Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Feb. 29, 2016 | Apr. 14, 2016 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | BIOMERICA INC. | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --05-31 | |
Entity Common Stock, Shares Outstanding | 7,659,339 | |
Amendment Flag | false | |
Entity Central Index Key | 73,290 | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Filer Category | Smaller Reporting Company | |
Entity Well-known Seasoned Issuer | No | |
Document Period End Date | Feb. 29, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Feb. 29, 2016 | Feb. 28, 2015 | Feb. 29, 2016 | Feb. 28, 2015 | |
Net sales | $ 1,361,608 | $ 1,299,400 | $ 3,813,683 | $ 3,467,450 |
Cost of sales | (1,017,090) | (840,568) | (2,635,701) | (2,391,464) |
Gross profit | 344,518 | 458,832 | 1,177,982 | 1,075,986 |
Operating Expenses: | ||||
Selling, general and administrative | 428,356 | 409,737 | 1,159,624 | 1,123,073 |
Research and development | 185,270 | 184,632 | 573,473 | 562,420 |
Total operating expenses | 613,626 | 594,369 | 1,733,097 | 1,685,493 |
Loss from operations | (269,108) | (135,537) | (555,115) | (609,507) |
Other Income (Expense): | ||||
Dividend and interest income | 9,175 | $ 1,724 | 27,134 | 18,421 |
Interest expense | (69) | (124) | (17) | |
Total other income | 9,106 | $ 1,724 | 27,010 | 18,404 |
Loss before income tax benefit | (260,002) | (133,813) | (528,105) | (591,103) |
Income tax benefit | 125,000 | 16,620 | 254,000 | 16,620 |
Net loss | $ (135,002) | $ (117,193) | $ (274,105) | $ (574,483) |
Basic net loss per common share (in Dollars per share) | $ (0.02) | $ (0.02) | $ (0.04) | $ (0.08) |
Diluted net loss per common share (in Dollars per share) | $ (0.02) | $ (0.02) | $ (0.04) | $ (0.08) |
Weighted average number of common and common equivalent shares: | ||||
Basic (in Shares) | 7,617,272 | 7,554,603 | 7,595,273 | 7,551,447 |
Diluted (in Shares) | 7,617,272 | 7,554,603 | 7,595,273 | 7,551,447 |
Net loss | $ (135,002) | $ (117,193) | $ (274,105) | $ (574,483) |
Other comprehensive loss, net of tax: | ||||
Foreign currency translation | (73) | (308) | (1,439) | (1,987) |
Comprehensive loss | $ (135,075) | $ (117,501) | $ (275,544) | $ (576,470) |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Feb. 29, 2016 | May. 31, 2015 |
Current Assets: | ||
Cash and cash equivalents | $ 859,145 | $ 1,088,307 |
Accounts receivable, less allowance for doubtful accounts of $8,456 and $17,468 as of February 29, 2016 and May 31, 2015, respectively | 919,944 | 1,111,570 |
Inventories, net | 2,100,101 | 2,027,372 |
Prepaid expenses and other | 102,083 | 164,352 |
Total current assets | 3,981,273 | 4,391,601 |
Property and Equipment, net of accumulated depreciation and amortization of $1,384,847 and $1,267,617 as of February 29, 2016 and May 31, 2015, respectively | 398,154 | 445,386 |
Deferred Tax Assets | 998,000 | 744,000 |
Investments | 165,324 | 165,324 |
Intangible Assets, net | 264,905 | 321,304 |
Other Assets | 68,286 | 56,838 |
Total Assets | 5,875,942 | 6,124,453 |
Current Liabilities: | ||
Accounts payable and accrued expenses | 327,007 | 392,139 |
Accrued compensation | 159,834 | 131,794 |
Total current liabilities | $ 486,841 | $ 523,933 |
Commitments and Contingencies (Note 5) | ||
Shareholders' Equity: | ||
Preferred stock, no par value authorized 5,000,000 shares, none issued and none outstanding at February 29, 2016 and May 31, 2015 | ||
Common stock, $0.08 par value authorized 25,000,000 shares, issued and outstanding 7,659,339 and 7,566,714 at February 29, 2016 and May 31, 2015, respectively | $ 612,746 | $ 605,336 |
Additional paid-in-capital | 18,383,605 | 18,326,890 |
Accumulated other comprehensive loss | (13,703) | (12,264) |
Accumulated deficit | (13,593,547) | (13,319,442) |
Total Shareholders' Equity | 5,389,101 | 5,600,520 |
Total Liabilities and Shareholders' Equity | $ 5,875,942 | $ 6,124,453 |
CONDENSED CONSOLIDATED BALANCE4
CONDENSED CONSOLIDATED BALANCE SHEETS (Parentheticals) - USD ($) | Feb. 29, 2016 | May. 31, 2015 |
Allowance for doubtful accounts (in Dollars) | $ 8,456 | $ 17,468 |
Accumulated Depreciation and Amortization (in Dollars) | $ 1,384,847 | $ 1,267,617 |
Preferred Stock, No Par Value (in Dollars per share) | $ 0 | $ 0 |
Preferred Stock, Shares Authorized | 5,000,000 | 5,000,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Common stock par value (in Dollars per share) | $ 0.08 | $ 0.08 |
Common stock, shares authorized | 25,000,000 | 25,000,000 |
Common stock, shares issued | 7,659,339 | 7,566,714 |
Common stock, shares outstanding | 7,659,339 | 7,566,714 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) | 9 Months Ended | |
Feb. 29, 2016 | Feb. 28, 2015 | |
Cash flows from operating activities: | ||
Net loss | $ (274,105) | $ (574,483) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||
Depreciation and amortization | 174,554 | 192,670 |
Stock option expense | 25,869 | 6,063 |
Change in provision for losses on accounts receivable | $ (9,012) | (12,993) |
Gain on disposal of property and equipment | (665) | |
Inventory reserve | $ 12,220 | 7,328 |
Decrease in deferred rent liability | (20,573) | $ (14,834) |
Increase in deferred tax assets | (254,000) | |
Changes in assets and liabilities: | ||
Accounts receivable | 200,638 | $ 529,304 |
Inventories | (84,949) | (352,354) |
Prepaid expenses and other assets | 62,269 | (26,521) |
Accounts payable and accrued expenses | (44,559) | (73,902) |
Other assets | (11,448) | (14,788) |
Accrued compensation | 28,040 | 16,262 |
Net cash used in operating activities | $ (195,056) | (318,913) |
Cash flows from investing activities: | ||
Proceeds from sale of equipment | 1,900 | |
Increases in intangibles | $ (925) | (14,135) |
Purchases of property and equipment | (69,998) | (8,656) |
Net cash used in investing activities | (70,923) | (20,891) |
Cash flows from financing activities: | ||
Proceeds from exercise of stock options | 38,256 | 4,355 |
Net cash provided by financing activities | 38,256 | 4,355 |
Effect of exchange rate changes in cash | (1,439) | (1,987) |
Net decrease in cash and cash equivalents | (229,162) | (337,436) |
