Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
May 31, 2018 | Aug. 29, 2018 | Nov. 30, 2017 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | BIOMERICA INC. | ||
Document Type | 10-K | ||
Current Fiscal Year End Date | --05-31 | ||
Entity Common Stock, Shares Outstanding | 8,953,832 | ||
Entity Public Float | $ 22,351,833 | ||
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 | May 31, 2018 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | May 31, 2018 | May 31, 2017 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 1,204,903 | $ 1,225,462 |
Accounts receivable, less allowance for doubtful accounts of $57,695 and $50,129, respectively | 799,940 | 1,060,011 |
Inventories, net | 2,178,777 | 1,729,121 |
Prepaid expenses and other | 300,409 | 195,757 |
Total current assets | 4,484,029 | 4,210,351 |
PROPERTY AND EQUIPMENT: | ||
Equipment | 1,808,152 | 1,549,411 |
Furniture, fixtures and leasehold improvements | 204,125 | 332,519 |
Total property and equipment | 2,012,277 | 1,881,930 |
Accumulated depreciation | (1,661,128) | (1,550,073) |
Net property and equipment | 351,149 | 331,857 |
DEFERRED TAX ASSETS | 10,000 | 41,000 |
INTANGIBLE ASSETS, net | 98,923 | 174,469 |
INVESTMENTS | 165,324 | 165,324 |
OTHER ASSETS | 113,157 | 94,989 |
TOTAL ASSETS | 5,222,582 | 5,017,990 |
CURRENT LIABILITIES: | ||
Accounts payable and accrued expenses | 686,956 | 352,000 |
Accrued compensation | 209,852 | 176,866 |
Total current liabilities | 896,808 | 528,866 |
COMMITMENTS AND CONTINGENCIES (NOTE 8) | ||
SHAREHOLDERS' EQUITY | ||
Preferred stock, no par value, 5,000,000 authorized shares, no shares issued and outstanding at May 31, 2018 and 2017 | ||
Common stock, $.08 par value; 25,000,000 shares authorized; 8,888,011 and 8,511,173 shares issued and outstanding at May 31, 2018 and 2017, respectively | 711,040 | 680,893 |
Additional paid-in capital | 20,843,550 | 19,551,855 |
Subscriptions receivable | (9,062) | |
Accumulated other comprehensive loss | (26,136) | (15,834) |
Accumulated deficit | (17,193,618) | (15,727,790) |
Total shareholders' equity | 4,325,774 | 4,489,124 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 5,222,582 | $ 5,017,990 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parentheticals) - USD ($) | May 31, 2018 | May 31, 2017 |
Allowance for doubtful accounts (in Dollars) | $ 57,695 | $ 50,129 |
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 | 8,888,011 | 8,511,173 |
Common stock, shares outstanding | 8,888,011 | 8,511,173 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) | 12 Months Ended | |
May 31, 2018 | May 31, 2017 | |
Net sales | $ 5,564,185 | $ 5,791,670 |
Cost of sales | (3,809,785) | (3,769,879) |
GROSS PROFIT | 1,754,400 | 2,021,791 |
OPERATING EXPENSES: | ||
Selling, general and administrative | 1,837,787 | 1,845,789 |
Research and development | 1,398,368 | 1,130,635 |
Total operating expenses | 3,236,155 | 2,976,424 |
LOSS FROM OPERATIONS | (1,481,755) | (954,633) |
OTHER INCOME (EXPENSE): | ||
Interest expense | (37) | (282) |
Interest and dividend income | 47,764 | 46,354 |
Total other income | 47,727 | 46,072 |
LOSS BEFORE INCOME TAXES | (1,434,028) | (908,561) |
INCOME TAX EXPENSE | (31,800) | |
NET LOSS | $ (1,465,828) | $ (908,561) |
BASIC NET LOSS PER COMMON SHARE (in Dollars per share) | $ (0.17) | $ (0.11) |
DILUTED NET LOSS PER COMMON SHARE (in Dollars per share) | $ (0.17) | $ (0.11) |
WEIGHTED AVERAGE NUMBER OF COMMON AND COMMON EQUIVALENT SHARES | ||
Basic (in Shares) | 8,570,029 | 8,329,769 |
Diluted (in Shares) | 8,570,029 | 8,329,769 |
NET LOSS | $ (1,465,828) | $ (908,561) |
OTHER COMPREHENSIVE LOSS: | ||
Foreign currency translation | (10,302) | (2,248) |
COMPREHENSIVE LOSS | $ (1,476,130) | $ (910,809) |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS` EQUITY - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Subscriptions Receivable [Member] | AOCI Attributable to Parent [Member] | Retained Earnings [Member] | Total |
Balances at May. 31, 2016 | $ 653,573 | $ 19,399,720 | $ (13,586) | $ (14,819,229) | $ 5,220,478 | |
Balances (in Shares) at May. 31, 2016 | 8,169,673 | |||||
Exercise of stock options | $ 27,320 | 130,408 | $ 157,728 | |||
Exercise of stock options (in Shares) | 341,500 | 341,500 | ||||
Foreign currency translation | (2,248) | $ (2,248) | ||||
Compensation expense in connection with options granted | 21,727 | 21,727 | ||||
Net loss | (908,561) | (908,561) | ||||
Balances at May. 31, 2017 | $ 680,893 | 19,551,855 | (15,834) | (15,727,790) | 4,489,124 | |
Balances (in Shares) at May. 31, 2017 | 8,511,173 | |||||
Exercise of stock options | $ 2,780 | 24,656 | $ 27,436 | |||
Exercise of stock options (in Shares) | 34,750 | 34,750 | ||||
Net proceeds from ATM | $ 27,367 | 1,248,566 | $ 1,275,933 | |||
Net proceeds from ATM (in Shares) | 342,088 | |||||
Stock subscription receivable | (9,062) | (9,062) | ||||
Foreign currency translation | (10,302) | (10,302) | ||||
Compensation expense in connection with options granted | 18,473 | 18,473 | ||||
Net loss | (1,465,828) | (1,465,828) | ||||
Balances at May. 31, 2018 | $ 711,040 | $ 20,843,550 | $ (9,062) | $ (26,136) | $ (17,193,618) | $ 4,325,774 |
Balances (in Shares) at May. 31, 2018 | 8,888,011 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
May 31, 2018 | May 31, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (1,465,828) | $ (908,561) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 186,601 | 219,219 |
Change in provision for allowance for doubtful accounts | 7,566 | 41,724 |
Inventory reserve | 7,613 | (16,505) |
Stock option expense | 18,473 | 21,727 |
Decrease in deferred rent liability | 15,787 | 8,070 |
Decrease in deferred tax asset | 31,000 | |
Changes in assets and liabilities: | ||
Accounts receivable | 252,505 | (132,261) |
Inventories | (457,269) | 150,475 |
Prepaid expenses and other | (104,652) | (82,179) |
Other assets | (18,168) | (39,336) |
Accounts payable and accrued expenses | 319,169 | 10,445 |
Accrued compensation | 32,986 | 4,324 |
Net cash used in operating activities | (1,174,217) | (722,858) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchases of property and equipment | (130,347) | (96,085) |
Net cash used in investing activities | (130,347) | (96,085) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from sale of common stock, net | 1,266,871 | |
Proceeds from exercise of stock options | 27,436 | 157,728 |
Net cash provided by financing activities | 1,294,307 | 157,728 |
Effect of exchange rate changes on cash | (10,302) | (2,248) |
Net decrease in cash and cash equivalents | (20,559) | (663,463) |
CASH AND CASH EQUIVALENTS, beginning of year | 1,225,462 | 1,888,925 |
CASH AND CASH EQUIVALENTS, end of year | 1,204,903 | 1,225,462 |
Non-cash investing and financing activities: | ||
Subscriptions receivable | 9,062 | |
Cash paid during the year for: | ||
Interest | 37 | 282 |
Income taxes | $ 800 | $ 800 |
ORGANIZATION
ORGANIZATION | 12 Months Ended |
May 31, 2018 | |
Disclosure Text Block [Abstract] | |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | 1. ORGANIZATION Biomerica, Inc. and Subsidiaries (collectively "the Company") are primarily engaged in the development, manufacture and marketing of medical diagnostic kits. The Company develops, manufactures, and markets medical diagnostic products designed for the early detection and monitoring of chronic diseases and medical conditions. The Company’s medical diagnostic products are sold worldwide in two markets: 1) clinical laboratories and 2) point of care (physicians' offices and over-the-counter drugstores). The diagnostic test kits are used to analyze blood, urine or fecal samples from patients in the diagnosis of various diseases and other medical complications, or to measure the level of specific hormones, antibodies, antigens or other substances, which may exist in the human body in extremely small concentrations. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
May 31, 2018 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies [Text Block] | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES PRINCIPLES OF CONSOLIDATION The consolidated financial statements for the years ended May 31, 2018 and 2017 include the accounts of Biomerica, Inc. ("Biomerica") as well as its German subsidiary (BioEurope GmbH) and Mexican subsidiary (Biomerica de Mexico). All significant intercompany accounts and transactions have been eliminated in consolidation. ACCOUNTING ESTIMATES The preparation of the consolidated 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 consolidated financial statements, and the reported amounts of revenues and expenses during the reported period. Actual results could materially differ from those estimates. FAIR VALUE OF FINANCIAL INSTRUMENTS The Company has financial instruments whereby the fair market value of the financial instruments could be different than that recorded on a historical basis. The Company's financial instruments consist of its cash and cash equivalents, accounts receivable, and accounts payable. The carrying amounts of the Company's financial instruments approximate their fair values. CONCENTRATION OF CREDIT RISK The Company maintains cash balances at certain financial institutions in excess of amounts insured by federal agencies. As of May 31, 2018, the Company had approximately $632,000 of uninsured cash. The Company does not believe it is exposed to any significant credit risks. The Company provides credit in the normal course of business to customers throughout the United States and foreign markets. For the years ended May 31, 2018 and 2017, the Company had one distributor which accounted for 43.3% and 45.2%, respectively, of consolidated sales. The Company performs ongoing credit evaluations of its customers and requires prepayment in some circumstances. At May 31, 2018, one customer accounted for 53.3% of gross accounts receivable. At May 31, 2017, two customers accounted for 54.2% of gross accounts receivable. For the year ended May 31, 2018, two companies accounted for 27.7% of the purchases of raw materials. For the year ended May 31, 2017, two companies accounted for 23.0 % of the purchases of raw materials. GEOGRAPHIC CONCENTRATION As of May 31, 2018 and 2017, approximately $657,000 and $467,000 of Biomerica's gross inventory and approximately $41,000 and $15,000, of Biomerica's property and equipment, net of accumulated depreciation, was located in Mexicali, Mexico, respectively. 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 $500 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 allowance for doubtful accounts accordingly. Balances over ninety days old are usually reserved for unless collection is reasonably assured. Occasionally certain long-standing customers, who routinely place large orders, will have unusually large receivables balances relative to the total gross receivables. Management monitors the payments for 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 net realizable value. 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 production facilities. Inventories approximate the following at May 31: 2018 2017 Raw materials $ 1,000,000 $ 830,000 Work in progress 854,000 728,000 Finished products 325,000 171,000 Total $ 2,179,000 $ 1,729,000 Reserves for inventory obsolescence are recorded as necessary to reduce obsolete inventory to estimated net realizable value or to specifically reserve for obsolete inventory that the Company intends to dispose of. As of May 31, 2018 and 2017, inventory reserves were approximately $52,000 and $35,000, respectively. 