UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
[X] Filed by the Registrant
[ ] Filed by a Party other than the Registrant
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material under Rule 14a-12
BIOMERICA, INC.
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of
transaction computed pursuant to Exchange Act Rule
0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
BIOMERICA, INC.
1533 MONROVIA AVENUE
NEWPORT BEACH, CALIFORNIA 92663
_____________________________
NOTICE OF 2007 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON NOVEMBER 29, 2007
_____________________________
To Our Stockholders:
NOTICE IS HEREBY GIVEN that the annual meeting of the stockholders of
BIOMERICA, INC., a Delaware corporation (herein called the "Company"), will be
held at the offices of the Company, 1533 Monrovia Avenue, Newport Beach,
California 92663 on November 29, 2007 at 10:00 a.m.
At the meeting, you will be asked to consider and vote upon the
following matters:
1. The election of six directors, each to serve until the next
annual meeting of stockholders and until his or her successor
has been elected and qualified or until his or her earlier
resignation, death or removal. The Proxy Statement which
accompanies this Notice includes the names of the nominees to
be presented by the Board of Directors for election and
2. Transaction of such other business which may properly come
before the annual meeting and any adjournment thereof.
In accordance with the provisions of the Company's Bylaws, the Board of
Directors has fixed the close of business on October 12, 2007, as the record
date for the determination of the holders of the Company's common stock, $0.08
par value entitled to notice of and to vote at said Annual Meeting. To assure
that your shares will be represented at the Annual Meeting, please complete,
sign, date and promptly return the accompanying proxy card in the enclosed
envelope. You may revoke your proxy at any time before it is voted.
By Order of the Board of Directors,
/S/ Zackary S. Irani
-------------------------------------------
ZACKARY S. IRANI, Chairman of the Board and
Chief Executive Officer
Newport Beach, California
September 28, 2007
BIOMERICA, INC.
1533 Monrovia Avenue
Newport Beach, CA 92663
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
_____________________________
GENERAL INFORMATION
This Proxy Statement is furnished by the Board of Directors of
BIOMERICA, INC., a Delaware corporation (together with its subsidiary, the
"Company"), in connection with the solicitation of proxies for use at the
Company's Annual Meeting of Stockholders to be held on November 29, 2007, at the
offices of the Company, 1533 Monrovia Avenue, Newport Beach, California 92663 at
10:00 a.m., and at any and all adjournments thereof (the "Annual Meeting"). The
Annual Meeting has been called for the purposes set forth in the accompanying
Notice of the Annual Meeting of Stockholders (the "Notice"). This Proxy
Statement, and the Annual Report of the Company for the year ended May 31, 2007,
will be mailed on or about October 20, 2007, to each stockholder of record as of
the close of business on October 12, 2007.
RECORD DATE AND OUTSTANDING SHARES
The close of business on October 12, 2007, has been set as the record
date for the determination of stockholders entitled to notice of and to vote at
the Annual Meeting (the "Record Date"). As of September 5, 2007, there was
outstanding and entitled to vote an aggregate of approximately 5,999,214 shares
of the Company's common stock, $0.08 par value per share (the "Common Stock"),
held of record by approximately 906 stockholders. However, brokers and other
institutions hold many shares on behalf of the Company's stockholders.
QUORUM
The presence at the Annual Meeting, in person or by proxy, of the
holders of a majority of the outstanding shares of Common Stock held of record
on the Record Date is necessary to constitute a quorum for the purposes of
electing directors and each other item of business. The holder of each share of
Common Stock held of record on the Record Date is entitled to vote on each
matter to be considered at the Annual Meeting.
VOTES REQUIRED
Directors shall be elected by a plurality of the affirmative votes cast
at the meeting of stockholders.
VOTING RIGHTS
Holders of our Common Stock are entitled to one vote for each share
held as of the Record Date.
EFFECT OF ABSTENTIONS AND BROKER NON-VOTES
If the stockholder or his, her or its broker marks "Abstain" on a duly
submitted proxy card representing such stockholder's shares, or if the
stockholders attend the Annual Meeting in person, but elect not to vote on a
particular proposal or proposals, then such shares will be considered present at
the meeting for purposes of determining the required quorums and will not be
taken into account in determining the outcome of the election of directors.
Brokers holding shares of record for customers generally are not
entitled to vote on some matters unless they receive voting instructions from
their customers. "Broker non-votes" are votes that could have been cast on the
matter in question if the brokers had received their customers' instructions,
and as to which the broker has notified the Company on a proxy form in
accordance with industry practice or has otherwise advised us that it lacks
voting authority. Shares represented by brokers' non-votes (i) will be
considered present at the meeting for purposes of determining the required
quorums and (ii) will not be taken into account in determining the outcome of
the election of directors.
All votes will be tabulated by the inspector of elections appointed for
the meeting, who will separately tabulate, for the proposal, affirmative and
negative votes, abstentions and broker non-votes.
-1-
APPRAISAL RIGHTS
Under Delaware law, stockholders are not entitled to any appraisal
rights with respect to the approval of any of the proposals described in this
Proxy Statement.