Cash and cash equivalents at beginning of period | 1,088,307 | 1,509,125 |
Cash and cash equivalents at end of period | 859,145 | 1,171,689 |
Cash paid during the period for: | ||
Interest | 124 | 17 |
Income taxes | $ 800 | $ 800 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Feb. 29, 2016 | |
Disclosure Text Block [Abstract] | |
Basis of Accounting [Text Block] | Note 1: Basis of Presentation The information set forth in these condensed consolidated statements is unaudited and reflects all adjustments which, in the opinion of management, are necessary to present a fair statement of the consolidated results of operations of Biomerica, Inc. and subsidiaries (the “Company”), for the periods indicated. It does not include all information and footnotes necessary for a fair presentation of financial position, results of operations, and cash flows in conformity with generally accepted accounting principles in the United States of America. All adjustments that were made are of a normal recurring nature. The unaudited Condensed Consolidated Financial Statements and Notes are presented as permitted by the requirements for Form 10-Q and do not contain certain information included in our annual financial statements and notes. The condensed consolidated balance sheet data as of May 31, 2015 was derived from audited financial statements. The accompanying interim condensed consolidated financial statements should be read in conjunction with the financial statements and related notes included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) on August 29, 2015 for the fiscal year ended May 31, 2015. The results of operations for our interim periods are not necessarily indicative of results to be achieved for our full fiscal year. |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended |
Feb. 29, 2016 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies [Text Block] | Note 2: Significant Accounting Policies Principles of Consolidation The condensed consolidated financial statements include the accounts of Biomerica, Inc. as well as the Company’s German subsidiary and Mexican subsidiary. The Mexican subsidiary has not begun operations. All significant intercompany accounts and transactions have been eliminated in consolidation. Accounting Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reported period. Actual results could materially differ from those estimates. Cash and Cash Equivalents Cash and cash equivalents consist of demand deposits and money market accounts with original maturities of less than three months. Accounts Receivable The Company extends unsecured credit to its customers on a regular basis. International accounts are required to prepay until they establish a history with the Company and at that time, they are extended credit at levels based on a number of criteria. Credit levels are approved by designated upper level management. Domestic customers are extended initial credit limits until they establish a history with the Company or submit credit information. All increases in credit limits are also approved by designated upper level management. Management evaluates receivables on a quarterly basis and adjusts the reserve for bad debt accordingly. Balances over ninety days old are usually reserved for unless collection is reasonably assured. Management evaluates quarterly what items to charge off. Occasionally certain long-standing customers, who routinely place large orders, will have unusually large accounts receivable balances relative to the total gross accounts receivable. Management monitors these large balances closely and very often requires payment of existing invoices before shipping new sales orders. Inventories The Company values inventory at the lower of cost (determined using a combination of specific lot identification and the first-in, first-out methods) or market. Management periodically reviews inventory for excess quantities and obsolescence. Management evaluates quantities on hand, physical condition, and technical functionality as these characteristics may be impacted by anticipated customer demand for current products and new product introductions. The reserve is adjusted based on such evaluation, with a corresponding provision included in cost of sales. Abnormal amounts of idle facility expenses, freight, handling costs and wasted material are recognized as current period charges and the allocation of fixed production overhead is based on the normal capacity of the Company’s production facilities. The approximate balances of inventories are the following at: February 29, 2016 May 31, 2015 Raw materials $ 1,061,000 $ 958,000 Work in progress 791,000 831,000 Finished products 248,000 238,000 Total $ 2,100,000 $ 2,027,000 Reserves for inventory obsolescence are reduced as necessary to reduce obsolete inventory to estimated realizable value or to specifically reserve for obsolete inventory that the Company intends to dispose of. Property and Equipment Property and equipment are stated at cost. Expenditures for additions and major improvements are capitalized. Repairs and maintenance costs are charged to operations as incurred. When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation or amortization is removed from the accounts, and gains or losses from retirements and dispositions are credited or charged to income. Depreciation and amortization are provided over the estimated useful lives of the related assets, ranging from 5 to 10 years, using the straight-line method. Leasehold improvements are amortized over the lesser of the estimated useful life of the asset or the term of the lease. Depreciation and amortization expense on property and equipment and leasehold improvements amounted to $38,370 and $46,819 for the three months ended February 29, 2016 and February 28, 2015, and $117,230 and $136,337 for the nine months ended February 29, 2016 and February 28, 2015, respectively. Intangible Assets Intangible assets include trademarks, product rights, licenses, technology rights and patents, and are accounted for based on Accounting Standards Codification ASC 350 “ Intangibles – Goodwill and Other that have indefinite Amortization amounted to $19,788 and $19,674 for the three months ended February 29, 2016 and February 28, 2015, respectively, and $57,324 and $56,333 for the nine months ended February 29, 2016 and February 28, 2015, respectively. Stock-Based Compensation The Company follows the guidance of the accounting provisions of ASC 718 “ Share-based Compensation Expected volatilities are based on weighted averages of the historical volatility of the Company’s stock and other factors estimated over the expected term of the options. The expected forfeiture rate is based on historical forfeitures experienced. The expected term of options granted is derived using the “simplified method” which computes expected term as the average of the sum of the vesting term plus the contract term as historically the Company had limited activity surrounding its options. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for the period of the expected term. The following summary presents the options and warrants granted, exercised, expired, cancelled and outstanding as of February 29, 2016: Exercise Price Weighted Average Option Shares Outstanding May 31, 2015 1,148,000 $ 0.60 Granted 70,000 1.04 Exercised (92,625) 0.41 Cancelled or expired (21,375) 0.70 Outstanding February 29, 2016 1,104,000 $ 0.64 Revenue Recognition Revenues from product sales are recognized at the time the product is shipped, customarily FOB shipping point, at which point title passes. An allowance is established when necessary for estimated returns as revenue is recognized. In conjunction with sales to certain customers, the Company provides free products upon attaining certain levels of purchases by the customer. The Company accounts for these free products in accordance with ASC 605-50 “Revenue Recognition – Customer Payments and Incentives” Investments From time-to-time, the Company makes investments in privately-held companies. The Company determines whether the fair values of any investments in privately-held entities have declined below their carrying value whenever adverse events or changes in circumstances indicate that recorded values may not be recoverable. If the Company considers any such decline to be other than temporary (based on various factors, including historical financial results, and the overall health of the investee’s industry), a write-down to estimated fair value is recorded. The Company currently has not written down the investment and no events have occured which could indicate the carrying value to be less than the fair value. Investments represent the Company’s investment in a Polish distributor which is primarily engaged in distributing medical devices. The Company owns approximately 6% of the investee, and accordingly, applies the cost method to account for the investment. Under the cost method, investments are recorded at cost, with gains and losses recognized as of the sale date, and income recorded when received. Shipping and Handling Fees and Costs The Company included shipping and handling fees billed to customers in net sales. The Company included shipping and handling costs associated with inbound freight and unreimbursed shipping to customers in cost of sales. Research and Development Research and development costs are expensed as incurred. Income Taxes The Company has provided a valuation allowance of $0 as of February 29, 2016 and May 31, 2015. Foreign Currency Translation The subsidiary located in Germany is accounted for primarily using local functional currency. Accordingly, assets and liabilities of this subsidiary are translated using exchange rates in effect at the end of the period, and revenues and costs are translated using average exchange rates for the period. The resulting adjustments are presented as a separate component of accumulated other comprehensive loss. Reclassification Certain amounts on the May 31, 2015 condensed consolidated balance sheet have been reclassified to conform to the current period presentation. Deferred Rent Incentive payments received from landlords are recorded as deferred lease incentives and are amortized over the underlying lease term on a straight-line basis as a reduction of rent expense. When the terms of an operating lease provide for periods of free rent, rent concessions, and/or rent escalations, the Company establishes a deferred rent liability for the difference between the scheduled rent payment and the straight-line rent expense recognized. This deferred rent liability is amortized over the underlying lease term on a straight-line basis as a reduction of rent expense. Net Loss Per Share Basic earnings (loss) per share are computed as net income (loss) divided by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per share reflect the potential dilution that could occur from common shares issuable through stock options, warrants and other convertible securities. The total amount of anti-dilutive options not included in the earnings (loss) per share calculation for the three and nine months ended February 29, 2016 was 484,983 and 415,960, respectively. The total amount of anti-dilutive warrants or options not included in the earnings (loss) per share calculation for the three and nine months ended February 28, 2015 was 364,319 and 403,524, respectively. The following table illustrates the required disclosure of the reconciliation of the numerators and denominators of the basic and diluted earnings (loss) per share computations. Nine Months Ended Three Months Ended February 29, 2016 February 28, 2015 February 29, 2016 February 28, 2015 Numerator: Net loss $ (274,105) $ (574,483) $ (135,002) $ (117,193) Denominator for basic net loss Per common share 7,595,273 7,551,447 7,617,272 7,554,603 Effect of dilutive securities: Options and warrants -- -- -- -- Denominator for diluted net loss per common share 7,595,273 7,551,447 7,617,272 7,554,603 Basic net loss per common share $ (0.04) $ (0.08) $ (0.02) $ (0.02) Diluted net loss per common share $ (0.04) $ (0.08) $ (0.02) $ (0.02) New Accounting Pronouncements In February 2013, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2013-04, Liabilities (Topic 405): Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation Is Fixed at the Reporting Date (“ASU 2013-04”). The amendments in ASU 2013-04 provide guidance for the recognition, measurement, and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this update is fixed at the reporting date, except for obligations addressed within existing guidance in generally accepted accounting principles in the United States of America. The guidance requires an entity to measure those obligations as the sum of the amount the reporting entity agreed to pay on the basis of its arrangement among its co-obligors and any additional amount the reporting entity expects to pay on behalf of its co-obligors. The guidance in this update also requires an entity to disclose the nature and amount of the obligation as well as other information about those obligations. The amendments in this standard are effective retrospectively for fiscal years, and interim periods within those years, beginning after December 15, 2013, which corresponds to the Company’s first quarter of fiscal 2015. The adoption of ASU 2013-04 did not have a material impact on the Company’s consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”). ASU 2014-09 is a comprehensive new revenue recognition model requiring a company to recognize revenue to depict the transfer of goods or services to a customer at an amount reflecting the consideration it expects to receive in exchange for those goods or services. In adopting, ASU 2014-09, companies may use either a full retrospective or a modified retrospective approach. ASU 2014-09 is effective for the first interim period within annual reporting periods beginning December 15, 2016, and early adoption is not permitted. Management is evaluating the provisions of this statement and has not determined what impact the adoption of ASU 2014-09 will have on the Company’s financial position or results of operations. During August 2015, the FASB voted to defer the effective date of the above mentioned revenue recognition guidance by one year to December 15, 2017 for interim and annual reporting periods beginning after that date and permitted early adoption of the standard, but not before the original effective date of December 15, 2016. In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory (“ASU-2015-11”). ASU 2015-11 applies to inventory that is measured using first-in, first-out (“FIFO”) or average cost. An entity should measure inventory within the scope of ASU 2015-11 at the lower of cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. The amendments in ASU 2015-11 more closely align the measurement of inventory in general accepted accounting principles of the United States of America with the measurement of inventory in International Financial Reporting Standards (“IFRS”). ASU 2015-11 is effective for fiscal years beginning after December 31, 2016. Management is evaluating the provisions of this statement and has not determined what impact the adoption of ASU 2015-11 will have on the Company’s financial position or results of operations. On November 20, 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes (“ASU-2015-17”). The update eliminates the requirement to classify deferred tax assets and liabilities on a classified statement of financial position. ASU 2015-17 is effective for fiscal years beginning after December 15, 2015, and interim periods within those annual periods. Early adoption is permitted for financial statements as of the beginning of an interim or annual reporting period. The Company chose to adopt ASU 2015-17 as of the fiscal quarter ended November 30, 2015. On January 5, 2016, the FASB issued ASU 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU-2016-01”). On February 25, 2016, the FASB issued ASU 2016-02, Leases (Topic 842)(“ASU-2016-02”) On March 30, 2016, the FASB issued ASU 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting Other recent ASU’s issued by the FASB and guidance issued by the Securities and Exchange Commission did not, or are not believed by management to have a material effect on the Company’s present or future consolidated financial statements. |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 9 Months Ended |
Feb. 29, 2016 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Liabilities Disclosure [Text Block] | Note 3: Accounts Payable and Accrued Expenses The Company’s accounts payable and accrued expenses consist of the following at: February 29, 2016 May 31, 2015 Accounts payable and accrued expenses $ 312,006 $ 356,565 Deferred rent 15,001 35,574 Total $ 327,007 $ 392,139 |
Geographic Information
Geographic Information | 9 Months Ended |
Feb. 29, 2016 | |
Geographic Information Disclosure [Abstract] | |
Geographic Information Disclosure [Text Block] | Note 4: Geographic Information Financial information about foreign and domestic operations and export sales is approximately as follows: Nine Months Ended Three Months Ended February 29, 2016 February 28, 2015 February 29, 2016 February 28, 2015 Revenues from sales to unaffiliated customers: United States $ 776,000 $ 784,000 $ 370,000 $ 310,000 Asia 1,219,000 494,000 367,000 375,000 Europe 1,634,000 2,031,000 543,000 587,000 South America 50,000 8,000 1,000 3,000 Middle East 134,000 136,000 81,000 23,000 Other 1,000 14,000 -- 1,000 $ 3,814,000 $ 3,467,000 $ 1,362,000 $ 1,299,000 No other geographic concentrations exist where net sales exceed 10% of total net sales. As of February 29, 2016 and May 31, 2015, approximately $701,000 and $530,000, of Biomerica’s gross inventory and approximately $28,000 and $35,000, of Biomerica’s property and equipment, net of accumulated depreciation, was located in Mexicali, Mexico, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Feb. 29, 2016 | |
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 ends 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 is currently set at $22,080 per month. On November 30, 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 is set at $21,000 per month with scheduled annual increases through the end of the lease term. During July 2015, the Board of Directors approved the execution of an agreement with an investment banker to raise up to $3.0 million through the sale of restricted common stock of the Company. On March 21, 2015, the Company’s line of credit in the amount of $250,000 expired. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 9 Months Ended |