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 are 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 amounted to $111,055 and $144,887 for the years ended May 31, 2018 and 2017, respectively. INTANGIBLE ASSETS Intangible assets include trademarks, product rights, technology rights and patents, and are accounted for based on Accounting Standards Codification (“ASC”), ASC 350 Intangibles – Goodwill and Other (“ASC 350”). In that regard, intangible assets that have indefinite useful lives are not amortized but are tested at least annually for impairment or more frequently if events or changes in circumstances indicate that the asset might be impaired. Intangible assets are being amortized using the straight-line method over the useful life, not to exceed 18 years for marketing and distribution rights, 10 years for purchased technology use rights, and 17 years for patents. Amortization amounted to $75,546 and $74,332 for the years ended May 31, 2018 and 2017, respectively The Company assesses the recoverability of these intangible assets by determining whether the amortization of the asset's balance over its remaining life can be recovered through projected undiscounted future cash flows. In July 2012, the Financial Accounting Standards Board (“FASB”) issued another update to ASC 350 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 occurred which could indicate the carrying value of the investment to be greater 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. SHARE-BASED COMPENSATION The Company follows the guidance of the accounting provisions of ASC 718 Share-based Compensation (“ASC 718”), which requires the use of the fair-value based method to determine compensation for all arrangements under which employees and others receive shares of stock or equity instruments (warrants and options). The fair value of each option award is estimated on the date of grant using the Black-Scholes options-pricing model that uses assumptions for expected volatility, expected dividends, expected forfeiture rate, expected term, and the risk-free interest rate. The Company has not paid dividends historically and does not expect to pay them in the future. Expected volatilities are based on weighted averages of the historical volatility of the Company’s common stock 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. In applying the Black-Scholes options-pricing model, assumptions used were as follows: 2018 2017 Dividend yield 0% 0% Expected volatility 59.8-61.28% 53.64-54.73% Risk free interest rate 1.61-2.53% 1.08-1.23% Expected life 3.75-6.0 years 3.75-6.25 years REVENUE RECOGNITION Revenues from product sales are recognized at the time the product is shipped, customarily FOB shipping point, at which point title passes. Revenue is recognized only when collectability is reasonably assured. An allowance is established when necessary for estimated returns as revenue is recognized. As of May 31, 2018 and 2017, the allowance for returns is $0. 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” and recognizes the cost of the product as part of cost of sales. SHIPPING AND HANDLING FEES AND COSTS Shipping and handling fees billed to customers are required to be classified as net sales, and shipping and handling costs are required to be classified as either cost of sales or disclosed in the notes to the consolidated financial statements. 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. The Company expensed $ 1,398,368 INCOME TAXES The Company accounts for income taxes in accordance with ASC 740, Income Taxes (“ASC 740”). Deferred tax assets and liabilities arise from temporary differences between the tax bases of assets and liabilities and their reported amounts in the consolidated financial statements that will result in taxable or deductible amounts in future years. These temporary differences are measured using enacted tax rates. A valuation allowance is recorded to reduce deferred tax assets to the extent that management considers it is more likely than not that a deferred tax asset will not be realized. In determining the valuation allowance, the Company considers factors such as the reversal of deferred income tax assets, projected taxable income, and the character of income tax assets and tax planning strategies. A change to these factors could impact the estimated valuation allowance and income tax expense. At May 31, 2018 and 2017, in accordance with ASC 740, the Company has a valuation allowance for substantially all of its deferred tax assets. During the fiscal year ended May 31, 2018, this valuation allowance was increased to $1,549,000. The Company accounts for its uncertain tax provisions by using a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not, based solely on the technical merits, that the position will be sustained in an audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the appropriate amount of the benefit to recognize. The amount of benefit to recognize is measured as the maximum amount which is more likely than not to be realized. The tax position is derecognized when it is no longer more likely than not capable of being sustained. On subsequent recognition and measurement the maximum amount which is more likely than not to be recognized at each reporting date will represent the Company’s best estimate, given the information available at the reporting date, although the outcome of the tax position is not absolute or final. Upon adopting the revisions in ASC 740, the Company elected to follow an accounting policy to classify accrued interest related to liabilities for income taxes within the “Interest expense” line and penalties related to liabilities for income taxes within the “Other expense” line of the consolidated statements of operations and comprehensive loss. ADVERTISING COSTS The Company reports the cost of all advertising as expense in the period in which those costs are incurred. Advertising costs were approximately $1,000 FOREIGN CURRENCY TRANSLATION The subsidiaries located in Germany and Mexico operate primarily using their local functional currencies. Accordingly, assets and liabilities of these subsidiaries are translated using exchange rates in effect at the end of the year, and revenues and costs are translated using average exchange rates for the year. The resulting adjustments to assets and liabilities are presented as a separate component of accumulated other comprehensive loss. The resulting adjustments to foreign currency loss of $10,302 and $2,248 are included in the consolidated statements of operations for the years ended May 31, 2018 and 2017, respectively. 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 loss per share is computed as net loss divided by the weighted average number of common shares outstanding for the period. Diluted loss per share reflects the potential dilution that could occur from common shares issuable through stock options, warrants and other convertible securities using the treasury stock method. The total amount of anti-dilutive stock options not included in the loss per share calculation for the years ended May 31, 2018 and 2017 were 1,138,625 and 897,000, respectively. The following table illustrates the reconciliation of the numerators and denominators of the basic and diluted earnings per share computations: For the Years Ended May 31 2018 2017 Numerator : Net loss for basic and diluted net loss per common share $ (1,465,828) $ (908,561) Denominator for basic net loss per common share 8,570,029 8,329,769 Effect of dilutive securities: Options -- -- Denominator for diluted net loss per common share 8,570,029 8,329,769 Basic net loss per common share $ (0.17) $ (0.11) Diluted net loss per common share $ (0.17) $ (0.11) SEGMENT REPORTING ASC 280, Segment Reporting (“ASC 280”), establishes standards for reporting, by public business enterprises, information about operating segments, products and services, geographic areas, and major customers. The Company’s operations are analyzed by management and its chief operating decision maker as being part of a single industry segment: the design, development, marketing and sales of diagnostic kits. REPORTING COMPREHENSIVE LOSS Comprehensive loss represents net loss and any revenues, expenses, gains and losses that, under GAAP, are excluded from net loss and recognized directly as a component of shareholders’ equity. Accumulated other comprehensive loss consists solely of foreign currency translation adjustments. RECENT ACCOUNTING PRONOUNCEMENTS In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements – Going Concern (Subtopic 205-40), which addresses “ Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern”. In connection with preparing financial statements for each annual and interim reporting period, an entity’s management should evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued (or within one year after the date that the financial statements are available to be issued when applicable). Management’s evaluation should be based on relevant conditions and events that are known and reasonably knowable at the date that the financial statements are issued (or at the date that the financial statements are available to be issued when applicable). The amendments in this update are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. Management adopted the provisions of this statement and is taking them into account in the preparation of the financial statements for the period ended May 31, 2018. 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. 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. 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. 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 accounting principles generally accepted 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 has implemented the provisions of this statement and does not believe the adoption of ASU 2015-11 had a significant impact on the Company’s financial position or results of operations. 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”). The release affects public and private companies that hold financial assets or owe financial liabilities. ASU-2016-01 will take effect for public companies for fiscal years beginning after December 15, 2017. Management is evaluating the provisions of this statement and has not determined what impact the adoption of ASU- 2016-01 will have on the Company’s financial position or results of operations. On February 25, 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU-2016-02”). ASU-2016-02 defines whether a contract is a lease. If it is a lease, the Company is required to recognize the lease assets and liabilities. ASU-2016-02 is effective for public companies for the annual periods beginning after December 15, 2018. Management is evaluating the provisions of this statement and has not determined what impact the adoption of ASU-2016-02 will have on the Company’s financial position or results of operations. On March 30, 2016, the FASB issued ASU 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The update includes provisions intended to simplify various aspects of accounting for share-based compensation. ASU-2016-09 will take effect for public companies for the annual periods beginning after December 15, 2016. Management does not believe the adoption of ASU 2016-09 has had a significant impact on the Company’s financial position or results of operations. On August 26, 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. This Update addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. ASU-2016-15 will take effect for public companies for the fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Management is evaluating the provisions of this statement and has not determined what impact the adoption of ASU-2016-15 will have on the Company’s financial position or results of operations. On November 27, 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. In January 2017 the FASB issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350), Simplifying the test for Goodwill Impairment. On February 15, 2018, the FASB issued ASU 2018-02, “Reclassification of Certain Tax Effects From Accumulated Comprehensive Income” (ASU 2018-02). ASU 2018-02 will give companies the option to reclassify stranded tax effects caused by the newly-enacted U.S. TAX Cuts and Jobs Act (TCJA) from accumulated other comprehensive income (ASCI) to retained earnings. ASU 2018-02 will take effect for all companies for the fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Management is evaluating the provisions of this statement and has not determined what impact the adoption of ASU 2018-02 will have on the Company’s financial position or results of operations. On June 20, 2018, the FASB issued ASU 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. ASU 2018-07 is intended to reduce cost and complexity and to improve financial reporting for share-based payments to nonemployees (for example, service providers, external legal counsel, suppliers, etc.). ASU 2018-07 will be effective for public companies for December 31, 2019 financial statements and for nonpublic entities for December 31, 2020 financial statements. Early adoption is permitted, but no earlier than entity’s adoption date for ASC Topic 606, Revenue from Contracts with Customers . Management is evaluating the provisions of this statement and has not determined what impact the adoption of ASU-2018-7 will have on the Company’s financial position or results of operations. 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. |
