,

osteoarthritis, psoriasis, migraine headaches, and depression. The first inFoods® patents filed by us pertained to IBS.

Several of these patents pertaining to the inFoods® IBS technology have been issued and many more are in active review

and prosecution.

In

August 2018, we received our first patent pertaining to the inFoods® technology platform from the Korean Intellectual

Property Office, covering IBS. Since then, we have been granted a total of 15 patents. The USPTO has issued the Company two patents

with broad claims that protect our inFoods® technology in testing and treating patients with IBS. Patents have also

been issued in the countries of Australia, Canada, Japan (two patents), Korea (two patents), Mexico, Panama, Peru, and Singapore,

covering our inFoods® IBS technology. Additional patent applications pertaining to the inFoods® IBS

product are in prosecution and review at the USPTO and with the patent issuance authorities in other countries.

We

are also developing and have filed patents with claims that cover products that target other diseases utilizing the inFoods®

technology platform. We have dozens of patents that are issued, in prosecution or review, pertaining to these other diseases, including:

Functional Dyspepsia, Crohn’s disease, Ulcerative Colitis, GERD, Migraine Headaches, Depression, and Osteoarthritis. In addition,

we have a family of patents that cover the use of certain information technology (“IT”) platforms and artificial intelligence/machine

learning (“AI/ML”) tools that could assist patients in identifying and avoiding packaged or processed food that contain specific

foods that they are trying to eliminate from their diet.

In

addition to our inFoods IBS related issued patents, we have also been issued inFoods® technology patents pertaining to

the following diseases in the following jurisdictions:

● Crohn’s Disease: Mexico, EP, United Kingdom (UK), UP

● GERD Disease: Australia, EP, UP, UK

● Migraine Disease: Japan, EP

● Osteoarthritis Disease: Mexico, Japan

● Psoriasis Disease: AU, EP, UK, UP

● Psychological depression: US, EP, Japan, Mexico, UK, UP

● Ulcerative Colitis: EP, Japan, UK, UP

● IT based food monitoring and elimination technology: Japan

We

believe the claims in these issued inFoods® IBS patents and claims in our pending patents that protect the use of the

inFoods® technology to diagnose and treat various other diseases, provide us with broad protections from other companies

making or selling competing products in this highly disruptive new field of medicine.

In

addition to the use of our own patents, we have been granted from third parties the rights to use, manufacture and sell certain products

that are protected by patents or other intellectual property owned by these third parties. In some cases, royalties are paid on the sales

of these products. We anticipate that we will license or purchase the rights to other products or technologies in the future.

We

also engage in contract research and development and contract manufacturing for third party companies. The technologies that relate to

this contract research and development and manufacturing are protected by patents and other intellectual property. In these situations,

this intellectual property is typically licensed to us under a limited license agreement enabling us to perform the services being contracted.

With

the launch of inFoods® IBS, our business model for this product includes the potential out-licensing of the product and

related patents to a large international life sciences or technology company that could commercialize it or support us in its commercialization.

Additionally, we may explore out-licensing opportunities for the patents or intellectual property associated with other products, including

our H. pylori product.

EMPLOYEES

As

of May 31, 2025 and 2024, we employed a total of 54 and 64 employees, respectively, in the United States, Mexico, UK and Germany, of

which 53 and 63 were full-time employees, respectively.

We

engage a range of external experts. including Ph.D.’s, M.D.’s, and other industry specialists, as well as medical institutions,

to support various aspects of our operations. These services include technical support, regulatory guidance, marketing and public relations,

financial advisory, and contract product development and manufacturing. To safeguard the Company, we implement confidentiality agreements,

intellectual property ownership clauses, and indemnification provisions with these external parties. Despite these measures, we cannot

guarantee complete protection against third-party claims or potential intellectual property theft.

CORPORATE

HISTORY

Biomerica,

Inc. is a Delaware corporation. The Company operates through two wholly owned subsidiaries: Biomerica de Mexico, which serves as an assembly

and manufacturing facility, and BioEurope GmbH, which functions as a distributor of the Company’s products in international markets.

ITEM

1A. RISK FACTORS

Investing

in our securities involves a high degree of risk. You should carefully consider the risks and uncertainties described below, together

with the other information in this Annual Report, including our consolidated financial statements and the related notes and “Management’s

Discussion and Analysis of Financial Condition and Results of Operations,” before deciding whether to invest in our securities.

The occurrence of one or more of the events or circumstances described in these risk factors, alone or in combination with other events

or circumstances, may have a material adverse effect on our business, reputation, revenue, financial condition, results of operations,

and future prospects, in which event the market price of our Common Stock could decline, and you could lose part or all of your investment.

The risks and uncertainties summarized above and described below are not intended to be exhaustive and are not the only ones we face.

Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business operations.

This Annual Report also contains forward-looking statements that involve risks and uncertainties, refer to “Cautionary Note Regarding

Forward-Looking Statements.” Our actual results could differ materially and adversely from our anticipated results as a result

of a number of factors, including the risks described below.