PERSONS MAKING THE SOLICITATION
The Proxy accompanying this Proxy Statement is solicited on behalf of
the Board of Directors of the Company for use at the Annual Meeting. The
solicitation of proxies is being made only by use of the mails and the cost of
preparing, assembling and mailing these proxy materials will be paid by the
Company. Following the mailing of this Proxy Statement, directors, officers and
regular employees of the Company may solicit proxies by mail, telephone,
telegraph or personal interview. Such persons will receive no additional
compensation for such services. Brokerage houses and other nominees, fiduciaries
and custodians nominally holding shares of the Company's common stock, $0.08 par
value (the "Common Stock"), of record will be requested to forward proxy
soliciting material to the beneficial owners of such shares. The Company will,
upon request, reimburse such parties for their reasonable expenses in forwarding
proxy materials to the beneficial owners.
TERMS OF THE PROXY
The enclosed Proxy indicates the matters to be acted upon at the Annual
Meeting and provides boxes to be marked to indicate the manner in which the
stockholder's shares are to be voted with respect to such matters. By
appropriately marking the boxes, a stockholder may specify whether the proxy
shall vote for or against or shall be without authority to vote the shares
represented by the Proxy. The Proxy also confers upon the proxy discretionary
voting authority with respect to such other business as may properly come before
the Annual Meeting.
If the Proxy is executed properly and is received by the proxy prior to
the Annual Meeting, the shares represented by the Proxy will be voted. Where a
stockholder specifies a choice with respect to the matter to be acted upon, the
shares will be voted in accordance with such specification. Any proxy which is
executed in such a manner as not to withhold authority to vote for the election
of the specified nominees as directors shall be deemed to confer such authority.
A Proxy may be revoked at any time prior to its exercise by giving written
notice of the revocation thereof to Ms. Janet Moore, Secretary, Biomerica, Inc.,
1533 Monrovia Avenue, Newport Beach, California 92663, by attending the meeting
and electing to vote in person, or by a duly executed Proxy bearing a later
date.
COMMON STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of September 28, 2007 certain
information as to shares of Common Stock owned by (i) each person known to
beneficially own more than 5% of the outstanding Common Stock, (ii) each
director, including nominees for director, and each named executive officer of
the Company, and (iii) all executive officers and directors of the Company as a
group. Unless otherwise indicated, each person listed has sole voting and
investment power over the shares beneficially owned by him or her. Unless
otherwise indicated, the address of each named beneficial owner is the same as
that of the Company's principal executive offices located at 1533 Monrovia
Avenue, Newport Beach, California 92663.
SHARES PERCENTAGE
NAME OF BENEFICIALLY BENEFICIALLY
BENEFICIAL OWNER (1) OWNED OWNED
------------------------------------- ------------------- -----------------
Janet Moore (2) 835,527 13.6%
Zackary Irani (3) 753,359 11.7%
Francis Capitanio (4) 158,750 2.6%
Allen Barbieri (5) 110,389 1.8%
Francis R. Cano, Ph.D. (6) 94,500 1.6%
Jane Emerson, M.D., Ph.D. (7) 12,500 .2%
John Roehm (8) 12,500 .2%
-2-
Joseph L. Rink (9) 429,431 7.0%
Keith A. Cannon (10) 420,375 7.0%
All executive officers and directors
as a group (seven persons) (11) 1,977,525 28.5%
--------------
(1) Beneficial ownership is determined in accordance with Rule 13d-3 of the
Securities Exchange Act of 1934. Any shares of Common Stock that each
named person and group has the right to acquire within 60 days pursuant
to options, warrants, conversion privileges or other rights, are deemed
outstanding for purposes of computing shares beneficially owned by and
the percentage ownership of each such person and group. However, such
shares are not deemed outstanding for purposes of computing the shares
beneficially owned by or percentage ownership of any other person or
group. Percentage ownership for each named beneficial owner, and the
ownership of the directors and executive officers as a group, is based on
5,999,214 shares outstanding as of the date of the Proxy plus the shares
the named person and group has a right to acquire within 60 days
thereafter pursuant to options, warrants, conversion privileges or other
rights and privileges.
(2) Includes 92,000 shares underlying options exercisable by Ms. Moore at or
within 60 days after the date of the Proxy; 58,000 shares underlying
warrants exercisable by The Janet Moore Trust of which Janet Moore is the
sole trustee, at or within 60 days after the date of the Proxy; 607,527
shares owned by The Janet Moore Trust of which Janet Moore is the sole
trustee.
(3) Includes 429,833 shares underlying options/warrants exercisable by Mr.
Irani at or within 60 days after the date of the Proxy.
(4) Includes 158,750 shares underlying options exercisable by Mr. Capitanio
at or within 60 days after the date of the Proxy.
(5) Includes 82,500 shares underlying options/warrants exercisable by Mr.
Barbieri at or within 60 days after the date of the Proxy.
(6) Includes 82,500 shares underlying options exercisable by Dr. Cano at or
within 60 days after the date of the Proxy.
(7) Includes 12,500 shares underlying options exercisable by Dr. Emerson at
or within 60 days after the date of the Proxy.
(8) Includes 12,500 shares underlying options exercisable by Mr. Roehm at or
within 60 days after the date of the Proxy.
(9) Includes 131,000 shares underlying options/warrants exercisable by Mr.
Rink at or within 60 days after the date of the Proxy. Mr. Rink's address
is 1533 Monrovia Avenue, Newport Beach, CA 92663.
(10) Includes 17,333 shares underlying warrants exercisable by Mr. Cannon at
or within 60 days after the date of the Proxy. Mr. Cannon's address is
3333 Tripoli Way, Oceanside, CA 92056.
(11) Includes all information set forth in footnotes (2) through (8), above.
