UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
SCHEDULE
14A
PROXY
STATEMENT PURSUANT TO SECTION 14(A) OF
THE
SECURITIES EXCHANGE ACT OF 1934
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BIOMERICA,
INC.
(Name
of Registrant as Specified In Its Charter)
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of Person(s) Filing Proxy Statement, if other than the Registrant)
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BIOMERICA,
INC.
17571
Von Karman Avenue
Irvine,
CA 92614
NOTICE
OF 2023 ANNUAL MEETING OF STOCKHOLDERS
TO
BE HELD ON DECEMBER 7, 2023
To
Our Stockholders:
NOTICE
IS HEREBY GIVEN that the annual meeting of the stockholders of BIOMERICA, INC., a Delaware corporation (herein called the “Company”
or “our”), will be held at the offices of the Company, 17571 Von Karman Avenue, Irvine, California 92614 on December 7, 2023
at 10:00 a.m., Pacific Time (the “Annual Meeting”).
At
the meeting, you will be asked to consider and vote upon the following matters:
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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; |
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2. |
To
approve, on a non-binding advisory basis, the compensation paid to our Named Executive Officers as disclosed in this Proxy Statement; |
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3. |
To
ratify the selection by the Audit Committee of our Board of Directors of Haskell & White LLP as our independent public accounting
firm for the fiscal year ending May 31, 2024; |
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4. |
To
consider and act upon a proposal to approve our 2023 Stock Incentive Plan; |
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5. |
To
approve an adjournment of the Annual Meeting; and |
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6. |
Transaction
of such other business which may properly come before the annual meeting and any adjournment thereof. |
You
will be able to attend the Annual Meeting in person at the Company’s headquarters located at 17571 Von Karman Ave. Irvine, CA 92614.
No virtual connection to the Annual Meeting will be available for off-site viewing or attendance.
In
accordance with the provisions of our bylaws, the Board of Directors has fixed the close of business on October 14, 2023, as the record
date for the determination of the holders of our common stock, $0.08 par value, entitled to notice of and to vote at our Annual Meeting.
To ensure 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. It is important that your shares be represented
and voted at the Annual Meeting, whether or not you plan to attend the meeting.
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By
Order of the Board of Directors, |
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/S/
Zackary S. Irani |
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ZACKARY
S. IRANI, Chairperson of the Board and |
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Chief
Executive Officer |
Irvine,
California
September
27, 2023
Approximate
Date of the Mailing of the Proxy Materials: October 28, 2023
BIOMERICA,
INC.
17571
Von Karman Avenue
Irvine,
CA 92614
PROXY
STATEMENT
ANNUAL
MEETING OF STOCKHOLDERS
GENERAL
INFORMATION
This
Proxy Statement is furnished by the Board of Directors of Biomerica, Inc., a Delaware corporation (the “Company” or “our”),
in connection with the solicitation of proxies for use at the Company’s Annual Meeting of Stockholders to be held at the offices
of the Company, 17571 Von Karman Avenue, Irvine, California 92614 on December 7, 2023, at 10:00 a.m., Pacific Time, 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 on Form 10-K of
the Company for the fiscal year ended May 31, 2023, will be mailed on or about October 28, 2023, to each stockholder of record as of
the close of business on October 14, 2023.
RECORD
DATE AND OUTSTANDING SHARES
The
close of business on October 14, 2023, 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 27, 2023, there was outstanding and entitled to vote an
aggregate of 16,821,646 shares of the Company’s common stock, $0.08 par value per share (the “Common Stock”), held
of record by approximately 800 stockholders. However, the actual number of shareholders is unknown as brokers and other institutions
hold the majority of the Company’s stock on behalf of other beneficial owners. The actual number of shares outstanding as of the
Record Date may vary from the number of shares outstanding as of September 27, 2023.
VOTING
RIGHTS, QUORUM, & VOTES REQUIRED
The
holder of each share of Common Stock is entitled to one vote for each share held as of the Record Date on each matter to be considered
at the Annual Meeting.
The
presence at the Annual Meeting, in-person or by proxy, of the holders of a majority of the issued and outstanding shares of Common Stock
held of record on the Record Date and entitled to vote at the Annual Meeting will constitute a quorum at the Annual Meeting. Shares represented
by proxies pursuant to which votes contain one or more abstentions or broker “non-votes,” are counted as present for purposes
of determining the presence or absence of a quorum for the Annual Meeting.
Broker
“non-votes” occur when a broker holding shares in “street name” votes on one proposal but does not vote on
another proposal because the broker does not have discretionary voting power and has not received instructions from the beneficial
owner of such shares. Usually, this would occur when brokers holding stock in “street name” have not received any
instructions from clients, in which case the brokers (as holders of record) are generally permitted to vote only on
“discretionary” matters. Brokers are not permitted to vote shares for which they have not received voting instructions
in favor of the proposed election of directors, on the proposals regarding the Company’s 2023 Stock Incentive Plan or the
say-on-pay advisory vote. However, under such rules, the proposed ratification of the selection by the Audit Committee of Haskell
& White LLP as the Company’s independent public accounting firm for the fiscal year ending May 31, 2024 and the
proposal to approve an adjournment of the Annual Meeting, are “discretionary” matters, and the Company
brokers will therefore generally be able to vote shares held in “street name” on such matter without receiving
instructions from the beneficial holders of such shares.
Directors
shall be elected by a plurality of the votes cast in person or by proxy at the Annual Meeting and entitled to vote on the election of
directors (“Proposal No. 1”). This means that the six director nominees with the most affirmative votes will be elected.
