LEASES

6 Months Ended

Nov. 30, 2023

Lessee Disclosure [Abstract]

LEASES

NOTE 5: LEASES

The Company leases its facilities. On November 30, 2023, the Company had approximately 22,000 square feet of floor space at its corporate headquarters at 17571 Von Karman Avenue in Irvine, California, which it has been leasing since 2009. The lease for its headquarters expired on August 31, 2016. The Company had an option to extend the term of its lease for two additional sixty-month periods. On November 30, 2015, the Company exercised its option to extend its lease for an additional sixty-month period and entered into the First Amendment to Lease wherein it extended its lease until August 31, 2021. On April 9, 2021, the Company exercised its second option to extend its lease for an additional five years. When the Company extended its lease in April 2021, it was also granted an additional five-year lease extension option. The Company made a security deposit of approximately $22,000.

In November 2016, the Company’s Mexican subsidiary, Biomerica de Mexico, entered into a 10-year lease for approximately 8,100 square feet of manufacturing space. The Company has one 10-year option to renew at the end of the initial lease period. Biomerica de Mexico also leases a smaller unit on a month-to-month basis for use in one manufacturing process.

In addition, the Company leases a small office in Lindau, Germany on a month-to-month basis, as headquarters for BioEurope GmbH, its Germany subsidiary.

For purposes of determining straight-line rent expense, the lease term is calculated from the date the Company first takes possession of the facility, including any periods of free rent and any renewal options periods that the Company is reasonably certain of exercising. The Company’s office and equipment leases generally have contractually specified minimum rent and annual rent increases are included in the measurement of the right-of-use asset and related lease liabilities. Additionally, under these lease arrangements, the Company may be required to pay directly, or reimburse the lessors, for some maintenance and operating costs. Such amounts are generally variable and therefore not included in the measurement of the right-of-use asset and related lease liabilities but are instead recognized as variable lease expense in the consolidated statements of operations and comprehensive loss when they are incurred.

The following table presents information on our operating leases for the three month and six month ended November 30, 2023 and 2022:

	Three Months Ended November 30,				Six Months Ended November 30,
	2023		2022		2023		2022
Operating lease cost	$	88,000	$	88,000	$	176,000		176,000
Variable lease cost		2,000		-		5,000		1,000
Short-term lease cost	$	1,000	$	1,000	$	2,000		2,000
Total lease cost	$	91,000	$	89,000	$	183,000	$	179,000

The approximate maturity of lease liabilities as of November 30, 2023 are as follows:

Year Ending November 30:
	Operating Leases
2024	$	361,000
2025		371,000
2026		290,000
2027		-
Total minimum future lease payments		1,022,000
Less: imputed interest		85,000
Total operating lease liabilities	$	937,000

The following table summarizes the Company’s other supplemental lease information for the six months ended November 30, 2023 and 2022:

	Six Months Ended November 30,
	2023			2022
Cash paid for operating lease liabilities	$	177,000		$	174,000
Weighted-average remaining lease term (years)		2.77			3.77
Weighted-average discount rate		6.50	%		6.50	%

The Company also has various insignificant leases for office equipment.