INTANGIBLE ASSETS, NET
INTANGIBLE ASSETS, NET | 12 Months Ended |
May 31, 2018 | |
Disclosure Text Block [Abstract] | |
Intangible Assets Disclosure [Text Block] | 3. INTANGIBLE ASSETS, NET Intangible assets, net of accumulated amortization, consist of the following at May 31: 2018 2017 Patents and licenses $ 509,485 $ 509,485 Less accumulated amortization (410,562) (335,016) Intangible Assets, Net $ 98,923 $ 174,469 Expected amortization of intangible assets for the years ending May 31: 2019 $ 60,861 2020 20,339 2021 12,694 2022 3,304 2023 900 Thereafter 825 Total $ 98,923 |
ACCOUNTS PAYABLE AND ACCRUED EX
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 12 Months Ended |
May 31, 2018 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Liabilities Disclosure [Text Block] | 4. ACCOUNTS PAYABLE AND ACCRUED EXPENSES The Company’s accounts payable and accrued expense balances consist of the following at May 31: 2018 2017 Accounts payable $ 655,599 $ 336,430 Deferred rent 31,357 15,570 Total $ 686,956 $ 352,000 |
SHAREHOLDERS` EQUITY
SHAREHOLDERS` EQUITY | 12 Months Ended |
May 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity Note Disclosure [Text Block] | 5. SHAREHOLDERS' EQUITY STOCK OPTION AND RESTRICTED STOCK PLANS In August 1999, the Company adopted a stock option and restricted stock plan (the "1999 Plan") which provides that non-qualified options and incentive stock options and restricted stock covering an aggregate of 1,000,000 shares of the Company's unissued common stock may be granted to affiliates, employees or consultants of the Company. As of January 1, of each calendar year, commencing January 1, 2000, this amount is subject to automatic annual increases equal to the lesser of 1.5% of the total number of outstanding common shares, assuming conversion of convertible securities, or 500,000 shares. The 1999 plan expired in November 2009. Options granted under the 1999 Plan were granted at prices not less than 80% of the then fair market value of the common stock and expired not more than 10 years after the date of grant. In August 2010, the Company adopted a stock option and restricted stock plan (the "2010 Plan") which provides that non-qualified options and incentive stock options and restricted stock covering an aggregate of 850,000 shares of the Company's unissued common stock may be granted to affiliates, employees or consultants of the Company. This plan was approved by shareholders in December 2010. The 2010 Plan expires in December 2020. Options granted under the 2010 Plan will be granted at prices not less than 80% of the then fair market value of the common stock and will expire not more than 10 years after the date of grant. In December 2014, the Company adopted a stock option and restricted stock plan (the "2014 Plan") which provides that non-qualified options and incentive stock options and restricted stock covering an aggregate of 850,000 shares of the Company's unissued common stock may be granted to affiliates, employees or consultants of the Company. This plan was approved by shareholders in December 2014. The 2014 Plan expires in December 2024. Options granted under the 2014 Plan will be granted at prices not less than 80% of the then fair market value of the common stock and will expire not more than 10 years after the date of grant. In December 2017, the Company adopted a stock option and restricted stock plan (the “2017 Plan”) which provides that non-qualified options and incentive stock options and restricted stock covering an aggregate of 900,000 shares of the Company’s unissued common stock may be granted to affiliates, employees or consultants of the Company. This plan was approved by shareholders in December 2017. The 2017 Plan expires in December 2027. Options granted under the 2017 Plan will be granted at prices not less than 80% of the then fair market value of the common stock and will expire not more than 10 years after the date of grant. Activity as to stock options outstanding is as follows: NUMBER OF STOCK OPTIONS PRICE RANGE PER SHARE WEIGHTED EXERCISE PRICE Options outstanding at May 31, 2016 1,199,000 $ 0.43-$ 1.20 $ 0.81 Options granted 55,000 $ 1.52-$ 1.61 $ 1.55 Options exercised (341,500) $ 0.43-$ 1.04 $ 0.46 Options canceled or expired (15,500) $ 0.43-$ 1.04 $ 0.90 Options outstanding at May 31, 2017 897,000 $ 0.71-$ 1.61 $ 0.98 Options granted 287,000 $ 2.41-$3.90 $ 3.63 Options exercised (34,750) $ 0.71-$ 1.04 $ 0.80 Options canceled or expired (10,625) $ 0.71-$ 2.41 $ 1.44 Options outstanding at May 31, 2018 1,138,625 $ 0.71-$ 3.90 $ 1.65 The weighted average fair value of options granted during 2018 and 2017 was $3.63 and $1.55, respectively. The aggregate intrinsic value of options exercised during 2018 and 2017 was approximately $87,000 and $616,000, respectively. The aggregate intrinsic value of options outstanding at May 31, 2018 and 2017 was approximately $2,755,000 and $1,354,000, respectively. The aggregate intrinsic value of options vested and exercisable at May 31, 2018 and 2017 was approximately $1,749,000 and $616,000, respectively. Activity as to non-vested stock options is as follows: STOCK OPTIONS WEIGHTED AVERAGE GRANT DATE FAIR VALUE NUMBER OF SHARES Nonvested shares at May 31, 2017 517,250 $ 0.96 Granted 287,000 $ 3.63 Vested/Exercised (212,125) $ 1.00 Forfeited (9,125) $ 1.56 Nonvested shares at May 31, 2018 583,000 $ 2.34 At May 31, 2018, total compensation cost related to non-vested stock option awards not yet recognized totaled approximately $212,000. The weighted-average period over which this amount is expected to be recognized is 1.82 years. The weighted average remaining contractual term of options that were exercisable at May 31, 2018 was 5.25 years. The following summarizes information about all of the Company's stock options outstanding at May 31, 2018. These options are comprised of those granted under the 1999, 2010, 2014 and 2017 plans. WEIGHTED AVERAGE REMAINING CONTRACTUAL LIFE IN YEARS WEIGHTED AVERAGE EXERCISE PRICE NUMBER EXERCISABLE AT MAY 31, 2018 NUMBER OUTSTANDING 05/31/2018 WEIGHTED AVERAGE EXERCISE PRICE RANGE OF EXERCISE PRICES $ 0.71-$ 0.84 460,625 4.66 $0.80 371,750 $0.79 $ 0.85-$ 1.04 65,000 2.22 $0.99 32,625 $0.98 $ 1.20-$ 1.61 330,000 8.32 $1.26 151,250 $1.23 $ 2.41-$ 3.90 283,000 8.69 $3.65 -- -- COMMON STOCK ACTIVITY During the year ended May 31, 2018, options to purchase 34,750 shares of common stock were exercised at prices ranging from $0.71 to $1.04. Total proceeds to the Company were $27,436. During the year ended May 31, 2017, options to purchase 341,500 shares of common stock were exercised at prices ranging from $0.43 to $1.04. Total proceeds to the Company were $157,728. During the year ended May 31, 2018, the Company sold 342,088 shares of its common stock at prices ranging from $3.73 to $4.74 under its S-3 Registration Statement which resulted in gross proceeds of $1,379,226 and net proceeds to the Company of $1,275,933 (after receipt of subscriptions receivable at May 31, 2018) after deducting commissions for each sale and the initial legal and accounting fees related to the filing of the S-3. The subscriptions receivable of $9,062 was collected on June 4, 2018. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
May 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Tax Disclosure [Text Block] | 6. INCOME TAXES Income tax (expense) benefit from continuing operations for the years ended May 31, 2018 and 2017 consists of the following: Years ended May 31, 2018 2017 Current: U.S. Federal $ -- $ -- State and local (800) -- Total current (800) -- Deferred: U.S. Federal (31,000) -- State and local -- -- Total deferred (31,000) -- Income tax (expense) benefit $ (31,800) $ -- Income tax benefit (expense) from continuing operations differs from the amounts computed by applying the U.S. Federal income tax rate applicable for each year (blended rate for 2018 (35% and 21%) and 35% for 2017) to pretax income as a result of the following: Years ended May 31, 2018 2017 Computed "expected" tax benefit $ 418,258 $ 317,997 Increase (reduction) in income taxes resulting from: Change in valuation allowance (114,000) (397,000) State income taxes, net of federal benefit 71,794 30,215 Research and development tax credits 46,602 40,205 Permanent tax differences and other 78,795 8,583 Impact of tax rate changes (533,249) -- Income tax (expense) $ (31,800) $ -- The tax effect of significant temporary differences is presented below: As of May 31, 2018 2017 Deferred tax assets: Accounts receivable, principally due to allowance for doubtful accounts and sales returns $ 15,000 $ 19,000 Inventory valuation 13,000 14,000 Compensated absences and deferred payroll 49,000 62,000 Net operating loss carryforwards 923,000 968,000 Tax credit carryforwards 385,000 307,000 Deferred rent expense 5,000 6,000 Other 163,000 108,000 Accumulated depreciation and amortization 6,000 -- Total deferred tax assets 1,559,000 1,484,000 Less valuation allowance (1,549,000) (1,435,000) Deferred tax asset Net 10,000 49,000 Deferred tax liabilities: Accumulated depreciation of property and equipment -- (8,000) Net deferred tax asset $ 10,000 $ 41,000 The Company has provided a valuation allowance of approximately $1,549,000 and $1,435,000 as of May 31, 2018 and 2017, respectively. The net change in the valuation allowance for the years ended May 31, 2018 and 2017 was an increase of approximately $114,000 and $397,000, respectively. The federal statutory tax rate of 35% has been changed to 21% for fiscal years beginning in 2019. Deferred tax assets as of May 31, 2018 have been adjusted to reflect the change in tax rates. At May 31, 2018, the Company has federal income tax net operating loss carryforwards of approximately $4,565,000. The federal net operating loss carryforwards begin to expire in 2030. At May 31, 2018, the Company has California state income tax net operating loss carryforwards of approximately $2,918,000. At May 31, 2018, the Company has federal research and development tax credit carryforward of approximately $323,000. The federal credits begin to expire in 2027. The Company also had similar credit carryforwards for state purposes of $62,000 at May 31, 2018. Pursuant to Internal Revenue Code Sections 382 and 383, annual use of the Company's net operating loss ("NOL") and credit carryforwards may be limited by statute because of a cumulative change in ownership of more than 50%. Pursuant to Sections 382 and 383 of the Code, the annual use of the Company's NOLs would be limited if there is a cumulative change of ownership (as that term is defined in Section 382(g) of the Code) of greater than 50% in a three year period. Based on management's analysis the Company does not believe that a cumulative change in ownership of greater than 50% has taken place. For the year ended May 31, 2018, the Company did an analysis of its ASC 740 position and has not identified any uncertain tax positions as defined under ASC 740. Should such position be identified in the future and should the Company owe interest and penalties as a result of this, these would be recognized as interest expense and other expense, respectively, in the consolidated financial statements. The Company is no longer subject to any significant U.S. federal tax examinations by tax authorities for years before fiscal year 2013. At May 31, 2018, the Company has German net operating loss carryforwards from its foreign subsidiary of approximately $35,000, resulting in a deferred tax asset of $10,000. No valuation allowance has been established for the German deferred tax asset. |