The affirmative vote of a majority of the shares present, in person or by proxy at the Annual Meeting, and entitled to vote on the subject
matter is required (i) to approve, on an advisory basis, the Named Executive Officers’ compensation (“Proposal No. 2”),
(ii) to ratify the selection of Haskell & White LLP as the Company’s independent public accounting firm for the fiscal year
ending May 31, 2024 (“Proposal No. 3”), (iii) to approve the 2023 Stock Incentive Plan (“Proposal No. 4”), and
(iv) to approve an adjournment of the Annual Meeting (“Proposal No. 5”). Stockholders may vote “FOR ALL,”
“WITHHOLD ALL,” or “FOR ALL EXCEPT” with respect to Proposal 1. A withhold vote, broker non-vote, and abstention
will not count as a vote cast and will have no effect on the outcome of the vote on Proposal 1. Stockholders may vote “FOR,”
“AGAINST, or “ABSTAIN” with respect to Proposals 2, 3, 4, and 5. A broker non-vote will not count as shares entitled
to vote and will have no effect on the outcome of the vote on Proposals 2 and, 4. Because a bank, broker, dealer, or
other nominee may generally vote without instructions on Proposals 3 and 5, we do not expect any broker non-votes on Proposals
3 and 5. Abstentions will have the same effect as a vote “AGAINST” with respect to Proposals 2, 3, 4, and 5.
All
votes will be tabulated by the inspector of elections appointed for the meeting, who will separately tabulate, for each proposal, affirmative
and negative votes, abstentions, and broker “non-votes.”
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 by use of the mail 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 employees of the Company may solicit
proxies by mail, telephone, 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, 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 Company 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 (i) by resubmitting
their vote online or (ii) by attending the Annual Meeting and electing to vote at the Annual Meeting.
COMMON
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following table sets forth, as of September 27, 2023, 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 director nominees, 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 17571 Von Karman Avenue,
Irvine, California 92614.
5%
or Greater Stockholders
NAME OF BENEFICIAL OWNER (1) | |
SHARES BENEFICIALLY OWNED | | |
PERCENTAGE
BENEFICIALLY OWNED (1) | |
Zackary Irani | |
| 1,608,618 | | |
| 9.2 | % |
Granahan Investment Management Inc | |
| 1,144,824 | | |
| 6.8 | % |
Wasatch Advisors LP | |
| 953,264 | | |
| 5.7 | % |
Directors
and Named Executive Officers
NAME OF BENEFICIAL OWNER (1) | |
SHARES BENEFICIALLY OWNED | | |
PERCENTAGE
BENEFICIALLY OWNED (1) | |
Zackary Irani (2) | |
| 1,608,618 | | |
| 9.2 | % |
Allen Barbieri (3) | |
| 358,327 | | |
| 2.1 | % |
Jane Emerson, M.D., Ph.D. (4) | |
| 261,000 | | |
| 1.5 | % |
Catherine Coste (5) | |
| 107,540 | | |
| 0.6 | % |
David Moatazedi (6) | |
| - | | |
| 0.0 | % |
Jack Kenny (7) | |
| - | | |
| 0.0 | % |
Gary Lu (8) | |
| - | | |
| 0.0 | % |
All executive officers and directors as a group (seven persons) (9) | |
| 2,335,485 | | |
| 13.5 | % |
(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 13,411,901 shares outstanding as of September 27, 2023 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 588,058 shares underlying options exercisable by Mr. Irani at or within 60 days of September 27, 2023.
(3)
Includes 265,000 shares underlying options exercisable by Mr. Barbieri at or within 60 days of September 27, 2023.
(4)
Includes 190,000 shares underlying options exercisable by Dr. Emerson at or within 60 days of September 27, 2023.
(5)
Includes 63,750 shares underlying options exercisable by Ms. Coste at or within 60 days of September 27, 2023.
(6)
Mr. Moatazedi joined the Board in December 2022, and has no stock options that are exercisable at or within 60 days of September 27,
2023.
(7)
Mr. Kenny joined the Board in August 2023 and has no stock options that are exercisable at or within 60 days of September 27, 2023.
(8)
Mr. Lu joined the company and was appointed Chief Financial Officer in March 2023 and has no stock options that are exercisable at or
within 60 days of September 27, 2023.
(9)
Includes all information set forth in footnotes (2) through (8), above.
PROPOSAL
NO. 1
ELECTION
OF DIRECTORS
DIRECTORS
The
Company’s bylaws give the Board of Directors of the Company (the “Board”) the power to set the number of directors
at no less than three or more than nine. The size of the Company’s Board is currently set at six directors and the following six
directors are nominated to be reelected at the Annual Meeting: Mr. Zackary Irani, Mr. Allen Barbieri, Dr. Jane Emerson, Ms. Catherine
Coste, Mr. David Moatazedi, and Mr. Jack Kenny.
A
proxy cannot be voted for a greater number of directors than the six (6) nominees identified in this Proxy Statement. Each director of
the Company is elected annually and holds office for the ensuing year and until his or her successor has been elected and qualified.
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 director nominee, the year he or she was first elected, 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 recommended
nominees from a stockholder and none of our directors or director nominees were selected pursuant to any arrangement or understanding,
other than with our directors acting within their capacity as a director. There are no family relationships among any of our directors
or executive officers.