Feb. 29, 2016 | |
Accounting Policies [Abstract] | |
Consolidation, Policy [Policy Text Block] | Principles of Consolidation The condensed consolidated financial statements include the accounts of Biomerica, Inc. as well as the Company’s German subsidiary and Mexican subsidiary. The Mexican subsidiary has not begun operations. All significant intercompany accounts and transactions have been eliminated in consolidation. |
Use of Estimates, Policy [Policy Text Block] | Accounting Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reported period. Actual results could materially differ from those estimates. |
Cash and Cash Equivalents, Policy [Policy Text Block] | Cash and Cash Equivalents Cash and cash equivalents consist of demand deposits and money market accounts with original maturities of less than three months. |
Trade and Other Accounts Receivable, Policy [Policy Text Block] | Accounts Receivable The Company extends unsecured credit to its customers on a regular basis. International accounts are required to prepay until they establish a history with the Company and at that time, they are extended credit at levels based on a number of criteria. Credit levels are approved by designated upper level management. Domestic customers are extended initial credit limits until they establish a history with the Company or submit credit information. All increases in credit limits are also approved by designated upper level management. Management evaluates receivables on a quarterly basis and adjusts the reserve for bad debt accordingly. Balances over ninety days old are usually reserved for unless collection is reasonably assured. Management evaluates quarterly what items to charge off. Occasionally certain long-standing customers, who routinely place large orders, will have unusually large accounts receivable balances relative to the total gross accounts receivable. Management monitors these large balances closely and very often requires payment of existing invoices before shipping new sales orders. |
Inventory, Policy [Policy Text Block] | Inventories The Company values inventory at the lower of cost (determined using a combination of specific lot identification and the first-in, first-out methods) or market. Management periodically reviews inventory for excess quantities and obsolescence. Management evaluates quantities on hand, physical condition, and technical functionality as these characteristics may be impacted by anticipated customer demand for current products and new product introductions. The reserve is adjusted based on such evaluation, with a corresponding provision included in cost of sales. Abnormal amounts of idle facility expenses, freight, handling costs and wasted material are recognized as current period charges and the allocation of fixed production overhead is based on the normal capacity of the Company’s production facilities. The approximate balances of inventories are the following at: February 29, 2016 May 31, 2015 Raw materials $ 1,061,000 $ 958,000 Work in progress 791,000 831,000 Finished products 248,000 238,000 Total $ 2,100,000 $ 2,027,000 Reserves for inventory obsolescence are reduced as necessary to reduce obsolete inventory to estimated realizable value or to specifically reserve for obsolete inventory that the Company intends to dispose of. |
Property, Plant and Equipment, Policy [Policy Text Block] | Property and Equipment Property and equipment are stated at cost. Expenditures for additions and major improvements are capitalized. Repairs and maintenance costs are charged to operations as incurred. When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation or amortization is removed from the accounts, and gains or losses from retirements and dispositions are credited or charged to income. Depreciation and amortization are provided over the estimated useful lives of the related assets, ranging from 5 to 10 years, using the straight-line method. Leasehold improvements are amortized over the lesser of the estimated useful life of the asset or the term of the lease. Depreciation and amortization expense on property and equipment and leasehold improvements amounted to $38,370 and $46,819 for the three months ended February 29, 2016 and February 28, 2015, and $117,230 and $136,337 for the nine months ended February 29, 2016 and February 28, 2015, respectively. |
Intangible Assets, Finite-Lived, Policy [Policy Text Block] | Intangible Assets Intangible assets include trademarks, product rights, licenses, technology rights and patents, and are accounted for based on Accounting Standards Codification ASC 350 “ Intangibles – Goodwill and Other that have indefinite Amortization amounted to $19,788 and $19,674 for the three months ended February 29, 2016 and February 28, 2015, respectively, and $57,324 and $56,333 for the nine months ended February 29, 2016 and February 28, 2015, respectively. |
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | Stock-Based Compensation The Company follows the guidance of the accounting provisions of ASC 718 “ Share-based Compensation Expected volatilities are based on weighted averages of the historical volatility of the Company’s stock and other factors estimated over the expected term of the options. The expected forfeiture rate is based on historical forfeitures experienced. The expected term of options granted is derived using the “simplified method” which computes expected term as the average of the sum of the vesting term plus the contract term as historically the Company had limited activity surrounding its options. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant for the period of the expected term. The following summary presents the options and warrants granted, exercised, expired, cancelled and outstanding as of February 29, 2016: Exercise Price Weighted Average Option Shares Outstanding May 31, 2015 1,148,000 $ 0.60 Granted 70,000 1.04 Exercised (92,625) 0.41 Cancelled or expired (21,375) 0.70 Outstanding February 29, 2016 1,104,000 $ 0.64 |