BUSINESS SEGMENTS
BUSINESS SEGMENTS | 12 Months Ended |
May 31, 2018 | |
Segment Reporting [Abstract] | |
Segment Reporting Disclosure [Text Block] | 7. BUSINESS SEGMENTS The Company operates as one segment. Geographic information regarding net sales is approximately as follows: Years ended May 31, 2018 2017 Net sales: Europe $ 2,023,000 $ 2,238,000 United States 685,000 874,000 Asia 2,506,000 2,412,000 South America 214,000 65,000 Middle East 132,000 186,000 Other foreign 4,000 17,000 Total net sales $ 5,564,000 $ 5,792,000 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
May 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure [Text Block] | 8. COMMITMENTS AND CONTINGENCIES OPERATING LEASES On June 18, 2009, the Company entered into an agreement to lease a building in Irvine, California. The lease commenced September 1, 2009 and ended August 31, 2016. On November 30, 2015, the Company entered into the First Amendment to Lease wherein it exercised its option to extend its lease until August 31, 2021. The initial base rent for the lease extension was $21,000 per month, increasing to $23,637 through August 31, 2021. The security deposit of $22,080 remains the same. In November 2016, the Company’s subsidiary, Biomerica de Mexico, entered into a ten year lease for approximately 8,104 square feet at a monthly rent of $2,926. The yearly rate is subject to an annual adjustment for inflation according to the United States Bureau of Labor Statistics Consumer Price Index For All Urban Consumers. Biomerica, Inc. is not a guarantor of such lease. The following is a schedule of rent payments due under the terms of the leases: Years ending May 31, 2019 $ 302,408 2020 311,782 2021 321,449 2022 112,299 2023 42,960 Thereafter 159,256 Total $ 1,250,154 According to the terms of the lease in Irvine, the Company is also responsible for routine repairs of the building and for certain increases in property tax. Total gross rent expense in the U.S. for fiscal 2018 and 2017 was $268,550 and $260,393, respectively. Rent expense for the Mexico facility for fiscal 2018 and 2017 was $45,963 and $44,986, respectively. The Company also has various insignificant leases for office equipment. RETIREMENT SAVINGS PLAN Effective September 1, 1986, the Company established a 401(k) plan for the benefit of its employees. The plan permits eligible employees to contribute to the plan up to the maximum percentage of total annual compensation allowable under the limits of Internal Revenue Code Sections 415, 401(k) and 404. The Company, at the discretion of its Board of Directors, may make contributions to the plan in amounts determined by the Board each year. No contributions by the Company have been made since the plan's inception. LITIGATION The Company is, from time to time, involved in legal proceedings, claims and litigation arising in the ordinary course of business. While the amounts claimed may be substantial, the ultimate liability cannot presently be determined because of considerable uncertainties that exist. Therefore, it is possible the outcome of such legal proceedings, claims and litigation could have a material effect on quarterly or annual operating results or cash flows when resolved in a future period. However, based on facts currently available, management believes such matters will not have a material adverse effect on the Company's consolidated financial position, results of operations or cash flows. There were no legal proceedings pending as of May 31, 2018. CONTRACTS The Company has one royalty agreement in which it has obtained rights to manufacture and market certain products for the life of the products. Royalty expense of approximately $19,000 is included in cost of sales for the agreement for each of the years ended May 31, 2018 and 2017. Sales of products manufactured under these agreements comprise approximately 2.6% and 2.5% of total sales for the years ended May 31, 2018 and 2017, respectively. The Company may license other products or technology in the future as it deems necessary for conducting business. The Company has other royalty agreements, however they are not considered material. On May 25, 2016, Biomerica, Inc. ("Biomerica") entered into an Exclusive Marketing License Agreement “Agreement” with Celtis Pharm Co., Ltd., a medical company in the Republic of Korea (South Korea) (“Celtis”), that grants to Celtis an exclusive license to market Biomerica’s new InFoods® IBS products (“IBS Products”). The IBS Products identify patient-specific trigger foods that exacerbate/alleviate IBS (Irritable Bowel Disease) symptoms. The Agreement only allows for Biomerica’s IBS Products to be sold by Celtis in the Republic of Korea with a possibility of expansion of territory in the future upon mutually agreeable negotiations. The term of the agreement is for a period of five years plus an additional two year term for Korean FDA clearance and begins after Biomerica first receives final clearance for sale of the IBS Products in the United States. The agreement may be cancelled if Biomerica has not obtained final approval or clearance for sale of the IBS Products in the United States from the United States FDA on or before December 31, 2017, or another date mutually agreed upon in writing. Biomerica is also obligated to maintain a full quality assurance system for the IBS Products following the harmonized standards according to Annex IV of Directive 98/79/EC. In September 2017, an agreement to extend the date for final approval or clearance for sale of the IBS Products in the United States from the United States FDA was signed to extend the date to December 31, 2019. Celtis, at its sole cost and expense, must use its commercially reasonable good faith efforts to obtain Korean FDA approval or clearance of the IBS Products. The terms of the Agreement provide up to $1.25 million in exclusivity fees based on certain milestones including Biomerica’s starting clinical trials in the United States, receipt of US FDA clearance and Celtis’ first sales of IBS Products in Korea. Should Biomerica not receive US FDA clearance for the IBS Products, $250,000 of the up-front exclusivity fee shall convert into Biomerica common stock at the price of $3.00 per share for a total of 83,333 shares. Additionally, the Agreement provides for royalty fees paid to Biomerica that are based on a percentage of net sales of the IBS Products in Korea. Minimum royalties in order to retain the exclusive South Korean license total $7.25 million On May 25, 2016, in connection with the Agreement, Biomerica, Inc. consummated a Stock Purchase Agreement with Celtis in which Celtis agreed to purchase 333,334 shares of Biomerica’s common stock at the purchase price of $3.00 per share for an aggregate purchase price of $1,000,002 (the “Private Placement”). The shares were offered and sold in the Private Placement to Celtis, an accredited investor, without registration under the Securities Act of 1933, as amended (the “Securities Act”), or state securities laws, in reliance on the exemptions provided by Section 4(2) of the Securities Act and Regulation S promulgated thereunder and in reliance on similar exemptions under applicable state laws. In October 2016, the Company entered into a Clinical Trial Agreement with Vanderbilt University Medical Center for a Specimen Collection Study for H. pylori testing in patients with dyspepsia. The study began in calendar 2017 and the maximum budget for the study is estimated at $85,000. In September 2017, the Company signed a Clinical Samples Agreement with the University of Southern California for the purpose of providing clinical samples for use by the Company in conducting future clinical trials for one of the products which the Company is developing. The work started in October 2017 with charges for work performed being invoiced and paid monthly. In November 2017, Biomerica announced the enrollment of its first patient at the University of Southern California for the Company’s Helicobacter Pylori test. In November 2017, the Company entered into a Clinical Trial Agreement with the University of Michigan to perform an InFoods 24 Endpoint Determination Study. The Company will be invoiced monthly for work performed the previous month. The maximum budget for the study is $181,015. In January 2018, the Company entered into a Clinical Trial Agreement with Beth Israel Deaconess Medical Center for the purposes of conducting “An Antibody Guided Restriction Trial Using Biomerica InFoods 24G Test in patients with a previous diagnosis of Irritable Bowel Syndrome (IBS)”. The study began in the first quarter of fiscal 2019. The Company will be invoiced monthly for work performed the previous month. The total cost of the study is estimated to be approximately $142,000. In April 2018, the Company entered into a Clinical Trial Agreement with Guardian Angel Research Center for the purposes of conducting a Specimen Collection Study Protocol for h. Pylori Testing in Patients with Dyspepsia. The Company will be invoiced monthly for work performed the previous month. The maximum budget for the study is $75,400. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
May 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | 9. SUBSEQUENT EVENTS Subsequent to May 31, 2018, the Company sold 44,321 shares of its common stock at prices ranging from $3.84 to $4.16 under its S-3 Registration Statement which resulted in net proceeds to the Company of $170,958, after deducting commissions for each sale. In August 2018, the Korean Intellectual Property Office (KIPO) issued a Certificate of Patent covering Biomerica’s compositions, devices and methods of IBS sensitivity testing (entitled “COMPOSITIONS, DEVICES, AND METHODS OF IBS SENSIVITY TESTING”). The patent specifically applies to Biomerica’s InFoods® IBS product, which is currently in a clinical study in the U.S. This patent is the first for the InFoods® patent portfolio, providing patent protection for InFoods® IBS in Korea until November 13, 2035. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 12 Months Ended |
May 31, 2018 | |
Accounting Policies [Abstract] | |
Consolidation, Policy [Policy Text Block] | PRINCIPLES OF CONSOLIDATION The consolidated financial statements for the years ended May 31, 2018 and 2017 include the accounts of Biomerica, Inc. ("Biomerica") as well as its German subsidiary (BioEurope GmbH) and Mexican subsidiary (Biomerica de Mexico). All significant intercompany accounts and transactions have been eliminated in consolidation. |
Use of Estimates, Policy [Policy Text Block] | ACCOUNTING ESTIMATES The preparation of the consolidated 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 consolidated financial statements, and the reported amounts of revenues and expenses during the reported period. Actual results could materially differ from those estimates. |