Name |
|
Age |
|
Director
Since |
|
Positions
Held |
Zackary
Irani |
|
56 |
|
1997 |
|
Chairperson
of the Board and Chief Executive Officer |
Allen
Barbieri |
|
64 |
|
1999 |
|
Executive
Vice-Chairperson of the Board, and Corporate Secretary |
Jane
Emerson, M.D., Ph.D. |
|
68 |
|
2007 |
|
Director,
Member of Nominating & Governance Committee and Compensation Committees |
Catherine
Coste |
|
56 |
|
2020 |
|
Director,
Chairperson of Audit Committee, Member of Nominating & Governance and Compensation Committees
|
David
Moatazedi |
|
44 |
|
2023 |
|
Director,
Chairperson of Compensation Committee and Member of Audit Committee
|
Jack
Kenny (1) |
|
55 |
|
2023 |
|
Director,
Chairperson of Nominating & Governance Committee and Member of Audit Committee |
(1)
On August 25, 2023, the board of directors elected and appointed Mr. Jack Kenny to serve as an independent member of the Board effectively
immediately.
Background
of Nominees
Zackary
Irani
Mr.
Zackary Irani has served as a Director, Chairperson of the Board and Chief Executive Officer of the Company since April 1997. Prior to
that time, Mr. Irani served as the Company’s Vice-President of Business Development. He has been an employee of the Company since
1986. During the fiscal years 2008 and 2009, Mr. Irani also served as Chairperson of the Board of Lancer Orthodontics, Inc. and served
as Lancer’s Chief Executive Officer from April 1997 until April 2004. Mr. Irani holds a BS degree and an MBA degree from the University
of California, Irvine - The Paul Merage School of Business.
We
believe Mr. Irani is qualified to serve on our Board because of his service as the Chief Executive Officer of the Company, his extensive
knowledge of the Company’s business and operations, his financial expertise, his education, and his knowledge of the business sector
in which the company competes.
Allen
Barbieri
Mr.
Allen Barbieri served as a Director and Executive Vice Chairperson and Corporate Secretary of the Company since August 2020. From October
1999 through August 2020, Mr. Barbieri also served as an outside independent Director of the Company From March 2015 to April 2022, Mr.
Barbieri served as a member of the board of directors of CareTrust REIT, Inc. (NYSE:CTRE), a large publicly traded real estate investment
trust, where he served as Chairman of the Corporate Governance and Nominating Committee and as a member of the Audit and Compensation
Committees. From January 2010 to March 2018, Mr. Barbieri served as the Chief Executive Officer of Biosynthetic Technologies, a privately
held, renewable specialty chemicals company, with BP and Monsanto as primary owners. Prior to that, from April 2004 to September 2009,
Mr. Barbieri served as the Chief Executive Officer of Lancer Orthodontics, Inc., a medical device company with manufacturing operations
in the U.S. and Mexico. From 1998 to 1999, he served as President and Chief Financial Officer of BUY.COM, a major internet retailer and
from 1994 to 1999 Mr. Barbieri was President and Chief Executive Officer of Pacific National Bank. Mr. Barbieri holds an MBA from Massachusetts
Institute of Technology (MIT).
We
believe Mr. Barbieri is qualified to serve on our Board due to his extensive knowledge of the Company’s business and operations,
his financial expertise in investment banking and experience as a Chief Executive Officer and Chief Financial Officer of public and private
institutions, his education, and his prior experience as a board member of numerous public and private companies.
Dr.
Jane Emerson
Dr.
Jane Emerson has served as a Director of the Company since April 2007. Since July 1, 2009, Dr. Emerson has served as Vice Chair for Clinical
Programs and Chief of Clinical Pathology at the University of Southern California Keck School of Medicine, Los Angeles, California. From
1994 to 2009, Dr. Emerson was on the faculty of the University of California, Irvine School of Medicines where she served as Chief of
Clinical Pathology, and from 2000 to 2009, she served as the Vice Chair for Clinical Programs, Department of Pathology, and Laboratory
Medicine.
We
believe Dr. Emerson is qualified to serve on our Board due to her extensive education, her industry leading experience in the clinical
laboratory sector, her knowledge of clinical lab products and the process of attaining regulatory clearance for new lab-based diagnostic
tests, and her 13 years of experience of service on the Board of the Company.
Catherine
Coste
Ms.
Catherine Coste has served as a Director of the Company since September 2020. Ms. Coste retired from Deloitte and Touche LLP in 2020,
where she was a senior partner and served as one of Deloitte’s Life Sciences Industry Executive Leaders. During her career at Deloitte,
Ms. Coste was directly involved with over 30 life science corporations, the majority of which were large-cap and medium-cap public corporations.
Ms. Coste has served as an independent Director at Minerva Surgical, Inc. since February 2021, where she is Chair of the Audit Committee
and a Member of the Compensation Committee. Ms. Coste has also served as an independent Director at Renalytix, plc, since June 2023,
where she Chairs the Audit Committee and is also a Member of the Renumeration Committee. Ms. Coste spent 32 years in both corporate and
professional services positions leading global finance, internal audit and operations teams. She has extensive experience in Sarbanes-Oxley
compliance, corporate risk analysis and management, cyber risk assessment, fraud prevention, IT systems analysis and upgrades, internal
controls, and corporate governance. Ms. Coste is a Certified Public Accountant in California.
We
believe Ms. Coste is qualified to serve on our Board due to her education, her extensive work experience as a partner at Deloitte and
Touche, more than 20 years of experience advising life sciences companies in multiple areas of their operations including accounting
and finance, and other experience serving on the board of a public life science company.
David
Moatazedi
Mr.