Revenue Recognition, Policy [Policy Text Block] | Revenue Recognition Revenues from product sales are recognized at the time the product is shipped, customarily FOB shipping point, at which point title passes. An allowance is established when necessary for estimated returns as revenue is recognized. In conjunction with sales to certain customers, the Company provides free products upon attaining certain levels of purchases by the customer. The Company accounts for these free products in accordance with ASC 605-50 “Revenue Recognition – Customer Payments and Incentives” |
Investment, Policy [Policy Text Block] | Investments From time-to-time, the Company makes investments in privately-held companies. The Company determines whether the fair values of any investments in privately-held entities have declined below their carrying value whenever adverse events or changes in circumstances indicate that recorded values may not be recoverable. If the Company considers any such decline to be other than temporary (based on various factors, including historical financial results, and the overall health of the investee’s industry), a write-down to estimated fair value is recorded. The Company currently has not written down the investment and no events have occured which could indicate the carrying value to be less than the fair value. Investments represent the Company’s investment in a Polish distributor which is primarily engaged in distributing medical devices. The Company owns approximately 6% of the investee, and accordingly, applies the cost method to account for the investment. Under the cost method, investments are recorded at cost, with gains and losses recognized as of the sale date, and income recorded when received. |
Shipping and Handling Cost, Policy [Policy Text Block] | Shipping and Handling Fees and Costs The Company included shipping and handling fees billed to customers in net sales. The Company included shipping and handling costs associated with inbound freight and unreimbursed shipping to customers in cost of sales. |
Research and Development Expense, Policy [Policy Text Block] | Research and Development Research and development costs are expensed as incurred. |
Income Tax, Policy [Policy Text Block] | Income Taxes The Company has provided a valuation allowance of $0 as of February 29, 2016 and May 31, 2015. |
Foreign Currency Transactions and Translations Policy [Policy Text Block] | Foreign Currency Translation The subsidiary located in Germany is accounted for primarily using local functional currency. Accordingly, assets and liabilities of this subsidiary are translated using exchange rates in effect at the end of the period, and revenues and costs are translated using average exchange rates for the period. The resulting adjustments are presented as a separate component of accumulated other comprehensive loss. |
Reclassification, Policy [Policy Text Block] | Reclassification Certain amounts on the May 31, 2015 condensed consolidated balance sheet have been reclassified to conform to the current period presentation. |
Deferred Charges, Policy [Policy Text Block] | Deferred Rent Incentive payments received from landlords are recorded as deferred lease incentives and are amortized over the underlying lease term on a straight-line basis as a reduction of rent expense. When the terms of an operating lease provide for periods of free rent, rent concessions, and/or rent escalations, the Company establishes a deferred rent liability for the difference between the scheduled rent payment and the straight-line rent expense recognized. This deferred rent liability is amortized over the underlying lease term on a straight-line basis as a reduction of rent expense. |
Earnings Per Share, Policy [Policy Text Block] | Net Loss Per Share Basic earnings (loss) per share are computed as net income (loss) divided by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per share reflect the potential dilution that could occur from common shares issuable through stock options, warrants and other convertible securities. The total amount of anti-dilutive options not included in the earnings (loss) per share calculation for the three and nine months ended February 29, 2016 was 484,983 and 415,960, respectively. The total amount of anti-dilutive warrants or options not included in the earnings (loss) per share calculation for the three and nine months ended February 28, 2015 was 364,319 and 403,524, respectively. The following table illustrates the required disclosure of the reconciliation of the numerators and denominators of the basic and diluted earnings (loss) per share computations. Nine Months Ended Three Months Ended February 29, 2016 February 28, 2015 February 29, 2016 February 28, 2015 Numerator: Net loss $ (274,105) $ (574,483) $ (135,002) $ (117,193) Denominator for basic net loss Per common share 7,595,273 7,551,447 7,617,272 7,554,603 Effect of dilutive securities: Options and warrants -- -- -- -- Denominator for diluted net loss per common share 7,595,273 7,551,447 7,617,272 7,554,603 Basic net loss per common share $ (0.04) $ (0.08) $ (0.02) $ (0.02) Diluted net loss per common share $ (0.04) $ (0.08) $ (0.02) $ (0.02) |