Fair Value Measurement, Policy [Policy Text Block] | FAIR VALUE OF FINANCIAL INSTRUMENTS The Company has financial instruments whereby the fair market value of the financial instruments could be different than that recorded on a historical basis. The Company's financial instruments consist of its cash and cash equivalents, accounts receivable, and accounts payable. The carrying amounts of the Company's financial instruments approximate their fair values. |
Concentration Risk, Credit Risk, Policy [Policy Text Block] | CONCENTRATION OF CREDIT RISK The Company maintains cash balances at certain financial institutions in excess of amounts insured by federal agencies. As of May 31, 2018, the Company had approximately $632,000 of uninsured cash. The Company does not believe it is exposed to any significant credit risks. The Company provides credit in the normal course of business to customers throughout the United States and foreign markets. For the years ended May 31, 2018 and 2017, the Company had one distributor which accounted for 43.3% and 45.2%, respectively, of consolidated sales. The Company performs ongoing credit evaluations of its customers and requires prepayment in some circumstances. At May 31, 2018, one customer accounted for 53.3% of gross accounts receivable. At May 31, 2017, two customers accounted for 54.2% of gross accounts receivable. For the year ended May 31, 2018, two companies accounted for 27.7% of the purchases of raw materials. For the year ended May 31, 2017, two companies accounted for 23.0 % of the purchases of raw materials. |
Concentration Risk Geographic Policy Policy [Text Block] | GEOGRAPHIC CONCENTRATION As of May 31, 2018 and 2017, approximately $657,000 and $467,000 of Biomerica's gross inventory and approximately $41,000 and $15,000, of Biomerica's property and equipment, net of accumulated depreciation, was located in Mexicali, Mexico, respectively. |
Cash and Cash Equivalents, Policy [Policy Text Block] | 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 $500 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 allowance for doubtful accounts accordingly. Balances over ninety days old are usually reserved for unless collection is reasonably assured. Occasionally certain long-standing customers, who routinely place large orders, will have unusually large receivables balances relative to the total gross receivables. Management monitors the payments for 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 net realizable value. 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 production facilities. Inventories approximate the following at May 31: 2018 2017 Raw materials $ 1,000,000 $ 830,000 Work in progress 854,000 728,000 Finished products 325,000 171,000 Total $ 2,179,000 $ 1,729,000 Reserves for inventory obsolescence are recorded as necessary to reduce obsolete inventory to estimated net realizable value or to specifically reserve for obsolete inventory that the Company intends to dispose of. As of May 31, 2018 and 2017, inventory reserves were approximately $52,000 and $35,000, respectively. |
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 are 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 amounted to $111,055 and $144,887 for the years ended May 31, 2018 and 2017, respectively. |
Goodwill and Intangible Assets, Policy [Policy Text Block] | INTANGIBLE ASSETS Intangible assets include trademarks, product rights, technology rights and patents, and are accounted for based on Accounting Standards Codification (“ASC”), ASC 350 Intangibles – Goodwill and Other (“ASC 350”). In that regard, intangible assets that have indefinite useful lives are not amortized but are tested at least annually for impairment or more frequently if events or changes in circumstances indicate that the asset might be impaired. Intangible assets are being amortized using the straight-line method over the useful life, not to exceed 18 years for marketing and distribution rights, 10 years for purchased technology use rights, and 17 years for patents. Amortization amounted to $75,546 and $74,332 for the years ended May 31, 2018 and 2017, respectively The Company assesses the recoverability of these intangible assets by determining whether the amortization of the asset's balance over its remaining life can be recovered through projected undiscounted future cash flows. In July 2012, the Financial Accounting Standards Board (“FASB”) issued another update to ASC 350 |
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 occurred which could indicate the carrying value of the investment to be greater 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. |
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | SHARE-BASED COMPENSATION The Company follows the guidance of the accounting provisions of ASC 718 Share-based Compensation (“ASC 718”), which requires the use of the fair-value based method to determine compensation for all arrangements under which employees and others receive shares of stock or equity instruments (warrants and options). The fair value of each option award is estimated on the date of grant using the Black-Scholes options-pricing model that uses assumptions for expected volatility, expected dividends, expected forfeiture rate, expected term, and the risk-free interest rate. The Company has not paid dividends historically and does not expect to pay them in the future. Expected volatilities are based on weighted averages of the historical volatility of the Company’s common stock 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. In applying the Black-Scholes options-pricing model, assumptions used were as follows: 2018 2017 Dividend yield 0% 0% Expected volatility 59.8-61.28% 53.64-54.73% Risk free interest rate 1.61-2.53% 1.08-1.23% Expected life 3.75-6.0 years 3.75-6.25 years |
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. Revenue is recognized only when collectability is reasonably assured. An allowance is established when necessary for estimated returns as revenue is recognized. As of May 31, 2018 and 2017, the allowance for returns is $0. 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” and recognizes the cost of the product as part of cost of sales. |
Shipping and Handling Cost, Policy [Policy Text Block] | SHIPPING AND HANDLING FEES AND COSTS Shipping and handling fees billed to customers are required to be classified as net sales, and shipping and handling costs are required to be classified as either cost of sales or disclosed in the notes to the consolidated financial statements. 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. The Company expensed $ 1,398,368 |
Income Tax, Policy [Policy Text Block] | INCOME TAXES The Company accounts for income taxes in accordance with ASC 740, Income Taxes (“ASC 740”). Deferred tax assets and liabilities arise from temporary differences between the tax bases of assets and liabilities and their reported amounts in the consolidated financial statements that will result in taxable or deductible amounts in future years. These temporary differences are measured using enacted tax rates. A valuation allowance is recorded to reduce deferred tax assets to the extent that management considers it is more likely than not that a deferred tax asset will not be realized. In determining the valuation allowance, the Company considers factors such as the reversal of deferred income tax assets, projected taxable income, and the character of income tax assets and tax planning strategies. A change to these factors could impact the estimated valuation allowance and income tax expense. At May 31, 2018 and 2017, in accordance with ASC 740, the Company has a valuation allowance for substantially all of its deferred tax assets. During the fiscal year ended May 31, 2018, this valuation allowance was increased to $1,549,000. The Company accounts for its uncertain tax provisions by using a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not, based solely on the technical merits, that the position will be sustained in an audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the appropriate amount of the benefit to recognize. The amount of benefit to recognize is measured as the maximum amount which is more likely than not to be realized. The tax position is derecognized when it is no longer more likely than not capable of being sustained. On subsequent recognition and measurement the maximum amount which is more likely than not to be recognized at each reporting date will represent the Company’s best estimate, given the information available at the reporting date, although the outcome of the tax position is not absolute or final. Upon adopting the revisions in ASC 740, the Company elected to follow an accounting policy to classify accrued interest related to liabilities for income taxes within the “Interest expense” line and penalties related to liabilities for income taxes within the “Other expense” line of the consolidated statements of operations and comprehensive loss. |
Advertising Costs, Policy [Policy Text Block] | ADVERTISING COSTS The Company reports the cost of all advertising as expense in the period in which those costs are incurred. Advertising costs were approximately $1,000 |
Foreign Currency Transactions and Translations Policy [Policy Text Block] | FOREIGN CURRENCY TRANSLATION The subsidiaries located in Germany and Mexico operate primarily using their local functional currencies. Accordingly, assets and liabilities of these subsidiaries are translated using exchange rates in effect at the end of the year, and revenues and costs are translated using average exchange rates for the year. The resulting adjustments to assets and liabilities are presented as a separate component of accumulated other comprehensive loss. The resulting adjustments to foreign currency loss of $10,302 and $2,248 are included in the consolidated statements of operations for the years ended May 31, 2018 and 2017, respectively. |
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 loss per share is computed as net loss divided by the weighted average number of common shares outstanding for the period. Diluted loss per share reflects the potential dilution that could occur from common shares issuable through stock options, warrants and other convertible securities using the treasury stock method. The total amount of anti-dilutive stock options not included in the loss per share calculation for the years ended May 31, 2018 and 2017 were 1,138,625 and 897,000, respectively. The following table illustrates the reconciliation of the numerators and denominators of the basic and diluted earnings per share computations: For the Years Ended May 31 2018 2017 Numerator : Net loss for basic and diluted net loss per common share $ (1,465,828) $ (908,561) Denominator for basic net loss per common share 8,570,029 8,329,769 Effect of dilutive securities: Options -- -- Denominator for diluted net loss per common share 8,570,029 8,329,769 Basic net loss per common share $ (0.17) $ (0.11) Diluted net loss per common share $ (0.17) $ (0.11) |
Segment Reporting, Policy [Policy Text Block] | SEGMENT REPORTING ASC 280, Segment Reporting (“ASC 280”), establishes standards for reporting, by public business enterprises, information about operating segments, products and services, geographic areas, and major customers. The Company’s operations are analyzed by management and its chief operating decision maker as being part of a single industry segment: the design, development, marketing and sales of diagnostic kits. |
Comprehensive Income, Policy [Policy Text Block] | REPORTING COMPREHENSIVE LOSS Comprehensive loss represents net loss and any revenues, expenses, gains and losses that, under GAAP, are excluded from net loss and recognized directly as a component of shareholders’ equity. Accumulated other comprehensive loss consists solely of foreign currency translation adjustments. |