David Moatazedi has served as a Director of the Company since September 2020. Mr. Moatazedi has served as the President and Chief Executive
Officer, and as a member of the of board of directors of Evolus, Inc. (“Evolus”) (NASDAQ: EOLS), since May 2018. Evolus is
a publicly traded life sciences company headquartered in Orange County, California, with a market capitalization of approximate $500
million. From March 2017 to June 2020, David also served as an independent board member of Obalon Therapeutics, a publicly traded life
sciences company that was later merged into ReShape Lifesciences Inc. From 2016 to 2018, Mr. Moatazedi served as Senior Vice President
at Allergan Inc. (“Allergan”), and head of the U.S. Medical Aesthetics division. Mr. Moatazedi also worked in various other
leadership positions within Allergan since 2005, including Vice President, Sales and Marketing of the U.S. Facial Aesthetics, and the
U.S. Plastic Surgery Divisions. Before Allergan, from 2000 to 2005 Mr. Moatazedi was a district manager for Novartis Pharmaceuticals,
a multinational pharmaceuticals company. Mr. Moatazedi holds, an MBA from Pepperdine University and a BA degree from California State
University, Long Beach.
We
believe Mr. Moatazedi is qualified to serve on our Board due to his education, his financial expertise, his experience as a Chief Executive
Officer of a publicly traded life sciences company, his professional experiences, and his prior experience serving as a member of the
board of directors of a public life science company.
Jack
Kenny
Mr.
Jack Kenny has served as a Director of the Company since August 2023. Mr. Kenny is also an independent member of the board of directors
for Quantum Si (NASDAQ: QSI), a protein sequencing company, where he has served since May 2023. Mr. Kenny joined Meridian Biosciences
(“Meridian”), a life science and diagnostic company, in October 2017, where he served as the Chief Executive Officer and
as a member of the board of directors. Mr. Kenny led Meridian’s turnaround resulting in the company’s sale in January 2023
(to SJL Partners and SD Biosensor). Before his tenure at Meridian, from 2014 to May 2017, Mr. Kenny served as Senior Vice President and
General Manager, North America, of Siemens Healthcare, a healthcare company providing healthcare solutions and services. From 2012 to
2014, Mr. Kenny served as Vice President and General Manager, U.S. Region, for Becton Dickinson, a medical device company. Prior to 2012,
he held executive roles at Danaher Corporation, a science and technology company, and Quest Diagnostics, a medical laboratory company.
Mr. Kenny holds a BS degree from Kettering University.
We
believe Mr. Kenny is qualified to serve on our Board due to his education, his operational experience as a Chief Executive Officer of
a publicly traded life sciences company, his key executive leadership within large public companies in the healthcare and medical device
industry, his other prior work experience, and his prior experience serving as a member of the Board of directors of a public life science
company.
BOARD
DIVERSITY
The
diversity of the Company’s Board is listed below and is reviewed annually by the Board.
Board Diversity Matrix (as of September 27, 2023) |
Total Number of Directors | |
6 |
| |
Female | |
Male | |
Non- Binary | |
Did Not Disclose Gender |
Part I: Gender Identity | |
| |
| |
| |
|
Directors | |
2 | |
4 | |
- | |
- |
Part II: Demographic Background | |
| |
| |
| |
|
African American or Black | |
- | |
- | |
- | |
- |
Alaskan Native or Native American | |
- | |
- | |
- | |
- |
Asian | |
- | |
- | |
- | |
- |
Hispanic or Latinx | |
- | |
- | |
- | |
- |
Native Hawaiian or Pacific Islander | |
- | |
- | |
- | |
- |
White | |
2 | |
4 | |
- | |
- |
Two or More Races or Ethnicities | |
- | |
- | |
- | |
- |
LGBTQ+ | |
- |
Did Not Disclose Demographic Background | |
- |
Our
Board Recommends that the Stockholders Vote “FOR” the Election of Each of the Nominated Directors.
EXECUTIVE
OFFICERS
The
following table sets forth the names, ages and positions of our executive officers:
Name |
|
Age |
|
Position(s) |
Zackary
Irani |
|
56 |
|
Chief
Executive Officer |
Allen
Barbieri |
|
64 |
|
Executive
Vice Chairperson |
Gary
Lu |
|
43 |
|
Chief
Financial Officer |
The
following provides certain biographical information with respective to each of our executive officers who is not a director.
Zackary
Irani |
Mr.
Irani’s background is discussed above under the heading “Directors.” |
|
|
Allen
Barbieri |
Mr.
Barbieri’s background is discussed above under the heading “Directors.” |
|
|
Gary
Lu |
Mr.
Gary Lu has served as the Chief Financial Officer of the Company since March 2023. Mr. Lu brings over 20 years of diverse extensive
experience with SEC publicly traded and privately held companies in corporate strategy, financial management, operations, fundraising,
and merger and acquisition activities. Prior to joining the Company, from September 2019 to February 2023, Mr. Lu served as the Controller
and Vice President of Finance at Happy Money, a leading platform for unsecured lending. From January 2019 to September 2019, Mr.
Lu served as Controller and Vice President of Finance at Verb Technology Company, Inc. (NASDAQ: VERB), a software company. From January
2015 to January 2019, Mr. Lu served as Vice President Southwest Corporate Controller at FirstService Residential Management, Inc.,
a property management company, and the largest subsidiary of FirstService Corporation (NASDAQ: FSV). From October 2014 to January
2015, he served as the Corporate Controller and Head of Finance at Hoag Orthopedic Institute, LLC, a nationally ranked organization
for orthopedic care. From December 2008 to October 2014, he served within various finance cross-disciplined roles at Broadcom Inc.