New Accounting Pronouncements, Policy [Policy Text Block] | New Accounting Pronouncements In February 2013, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2013-04, Liabilities (Topic 405): Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation Is Fixed at the Reporting Date (“ASU 2013-04”). The amendments in ASU 2013-04 provide guidance for the recognition, measurement, and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this update is fixed at the reporting date, except for obligations addressed within existing guidance in generally accepted accounting principles in the United States of America. The guidance requires an entity to measure those obligations as the sum of the amount the reporting entity agreed to pay on the basis of its arrangement among its co-obligors and any additional amount the reporting entity expects to pay on behalf of its co-obligors. The guidance in this update also requires an entity to disclose the nature and amount of the obligation as well as other information about those obligations. The amendments in this standard are effective retrospectively for fiscal years, and interim periods within those years, beginning after December 15, 2013, which corresponds to the Company’s first quarter of fiscal 2015. The adoption of ASU 2013-04 did not have a material impact on the Company’s consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”). ASU 2014-09 is a comprehensive new revenue recognition model requiring a company to recognize revenue to depict the transfer of goods or services to a customer at an amount reflecting the consideration it expects to receive in exchange for those goods or services. In adopting, ASU 2014-09, companies may use either a full retrospective or a modified retrospective approach. ASU 2014-09 is effective for the first interim period within annual reporting periods beginning December 15, 2016, and early adoption is not permitted. Management is evaluating the provisions of this statement and has not determined what impact the adoption of ASU 2014-09 will have on the Company’s financial position or results of operations. During August 2015, the FASB voted to defer the effective date of the above mentioned revenue recognition guidance by one year to December 15, 2017 for interim and annual reporting periods beginning after that date and permitted early adoption of the standard, but not before the original effective date of December 15, 2016. In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory (“ASU-2015-11”). ASU 2015-11 applies to inventory that is measured using first-in, first-out (“FIFO”) or average cost. An entity should measure inventory within the scope of ASU 2015-11 at the lower of cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. The amendments in ASU 2015-11 more closely align the measurement of inventory in general accepted accounting principles of the United States of America with the measurement of inventory in International Financial Reporting Standards (“IFRS”). ASU 2015-11 is effective for fiscal years beginning after December 31, 2016. Management is evaluating the provisions of this statement and has not determined what impact the adoption of ASU 2015-11 will have on the Company’s financial position or results of operations. On November 20, 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes (“ASU-2015-17”). The update eliminates the requirement to classify deferred tax assets and liabilities on a classified statement of financial position. ASU 2015-17 is effective for fiscal years beginning after December 15, 2015, and interim periods within those annual periods. Early adoption is permitted for financial statements as of the beginning of an interim or annual reporting period. The Company chose to adopt ASU 2015-17 as of the fiscal quarter ended November 30, 2015. On January 5, 2016, the FASB issued ASU 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU-2016-01”). On February 25, 2016, the FASB issued ASU 2016-02, Leases (Topic 842)(“ASU-2016-02”) On March 30, 2016, the FASB issued ASU 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting Other recent ASU’s issued by the FASB and guidance issued by the Securities and Exchange Commission did not, or are not believed by management to have a material effect on the Company’s present or future consolidated financial statements. |
Significant Accounting Polici12
Significant Accounting Policies (Tables) | 9 Months Ended |
Feb. 29, 2016 | |
Accounting Policies [Abstract] | |
Schedule of Inventory, Current [Table Text Block] | February 29, 2016 May 31, 2015 Raw materials $ 1,061,000 $ 958,000 Work in progress 791,000 831,000 Finished products 248,000 238,000 Total $ 2,100,000 $ 2,027,000 |
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block] | Exercise Price Weighted Average Option Shares Outstanding May 31, 2015 1,148,000 $ 0.60 Granted 70,000 1.04 Exercised (92,625) 0.41 Cancelled or expired (21,375) 0.70 Outstanding February 29, 2016 1,104,000 $ 0.64 |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | Nine Months Ended Three Months Ended February 29, 2016 February 28, 2015 February 29, 2016 February 28, 2015 Numerator: Net loss $ (274,105) $ (574,483) $ (135,002) $ (117,193) Denominator for basic net loss Per common share 7,595,273 7,551,447 7,617,272 7,554,603 Effect of dilutive securities: Options and warrants -- -- -- -- Denominator for diluted net loss per common share 7,595,273 7,551,447 7,617,272 7,554,603 Basic net loss per common share $ (0.04) $ (0.08) $ (0.02) $ (0.02) Diluted net loss per common share $ (0.04) $ (0.08) $ (0.02) $ (0.02) |
Accounts Payable and Accrued 13
Accounts Payable and Accrued Expenses (Tables) | 9 Months Ended |
Feb. 29, 2016 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Liabilities [Table Text Block] | February 29, 2016 May 31, 2015 Accounts payable and accrued expenses $ 312,006 $ 356,565 Deferred rent 15,001 35,574 Total $ 327,007 $ 392,139 |
Geographic Information (Tables)
Geographic Information (Tables) | 9 Months Ended |
Feb. 29, 2016 | |
Geographic Information Disclosure [Abstract] | |
Revenue from External Customers by Geographic Areas [Table Text Block] | Nine Months Ended Three Months Ended February 29, 2016 February 28, 2015 February 29, 2016 February 28, 2015 Revenues from sales to unaffiliated customers: United States $ 776,000 $ 784,000 $ 370,000 $ 310,000 Asia 1,219,000 494,000 367,000 375,000 Europe 1,634,000 2,031,000 543,000 587,000 South America 50,000 8,000 1,000 3,000 Middle East 134,000 136,000 81,000 23,000 Other 1,000 14,000 -- 1,000 $ 3,814,000 $ 3,467,000 $ 1,362,000 $ 1,299,000 |
Significant Accounting Polici15
Significant Accounting Policies (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Feb. 29, 2016 | Feb. 28, 2015 | Feb. 29, 2016 | Feb. 28, 2015 | May. 31, 2015 | |
Significant Accounting Policies (Details) [Line Items] | |||||