New Accounting Pronouncements, Policy [Policy Text Block] | RECENT ACCOUNTING PRONOUNCEMENTS In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements – Going Concern (Subtopic 205-40), which addresses “ Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern”. In connection with preparing financial statements for each annual and interim reporting period, an entity’s management should evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued (or within one year after the date that the financial statements are available to be issued when applicable). Management’s evaluation should be based on relevant conditions and events that are known and reasonably knowable at the date that the financial statements are issued (or at the date that the financial statements are available to be issued when applicable). The amendments in this update are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. Management adopted the provisions of this statement and is taking them into account in the preparation of the financial statements for the period ended May 31, 2018. 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. 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. 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. 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 accounting principles generally accepted 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 has implemented the provisions of this statement and does not believe the adoption of ASU 2015-11 had a significant impact on the Company’s financial position or results of operations. 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”). The release affects public and private companies that hold financial assets or owe financial liabilities. ASU-2016-01 will take effect for public companies for fiscal years beginning after December 15, 2017. Management is evaluating the provisions of this statement and has not determined what impact the adoption of ASU- 2016-01 will have on the Company’s financial position or results of operations. On February 25, 2016, the FASB issued ASU 2016-02, Leases (Topic 842) (“ASU-2016-02”). ASU-2016-02 defines whether a contract is a lease. If it is a lease, the Company is required to recognize the lease assets and liabilities. ASU-2016-02 is effective for public companies for the annual periods beginning after December 15, 2018. Management is evaluating the provisions of this statement and has not determined what impact the adoption of ASU-2016-02 will have on the Company’s financial position or results of operations. On March 30, 2016, the FASB issued ASU 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The update includes provisions intended to simplify various aspects of accounting for share-based compensation. ASU-2016-09 will take effect for public companies for the annual periods beginning after December 15, 2016. Management does not believe the adoption of ASU 2016-09 has had a significant impact on the Company’s financial position or results of operations. On August 26, 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. This Update addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. ASU-2016-15 will take effect for public companies for the fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Management is evaluating the provisions of this statement and has not determined what impact the adoption of ASU-2016-15 will have on the Company’s financial position or results of operations. On November 27, 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. In January 2017 the FASB issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350), Simplifying the test for Goodwill Impairment. On February 15, 2018, the FASB issued ASU 2018-02, “Reclassification of Certain Tax Effects From Accumulated Comprehensive Income” (ASU 2018-02). ASU 2018-02 will give companies the option to reclassify stranded tax effects caused by the newly-enacted U.S. TAX Cuts and Jobs Act (TCJA) from accumulated other comprehensive income (ASCI) to retained earnings. ASU 2018-02 will take effect for all companies for the fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Management is evaluating the provisions of this statement and has not determined what impact the adoption of ASU 2018-02 will have on the Company’s financial position or results of operations. On June 20, 2018, the FASB issued ASU 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. ASU 2018-07 is intended to reduce cost and complexity and to improve financial reporting for share-based payments to nonemployees (for example, service providers, external legal counsel, suppliers, etc.). ASU 2018-07 will be effective for public companies for December 31, 2019 financial statements and for nonpublic entities for December 31, 2020 financial statements. Early adoption is permitted, but no earlier than entity’s adoption date for ASC Topic 606, Revenue from Contracts with Customers . Management is evaluating the provisions of this statement and has not determined what impact the adoption of ASU-2018-7 will have on the Company’s financial position or results of operations. 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. |
SUMMARY OF SIGNIFICANT ACCOUN17
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
May 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of Inventory, Current [Table Text Block] | 2018 2017 Raw materials $ 1,000,000 $ 830,000 Work in progress 854,000 728,000 Finished products 325,000 171,000 Total $ 2,179,000 $ 1,729,000 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | 2018 2017 Dividend yield 0% 0% Expected volatility 59.8-61.28% 53.64-54.73% Risk free interest rate 1.61-2.53% 1.08-1.23% Expected life 3.75-6.0 years 3.75-6.25 years |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | For the Years Ended May 31 2018 2017 Numerator : Net loss for basic and diluted net loss per common share $ (1,465,828) $ (908,561) Denominator for basic net loss per common share 8,570,029 8,329,769 Effect of dilutive securities: Options -- -- Denominator for diluted net loss per common share 8,570,029 8,329,769 Basic net loss per common share $ (0.17) $ (0.11) Diluted net loss per common share $ (0.17) $ (0.11) |
INTANGIBLE ASSETS, NET (Tables)
INTANGIBLE ASSETS, NET (Tables) | 12 Months Ended |
May 31, 2018 | |
Disclosure Text Block [Abstract] | |
Schedule of Finite-Lived Intangible Assets [Table Text Block] | 2018 2017 Patents and licenses $ 509,485 $ 509,485 Less accumulated amortization (410,562) (335,016) Intangible Assets, Net $ 98,923 $ 174,469 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | 2019 $ 60,861 2020 20,339 2021 12,694 2022 3,304 2023 900 Thereafter 825 Total $ 98,923 |
ACCOUNTS PAYABLE AND ACCRUED 19
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables) | 12 Months Ended |
May 31, 2018 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Liabilities [Table Text Block] | 2018 2017 Accounts payable $ 655,599 $ 336,430 Deferred rent 31,357 15,570 Total $ 686,956 $ 352,000 |
SHAREHOLDERS` EQUITY (Tables)
SHAREHOLDERS` EQUITY (Tables) | 12 Months Ended |
May 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
Share-based Compensation, Stock Options, Activity [Table Text Block] | NUMBER OF STOCK OPTIONS PRICE RANGE PER SHARE WEIGHTED EXERCISE PRICE Options outstanding at May 31, 2016 1,199,000 $ 0.43-$ 1.20 $ 0.81 Options granted 55,000 $ 1.52-$ 1.61 $ 1.55 Options exercised (341,500) $ 0.43-$ 1.04 $ 0.46 Options canceled or expired (15,500) $ 0.43-$ 1.04 $ 0.90 Options outstanding at May 31, 2017 897,000 $ 0.71-$ 1.61 $ 0.98 Options granted 287,000 $ 2.41-$3.90 $ 3.63 Options exercised (34,750) $ 0.71-$ 1.04 $ 0.80 Options canceled or expired (10,625) $ 0.71-$ 2.41 $ 1.44 Options outstanding at May 31, 2018 1,138,625 $ 0.71-$ 3.90 $ 1.65 |
Schedule of Nonvested Share Activity [Table Text Block] | STOCK OPTIONS WEIGHTED AVERAGE GRANT DATE FAIR VALUE NUMBER OF SHARES Nonvested shares at May 31, 2017 517,250 $ 0.96 Granted 287,000 $ 3.63 Vested/Exercised (212,125) $ 1.00 Forfeited (9,125) $ 1.56 Nonvested shares at May 31, 2018 583,000 $ 2.34 |
Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range [Table Text Block] | WEIGHTED AVERAGE REMAINING CONTRACTUAL LIFE IN YEARS WEIGHTED AVERAGE EXERCISE PRICE NUMBER EXERCISABLE AT MAY 31, 2018 NUMBER OUTSTANDING 05/31/2018 WEIGHTED AVERAGE EXERCISE PRICE RANGE OF EXERCISE PRICES $ 0.71-$ 0.84 460,625 4.66 $0.80 371,750 $0.79 $ 0.85-$ 1.04 65,000 2.22 $0.99 32,625 $0.98 $ 1.20-$ 1.61 330,000 8.32 $1.26 151,250 $1.23 $ 2.41-$ 3.90 283,000 8.69 $3.65 -- -- |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
May 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] | Years ended May 31, 2018 2017 Current: U.S. Federal $ -- $ -- State and local (800) -- Total current (800) -- Deferred: U.S. Federal (31,000) -- State and local -- -- Total deferred (31,000) -- Income tax (expense) benefit $ (31,800) $ -- |
Schedule of Effective Income Tax Rate Reconciliation [Table Text Block] | Years ended May 31, 2018 2017 Computed "expected" tax benefit $ 418,258 $ 317,997 Increase (reduction) in income taxes resulting from: Change in valuation allowance (114,000) (397,000) State income taxes, net of federal benefit 71,794 30,215 Research and development tax credits 46,602 40,205 Permanent tax differences and other 78,795 8,583 Impact of tax rate changes (533,249) -- Income tax (expense) $ (31,800) $ -- |
Schedule of Deferred Tax Assets and Liabilities [Table Text Block] | As of May 31, 2018 2017 Deferred tax assets: Accounts receivable, principally due to allowance for doubtful accounts and sales returns $ 15,000 $ 19,000 Inventory valuation 13,000 14,000 Compensated absences and deferred payroll 49,000 62,000 Net operating loss carryforwards 923,000 968,000 Tax credit carryforwards 385,000 307,000 Deferred rent expense 5,000 6,000 Other 163,000 108,000 Accumulated depreciation and amortization 6,000 -- Total deferred tax assets 1,559,000 1,484,000 Less valuation allowance (1,549,000) (1,435,000) Deferred tax asset Net 10,000 49,000 Deferred tax liabilities: Accumulated depreciation of property and equipment -- (8,000) Net deferred tax asset $ 10,000 $ 41,000 |
BUSINESS SEGMENTS (Tables)
BUSINESS SEGMENTS (Tables) | 12 Months Ended |
May 31, 2018 | |
Segment Reporting [Abstract] | |
Revenue from External Customers by Geographic Areas [Table Text Block] | Years ended May 31, 2018 2017 Net sales: Europe $ 2,023,000 $ 2,238,000 United States 685,000 874,000 Asia 2,506,000 2,412,000 South America 214,000 65,000 Middle East 132,000 186,000 Other foreign 4,000 17,000 Total net sales $ 5,564,000 $ 5,792,000 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
May 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block] | Years ending May 31, 2019 $ 302,408 2020 311,782 2021 321,449 2022 112,299 2023 42,960 Thereafter 159,256 Total $ 1,250,154 |
SUMMARY OF SIGNIFICANT ACCOUN24
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | 12 Months Ended | |
May 31, 2018 | May 31, 2017 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | ||
Cash, Uninsured Amount | $ 632,000 | |
Property, Plant and Equipment, Net | $ 351,149 | $ 331,857 |
Threshold Period Past Due for Write-off of Trade Accounts Receivable | 90 days | |
Inventory Valuation Reserves | $ 52,000 | 35,000 |
Depreciation, Depletion and Amortization | 111,055 | 144,887 |
Amortization of Intangible Assets | 75,546 | 74,332 |
Revenue Recognition, Sales Returns, Reserve for Sales Returns | 0 | 0 |
Research and Development Expense | 1,398,368 | 1,130,635 |
Deferred Tax Assets, Valuation Allowance | 1,549,000 | 1,435,000 |
Advertising Expense | 1,000 | 7,000 |
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax | $ 10,302 | $ 2,248 |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in Shares) | 1,138,625 | 897,000 |