-3-
PROPOSAL NO. 1: ELECTION OF DIRECTORS
DIRECTORS
The Company's Bylaws give the Board of Directors ("the Board") the
power to set the number of directors at no less than three (3) or more than nine
(9). The size of the Company's Board is currently set at six (6) and six (6)
directors are to be elected at the Annual Meeting to be held on November 29,
2007. The directors so elected will serve until replaced by a vote of the
stockholders. In the event that any of them should become unavailable prior to
the Annual Meeting, the Proxy will be voted for a substitute nominee or nominees
designated by the Board or the number of directors may be reduced accordingly.
The following table sets forth the name and current age of each nominee
for director, the year he or she was first elected a director and his or her
position(s) with the Company. The Company does not pay a fee to any third party
to identify potential nominees. The Board has not received during the 120-day
period between the end of the fiscal year and the date of the proxy, any
recommended nominees from a stockholder owning more than 5% of the Company's
stock for at least one year.
Director
Name Age Since Positions Held
-----------------------------------------------------------------------------------------------
Zackary Irani 41 1997 Chairman of the Board and
Chief Executive Officer
Janet Moore 56 1997 Secretary, Chief Financial
Officer, Treasurer and Director
Allen Barbieri 49 1999 Director, Audit Committee Chairman
Francis R. Cano, Ph.D. 60 1999 Director
Jane Emerson, M.D., Ph.D. 53 2007 Director
John Roehm 48 2007 Director
Mr. Zackary Irani has been a Director of the Company, and has been
serving as the Company's Chairman of the Board and Chief Executive Officer since
April 29, 1997. Prior to that time, Mr. Irani served as the Company's Vice
President of Business Development since July 1994. He has been an employee of
the Company since 1986. Mr. Irani also serves as Chairman of the Board of Lancer
Orthodontics, Inc. and served as Lancer's Chief Executive Officer from April
1997 until April 2004.
Ms. Janet Moore has been a Director of the Company since April 29,
1997, and has been serving as the Company's Secretary and Treasurer since 1985.
She has served as the Company's Chief Financial Officer since 1999 and has been
an employee of the Company since 1976. Ms. Moore also serves as a director and
Secretary of Lancer Orthodontics, Inc.
Francis R. Cano, Ph.D. has served as a Director of the Company since
June 1999. Dr. Cano is currently working as a consultant through Cano
Biotechnology Corp. From 2003 until 2005 Dr. Cano served as the Chief Executive
Officer and Chairman of the Board of Vaxin, Inc. from where he retired. From
1996 to 1997, Dr. Cano served as Senior Vice President - Biotechnology of BDM,
an information technology company. In 1996, Dr. Cano started the Cano
Biotechnology Corp., where he worked with vaccine leaders (Aventis), small
private and public biotechnology companies, venture groups and universities.
From 1992 to 1996, he served as President and Chief Operating Officer of Aviron,
a public biotechnology company focused on developing viral vaccines for disease
prevention. Dr. Cano was also involved in developing a vaccine business at a
division of American Cynamid Corporation. Dr. Cano also serves on the board of
Lancer Orthodontics, Inc., Avant Immunotherapeutics and Arbor Vita Corporation.
Mr. Allen Barbieri has served as a Director of the Company since
October 1999. Since April 2004 Mr. Barbieri has served as part-time, Chief
Executive Officer of Lancer Orthodontics, Inc. and from 1999 until the present
time, Mr. Barbieri has also worked as a private investor. From 1998 to 1999, he
served as President and Chief Financial Officer of Buy.com. From 1994 until 1998
Mr. Barbieri was President and Chief Executive Officer of Pacific National Bank.
-4-
Dr. Emerson has served as a director of the Company since April 2007.
Since 1994 Dr. Emerson has served as Chief, Division of Chemical Pathology for
the University of California, Irvine. Since 2000 she has also served as the
Chief of Clinical Pathology and since 2004 as a Clinical Professor for the
University of California, Irvine. Since 2005 Dr. Emerson has served as Vice
Chair for Clinical Programs, Department of Pathology and Laboratory Medicine for
the University of California, Irvine.
Mr. John Roehm has served as a director of the Company since July 2007.
From 1999 to 2006 Mr. Roehm served as Director of Pharmacy Marketing for
Albertsons, Inc. Since 2006 Mr. Roehm has been serving as President and Chief
Executive Officer of Mollen Immunization Clinics.
The Board recommends a vote for the election of each of the nominated directors.
The Board of Directors regularly assesses the appropriate size of the
Board of Directors and whether any vacancies on the Board of Directors are
expected due to retirement or otherwise. In the event that vacancies are
anticipated or otherwise arise, the Board utilizes a variety of methods for
identifying and evaluating director candidates. Candidates may come to the
attention of the Committee through current directors, professional search firms,
stockholders or other persons.
Once the Board has identified a prospective nominee, the Board will
evaluate the prospective nominee in the context of the then current composition
of the Board of Directors and will consider a variety of other factors,
including the prospective nominee's business, technology and industry, finance
and financial reporting experience, and other attributes that would be expected
to contribute to an effective Board of Directors. The Board seeks to identify
nominees who possess a diligent range of experience, skills, areas of expertise,
industry knowledge and business judgment. Successful nominees should have a
history of superior performance or accomplishments in their professional
undertakings and should have the highest personal and professional ethics and
values. The Board does not evaluate stockholder nominees differently than any
other nominee.
