Biomerica, Inc. (BMRA) FY2026 Earnings: Revenue $4.5M (-16.2%)
BMRA — FY2026 Annual Financial Report Analysis
Full Year · Fiscal year 2026 · Published by Pham Hop
Biomerica's FY2026 sales fell 16% to $4.45M and its operating loss widened to $5.32M; the smaller $3.78M net loss came from a one-off $1.1M COVID tax refund and a paper gain, with going-concern doubt and heavy share dilution continuing.
Revenue
$4.5M
-16.2% YoY
Net income
-$3.8M
Diluted EPS
$-1.30
Operating margin
-119.5%
This period vs a year ago
Same period last year
This period
Revenue▼-16.2%
≈$5.3M
$4.5M
Year-ago figures (≈) are worked out from the growth rate the company reported. Each row has its own scale.
Biomerica, a small Irvine, California maker of diagnostic test kits, closed its fiscal year ended May 31, 2026 with sales down 16% to $4.45 million and a loss from operations that got slightly worse, at $5.32 million. The reported net loss shrank to $3.78 million from $4.97 million, but that improvement came entirely from two items unrelated to selling tests: a $1.10 million COVID-era payroll tax refund and a $335,000 paper gain on a stake the company is selling to its own CEO. The auditor's report again flags substantial doubt about whether the company can keep operating for the next year without more funding, and it raised about $2.23 million by selling stock at $1.60 a share in August, after the year ended.
At a glance
Sales of $4.45 million, down 16%: every part of the business shrank. Lab tests, contract manufacturing and over-the-counter kits each fell between 14% and 22%.
Operating loss of $5.32 million against $4.45 million of sales: the company spends about $2.20 for every $1 of sales it brings in. Before the one-off items, that gap got wider this year, not narrower.
$1.31 million of cash at year-end, down from $2.40 million: that's well under one year of the $3.42 million the business used in its day-to-day operations this year. The August share sale adds about $2.23 million before fees.
The numbers
Metric
FY2026 (year to May 31, 2026)
FY2025
YoY Change
Net sales
$4.45M
$5.31M
-16.2%
Gross margin
8.1%
9.4%
-1.3 pts
Loss from operations
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-$5.32M
-$5.14M
loss widened $0.18M
Operating margin
-119.5%
-96.7%
-22.8 pts
Net loss
-$3.78M
-$4.97M
n/m (loss narrowed $1.20M)
Diluted EPS
-$1.30
-$2.16
n/m (loss per share narrowed $0.86)
Cash used in operations
-$3.42M
-$3.84M
burn down $0.42M
Order backlog (unshipped orders)
$0.60M
$1.32M
-54%
n/m = not meaningful: a percentage change between two losses doesn't mean much, so the dollar change is shown.
Where the sales went
Biomerica sells into four markets. All of them shrank:
Market
FY2026
FY2025
Change
Clinical lab
$2.73M
$3.18M
-14%
Contract manufacturing
$0.89M
$1.07M
-17%
Over-the-counter
$0.82M
$1.05M
-22%
Physician's office
$0.01M
$0.01M
-18%
Management gives three reasons. Lab sales fell because of "variability in the timing and periodic nature of customer orders". Over-the-counter sales fell because of "lower retail market activity from international distributors", which the company partly blames on uncertainty about tariffs and international trade. Contract manufacturing (making products for other companies) fell after an earlier research and development project for a customer was completed. Sales fell in every region: North America -12%, Asia -18%, Europe -14% and the Middle East -29%. One distributor still accounted for 31% of sales, the same share as last year.
The company says demand for inFoods IBS grew. This is its own product, a blood test that tries to identify which foods set off symptoms of irritable bowel syndrome (IBS) in a particular patient. But management also says the product is still "in the early stages of commercialization" and only partly offset the declines elsewhere. The 10-K doesn't give an inFoods revenue figure.
Why the operating loss widened
Gross margin is the share of sales left after the direct cost of making the product. It fell to just 8.1%, because cost of sales was 92% of sales. The factory has fixed costs (rent, salaried staff, equipment) that don't shrink when volumes do. The filing says the slight rise in cost of sales as a share of sales came from product mix and "reduced absorption of fixed manufacturing costs": with fewer units made, each one carries more of that fixed overhead. At this size, the company barely makes money on its products even before paying for sales staff, administration or research.
Operating expenses were roughly flat at $5.68 million, but the mix changed:
Selling, general and administrative costs rose $282,000 (+6%) to $4.89 million, equal to 110% of sales. Legal fees rose $179,000, regulatory fees rose $126,000, sales-team pay rose $27,000 and outside services for inFoods marketing rose $25,000. Lower sales commissions saved $88,000.
Research and development fell $235,000 (-23%) to $0.79 million, mainly from $199,000 less payroll. Management says programs such as inFoods IBS and hp+detect (an H. pylori stomach-bacteria test) have moved from development toward selling.