(NASDAQ: AVGO), a semi-conductor manufacturing company. Mr. Lu began his career at Ernst & Young, LLP, a professional services
company, where he served as an Assurance Manager from September 2003 to November 2008, and provided assurance services to both publicly
traded and private company clients of the firm. Mr. Lu is a certified public accountant and received a BA in Economics and Accounting
from the University of California, Los Angeles (UCLA). |
BOARD
OF DIRECTORS MEETINGS AND COMMITTEES
The
Board maintains an Audit Committee, a Compensation Committee, and a Nominating and Corporate Governance Committee. For the fiscal year
ended May 31, 2023, the Board held five in-person or telephonic Board meetings, acted by unanimous written consent three times, and held
three strategy, and review and update meetings with management. The Audit Committee held seven meetings; the Compensation Committee held
four meetings; and the Nominating and Corporate Governance Committee held four meeting. During the fiscal year ended May 31, 2023, all
directors attended 75% or more of the aggregate meetings of the Board and the committees on which they serve.
NOMINATING
AND CORPORATE GOVERNANCE COMMITTEE
The
Company has a Nominating and Corporate Governance Committee Charter which may be viewed on the Company’s website at www.biomerica.com.
The
Company has a standing Nominating and Corporate Governance Committee (the “Governance Committee”). The Governance Committee
regularly assesses the appropriate size of the Board and whether any vacancies on the Board are expected due to retirement or otherwise
arise. In the event that vacancies are anticipated or otherwise arise, the Governance Committee utilizes a variety of methods for identifying
and evaluating director candidates. The Governance Committee will consider candidates recommended by current directors, professional
search firms, stockholders or other persons.
To
select a director candidate, the Governance Committee undergoes a series of discussions and review of the candidates. Once the Governance
Committee has identified a prospective nominee, the Governance Committee will evaluate the prospective nominee in the context of the
then current composition of the Board and will consider a variety of other factors, including the prospective nominee’s public
company experience, corporate governance experience, business, technology, strategy, and industry experience, finance and financial reporting
experience, and other attributes that would be expected to contribute to an effective Board. The Board seeks to identify nominees who
possess a diverse range of experience, skills, areas of expertise, industry knowledge, business judgment, and professional ethics and
values. Although the committee does not have a formal policy with respect to diversity, it has a well-established process to identify
director nominees, and considers diversity when evaluating candidates for director nominees. 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 “Date of Submission of Stockholder Proposals.” To be in proper form, the notice must, among other
matters, include each nominee’s written consent to serve as a director for Company if elected at the next annual meeting, a description
of all arrangements or understandings between the nominating stockholder and each nominee and information about the nominating stockholder
and each nominee.
The
Governance Committee met four times during the fiscal year ended May 31, 2023. For the fiscal year ended May 31, 2023, the Committee
consisted of Dr. Jane Emerson, Mr. David Moatazedi and Ms. Catherine Coste, with Dr. Jane Emerson serving as Chairperson of the Governance
Committee. Following the fiscal year end, on August 25, 2023, the Board appointed Mr. Jack Kenny as the chair of the Governance Committee,
and Ms. Jane Emerson and Ms. Cathy Coste as additional members of the committee. It is anticipated that Mr. Jack Kenny will continue
to serve as the chair of the Governance Committee after the Annual Meeting.
COMPENSATION
COMMITTEE
The
Company has a Compensation Committee Charter which may be viewed on the Company’s website at www.biomerica.com.
The
Compensation Committee is responsible for assisting the Board 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; making recommendations to the Board for annual compensation of directors;
and making recommendations to our Board regarding our overall compensation structure, policies and programs.
The
Compensation Committee may delegate authority to the Chief Executive Officer or the Chief Financial Officer to grant equity incentive
plan awards to our non-executive employees consistent with the parameters approved in advance by the compensation committee.
Historically,
our Chief Executive Officer and Executive Vice-Chairperson have provided input and recommendations to the Compensation Committee on the
compensation of executive officers and members of the Board. In addition, representatives from our Executive Management team finance
function have provided information or recommendations to the Compensation Committee regarding design of any cash and equity incentive
programs. Also, while the Committee does not officially retain an executive compensation consultant, the Committee does obtain industry
and peer-group compensation information from certain national compensation consulting firms and other industry resources. The Compensation
Committee reviews all of this input and information in determining and setting Director and Executive Officer compensation plans. All
decisions affecting executive officer compensation are made by the Committee, in its sole discretion.
The
Compensation Committee met four times during the fiscal year ended May 31, 2023. One Compensation Committee meetings was held without
management, and three Compensation Committee meeting were held with management. At fiscal year-end May 31, 2023, the Compensation Committee
was comprised of Mr. David Moatazedi, Dr. Jane Emerson and Ms. Catherine Coste, with Mr. David Moatazedi serving as Chairperson of the
Compensation Committee. It is anticipated that Dr. Jane Emerson and Ms. Catherine will continue to serve on the Compensation Committee
after the Annual Meeting. It is also anticipated that Mr. David Moatazedi will serve as the Chairperson of the Compensation Committee
after the Annual Meeting.
AUDIT
COMMITTEE
The
Company has an Audit Committee Charter which may be viewed on the Company’s website at www.biomerica.com.
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 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. 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 the Company’s expense
and without further approval of the Board, special legal, accounting, or other consultants or experts that it deems necessary in the
performance of its duties.