Our Board will consider stockholder nominations for directors if we
receive timely written notice, in proper form, of the intent to make a
nomination at a meeting of stockholders. To be timely, the notice must be
received within the time frame discussed below in this Proxy Statement under the
heading "Stockholder Proposals." To be in proper form, the notice must, among
other matters, include each nominee's written consent to serve as a director if
elected, a description of all arrangements or understandings between the
nominating stockholder and each nominee and information about the nominating
stockholder and each nominee.
EXECUTIVE OFFICERS
Mr. Francis Capitanio, age 63, has served as the President of the
diagnostics division of Biomerica since July 10, 2000. Mr. Capitanio was
President and Chief Executive Officer of Kalisto Biologicals, Inc. from 1997
until 2000. From 1980 until 1996, he was President and Chief Executive Officer
of Diatech Diagnostics.
BOARD OF DIRECTORS MEETINGS AND COMMITTEES
The Board of Directors has a standing Audit and Compensation Committee.
The Board of Directors held three meetings during the year ended May 31, 2007
and acted by unanimous written consent six times. All directors attended 75% or
more of the aggregate of all meetings of the Board of Directors and the
committees, if any, upon which the directors served during the year ended May
31, 2007.
COMPENSATION COMMITTEE
The Compensation Committee is responsible for assisting the Board of
Directors in discharging its responsibilities regarding the compensation of our
employees and directors. The specific duties of the Compensation Committee
include, among other matters: reviewing and approving executive compensation;
evaluating our executive officers' performance; setting the compensation levels
of our executive officers; setting our incentive compensation plans, including
our equity-based incentive plans; and making recommendations to our Board of
Directors regarding our overall compensation structure, policies and programs.
During fiscal 2006 the compensation committee was comprised of Mr. Allen
Barbieri and Dr. Francis Cano. One compensation committee meeting was held
during the fiscal year ended May 31, 2007.
-5-
AUDIT COMMITTEE
The Audit Committee is responsible for overseeing our accounting and
financial reporting processes and the audits of our financial statements. In
addition, the Audit Committee assists the Board of Directors in its oversight of
our compliance with legal and regulatory requirements. The specific duties of
the Audit Committee include, among others: monitoring the integrity of our
financial process and systems of internal controls regarding finance, accounting
and legal compliance; selecting our independent auditor; monitoring the
independence and performance of our independent auditor; and providing an avenue
of communication among the independent auditor, our management and our Board of
Directors. The Audit Committee has the authority to conduct any investigation
appropriate to fulfilling its responsibilities, and it has direct access to all
of our employees and to the independent auditor. The Audit Committee also has
the ability to retain, at our expense and without further approval of the Board
of Directors, special legal, accounting or other consultants or experts that it
deems necessary in the performance of its duties.
The Audit Committee met two times during fiscal 2007. The members of
the Audit Committee are Mr. Barbieri and Dr. Cano. The Board of Directors
determined that Mr. Barbieri qualifies as an "audit committee financial expert"
and that each member of the Audit Committee is financially literate.
DIRECTOR INDEPENDENCE
The Board reviews the independence of each director when he/she is elected
to the board and monitors such on a continual basis. The Board considers the
transactions and relationships between each member and the Company in
determining independence. The Board judges independence based on the definition
of Director Independence as defined by Rule 4200(a)(15) of the Nasdaq Stock
Market LLC. Based upon that review the Board affirmatively determined that Dr.
Cano, Dr. Emerson and Mr. John Roehm are considered "independent" with respect
to NASDAQ's definition of such. Please refer to Appendix A annexed hereto for
the definition of independence.
REPORT OF THE AUDIT COMMITTEE
The Audit Committee oversees the Company's financial reporting process
on behalf of the Board of Directors. Management has the primary responsibility
for the financial statements and the reporting process including the systems of
internal controls. In fulfilling its oversight responsibilities, the Committee
reviewed the audited financial statements in the Annual Report with management
including a discussion of the quality, not just the acceptability, of the
accounting principles, the reasonableness of significant judgments, and the
clarity of disclosures in the financial statements.
The Committee reviewed with the independent auditors, who are
responsible for expressing an opinion on the conformity of those audited
financial statements with generally accepted accounting principles, their
judgments as to the quality, not just the acceptability, of the Company's
accounting principles and such other matters as are required to be discussed
with the Committee. The Committee has discussed with the independent auditors
the auditors' independence from management and the Company including the matters
in the written disclosures required by the Independence Standards Board and
considered the compatibility of non-audit services with the auditors'
independence.
The Committee discussed with the Company's independent auditors the
overall scope and plans for their audit. The Committee meets with the
independent auditors, with and without management present, to discuss the
results of their examinations, their evaluations of the Company's internal
controls, and the overall quality of the Company's financial reporting.
In reliance on the reviews and discussions referred to above, the
Committee recommended to the Board of Directors (and the Board has approved)
that the audited financial statements be included in the Annual Report on Form
10-KSB for the year ended May 31, 2007 for filing with the Securities and
Exchange Commission. The Committee and the Board have also recommended the
selection of the Company's independent auditors, PKF, Certified Public
Accountants, a Professional Corporation.