RISKS

RELATED TO OUR BUSINESS

We

have a history of operating losses.

We

have a history of operating losses, and there is no guarantee that we will achieve profitability in the future. Our ability to generate

net profits and maintain positive cash flows is uncertain. Failure to achieve or sustain profitability could result in a decline in the

value of our common stock and may necessitate seeking additional funding under potentially unfavorable conditions.

Although

our financial statements have been prepared on a going concern basis, our current level of cash and cash equivalents available to us

is not sufficient to meet our operating plans for the next 12 months, raising substantial doubt regarding our ability to continue as

a going concern.

Our

financial statements as of May 31, 2025, have been prepared under the assumption that we will continue as a going concern for the next

twelve months from the date of issuance. However, our independent registered public accounting firm has issued a report that includes

an explanatory paragraph highlighting our operational losses and expressing substantial doubt about our ability to continue as a going

concern for a period of at least the next twelve months from the date this report is filed.

Our

ability to continue as a going concern depends on obtaining additional financing, achieving further operating efficiencies, increasing

sales, reducing costs, and ultimately generating profitable operations. There is no assurance that we will be able to secure the necessary

capital on favorable terms, achieve sufficient revenue growth, or implement adequate cost reductions. Our financial statements do not

reflect any adjustments that might result from the resolution of this uncertainty.

Our

operating results may fluctuate adversely as a result of many factors that are outside our control, which may negatively impact our stock

price.

Our

operating results are subject to fluctuations due to factors outside our control, which may adversely affect our business, financial

condition, and stock price. Key factors include:

● Tariffs: Potential of order holds or sales delays or reductions due to Tariffs

Fluctuations

in our operating results, for any reason, could cause operating losses as a result of significant fixed expenses.

We

base the scope of our operations and related expenses on our estimates of future revenues. A significant portion of our operating expenses

are fixed, and we may not be able to rapidly adjust our expenses if our revenues fall short of our expectations. Our revenue estimates

for future periods are based, among other factors, on estimated end-user demand for our products. If end-user consumption is less than

estimated, revenues from our distribution partners and other distribution channels would be expected to fall short of expectations, and

because such a significant portion of our costs are fixed, could result in operating losses.

To

remain competitive, we must continue to develop, obtain, and protect our proprietary technology rights; otherwise, we may lose market

share or need to reduce prices as a result of competitors selling technologically superior products that compete with our products, or

selling products at lower prices.

Our

ability to compete successfully in the diagnostic market depends on continued development and introduction of new products, technology,

and the improvement of existing technology. If we cannot continue to improve upon or develop, obtain, and protect our technology, our

operating results could be adversely affected.

To

remain competitive, we must expend considerable resources to research new technologies and products and develop new markets, and there

is no assurance our efforts to develop new technologies, products, or markets will be successful or such technologies, products, or markets

will be commercially viable.

We

devote a significant amount of financial and other resources to researching and developing new technologies, new products, and new markets.

The development, manufacture and sale of diagnostic products require a significant investment of resources. The development of new products

and markets also requires a substantial investment of resources, such as new employees, offices and manufacturing facilities, consultants,

and clinical trials. No assurances can be given that our efforts to develop new technologies or products will be successful, that such

technologies and products will be commercially viable, or our expansion into new markets will be profitable.

There

is also no guarantee that our new products, including our inFoods® IBS product and hp+detectTM, will be

well accepted into the marketplace.

Our

operations will be adversely affected if our operating results do not correspondingly increase with our increased expenditures or if

our technology, product, and market development efforts are unsuccessful or delayed. Furthermore, our failure to successfully introduce

new technologies or products and develop new markets could have a material adverse effect on our business and prospects.

The

Company is required to obtain government or regulatory certification in many countries and the European community to sell its products

in those countries or regions. There is no assurance that the Company will be able to retain its certification in the future. This includes

the possibility and risk that the Company’s products do not meet the new EU IVDR testing and documentation requirements in the

future as described in the above “Research and Development” section of this document.

Significant

government regulation exists in countries in which we conduct business. A large part of the Company’s sales is to distributors

in Europe, China, and other countries, which require us to maintain certain certifications to sell our products. Failure to comply with

current governmental regulations and quality assurance guidelines could cause the loss of these certifications, which could materially

adversely affect the results of the Company. Loss of certifications could lead to temporary manufacturing shutdowns, product recalls,

product shortages, or delays in product manufacturing and a decline in sales. Also, evolving EU IVDR requirements may increase compliance

costs and extend certification timelines, which could limit our ability to sell certain IVDD products in the EU.

The

Company maintains a manufacturing plant in Mexico which presents risks to the Company including risks associated with doing business

outside the United States.

We

operate a significant manufacturing facility in Mexico through our subsidiary, Biomerica de Mexico. This international presence introduces

a range of risks, including exposure to local economic and political conditions. Factors such as social unrest, potential terrorism,

export and import restrictions, and fluctuations in currency exchange rates could impact our operations. Additionally, there is a risk

of labor shortages, which could affect our manufacturing capabilities. These factors could lead to unforeseen costs and disruptions,

materially impacting our business, financial results, and operational stability.