The
Audit Committee met seven times during the fiscal year ended May 31, 2023. For the fiscal year ended May 31, 2023, the Audit Committee
consisted of Ms. Catherine Coste, Dr. Jane Emerson, and Mr. David Moatazedi, with Ms. Coste serving as Chairperson of the Audit Committee.
Following the fiscal year end, on August 25, 2023, the Board modified the Audit Committee structure with Ms. Coste continuing to serve
as Committee Chair and Mr. Jack Kenny and Mr. Moatazedi as additional members of the committee. It is anticipated that Ms. Coste will
continue to chair, and Mr. Moatazedi and Mr. Kenny will continue to serve on the Audit Committee after the Annual Meeting. The Board
has determined that Ms. Coste qualifies as an “audit committee financial expert” and that each member of the Audit Committee
is financially literate. All members of the Audit Committee meet the independence standards set forth in applicable SEC and Nasdaq rules.
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 Securities and Exchange Commission rules and as determined in accordance
with Rule 5605 of the Marketplace Rules of the Nasdaq Stock Market, Inc. Based upon that review, the Board affirmatively determined that
during the fiscal year ended May 31, 2023, Ms. Catherine Coste, Mr. David Moatazedi, and Dr. Jane Emerson were considered “independent”
and has further affirmatively determined that Mr. Jack Kenny who joined the Board in August 2023, is considered “independent.”
BOARD
LEADERSHIP STRUCTURE
The
Company’s Board selects the Company’s Chairperson of the Board in the manner it determines to be in the best interests of
the Company. Mr. Irani is Chairperson of the Board and Chief Executive Officer. The Board believes it is appropriate for Mr. Irani to
serve as Chairperson of the Board due to his extensive knowledge of, and experience in, the global medical diagnostic industry. This
knowledge and experience is critical in identifying strategic priorities and providing unified leadership in the execution of strategy.
The Company believes that Mr. Irani’s experience and knowledge as the Chief Executive Officer of the Company, combined with his
role as Chairperson of the Board, is an asset to the Company and promotes efficient board functioning, with independent board leadership
provided by the Independent Directors. Additionally, in April 2020, the Board appointed Mr. Barbieri as the Executive Vice Chairperson
and Lead Director. As such, Mr. Barbieri assumed, among other responsibilities, communications between the members of management and
the members of the Board. Further, in August 2020, Mr. Barbieri dropped off of all committees of the Board and transitioned from an independent
outside director to an executive director with the title of Executive Vice Chairperson. This move better enables Mr. Barbieri to be involved
in the daily operations, regulatory and legal matters, and strategic relationships of the Company. Mr. Barbieri also serves as the Secretary
of the Company. Further, given the addition of Mr. Barbieri as Vice Chairman, and due to the Company’s small size, small employee
base and limited operations, the Board has determined that separating the Chief Executive Office and the Chairman roles is not in the
best interest of the Company at this time.
BOARD
ROLE IN RISK OVERSIGHT
The
Board is responsible for oversight of material risks facing the Company, including financial, cybersecurity, and compliance risks, while
our management team is responsible for the day-to-day management of risk. In addition, the Board has delegated oversight of certain categories
of risk to the Audit Committee and the Compensation Committee, which are comprised entirely of independent directors. The Audit Committee
and the Compensation Committee respectively report to the Board as appropriate on matters that involve specific areas of risk that each
Committee oversees.
Financial,
Compliance and Controls Risks
The
Audit Committee has scheduled periodic and annual reviews and discussions with management regarding significant risk exposures and incident
metrics, including those relating to global financial, accounting, and treasury matters, internal audit and controls, and legal and regulatory
compliance. These discussions cover the steps management has taken to monitor, control, and report such exposures, as well as the Company’s
policies with respect to risk assessment and risk management.
Employee
Compensation Risks
The
Compensation Committee oversees management of risks relating to the Company’s compensation plans and programs. The Company’s
management and the Compensation Committee have assessed the risks associated with the Company’s compensation policies and practices
for all employees, including non-executive officers. These include risks relating to setting ambitious targets for our employees’
compensation or the vesting of their equity awards, our emphasis on at-risk equity-based compensation, discrepancies in the values of
equity-based compensation depending on employee tenure relative to increases in stock price over time and the potential impact of such
factors on the retention or decision-making of our employees, particularly our senior management. Based on the results of this assessment,
the Company does not believe that its compensation policies and practices for all employees, including non-executive officers, create
risks that are reasonably likely to have a material adverse effect on the Company.
REPORT
OF THE AUDIT COMMITTEE
The
information in this Report of the Audit Committee is not deemed “soliciting material” or to be “filed” with the
Securities and Exchange Commission.
The
Audit Committee oversees the Company’s financial reporting process on behalf of the Board. 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 Audit Committee reviewed and discussed the audited consolidated financial statements in the Annual Report on Form 10-K 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 consolidated financial statements.
The
Audit Committee reviewed with the independent auditors, who are responsible for expressing an opinion on the conformity of those audited
consolidated financial statements with accounting principles generally accepted in the United States of America, 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
by the applicable requirements of the Public Company Accounting Oversight Board including Auditing Standard No. 1301, “Communication
with Audit Committees,” and the Securities and Exchange Commission. The Audit Committee has discussed with the independent auditors
their independence from management and the Company, and the Audit Committee has received the written disclosures and the letter from
the independent auditor required by applicable requirements of the Public Company Accounting Oversight Board, including Rule 3526 “Communication
with Audit Committees Concerning Independence,” and considered the compatibility of non-audit services with the auditors’
independence.