MEXICO | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | ||
Inventory, Gross | $ 657,000 | $ 467,000 |
Property, Plant and Equipment, Net | $ 41,000 | $ 15,000 |
Minimum [Member] | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | ||
Property, Plant and Equipment, Useful Life | 5 years | |
Maximum [Member] | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | ||
Property, Plant and Equipment, Useful Life | 10 years | |
Marketing-Related Intangible Assets [Member] | Maximum [Member] | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | ||
Finite-Lived Intangible Asset, Useful Life | 18 years | |
Purchased Technology Rights [Member] | Maximum [Member] | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | ||
Finite-Lived Intangible Asset, Useful Life | 10 years | |
Patents [Member] | Maximum [Member] | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | ||
Finite-Lived Intangible Asset, Useful Life | 17 years | |
Domestic Customer [Member] | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | ||
Accounts Receivable Initial Credit Limit | $ 500 | |
Customer Concentration Risk [Member] | Sales Revenue, Net [Member] | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | ||
Concentration Risk, Percentage | 43.30% | 45.20% |
Credit Concentration Risk [Member] | One Customer [Member] | Accounts Receivable [Member] | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | ||
Concentration Risk, Percentage | 53.30% | |
Credit Concentration Risk [Member] | Two Customers [Member] | Accounts Receivable [Member] | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | ||
Concentration Risk, Percentage | 54.20% | |
Supplier Concentration Risk [Member] | Cost of Goods, Product Line [Member] | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | ||
Concentration Risk, Percentage | 27.70% | 23.00% |
Investment In Polish Distributor [Member] | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) [Line Items] | ||
Equity Method Investment, Ownership Percentage | 6.00% |
SUMMARY OF SIGNIFICANT ACCOUN25
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - Inventories - USD ($) | May 31, 2018 | May 31, 2017 |
Inventories [Abstract] | ||
Raw materials | $ 1,000,000 | $ 830,000 |
Work in progress | 854,000 | 728,000 |
Finished products | 325,000 | 171,000 |
Total | $ 2,178,777 | $ 1,729,121 |
SUMMARY OF SIGNIFICANT ACCOUN26
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - Share based compensation assumptions | 12 Months Ended | |
May 31, 2018 | May 31, 2017 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - Share based compensation assumptions [Line Items] | ||
Dividend yield | 0.00% | 0.00% |
Minimum [Member] | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - Share based compensation assumptions [Line Items] | ||
Expected volatility | 59.80% | 53.64% |
Risk free interest rate | 1.61% | 1.08% |
Expected life | 3 years 9 months | 3 years 9 months |
Maximum [Member] | ||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - Share based compensation assumptions [Line Items] | ||
Expected volatility | 61.28% | 54.73% |
Risk free interest rate | 2.53% | 1.23% |
Expected life | 6 years | 6 years 3 months |
SUMMARY OF SIGNIFICANT ACCOUN27
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - Reconciliation of the numerators and denominators of the basic and diluted earnings per share computations - USD ($) | 12 Months Ended | |
May 31, 2018 | May 31, 2017 | |
Reconciliation of the numerators and denominators of the basic and diluted earnings per share computations [Abstract] | ||
Net loss for basic and diluted net loss per common share (in Dollars) | $ (1,465,828) | $ (908,561) |
Denominator for basic net loss per common share | 8,570,029 | 8,329,769 |
Effect of dilutive securities: | ||
Options | ||
Denominator for diluted net loss per common share | 8,570,029 | 8,329,769 |
Basic net loss per common share (in Dollars per share) | $ (0.17) | $ (0.11) |
Diluted net loss per common share (in Dollars per share) | $ (0.17) | $ (0.11) |
INTANGIBLE ASSETS, NET (Details
INTANGIBLE ASSETS, NET (Details) - Intangible assets, net - USD ($) | May 31, 2018 | May 31, 2017 |
Intangible assets, net [Abstract] | ||
Patents and licenses | $ 509,485 | $ 509,485 |
Less accumulated amortization | (410,562) | (335,016) |
Intangible Assets, Net | $ 98,923 | $ 174,469 |
INTANGIBLE ASSETS, NET (Detai29
INTANGIBLE ASSETS, NET (Details) - Expected amortization of intangible assets | May 31, 2018USD ($) |
Expected amortization of intangible assets [Abstract] | |
2,019 | $ 60,861 |
2,020 | 20,339 |
2,021 | 12,694 |
2,022 | 3,304 |
2,023 | 900 |
Thereafter | 825 |
Total | $ 98,923 |
ACCOUNTS PAYABLE AND ACCRUED 30
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - Accounts payable and accrued expense balances - USD ($) | May 31, 2018 | May 31, 2017 |
Accounts payable and accrued expense balances [Abstract] | ||
Accounts payable | $ 655,599 | $ 336,430 |
Deferred rent | 31,357 | 15,570 |
Total | $ 686,956 | $ 352,000 |
SHAREHOLDERS` EQUITY (Details)
SHAREHOLDERS` EQUITY (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Aug. 29, 2018 | May 31, 2018 | May 31, 2017 | Jun. 04, 2018 | |
SHAREHOLDERS` EQUITY (Details) [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value (in Dollars per share) | $ 3.63 | $ 1.55 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value | $ 87,000 | $ 616,000 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value | 2,755,000 | 1,354,000 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Intrinsic Value | 1,749,000 | $ 616,000 | ||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options | $ 212,000 | |||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 1 year 299 days | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term | 5 years 3 months | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period (in Shares) | 34,750 | 341,500 | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Lower Range Limit (in Dollars per share) | $ 0.71 | $ 0.43 | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range, Upper Range Limit (in Dollars per share) | $ 1.04 | $ 1.04 | ||
Proceeds from Stock Options Exercised | $ 27,436 | $ 157,728 | ||
Proceeds from Issuance of Common Stock | $ 1,266,871 | |||
Common Stock [Member] | ||||
SHAREHOLDERS` EQUITY (Details) [Line Items] | ||||
Sale of Stock, Number of Shares Issued in Transaction (in Shares) | 342,088 | |||
Proceeds from Issuance of Common Stock | $ 1,379,226 | |||
Sale of Stock, Consideration Received on Transaction | $ 1,275,933 | |||
Common Stock [Member] | Subsequent Event [Member] | ||||
SHAREHOLDERS` EQUITY (Details) [Line Items] | ||||
Sale of Stock, Number of Shares Issued in Transaction (in Shares) | 44,321 | |||
Sale of Stock, Consideration Received on Transaction | $ 170,958 | |||
Common Stock, Value, Subscriptions | $ 9,062 | |||
Common Stock [Member] | Minimum [Member] | ||||
SHAREHOLDERS` EQUITY (Details) [Line Items] | ||||
Sale of Stock, Price Per Share (in Dollars per share) | $ 3.73 | |||
Common Stock [Member] | Minimum [Member] | Subsequent Event [Member] | ||||
SHAREHOLDERS` EQUITY (Details) [Line Items] | ||||
Sale of Stock, Price Per Share (in Dollars per share) | $ 3.84 | |||
Common Stock [Member] | Maximum [Member] | ||||
SHAREHOLDERS` EQUITY (Details) [Line Items] | ||||
Sale of Stock, Price Per Share (in Dollars per share) | $ 4.74 | |||
Common Stock [Member] | Maximum [Member] | Subsequent Event [Member] | ||||
SHAREHOLDERS` EQUITY (Details) [Line Items] | ||||
Sale of Stock, Price Per Share (in Dollars per share) | $ 4.16 | |||
1999 Plan [Member] | ||||
SHAREHOLDERS` EQUITY (Details) [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized (in Shares) | 1,000,000 | |||
Share Based Compensation Arrangement By Share Based Payment Award Number Of Shares Authorized Annual Increment Threshold Percentage | 1.50% | |||
Share Based Compensation Arrangement By Share Based Payment Award Number Of Shares Authorized Annual Increment Threshold Number (in Shares) | 500,000 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Purchase Price of Common Stock, Percent | 80.00% | |||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | 10 years | |||
2010 Plan [Member] | ||||
SHAREHOLDERS` EQUITY (Details) [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized (in Shares) | 850,000 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Purchase Price of Common Stock, Percent | 80.00% | |||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | 10 years | |||
2014 Plan [Member] | ||||
SHAREHOLDERS` EQUITY (Details) [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized (in Shares) | 850,000 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Purchase Price of Common Stock, Percent | 80.00% | |||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | 10 years | |||
2017 Plan [Member] | ||||
SHAREHOLDERS` EQUITY (Details) [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized (in Shares) | 900,000 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Purchase Price of Common Stock, Percent | 80.00% | |||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | 10 years |
SHAREHOLDERS` EQUITY (Details)
SHAREHOLDERS` EQUITY (Details) - Outstanding Stock Options Activity - $ / shares | 12 Months Ended | |
May 31, 2018 | May 31, 2017 | |
SHAREHOLDERS` EQUITY (Details) - Outstanding Stock Options Activity [Line Items] | ||
Options granted, number of stock options | 287,000 | |
Options exercised, number of stock options | (34,750) | (341,500) |
Price Range Per Share $0.43 - $1.20 [Member] | ||
SHAREHOLDERS` EQUITY (Details) - Outstanding Stock Options Activity [Line Items] | ||
Options outstanding, number of stock options | 1,199,000 | |
Options outstanding, weighted average exercise price | $ 0.81 | |
Price Range Per Share $1.52 - $1.61 [Member] | ||
SHAREHOLDERS` EQUITY (Details) - Outstanding Stock Options Activity [Line Items] | ||
Options granted, number of stock options | 55,000 | |
Options granted, weighted average exercise price | $ 1.55 | |
Price Range Per Share $0.43 - $1.04 [Member] | ||
SHAREHOLDERS` EQUITY (Details) - Outstanding Stock Options Activity [Line Items] | ||
Options exercised, number of stock options | (341,500) | |
Options exercised, weighted average exercise price | $ 0.46 | |
Options canceled or expired, number of stock options | (15,500) | |
Options canceled or expired, weighted average exercise price | $ 0.90 | |
Price Range Per Share $0.71 - $1.61 [Member] | ||
SHAREHOLDERS` EQUITY (Details) - Outstanding Stock Options Activity [Line Items] | ||
Options outstanding, number of stock options | 897,000 | |
Options outstanding, weighted average exercise price | $ 0.98 | |
Options outstanding, number of stock options | 897,000 | |
Options outstanding, weighted average exercise price | $ 0.98 | |
Price Range Per Share $2.41 - $3.90 [Member] | ||
SHAREHOLDERS` EQUITY (Details) - Outstanding Stock Options Activity [Line Items] | ||
Options granted, number of stock options | 287,000 | |
Options granted, weighted average exercise price | $ 3.63 | |
Price Range Per Share $0.71 - $1.04 [Member] | ||
SHAREHOLDERS` EQUITY (Details) - Outstanding Stock Options Activity [Line Items] | ||
Options exercised, number of stock options | (34,750) | |
Options exercised, weighted average exercise price | $ 0.80 | |
Price Range Per Share $0.71 - $2.41 [Member] | ||
SHAREHOLDERS` EQUITY (Details) - Outstanding Stock Options Activity [Line Items] | ||
Options canceled or expired, number of stock options | (10,625) | |
Options canceled or expired, weighted average exercise price | $ 1.44 | |
Price Range Per Share $0.71 - $3.90 [Member] | ||
SHAREHOLDERS` EQUITY (Details) - Outstanding Stock Options Activity [Line Items] | ||
Options outstanding, number of stock options | 1,138,625 | |
Options outstanding, weighted average exercise price | $ 1.65 |