/s/ Francis R. Cano /s/ Allen Barbieri
------------------- ------------------
-6-
The following table sets forth the total compensation earned by all
executive officers of the company for the fiscal year ended May 31, 2007.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
--------------------------
Name Stock Option Non Nonquali- All Total
And Principal Salary Bonus Awards Awards Equity fied Other ($)
Position Year ($) ($) ($) ($) Incentive Deferred Compen-
Plan Compen- sation
Compen- sation ($)
sation Earnings
($)
----------------------- ------- ----------- ------ ------- ------ --------- ---------- ------------ ---------
Zackary Irani
Chairman & Chief
Executive Officer 2007 105,000 -0- -0- 34,500 27,643 -0- -0- 167,143
Francis Capitanio
President 2007 123,305 -0- -0- 23,000 21,643 -0- -0- 167,948
Janet Moore
Chief Financial
Officer, Treasurer & 2007 68,670 -0- -0- 15,640 7,643 -0- -0- 91,953
Secretary
-7-
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
--------------------------------------------
OPTION AWARDS STOCK AWARDS:
------------------------------------------------------------------ ----------------------------------------------
Name Number Number Equity Option Option Number Market Equity Equity
of of Incentive Exercise Expiration of Value of Incentive Incentive
Securities Securities Plan Price Date Shares or Shares or Plan Plan
Underlying Underlying Awards: ($) Units Units Awards: Awards:
Unexercised Unexercised Number of of Stock of Stock Number Market
Options (#) Options (#) Securities That Have That Have of or Payout
Exercisable Unexercisable Underlying Not Not Unearned Value
Unexercised Vested Vested Shares, of
Unearned (#) ($) Units or Unearned
Options Other Shares,
(#) Rights Units or
That Have Other
Not Rights
Vested That Have
(#) Not
Vested
($)
----------------------------------------------------------------- ----------------------------------------------
Zackary Irani 75,000 -0- -0- .28 5-23-08 -0- -0- -0- -0-
50,000 -0- -0- .53 6-3-10 -0- -0- -0- -0-
150,000 50,000 -0- .40 5-31-11 -0- -0- -0- -0-
37,500 37,500 -0- .80 5-31-12 -0- -0- -0- -0-
Francis Capitanio
25,000 -0- -0- 5-23-08 -0- -0- -0- -0-
.28
18,750 6,250 -0- 4-5-10 -0- -0- -0- -0-
.40
36,000 -0- -0- .53 6-3-10 -0- -0- -0- -0-
54,000 18,000 -0- .40 5-31-11 -0- -0- -0- -0-
25,000 25,000 -0- .80 5-31-12 -0- -0- -0- -0-
Janet Moore 20,000 -0- -0- .28 5-23-08 -0- -0- -0- -0-
25,000 -0- -0- .53 6-3-10 -0- -0- -0- -0-
30,000 10,000 -0- .40 5-31-11 -0- -0- -0- -0-
17,000 17,000 -0- .80 5-31-12 -0- -0- -0- -0-
-8-
COMPENSATION OF DIRECTORS
Although not prohibited by the Company's Bylaws, directors receive no
direct payment for their services as directors, but they have been, and may in
the future be, granted options to purchase the Company's securities. The
compensation of directors is subject to review and adjustment from time to time
by the Board of Directors.
The following table presents the compensation of Non-Employee Directors for
the fiscal year ended May 31, 2007. As indicated below, during fiscal 2007 the
Non-Employee Directors' compensation consisted of a stock option award.
DIRECTOR COMPENSATION
---------------------
Name Fees Stock Option Non-Equity Change in All Other Total
Earned Awards Awards Incentive Plan Pension Compensation ($)
Or ($) ($) Compensa- Value and ($)
Paid in tion Nonqualified
Cash ($) Deferred
($) Compensation
Earnings
------------------------ ---------- --------- --------- -------------- -------------- -------------- --------
Allen Barbieri -0- -0- 9,050 (1) -0- -0- -0- 9,050
Francis Cano, Ph.D. -0- -0- 9,050 (1) -0- -0- -0- 9,050
Jane Emerson, M.D., Ph.D. -0- -0- 11,632 (1) -0- -0- -0- 11,632
John Roehm (2) n/a n/a n/a n/a n/a n/a n/a
(1) All directors received non-qualified stock options to purchase 25,000
shares, however the value of the options varied due to factors that fluctuate in
the calculation of stock option value, such as current market value.
(2) Mr. Roehm was not a director during the fiscal year ended May 31, 2007.
-9-
SECTION 16(a) - BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's executive officers, directors and persons who beneficially own more
than 10% of the Company's stock, to file initial reports of ownership and
reports of changes in ownership with the Securities and Exchange Commission.
Executive officers, directors and greater than 10% beneficial owners are
required by applicable regulations to furnish the Company with copies of all
Section 16(a) forms they file.
Based solely upon a review of the copies of such forms furnished to the
Company and information involving securities transactions of which the Company
is aware, the Company believes that during the fiscal year ended May 31, 2007,
all Section 16(a) filing requirements applicable to its executive officers,
directors and greater than 10% beneficial stockholders were complied with,
except for one filing in which director, Dr. Francis Cano, inadvertently filed
one Form 4 late after he purchased 12,000 shares of Biomerica common stock on
the open market in May 2007.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
NOTES PAYABLE -SHAREHOLDER
Biomerica's shareholder's line of credit expired on September 13, 2003
and was not renewed, however the unpaid principal and interest was converted
into a note payable bearing interest at 8% and payable September 1, 2004. The
due date on this note has been extended until September 1, 2008. Minimum
payments are $4,000 per month plus an additional $2,000 per month, depending on
quarterly results of the Company. The Company is currently in compliance with
the payment terms of the agreement.
During 2007 and 2006, the Company incurred $19,898 and $22,355,
respectively, in interest expense related to the shareholder note payable. As of
May 31, 2007, $0 in accrued interest was due on the promissory note.
