Biomerica (BMRA) risk factors, FY2025 10-K

RISKS RELATED TO OUR BUSINESS

1. 01We have a history of operating losses
2. 02Although our financial statements have been prepared on a going concern basis, our current level of cash and cash equivalents available to us is not sufficient to meet our operating plans for the next 12 months, raising substantial doubt regarding our ability to continue as a going concern
3. 03Our operating results may fluctuate adversely as a result of many factors that are outside our control, which may negatively impact our stock price
4. 04Fluctuations in our operating results, for any reason, could cause operating losses as a result of significant fixed expenses
5. 05To remain competitive, we must expend considerable resources to research new technologies and products and develop new markets, and there is no assurance our efforts to develop new technologies, products, or markets will be successful or such technologies, products, or markets will be commercially viable
6. 06There is also no guarantee that our new products, including our inFoods® IBS product and hp+detect™, will be well accepted into the marketplace
7. 07The Company maintains a manufacturing plant in Mexico which presents risks to the Company including risks associated with doing business outside the United States
8. 08We use hazardous materials in our research and production that may result in unexpected and substantial claims against us relating to handling, storage, or disposal
9. 09Our net sales were approximately $5,311,000 for fiscal year ended May 31, 2025, compared to $5,415,000 for fiscal year eneded May 31, 2024. For the fiscal years ended May 31, 2025 and 2024, the Company had one distributor each year that accounted for 31% and 33% of our net sales, respectively
10. 10We face risks relating to our international sales, including economic, political, and regulatory challenges, which could impact our financial performance, disrupt our business operations, and hinder our growth strategy
11. 11We also have supply agreements with foreign vendors that involve sharing foreign currency exchange fluctuation risks. We may enter into similar arrangements in the future
12. 12Tariffs and trade dynamics may affect order timing
13. 13Our results of operations and financial conditions may be adversely affected by the financial soundness of our customers, distributors, and suppliers
14. 14We extend credit to customers outside the United States which can be difficult to collect
15. 15If we are not able to manage our growth strategy our operating results may be adversely affected
16. 16The industry and market segments in which we operate are highly competitive, and intense competition with other providers of diagnostic products may reduce our sales and margins
17. 17If our competitors’ products prove to be more effective or capture market share through superior marketing or competitive pricing, our sales and margins could suffer. This intense competition could materially and adversely affect our operating results
18. 18We need to continue to raise additional funds to finance our future capital or operating needs, which could have adverse consequences on our operations and the interests of our stockholders
19. 19Changes in government policy could adversely affect our business and potential profitability
20. 20We are subject to numerous government regulations in addition to FDA regulations, and compliance with laws, including changed or new laws, could increase our costs and adversely affect our operations. There is also the risk that our facilities could fail to get the proper licensing at our next inspection or renewal
21. 21Our total revenue could be affected by third-party reimbursement policies and potential cost constraints
22. 22Unexpected increases in, or inability to meet, demand for our products could require us to spend considerable resources to meet the demand or harm our reputation and customer relationships if we are unable to meet demand
23. 23If one or more of our products is claimed to be defective or does not meet the performance criteria we claim in our marketing materials, we could be subject to product recalls, claims of liability, harm to patients or users of our products, or harm to our reputation that could adversely affect our business
24. 24We are exposed to business risks which, if not covered by insurance, could have an adverse effect on our results of operations. We face potential product liability exposure, and, if claims brought against us are successful, we could incur substantial liabilities
25. 25Clinical trials involve a lengthy and expensive process with an uncertain outcome, and results of studies and trials may not be predictive of future trial results
26. 26We may rely on third parties to conduct or be part of our clinical trials. If these third parties do not successfully carry out their contractual duties or meet expected deadlines, we may not be able to seek or obtain regulatory approval for or commercialize our product candidates
27. 27Failures in our information technology and storage systems, many of which are outsourced to third parties, could significantly disrupt our business and incur excessive costs
28. 28Our business could be negatively affected by the loss of or the inability to hire key personnel
29. 29Sales of our common stock in the public market could lower the market price for our common stock and adversely impact the trading price of our securities
30. 30We also have a number of stockholders who own large blocks of our common stock. If one or more of these stockholders were to sell large portions of their holdings in a relatively short time, for liquidity or other reasons, the prevailing market price of shares of our common stock could be negatively affected
31. 31The price of our stock may fluctuate unpredictably in response to factors unrelated to our operating performance
32. 32Our ability to use our net operating loss carry forwards in the future may be subject to limitation