SHAREHOLDERS` EQUITY (Details33
SHAREHOLDERS` EQUITY (Details) - Non-vested Stock Options Activity - $ / shares | 12 Months Ended | |
May 31, 2018 | May 31, 2017 | |
Non-vested Stock Options Activity [Abstract] | ||
Nonvested shares at May 31, 2017 | 517,250 | |
Nonvested shares at May 31, 2017 | $ 0.96 | |
Granted | 287,000 | |
Granted | $ 3.63 | $ 1.55 |
Vested/Exercised | (212,125) | |
Vested/Exercised | $ 1 | |
Forfeited | (9,125) | |
Forfeited | $ 1.56 | |
Nonvested shares at May 31, 2018 | 583,000 | 517,250 |
Nonvested shares at May 31, 2018 | $ 2.34 | $ 0.96 |
SHAREHOLDERS` EQUITY (Details34
SHAREHOLDERS` EQUITY (Details) - Stock Options Summary - $ / shares | 12 Months Ended | |
May 31, 2018 | May 31, 2017 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Range of Exercise Price, Minimum | $ 0.71 | $ 0.43 |
Range of Exercise Price, Maximum | 1.04 | $ 1.04 |
Range Of Exercise Price $0.71 - $0.84 [Member] | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Range of Exercise Price, Minimum | 0.71 | |
Range of Exercise Price, Maximum | $ 0.84 | |
Options Outstanding, Number (in Shares) | 460,625 | |
Options Outstanding, Weighted Average Remaining Contractual Life | 4 years 240 days | |
Options Outstanding, Weighted Average Exercise Price | $ 0.80 | |
Options Exercisable, Number (in Shares) | 371,750 | |
Options Exercisable, Weighted Average Exercise Price | $ 0.79 | |
Range Of Exercise Price $0.85 - $1.04 [Member] | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Range of Exercise Price, Minimum | 0.85 | |
Range of Exercise Price, Maximum | $ 1.04 | |
Options Outstanding, Number (in Shares) | 65,000 | |
Options Outstanding, Weighted Average Remaining Contractual Life | 2 years 80 days | |
Options Outstanding, Weighted Average Exercise Price | $ 0.99 | |
Options Exercisable, Number (in Shares) | 32,625 | |
Options Exercisable, Weighted Average Exercise Price | $ 0.98 | |
Range Of Exercise Price $1.20 - $1.61 [Member] | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Range of Exercise Price, Minimum | 1.20 | |
Range of Exercise Price, Maximum | $ 1.61 | |
Options Outstanding, Number (in Shares) | 330,000 | |
Options Outstanding, Weighted Average Remaining Contractual Life | 8 years 116 days | |
Options Outstanding, Weighted Average Exercise Price | $ 1.26 | |
Options Exercisable, Number (in Shares) | 151,250 | |
Options Exercisable, Weighted Average Exercise Price | $ 1.23 | |
Range Of Exercise Price $2.41 - $3.90 [Member] | ||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ||
Range of Exercise Price, Minimum | 2.41 | |
Range of Exercise Price, Maximum | $ 3.90 | |
Options Outstanding, Number (in Shares) | 283,000 | |
Options Outstanding, Weighted Average Remaining Contractual Life | 8 years 251 days | |
Options Outstanding, Weighted Average Exercise Price | $ 3.65 | |
Options Exercisable, Number (in Shares) | ||
Options Exercisable, Weighted Average Exercise Price |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | Jun. 01, 2018 | May 31, 2018 | May 31, 2017 |
INCOME TAXES (Details) [Line Items] | |||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 35.00% | 35.00% | |
Effective Income Tax Rate Reconciliation, Percent | 21.00% | ||
Deferred Tax Assets, Valuation Allowance | $ 1,549,000 | $ 1,435,000 | |
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount | 114,000 | 397,000 | |
Operating Loss Carryforwards | 4,565,000 | ||
Effective Income Tax Rate Reconciliation, Tax Credit, Research, Amount | 46,602 | $ 40,205 | |
California State Income Tax [Member] | |||
INCOME TAXES (Details) [Line Items] | |||
Operating Loss Carryforwards | 2,918,000 | ||
Domestic Tax Authority [Member] | |||
INCOME TAXES (Details) [Line Items] | |||
Effective Income Tax Rate Reconciliation, Tax Credit, Research, Amount | 323,000 | ||
State and Local Jurisdiction [Member] | |||
INCOME TAXES (Details) [Line Items] | |||
Effective Income Tax Rate Reconciliation, Tax Credit, Research, Amount | 62,000 | ||
Subsequent Event [Member] | |||
INCOME TAXES (Details) [Line Items] | |||
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 21.00% | ||
Federal Ministry of Finance, Germany [Member] | |||
INCOME TAXES (Details) [Line Items] | |||
Operating Loss Carryforwards | 35,000 | ||
Deferred Tax Assets, Operating Loss Carryforwards, Foreign | $ 10,000 |
INCOME TAXES (Details) - Income
INCOME TAXES (Details) - Income tax - USD ($) | 12 Months Ended | |
May 31, 2018 | May 31, 2017 | |
Current: | ||
U.S. Federal | ||
State and local | (800) | |
Total current | (800) | |
Deferred: | ||
U.S. Federal | (31,000) | |
State and local | ||
Total deferred | (31,000) | |
Income tax (expense) benefit | $ (31,800) |
INCOME TAXES (Details) - Inco37
INCOME TAXES (Details) - Income Tax Rate Reconciliation - USD ($) | 12 Months Ended | |
May 31, 2018 | May 31, 2017 | |
Income Tax Rate Reconciliation [Abstract] | ||
Computed "expected" tax benefit | $ 418,258 | $ 317,997 |
Increase (reduction) in income taxes resulting from: | ||
Change in valuation allowance | (114,000) | (397,000) |
State income taxes, net of federal benefit | 71,794 | 30,215 |
Research and development tax credits | 46,602 | 40,205 |
Permanent tax differences and other | 78,795 | 8,583 |
Impact of tax rate changes | (533,249) | |
Income tax (expense) | $ (31,800) |
INCOME TAXES (Details) - Deferr
INCOME TAXES (Details) - Deferred Tax - USD ($) | May 31, 2018 | May 31, 2017 |
Deferred tax assets: | ||
Accounts receivable, principally due to allowance for doubtful accounts and sales returns | $ 15,000 | $ 19,000 |
Inventory valuation | 13,000 | 14,000 |
Compensated absences and deferred payroll | 49,000 | 62,000 |
Net operating loss carryforwards | 923,000 | 968,000 |
Tax credit carryforwards | 385,000 | 307,000 |
Deferred rent expense | 5,000 | 6,000 |
Other | 163,000 | 108,000 |
Accumulated depreciation and amortization | 6,000 | |
Total deferred tax assets | 1,559,000 | 1,484,000 |
Less valuation allowance | (1,549,000) | (1,435,000) |
Deferred tax asset Net | 10,000 | 49,000 |
Deferred tax liabilities: | ||
Accumulated depreciation of property and equipment | (8,000) | |
Net deferred tax asset | $ 10,000 | $ 41,000 |
BUSINESS SEGMENTS (Details)
BUSINESS SEGMENTS (Details) | 12 Months Ended |
May 31, 2018 | |
Segment Reporting [Abstract] | |
Number of Operating Segments | 1 |
BUSINESS SEGMENTS (Details) - G
BUSINESS SEGMENTS (Details) - Geographic information regarding net sales - USD ($) | 12 Months Ended | |
May 31, 2018 | May 31, 2017 | |
Net sales: | ||
Net Sales | $ 5,564,185 | $ 5,791,670 |
Europe [Member] | ||
Net sales: | ||
Net Sales | 2,023,000 | 2,238,000 |
UNITED STATES | ||
Net sales: | ||
Net Sales | 685,000 | 874,000 |
Asia [Member] | ||
Net sales: | ||
Net Sales | 2,506,000 | 2,412,000 |
South America [Member] | ||
Net sales: | ||
Net Sales | 214,000 | 65,000 |
Middle East [Member] | ||
Net sales: | ||
Net Sales | 132,000 | 186,000 |
Other Foreign [Member] | ||
Net sales: | ||
Net Sales | $ 4,000 | $ 17,000 |
COMMITMENTS AND CONTINGENCIES41
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) | May 25, 2016 | Jun. 18, 2009 | Nov. 30, 2016 | May 31, 2018 | May 31, 2017 | Apr. 30, 2018 | Jan. 31, 2018 | Nov. 30, 2017 | Oct. 31, 2016 |
COMMITMENTS AND CONTINGENCIES (Details) [Line Items] | |||||||||
Stock Issued During Period, Value, New Issues | $ 1,275,933 | ||||||||
Vanderbilt University Medical Center [Member] | |||||||||
COMMITMENTS AND CONTINGENCIES (Details) [Line Items] | |||||||||
Startup Costs | $ 85,000 | ||||||||
University OF Michigan [Member] | |||||||||
COMMITMENTS AND CONTINGENCIES (Details) [Line Items] | |||||||||
Startup Costs | $ 181,015 | ||||||||
Beth Israel Deaconess Medical Center [Member] | |||||||||
COMMITMENTS AND CONTINGENCIES (Details) [Line Items] | |||||||||
Startup Costs | $ 142,000 | ||||||||
Guardian Angel Research Center [Member] | |||||||||
COMMITMENTS AND CONTINGENCIES (Details) [Line Items] | |||||||||
Startup Costs | $ 75,400 | ||||||||
Royalty Agreements [Member] | |||||||||
COMMITMENTS AND CONTINGENCIES (Details) [Line Items] | |||||||||
Royalty Expense | $ 19,000 | $ 19,000 | |||||||
Royalty Expense Percentage Of Sales | 2.60% | 2.50% | |||||||
Exclusive Marketing License Agreement [Member] | US FDA [Member] | |||||||||
COMMITMENTS AND CONTINGENCIES (Details) [Line Items] | |||||||||
Clearance Fees | $ 1,250,000 | ||||||||
Conversion of Stock, Amount Converted | $ 250,000 | ||||||||
Shares Issued, Price Per Share (in Dollars per share) | $ 3 | ||||||||
Conversion of Stock, Shares Issued (in Shares) | 83,333 | ||||||||
Exclusive Marketing License Agreement [Member] | Korean FDA [Member] | |||||||||
COMMITMENTS AND CONTINGENCIES (Details) [Line Items] | |||||||||
Royalty Expense | $ 7,250,000 | ||||||||
Agreement Term Period | 5 years | ||||||||
Building In Irvine California [Member] | |||||||||
COMMITMENTS AND CONTINGENCIES (Details) [Line Items] | |||||||||
Operating Lease Initiation Date | Sep. 1, 2009 | ||||||||
Lease Expiration Date | Aug. 31, 2016 | ||||||||
Property Available for Operating Lease [Member] | |||||||||
COMMITMENTS AND CONTINGENCIES (Details) [Line Items] | |||||||||
Operating Leases, Rent Expense | $ 2,926 | ||||||||
Lease Expiration Period | 10 years | ||||||||
UNITED STATES | Property Available for Operating Lease [Member] | |||||||||
COMMITMENTS AND CONTINGENCIES (Details) [Line Items] | |||||||||
Operating Leases, Rent Expense | $ 268,550 | $ 260,393 | |||||||
MEXICO | Property Available for Operating Lease [Member] | |||||||||
COMMITMENTS AND CONTINGENCIES (Details) [Line Items] | |||||||||
Operating Leases, Rent Expense | $ 45,963 | $ 44,986 | |||||||
First Amendment To Lease [Member] | Building In Irvine California [Member] | |||||||||
COMMITMENTS AND CONTINGENCIES (Details) [Line Items] | |||||||||
Lease Expiration Date | Aug. 31, 2021 | ||||||||
Operating Leases, Rent Expense, Minimum Rentals | $ 21,000 | ||||||||
Operating Leases, Rent Expense | 23,637 | ||||||||
Security Deposit | $ 22,080 | ||||||||
Exclusive Marketing License Agreement [Member] | Private Placement [Member] | Celtis Pharm Co., Ltd [Member] | |||||||||
COMMITMENTS AND CONTINGENCIES (Details) [Line Items] | |||||||||
Shares Issued, Price Per Share (in Dollars per share) | $ 3 | ||||||||
Stock Issued During Period, Shares, New Issues (in Shares) | 333,334 | ||||||||
Stock Issued During Period, Value, New Issues | $ 1,000,002 |
COMMITMENTS AND CONTINGENCIES42
COMMITMENTS AND CONTINGENCIES (Details) - Schedule of rent payments due under the terms of the leases | May 31, 2018USD ($) |
Schedule of rent payments due under the terms of the leases [Abstract] | |
2,019 | $ 302,408 |
2,020 | 311,782 |
2,021 | 321,449 |
2,022 | 112,299 |
2,023 | 42,960 |
Thereafter | 159,256 |
Total | $ 1,250,154 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Common Stock [Member] - USD ($) | 3 Months Ended | 12 Months Ended |
Aug. 29, 2018 | May 31, 2018 | |
SUBSEQUENT EVENTS (Details) [Line Items] | ||
Sale of Stock, Number of Shares Issued in Transaction (in Shares) | 342,088 | |
Sale of Stock, Consideration Received on Transaction (in Dollars) | $ 1,275,933 | |
Subsequent Event [Member] | ||
SUBSEQUENT EVENTS (Details) [Line Items] | ||
Sale of Stock, Number of Shares Issued in Transaction (in Shares) | 44,321 | |
Sale of Stock, Consideration Received on Transaction (in Dollars) | $ 170,958 | |
Minimum [Member] | ||
SUBSEQUENT EVENTS (Details) [Line Items] | ||
Sale of Stock, Price Per Share | $ 3.73 | |
Minimum [Member] | Subsequent Event [Member] | ||
SUBSEQUENT EVENTS (Details) [Line Items] | ||
Sale of Stock, Price Per Share | $ 3.84 | |
Maximum [Member] | ||
SUBSEQUENT EVENTS (Details) [Line Items] | ||
Sale of Stock, Price Per Share | $ 4.74 | |
Maximum [Member] | Subsequent Event [Member] | ||
SUBSEQUENT EVENTS (Details) [Line Items] | ||
Sale of Stock, Price Per Share | $ 4.16 |