During 2005 and 2004, a shareholder/director advanced the Company $0
and $4,000, respectively. At May 31, 2007 and 2006 $1,659 was owed in interest
payable on this loan and a previous loan of $10,000. During fiscal 2006, $320 of
interest due on the $4,000 was forgiven by the shareholder/director.
During fiscal 2007 a shareholder/director advanced the Company
$15,000, $50,000 and $35,000 in short term loans. The loans were repaid in two
days, twenty-five days and fourteen days, respectively. Interest of $388 was
paid on the loans.
RENT EXPENSE
The Company is currently operating on a month-to-month agreement while
it explores various leasing options. The facilities are owned and operated by
four of the Company's shareholders, one of whom is an officer and director.
Effective May 1, 2006, the monthly rent was set at $14,000 per month. Management
believes there would be no significant difference in the terms of the property
rental if the Company was renting from a third party. Total gross rent expense
for this facility was approximately $168,000 and $158,000 during the years ended
May 31, 2007 and 2006, respectively.
Biomerica subleased a portion of its facility under a non-cancelable
operating lease, which expired May 16, 2003 and was month-to-month until April
1, 2006, at which time the Company returned that space to the landlord. The
Company recorded base rental income of $15,478 during the year ended May 31,
2006.
The facilities are leased from the trusts of Mrs. Ilse Sultanian, Ms.
Janet Moore, an officer, director and shareholder of our Company, Jennifer Irani
and Susan Irani. All landlords, are also shareholders of the Company. Gross rent
expense of approximately $168,000 and $158,000 was incurred during 2007 and
2006, respectively, for this lease.
As of May 31, 2007, we believe that our facilities and equipment are in
suitable condition and are adequate to satisfy the current requirements of our
Company. However, management is exploring alternative leasing space, which may
be more beneficial to the needs of the Company and allow for a more efficient
operation at a cost effective rate.
-10-
ACCRUED COMPENSATION
During fiscal 2002-2005, two officers, who are also shareholders of the
Company, agreed to defer payment of a all or a portion of their salaries. At May
31, 2007 approximately $264,548 of deferred officer's salary is included in
accrued compensation in the accompanying consolidated financial statements.
During fiscal 2006 one of the officers agreed to participate in the Company's
private placement in part by reducing his accrued compensation by approximately
$20,000 in exchange for restricted common stock. No interest was accrued on the
deferred wages until March 2007. As of March 1, 2007 the Company has been
accruing interest at the rate of 8% per year. For the year ended May 31, 2007,
$5,334 in interest expense was incurred.
Included in accrued compensation as of May 31, 2007 is vacation accrual
of $169,044. Of this, approximately $121,000 is due to the former chief
executive officer's estate. The Company is disputing the validity of this claim.
LANCER ORTHODONTICS, INC.
In fiscal 2003, Biomerica entered into an agreement with Lancer (the
Company's former subsidiary) whereby Biomerica agreed to pay an initial shelter
fee of $5,000 with additional payments of $2,875 for use of the Lancer de Mexico
facilities to produce and manufacture Biomerica products. The monthly payments
are due as long as Biomerica produces its products at the Lancer de Mexico
facility. At May 31, 2007, Biomerica had paid all applicable shelter fees.
Biomerica also contracts the services of certain Lancer employees each
month at the manufacturing facility. The costs include wages and other related
employment costs, which are billed to Biomerica on a monthly basis. These costs
for the fiscal years ended May 31, 2007 and 2006 were approximately $236,000 and
$154,000, respectively.
PRIVATE PLACEMENT
During fiscal 2006 the Chief Executive Officer purchased 52,000 shares
of restricted common stock with 17,333 warrants at a purchase price of $0.48 per
one share and one-third of a warrant. The shares were paid for with $5,000 cash
and approximately $20,000 reduction in accrued salary.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
It is expected that a representative of the independent registered
public accounting firm of PKF, Certified Public Accountants, a Professional
Corporation, the Company's auditor for the fiscal years ended May 31, 2007 and
2006, and for the current fiscal year, will be present at the Annual Meeting to
respond to appropriate questions or to make a statement if he or she so desires.
AUDIT FEES
The aggregate fees billed for professional services rendered for audit
and audit related fees of the Company's and subsidiaries' annual and quarterly
financial statements for the year ended May 31, 2007 was $50,000.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
There were no fees billed by the principal accountants for professional
services with respect to financial information systems design and implementation
for the fiscal year ended May 31, 2007.
ALL OTHER FEES
The aggregate fees billed for services rendered during the fiscal year
ended May 31, 2007, for all other services was $1,732 for general consulting
services and review of the 2007 proxy statement and $5,362 for income tax return
preparation.
The audit committee has considered that the provision of the above
services has not impaired the principal accountant's ability to maintain
independence.
-11-
OTHER BUSINESS
Management is not aware of any matters to come before the Annual
Meeting other than those stated in this Proxy Statement. However, inasmuch as
matters of which management is not now aware may come before the meeting or any
adjournment thereof, the Proxy confers discretionary authority with respect to
acting thereon, and the persons named in such Proxy intend to vote, act, and
consent in accordance with their best judgment with respect thereto.
DIRECTOR ATTENDANCE AT ANNUAL MEETINGS
Our Board of Directors has adopted a policy that encourages our
directors to attend our annual stockholder meetings. The annual meeting of
stockholders held on November 29, 2006 was attended by all of our incumbent
directors.