What the headline numbers hide
The smaller net loss comes from one-off items, not the business. "Dividend, interest, and other income" jumped to $1.23 million from $165,000. Of that, $1.10 million was an Employee Retention Credit, a payroll tax refund for wages paid in calendar 2021 during the pandemic, which won't recur. Another $335,000 was an "unrealized holding gain": the company raised the book value of its small stake in Diagnosis S.A., a Polish company, from $165,000 to $500,000 because it agreed to sell the stake for that price. Take out both items and the pre-tax loss would have been about $5.19 million, slightly worse than the $4.97 million a year earlier. That's the same story the operating line tells.
The sale of that stake is a related-party deal. The buyers include Biomerica's CEO. Polish share-transfer procedures aren't finished yet, so the buyers paid the $500,000 up front, and the company booked it as a secured 8% loan from the CEO due May 2027. The loan is cancelled once the shares transfer, which the company expects in the second quarter of fiscal 2027. So the $500,000 is effectively the sale price, received early. The Board and its Nominating and Corporate Governance Committee approved the deal.
Cash burn understates the true run-rate. Operating cash outflow improved to $3.42 million from $3.84 million. The balance sheet shows no receivable anywhere near $1.10 million, so the ERC refund appears to have come in as cash during the year. Without that refund, underlying cash burn would have been about $4.5 million, higher than last year. Part of the reported improvement also came from paying suppliers more slowly: accounts payable and accrued expenses rose $499,000 even though activity fell.
Inventory and receivables grew while sales shrank. Inventory rose 15% to $1.71 million, which included a $77,000 release of inventory reserves (money set aside earlier for stock that might not sell). Net receivables, money customers owe, rose 7% to $0.79 million. Both moved against a 16% drop in sales. The auditor chose inventory valuation as its "critical audit matter", the area of the audit needing the most judgment.
The smaller loss per share partly reflects share issuance. The loss per share improved 40%, much more than the 24% improvement in net loss. That's because the average number of shares grew 27% as the company sold 580,452 new shares through its "at-the-market" program (selling stock gradually into the open market), for $1.83 million after costs. The August private placement adds another 1,393,705 shares at $1.60. That's about 44% more than the 3.20 million shares outstanding at year-end, so existing shareholders own a much smaller slice of the company.
Shareholders' equity fell to $2.63 million from $4.11 million. (Equity is what would be left for shareholders if every asset were sold at book value and every debt paid.) The company's accumulated losses since it started now total $56.9 million.
Takeaway: Biomerica's smaller net loss is an illusion created by a $1.1 million pandemic-era tax refund and a $335,000 paper gain. The business itself sold 16% less, ran a gross margin of just 8%, and lost slightly more at the operating line. It is now financing itself by selling new shares at falling prices ($2.20–$4.02 during the year, $1.60 in August).
What to watch next
Management is counting on three things:
Medicare payments for inFoods IBS. Medicare set a national payment rate of $300 per test for dates of service from January 1, 2026. After the year ended, Biomerica's partner lab began submitting claims, and the company says the valid claims submitted so far have been paid the full $300. Medicare still reviews claims one at a time, so payment isn't guaranteed. The company also has a marketing agreement with Henry Schein, a large medical supplies distributor, to introduce inFoods to U.S. physicians.
A new contract development deal. In May 2026 the company signed a master services agreement with a life sciences company to develop diagnostic tests, with initial target fees of more than $1.75 million. The fees are paid as milestones are completed, over an estimated 19 to 25 months. That's roughly $0.8–1.1 million a year if every milestone lands, which would be material next to $0.89 million of contract manufacturing revenue this year. Management expects it to need little extra cost, which should help cover the factory's fixed overhead.
hp+detect. The H. pylori test got UK registration in February 2026, and a large UK lab chain placed a first commercial order during the year.
The backlog points the other way. Unshipped orders at year-end were $604,000, down 54% from $1.32 million, and most of them are bound for Asia. That doesn't suggest the established product lines will recover quickly in the first half of fiscal 2027.
The company gives no revenue or earnings guidance. Management says its cash is insufficient to meet operating needs for the next twelve months without further action, and that its plans may address near-term needs but with no assurance. Small-company SEC rules also cap how much stock Biomerica can sell under its shelf registration: when the 10-K was filed, the remaining capacity was about $2.12 million. Our read: unless inFoods reimbursement and the new development contract start adding meaningful revenue within the next few quarters, the company will likely have to raise money again in fiscal 2027, and at today's share price that would mean further heavy dilution.
Note: Biomerica filed a 10-K/A on September 28, 2026. It only adds the Part III information (directors, executive pay, share ownership) that would normally come from a proxy statement. It contains no financial statements and doesn't change any figure above, which all come from the original 10-K filed August 31, 2026.