The
Audit Committee discussed with the Company’s independent auditors the overall scope and plans for their audit. The Audit Committee
meets with the independent auditors, with and without management present, to discuss the results of their examinations, their understanding
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 Audit Committee recommended to the Board (and the Board has approved)
that the audited consolidated financial statements be included in the Annual Report on Form 10-K for the fiscal year ended May 31, 2023
for filing with the Securities and Exchange Commission. The Audit Committee and the Board have also recommended the selection of the
Company’s independent auditors, Haskell & White LLP.
|
AUDIT
COMMITTEE |
|
|
|
Ms.
Catherine Coste (Chair) |
|
Mr.
David Moatazedi |
|
Dr.
Jane Emerson |
EXECUTIVE
COMPENSATION OF NAMED EXECUTIVE OFFICERS
In
December 2020, our Compensation Committee conducted its annual review of our compensation philosophy and made recommendations to the
Board, which set the total compensation plan for our Named Executive Officers. This review included certain market data, other factors,
and operational performance of the company. The focus of the Compensation Committee, the Board, and management is aligning management
total compensation with shareholder return. As such, the Company pays below market salaries and cash bonuses (when paid) and focuses
on equity awards for Named Executive Officers.
Cash
Compensation
We
use salary to compensate our Named Executive Officers for services rendered during the year and to recognize the experience, skills,
knowledge, and responsibilities required of each Named Executive Officer. Our Compensation Committee considers adjustments to salary
to reflect market conditions and Company results. During the fiscal year ended May 31, 2022, a bonus of $100,000 was paid to Mr. Barbieri,
Executive Vice Chairperson for his work related to our introduction of COVID products and his managing of certain regulatory and legal
matters. In December 2022, following its review and using the factors and methodologies described above, our Compensation Committee approved
cash salaries as set forth in the table below.
Equity
Compensation
We
view equity awards as the critical element of total compensation of our Named Executive Officers. Although we do not specifically tie
any portion of a Named Executive Officer’s equity compensation to Company performance, the Company utilizes incentive stock options
as equity awards, the value of which bears a direct correlation to total shareholder return. Stock options issued to Named Executive
Officers, often vest over a four-year period and are always issued with an exercise price equal to the then current market price of the
Company’s Common Stock. As such, the value in these issued stock options is tied to long-term increases in stockholder value. Further,
since issued stock options generally vest over four (4) years, these stock options awards serve as a means of retaining our Named Executive
Officers, as well as other employees in the Company.
The
following table sets forth the total compensation earned by the Company’s Chief Executive Officer, Vice Chairperson and Chief Financial
Officer, Treasurer and Secretary (the “Named Executive Officers”) for the fiscal years ended May 31, 2023 and 2022.
EXECUTIVE
COMPENSATION
SUMMARY
COMPENSATION TABLE
Name and Principal Position | |
Fiscal Year | |
Salary ($) | | |
Bonus ($) | | |
Stock Awards ($) | | |
Option Awards ($) (5) | | |
Non-Equity Incentive Plan Compensation ($) | | |
Non-qualified Deferred Compensation Earnings | | |
All Other Compen-sation ($) | | |
Total ($) | |
Zackary Irani (1), | |
2023 | |
| 141,250 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 141,250 | |
Chairman & Chief Executive Officer | |
2022 | |
| 135,000 | | |
| - | | |
| - | | |
| 356,333 | | |
| - | | |
| - | | |
| - | | |
| 491,333 | |
Allen Barbieri (2),
| |
2023 | |
| 126,250 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 126,250 | |
Director, Executive Vice Chairman & Secretary | |
2022 | |
| 97,962 | | |
| 100,000.00 | | |
| - | | |
| 157,992 | | |
| - | | |
| - | | |
| - | | |
| 355,954 | |
Gary Lu (3), | |
2023 | |
| 65,000 | | |
| - | | |
| - | | |
| 140,098 | | |
| - | | |
| - | | |
| - | | |
| 205,098 | |
Chief Financial Officer | |
2022 | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | |
Steve Sloan (4), | |
2023 | |
| 190,733 | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 190,733 | |
Chief Financial Officer & Treasurer | |
2022 | |
| 97,962 | | |
| - | | |
| - | | |
| 142,533 | | |
| - | | |
| - | | |
| - | | |
| 347,533 | |
(1)
In the fiscal years ended May 31, 2023 and 2022, there were no management incentive cash bonuses and Mr. Irani received no issuance of
stock. Mr. Irani received a 100,000 share stock option grant in the fiscal year ended May 31, 2022. The option was granted at the exercise
price of $4.46 per share (market value on the date of grant) and was valued at $356,333 using the Black-Scholes option-pricing model
(which uses assumptions for expected volatility, expected dividends, expected forfeiture rate, expected term and the risk-free interest
rate). The amounts in the table above do not reflect the value of a certain stock option granted to Mr. Irani in April 2023, that is
subject to and conditioned upon the approval by our stockholders of the 2023 Stock Incentive Plan, and as such the value of that option
is not currently determinable or shown in the table.
