LEASES

6 Months Ended

Nov. 30, 2024

NOTE 5: LEASES

The Company leases facilities in Irvine, California and Mexicali, Mexico.

As of November 30, 2024, the Company had approximately 22,000 square feet of floor space at its corporate headquarters at 17571 Von Karman Avenue in Irvine, California. The lease for its headquarters expires in August 2026. The Company has the option to extend the lease for an additional five-year term. 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 and six months ended November 30, 2024 and 2023:

SCHEDULE OF OPERATING LEASES

	2024		2023		2024		2023
	Three Months Ended November 30,				Six Months Ended November 30,
	2024		2023		2024		2023
Operating lease cost	$	88,000	$	88,000	$	176,000		176,000
Variable lease cost		2,000		2,000		5,000		5,000
Short-term lease cost		3,000		1,000		4,000		2,000
Total lease cost	$	93,000	$	91,000	$	185,000	$	183,000

The approximate maturity of lease liabilities as of November 30, 2024 are as follows:

	Operating
Year Ending November 30:	Leases
2025 (excluding the six months ended November 30, 2024)	$	371,000
2026		290,000
Total minimum future lease payments		661,000
Less: imputed interest		35,000
Total operating lease liabilities	$	626,000

The following table summarizes the Company’s other supplemental lease information for the six months ended November 30, 2024 and 2023:


	Six Months Ended November 30,
	2024			2023

Cash paid for operating lease liabilities	$	182,000		$	177,000
Weighted-average remaining lease term (years)		1.07			2.77
Weighted-average discount rate		6.50	%		6.50	%

The Company also has various insignificant leases for office equipment.

BIOMERICA INC 10-Q