LEASES

9 Months Ended

Feb. 29, 2024

Leases

LEASES

NOTE 5: LEASES

The Company operates through leased facilities. As of February 29, 2024, our corporate headquarters, situated at 17571 Von Karman Avenue in Irvine, California, encompasses approximately 22,000 square feet of floor space, under lease since 2009. The initial lease term for our headquarters expired on August 31, 2016, with the Company exercising its option to extend for an additional sixty-month period through the First Amendment to Lease on November 30, 2015. Subsequently, on April 9, 2021, the Company opted for a second extension, securing an additional five-year term, and was further granted a similar option for future extension. A security deposit of approximately $22,000 was made in conjunction with the lease extension.

In November 2016, our Mexican subsidiary, Biomerica de Mexico, entered a 10-year lease for approximately 8,100 square feet of manufacturing space, with a single 10-year renewal option at lease end. Additionally, Biomerica de Mexico leases a smaller unit on a month-to-month basis for specific manufacturing processes. In addition, our German subsidiary, BioEurope GmbH, maintains a small office in Lindau, Germany, under a month-to-month lease agreement, serving as its headquarters.

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 months and nine months ended February 29, 2024 and February 28, 2023:

	Three Months Ended				Nine Months Ended
	February 29, 2024		February 28, 2023		February 29, 2024		February 28, 2023
Operating lease cost	$	88,000	$	88,000	$	265,000		265,000
Variable lease cost		3,000		-		8,000		-
Short-term lease cost		8,000		1,500		10,000		3,000
Total lease cost	$	99,000	$	89,500	$	283,000	$	268,000

The approximate maturity of lease liabilities as of February 29, 2024 are as follows:

Year Ending February 29:
	Operating Leases
2024	$	365,000
2025		373,000
2026		195,000
Total minimum future lease payments		933,000
Less: imputed interest		71,000
Total operating lease liabilities	$	862,000

The following table summarizes the Company’s other supplemental lease information for the nine months ended February 29, 2024 and February 28, 2023:

	Nine Months Ended
	February 29, 2024			February 28, 2023
Cash paid for operating lease liabilities	$	267,000		$	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.