We

use hazardous materials in our research and production that may result in unexpected and substantial claims against us relating to handling,

storage, or disposal.

Our

research and production processes involve the use of hazardous materials, which presents inherent risks. Despite rigorous safety protocols,

the possibility of accidental contamination or injury cannot be entirely eliminated. In the event of an accident, we could face significant

liability for harm or damages, potentially exceeding our financial resources. Compliance with environmental regulations also entails

substantial costs.

If

government authorities introduce new environmental regulations or change the interpretation of existing regulations, our operations could

be further impacted. Such changes may impose additional costs, restrictions, or compliance requirements, which could hinder our research,

development, or production efforts. Noncompliance with these regulations may result in significant fines, penalties, or damages, and

could necessitate costly remediation efforts. Furthermore, severe environmental or safety violations could lead to partial or total shutdowns

of our research and manufacturing facilities, adversely affecting our business. The risk of contamination or injury from hazardous materials

may also expose individuals to potential health hazards, resulting in fines or penalties that might not be covered by insurance, thereby

impacting our financial stability and operational continuity.

We

rely on a limited number of key distributors that account for a substantial majority of our total revenue. The loss of any key distributor

or an unsuccessful effort by us to directly distribute our products could lead to reduced sales.

Our

net sales were approximately $5,311,000 for fiscal year ended May 31, 2025, compared to $5,415,000 for fiscal year eneded May 31,

2024. For the fiscal years ended May 31, 2025 and 2024, the Company had one distributor each year that accounted for 31% and 33% of

our net sales, respectively.

Total

gross receivables as of May 31, 2025, and 2024 were approximately $757,000 and $966,000, respectively. As of May 31, 2025 and 2024, the

Company had four distributors, respectively, that accounted for a total of 69% and 64% of gross accounts receivable, respectively. Of

the 69% as of May 31, 2025, 27% was owed by a distributor in North America. Any adverse changes in our relationships with key distributors,

or adverse issues related to their financial condition, performance, or purchasing patterns, could have a significant impact on our sales

and overall financial results. The loss of a key distributor, or the failure of our direct distribution efforts, could further exacerbate

these challenges and adversely affect our business.

We

face risks relating to our international sales, including inherent economic, political, and regulatory risks, which could impact our

financial performance, cause interruptions in our current business operations and impede our growth strategy.

We

face risks relating to our international sales, including economic, political, and regulatory challenges, which could impact our financial

performance, disrupt our business operations, and hinder our growth strategy.

A

significant amount of our products are sold internationally, with substantial sales to distributors in Asia and Europe. We rely on distributor

organizations and sales agents to market and sell our products abroad, which exposes us to various foreign risks, including:

Most

of our international sales are negotiated and paid in U.S. dollars. However, currency risks remain, as fluctuations in foreign exchange

rates can make our products comparatively more expensive. These exchange rate changes, along with general economic conditions in international

markets, could negatively impact our sales. To maintain competitive pricing, we may need to offer discounts or reduce prices, leading

to lower margins on international sales. Continued changes in the values of the Euro, the Mexican peso, and other foreign currencies

could adversely affect our business, financial condition, and results of operations.

We

also have supply agreements with foreign vendors that involve sharing foreign currency exchange fluctuation risks. We may enter into

similar arrangements in the future.

A

significant portion of our revenues comes from sales to our distribution partner in China. Political tensions between the U.S. and China

could disrupt or reduce our sales in the Chinese market, posing a substantial risk to our business.

Tariffs

and trade dynamics may affect order timing.

In

certain markets, tariff changes and related trade uncertainties contributed to extended lead times and rescheduled shipments, which affected

the timing of revenue recognition for certain international orders.

Our

results of operations and financial conditions may be adversely affected by the financial soundness of our customers, distributors, and

suppliers.

Our

operational results and financial condition are closely linked to the financial health of our customers, distributors, and suppliers.

If any of these parties experience a deterioration in their financial performance or encounter difficulties with scheduled payments or

credit, it could have several adverse effects on our business.

For

instance, if our customers are unable to pay or delay payment on accounts receivable, this would negatively impact our cash flow. Similarly,

if our suppliers face financial challenges, they may restrict credit, impose more stringent payment terms, reduce or cease production

of essential components, or even stop operations entirely. Such disruptions could directly affect our ability to procure necessary materials

and maintain consistent product supply.

Moreover,

reductions in reimbursements or purchase volumes from state and federal government programs, or private payers, could also occur due

to budget constraints or expenditure cuts. These reductions could adversely impact our revenues and cash flow, further straining our

financial performance.

The

combined effect of these potential challenges could significantly influence our operating results and financial stability.

We

extend credit to customers outside the United States which can be difficult to collect.

We

extend credit to many of our customers, including those located outside the United States. Collecting receivables, particularly from

international customers, can be challenging due to difficulties in obtaining reliable credit information and the complexities of enforcing

collections through foreign legal systems. If we are unable to effectively manage and collect on these receivables, especially from international