Depreciation, Depletion and Amortization | $ 38,370 | $ 46,819 | $ 117,230 | $ 136,337 | |
Amortization of Intangible Assets | 19,788 | $ 19,674 | 57,324 | $ 56,333 | |
Deferred Tax Assets, Valuation Allowance | $ 0 | $ 0 | $ 0 | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in Shares) | 484,983 | 364,319 | 415,960 | 403,524 | |
Investment In Polish Distributor [Member] | |||||
Significant Accounting Policies (Details) [Line Items] | |||||
Equity Method Investment, Ownership Percentage | 6.00% | 6.00% | |||
Minimum [Member] | |||||
Significant Accounting Policies (Details) [Line Items] | |||||
Property, Plant and Equipment, Useful Life | 5 years | ||||
Maximum [Member] | |||||
Significant Accounting Policies (Details) [Line Items] | |||||
Property, Plant and Equipment, Useful Life | 10 years | ||||
Maximum [Member] | Marketing-Related Intangible Assets [Member] | |||||
Significant Accounting Policies (Details) [Line Items] | |||||
Finite-Lived Intangible Asset, Useful Life | 18 years | ||||
Maximum [Member] | Purchased Technology Rights [Member] | |||||
Significant Accounting Policies (Details) [Line Items] | |||||
Finite-Lived Intangible Asset, Useful Life | 10 years | ||||
Maximum [Member] | Patents [Member] | |||||
Significant Accounting Policies (Details) [Line Items] | |||||
Finite-Lived Intangible Asset, Useful Life | 17 years |
Significant Accounting Polici16
Significant Accounting Policies (Details) - Inventories - USD ($) | Feb. 29, 2016 | May. 31, 2015 |
Inventories [Abstract] | ||
Raw materials | $ 1,061,000 | $ 958,000 |
Work in progress | 791,000 | 831,000 |
Finished products | 248,000 | 238,000 |
Total | $ 2,100,101 | $ 2,027,372 |
Significant Accounting Polici17
Significant Accounting Policies (Details) - Options Activity | 9 Months Ended |
Feb. 29, 2016$ / sharesshares | |
Options Activity [Abstract] | |
Outstanding May 31, 2015 | shares | 1,148,000 |
Outstanding May 31, 2015 | $ / shares | $ 0.60 |
Granted | shares | 70,000 |
Granted | $ / shares | $ 1.04 |
Exercised | shares | (92,625) |
Exercised | $ / shares | $ 0.41 |
Cancelled or expired | shares | (21,375) |
Cancelled or expired | $ / shares | $ 0.70 |
Outstanding February 29, 2016 | shares | 1,104,000 |
Outstanding February 29, 2016 | $ / shares | $ 0.64 |
Significant Accounting Polici18
Significant Accounting Policies (Details) - Reconciliation of the numerators and denominators of the basic and diluted earnings per share - USD ($) | 3 Months Ended | 9 Months Ended | ||
Feb. 29, 2016 | Feb. 28, 2015 | Feb. 29, 2016 | Feb. 28, 2015 | |
Numerator: | ||||
Net loss (in Dollars) | $ (135,002) | $ (117,193) | $ (274,105) | $ (574,483) |
Denominator for basic net loss Per common share | 7,617,272 | 7,554,603 | 7,595,273 | 7,551,447 |
Effect of dilutive securities: | ||||
Options and warrants | ||||
Denominator for diluted net loss per common share | 7,617,272 | 7,554,603 | 7,595,273 | 7,551,447 |
Basic net loss per common share (in Dollars per share) | $ (0.02) | $ (0.02) | $ (0.04) | $ (0.08) |
Diluted net loss per common share (in Dollars per share) | $ (0.02) | $ (0.02) | $ (0.04) | $ (0.08) |
Accounts Payable and Accrued 19
Accounts Payable and Accrued Expenses (Details) - Accounts payable and accrued expense balances - USD ($) | Feb. 29, 2016 | May. 31, 2015 |
Accounts payable and accrued expense balances [Abstract] | ||
Accounts payable and accrued expenses | $ 312,006 | $ 356,565 |
Deferred rent | 15,001 | 35,574 |
Total | $ 327,007 | $ 392,139 |
Geographic Information (Details
Geographic Information (Details) - USD ($) | 9 Months Ended | |
Feb. 29, 2016 | May. 31, 2015 | |
Geographic Information (Details) [Line Items] | ||
Property, Plant and Equipment, Net | $ 398,154 | $ 445,386 |
MEXICO | ||
Geographic Information (Details) [Line Items] | ||
Inventory, Gross | 701,000 | 530,000 |
Property, Plant and Equipment, Net | $ 28,000 | $ 35,000 |
Geographic Concentration Risk [Member] | ||
Geographic Information (Details) [Line Items] | ||
Concentration Risk, Percentage | 10.00% |
Geographic Information (Detai21
Geographic Information (Details) - Financial information about foreign and domestic operations and export sales - USD ($) | 3 Months Ended | 9 Months Ended | ||
Feb. 29, 2016 | Feb. 28, 2015 | Feb. 29, 2016 | Feb. 28, 2015 | |
Revenues from sales to unaffiliated customers: | ||||
Net sales | $ 1,361,608 | $ 1,299,400 | $ 3,813,683 | $ 3,467,450 |
UNITED STATES | ||||
Revenues from sales to unaffiliated customers: | ||||
Net sales | 370,000 | 310,000 | 776,000 | 784,000 |
Asia [Member] | ||||
Revenues from sales to unaffiliated customers: | ||||
Net sales | 367,000 | 375,000 | 1,219,000 | 494,000 |
Europe [Member] | ||||
Revenues from sales to unaffiliated customers: | ||||
Net sales | 543,000 | 587,000 | 1,634,000 | 2,031,000 |
South America [Member] | ||||
Revenues from sales to unaffiliated customers: | ||||
Net sales | 1,000 | 3,000 | 50,000 | 8,000 |
Middle East [Member] | ||||
Revenues from sales to unaffiliated customers: | ||||
Net sales | $ 81,000 | 23,000 | 134,000 | 136,000 |
Other Foreign [Member] | ||||
Revenues from sales to unaffiliated customers: | ||||
Net sales | $ 1,000 | $ 1,000 | $ 14,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | Nov. 30, 2015 | Mar. 21, 2015 | Jun. 18, 2009 | Feb. 29, 2016 | Feb. 29, 2016 | Jul. 31, 2015 |
Commitments and Contingencies (Details) [Line Items] | ||||||
Sale of Restricted Stock, Authorized Amount | $ 3,000,000 | |||||
Buildingin Irvine California [Member] | ||||||
Commitments and Contingencies (Details) [Line Items] | ||||||
Operating Lease Initiation Date | Sep. 1, 2009 | |||||
Lease Expiration Date | Aug. 31, 2016 | |||||
Initial Rent | $ 18,490 | |||||
Operating Leases, Rent Expense | $ 22,080 | |||||
First Amendment To Lease [Member] | Buildingin Irvine California [Member] | ||||||
Commitments and Contingencies (Details) [Line Items] | ||||||
Operating Lease Initiation Date | Sep. 1, 2016 | |||||
Lease Expiration Date | Aug. 31, 2021 | |||||
Initial Rent | $ 21,000 | |||||
Line of Credit [Member] | ||||||
Commitments and Contingencies (Details) [Line Items] | ||||||
Line of Credit, Expired | $ 250,000 |