ANNUAL REPORT
The Annual Report to Stockholders and Form 10-KSB covering the
Company's fiscal year ended May 31, 2007 are being mailed to stockholders with
this Proxy Statement. The Annual Report does not form any part of the material
for the solicitation of the Proxy.
COMMUNICATIONS WITH THE BOARD OF DIRECTORS
Our stockholders may communicate with our Board of Directors, a
committee of our Board of Directors or a director by sending a letter addressed
to the Board, a committee or a director c/o Corporate Secretary, Biomerica Inc.,
1533 Monrovia Ave, Newport Beach, California 92663. All communications will be
compiled by our corporate Secretary and forwarded to the Board of Directors, the
committee or the director accordingly.
-12-
DATE FOR SUBMISSION OF STOCKHOLDER PROPOSALS FOR NEXT ANNUAL MEETING
Any eligible stockholder who desires to have a proposal considered for
inclusion in our 2008 proxy solicitation materials, including director
nominations, must cause their proposals to be received in writing by our
Secretary at 1533 Monrovia Ave, Newport Beach, California 92663 no later than
January 3, 2008. The Board of Directors will review new proposals from eligible
stockholders if they are received in writing by January 3, 2008. Proposals must
be submitted in accordance with our bylaws and must comply with Securities and
Exchange Commission regulations promulgated under Rule 14a-8 of the Exchange Act
of 1934, as amended.
Any notice to the Secretary must include as to each matter the
stockholder proposes to bring before the meeting: (a) a brief description of the
business desired to be brought before the meeting and the reason for conducting
the business at the Annual Meeting, (b) the stockholder's name and address, as
they appear on our records, (c) the class and number of shares which the
stockholder beneficially owns, (d) any material interest of the stockholder in
the business requested to be brought before the meeting and (e) any other
information that is required to be provided by the stockholder pursuant to
Regulation 14A under the Securities Exchange Act of 1934 in his or her capacity
as a proponent of the stockholder proposal.
A stockholder's notice to the Secretary regarding a nomination for the
election of directors must set forth: (a) as to each person whom the stockholder
proposes to nominate for election or re-election as a director, (i) the person's
name, age, business address and residence address, (ii) the person's principal
occupation or employment, (iii) the class and number of shares of capital stock
beneficially owned by the person, and (iv) any other information relating to the
person that is required to be disclosed in solicitations for proxies for
election of directors pursuant to Regulation 14A under the Securities Exchange
Act of 1934; and (b) as to the stockholder giving the notice (i) the name and
address of the stockholder, as they appear on our records, and (ii) the class
and number of shares of stock that are beneficially owned by the stockholder on
the date of the stockholder notice. If the Board of Directors so requests, any
person nominated for election to the Board shall furnish to our Secretary the
information required to be set forth in the notice of nomination pertaining to
the nominee.
Nothing in this section shall be deemed to require us to include in our
proxy solicitation materials relating to any annual meeting any stockholder
proposal or nomination that does not meet all of the requirements for inclusion
established by the Securities and Exchange Commission.
By Order of the Board of Directors,
/S/ ZACKARY S. IRANI,
------------------------------------
Chairman and Chief Executive Officer
Newport Beach, California
September 28, 2007
-13-
APPENDIX A
The following is the definition of independence as adopted by the NASDAQ
Stock Market and the definition which the Company is using in determining
independence of its board members:
IM-4200 DEFINITION OF INDEPENDENCE -- RULE 4200(A)(15)
It is important for investors to have confidence that individuals
serving as independent directors do not have a relationship with the listed
company that would impair their independence. The board has a responsibility to
make an affirmative determination that no such relationships exist through the
application of Rule 4200. Rule 4200 also provides a list of certain
relationships that preclude a board finding of independence. These objective
measures provide transparency to investors and companies, facilitate uniform
application of the rules, and ease administration. Because Nasdaq does not
believe that ownership of company stock by itself would preclude a board finding
of independence, it is not included in the aforementioned objective factors. It
should be noted that there are additional, more stringent requirements that
apply to directors serving on audit committees, as specified in Rule 4350.
The Rule's reference to the "company" includes any parent or subsidiary
of the company. The term "parent or subsidiary" is intended to cover entities
the issuer controls and consolidates with the issuer's financial statements as
filed with the Commission (but not if the issuer reflects such entity solely as
an investment in its financial statements). The reference to executive officer
means those officers covered in SEC Rule 16a-1(f) under the Act. In the context
of the definition of Family Member under Rule 4200(a)(14), the reference to
marriage is intended to capture relationships specified in the Rule (parents,
children and siblings) that arise as a result of marriage, such as "in-law"
relationships.
The three year look-back periods referenced in paragraphs (A), (C), (E)
and (F) of the Rule commence on the date the relationship ceases. For example, a
director employed by the company is not independent until three years after such
employment terminates.
For purposes of paragraph (A) of the Rule, employment by a director as
an executive officer on an interim basis shall not disqualify that director from
being considered independent following such employment, provided the interim
employment did not last longer than one year. A director would not be considered
independent while serving as an interim officer. Similarly, for purposes of
paragraph (B) of the Rule, compensation received by a director for former
service as an interim executive officer need not be considered as compensation
in determining independence after such service, provided such interim employment
did not last longer than one year. Nonetheless, the issuer's board of directors
still must consider whether such former employment and any compensation received
would interfere with the director's exercise of independent judgment in carrying
out the responsibilities of a director. In addition. if the director
participated in the preparation of the company's financial statements while
serving as an interim executive officer. Rule 4350(d)(2)(A)(iii) would preclude
service on the audit committee for three years.
Paragraph (B) of the Rule is generally intended to capture situations
where a compensation is made directly to (or for the benefit of) the director or
a Family Member of the director. For example, consulting or personal service
contracts with a director or Family Member of the director would be analyzed
under paragraph (B) of the Rule. In addition, political contributions to the
campaign of a director or a Family Member of the director would be considered
indirect compensation under paragraph (B). Non-preferential payments made in the
ordinary course of providing business services (such as payments of interest or
proceeds related to banking services or loans by an issuer that is a financial
institution or payment of claims on a policy by an issuer that is an insurance
company), payments arising solely from investments in the company's securities
and loans permitted under Section 13(k) of the Act will not preclude a finding
of director independence as long as the payments are non-compensatory in nature.
Depending on the circumstances, a loan or payment could be compensatory if, for
example, it is not on terms generally available to the public.
Paragraph (D) of the Rule is generally intended to capture payments to
an entity with which the director or Family Member of the director is affiliated
by serving as a partner, controlling shareholder or executive officer of such
entity. Under exceptional circumstances, such as where a director has direct,
significant business holdings, it may be appropriate to apply the corporate
measurements in paragraph (D), rather than the individual measurements of
paragraph (B). Issuers should contact Nasdaq if they wish to apply the Rule in
this manner. The reference to a partner in paragraph (D) is not intended to
include limited partners. It should be noted that the independence requirements
of paragraph (D) of the Rule are broader than SEC Rule 10A-3(e)(8) under the
Act.
-14-
Under paragraph (D), a director who is, or who has a Family Member who
is, an executive officer of a charitable organization may not be considered
independent if the company makes payments to the charity in excess of the
greater of 5% of the charity's revenues or $200,000. However, Nasdaq encourages
companies to consider other situations where a director or their Family Member
and the company each have a relationship with the same charity when assessing
director independence.
For purposes of determining whether a lawyer is eligible to serve on an
audit committee, SEC Rule 10A-3 under the Act generally provides that any
partner in a law firm that receives payments from the issuer is ineligible to
serve on that issuer's audit committee. In determining whether a director may be
considered independent for purposes other than the audit committee, payments to
a law firm would generally be considered under Rule 4200(a)(15)(D), which looks
to whether the payment exceeds the greater of 5% of the recipient's gross
revenues or $200,000; however, if the firm is a sole proprietorship, Rule
4200(a)(15)(B), which looks to whether the payment exceeds $100,000, applies.
Paragraph (G) of the Rule provides a different measurement for
independence for investment companies in order to harmonize with the Investment
Company Act of 1940. In particular, in lieu of paragraphs (A)-(F), a director
who is an "interested person" of the company as defined in Section 2(a)(19) of
the Investment Company Act of 1940, other than in his or her capacity as a
member of the board of directors or any board committee, shall not be considered
independent.
-------------------------------------------------
Amended by SR-NASDAQ-2006-041 eff. Mar. 13, 2007.
Amended by SR-NASDAQ-2006-021 eff. Oct. 6, 2006
Adopted by SEC Release 34-53128 (Jan. 13, 2006).
-------------------------------------------------
-15-
REVOCABLE PROXY
BIOMERICA, INC. ANNUAL MEETING OF STOCKHOLDERS
NOVEMBER 29, 2007
The undersigned stockholder(s) of Biomerica, Inc., a Delaware
corporation (the "Company") hereby nominates, constitutes and appoints Janet
Moore, his, her or its true and lawful agent and proxy, with full power of
substitution, to vote all the shares of stock of the Company which the
undersigned is entitled to vote at the Annual Meeting of the Company to be held
at the offices of the Company, 1533 Monrovia Avenue, Newport Beach, California
92663 at 10:00 a.m., and any and all adjournments thereof, with respect to the
matters described in the accompanying Proxy Statement, and, in her discretion,
on such other matters which properly come before the Annual Meeting, as fully
and with the same force and effect as the undersigned might or could do if
personally present thereat, as follows:
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 1.
1. _______ FOR all nominees ________ WITHHOLD AUTHORITY TO VOTE
(Except as listed below) (As to all nominees)
Nominees: Dr. Francis R. Cano; Zackary Irani; Allen Barbieri;
Janet Moore; Dr. Jane Emerson; and John Roehm.
Instructions: To withhold authority to vote for any individual nominee,
write the nominee's name in the space provided below.
________________________________________________________________________________
_____For ____Against ____Abstain
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND
MAY BE REVOKED PRIOR TO ITS EXERCISE.
PLEASE SIGN AND DATE ON REVERSE SIDE.
-16-
THE PROXY CONFERS AUTHORITY TO VOTE AND UNLESS SPECIFIED OTHERWISE
SHALL BE VOTED FOR PROPOSAL 1 AND WILL BE VOTED BY THE PROXY HOLDER AT HIS, HER
OR ITS DISCRETION AS TO ANY OTHER MATTERS PROPERLY TRANSACTED AT THE MEETING.
Dated: ______________________
____________________________________________
(Please Print Name)
____________________________________________
(Signature of Stockholder)
____________________________________________
(Please Print Name)
____________________________________________
(Signature of Stockholder)
(Please date this Proxy and sign your name as it appears on your stock
certificate(s). Executors, administrators, trustees, etc., should give their
full titles. All joint owners should sign.)
I (We) do do not
--------- ------
expect to attend the meeting.
-17-