(2)
In the fiscal years ended May 31, 2023 and 2022, there were management incentive cash bonuses paid to Mr. Barbieri of $0 and $100,000
respectively. During these years, Mr. Barbieri received no issuance of stock. Mr. Barbieri did receive a 45,000 share stock option grant
in the fiscal year ended May 31, 2022. The option was granted at the exercise price of $4.46 per share (market value on the date of grant)
and was valued at $157,992 using the Black-Scholes option-pricing model (which uses assumptions for expected volatility, expected dividends,
expected forfeiture rate, expected term and the risk-free interest rate). The amounts in the table above do not reflect the value of
a certain stock option granted to Mr. Barbieri in April 2023 that is subject to and conditioned upon the approval by our stockholders
of the 2023 Stock Incentive Plan, and as such the value of that option is not currently determinable or shown in the table.
(3)
Mr. Gary Lu joined the Company on March 1, 2023 as the new CFO and the reflected salary is pro-rated. In the fiscal years ended May 31,
2023 and 2022, there were no management incentive cash bonuses and Mr. Lu received no cash raise. Mr. Lu did receive a 100,000 share
stock option grant in the fiscal year ended May 31, 2023. The option was granted at the exercise price of $1.74 per share (market value
on the date of grant) and was valued at $140,097.70 using the Black-Scholes option-pricing model (which uses assumptions for expected
volatility, expected dividends, expected forfeiture rate, expected term and the risk-free interest rate).
(4)
Mr. Steve Sloan stepped down as the CFO and left the company on March 1, 2023. In the fiscal years ended May 31, 2023 and 2022, there
were no management incentive cash bonuses paid to Mr. Sloan, and Mr. Sloan received no cash raise or issuance of stock. Mr. Sloan did
receive a 40,000 share stock option grant in the fiscal year ended May 31, 2022. The option was granted at the exercise price of $4.46
per share (market value on the date of grant) and was valued at $142,533 using the Black-Scholes option-pricing model (which uses assumptions
for expected volatility, expected dividends, expected forfeiture rate, expected term and the risk-free interest rate).
(5)
For additional information as to the assumptions made in valuation, see Note 2 to the Company’s audited financial statements filed
with the Securities and Exchange Commission in the Company’s Annual Report on Form 10-K for the fiscal year ended May 31, 2023.
OUTSTANDING
EQUITY AWARDS AT FISCAL YEAR-END
| |
| |
Option Awards | | |
Stock Awards | |
Name
| |
Option Grant Date | |
Number of Securities Underlying Unexercised Options (#) Exercisable | | |
Number of Securities Underlying Unexercised Options (#) Unexercisabe | | |
Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options | | |
Option Exercise Price ($) | | |
Option Expiration Date | |
Number of Shares or Units of Stock That Have Not Vested (#) | | |
Market Value of Shares or Units of Stock That Have Not Vested ($) | | |
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | | |
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | |
| |
2/26/2015 | |
| 105,000 | | |
| 0 | | |
| 0 | | |
| 0.82 | | |
2/26/2025 | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | |
| |
3/24/2016 | |
| 100,000 | | |
| 0 | | |
| 0 | | |
| 1.20 | | |
3/24/2026 | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | |
| |
1/22/2018 | |
| 75,000 | | |
| 0 | | |
| 0 | | |
| 3.90 | | |
1/22/2028 | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | |
Zackary Irani | |
12/20/2018 | |
| 150,000 | | |
| 0 | | |
| 0 | | |
| 2.25 | | |
12/20/2028 | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | |
| |
12/19/2019 | |
| 93,750 | | |
| 31,250 | | |
| 0 | | |
| 2.81 | | |
12/19/2029 | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | |
| |
12/10/2020 | |
| 39,308 | | |
| 39,308 | | |
| 0 | | |
| 6.36 | | |
12/10/2030 | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | |
| |
12/9/2021 | |
| 25,000 | | |
| 75,000 | | |
| 0 | | |
| 4.46 | | |
12/9/2031 | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | |
| |
2/26/2015 | |
| 30,000 | | |
| 0 | | |
| 0 | | |
| 0.82 | | |
2/26/2025 | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | |
| |
3/24/2016 | |
| 35,000 | | |
| 0 | | |
| 0 | | |
| 1.20 | | |
3/24/2026 | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | |
| |
1/22/2018 | |
| 25,000 | | |
| 0 | | |
| 0 | | |
| 3.90 | | |
1/22/2028 | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | |
Allen Barbieri | |
12/20/2018 | |
| 50,000 | | |
| 0 | | |
| 0 | | |
| 2.25 | | |
12/20/2028 | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | |
| |
12/19/2019 | |
| 50,000 | | |
| 0 | | |
| 0 | | |
| 2.81 | | |
12/19/2029 | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | |
| |
12/10/2020 | |
| 30,000 | | |
| 0 | | |
| 0 | | |
| 6.36 | | |
12/10/2030 | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | |
| |
12/9/2021 | |
| 45,000 | | |
| 0 | | |
| 0 | | |
| 4.46 | | |
12/9/2031 | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | |
Gary Lu | |
4/6/2023 | |
| 0 | | |
| 100,000 | | |
| 0 | | |
| 1.74 | | |
4/6/2033 | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | |
| |
7/13/2020 | |
| 25,000 | | |
| 25,000 | | |
| 0 | | |
| 8.70 | | |
7/13/2030 | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | |
Steve Sloan | |
12/10/2020 | |
| 6,250 | | |
| 18,750 | | |
| 0 | | |
| 6.36 | | |
12/10/2030 | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | |
| |
12/9/2021 | |
| 20,000 | | |
| 20,000 | | |
| 0 | | |
| 4.46 | | |
12/9/2031 | |
| 0 | | |
| 0 | | |
| 0 | | |
| 0 | |
ITEM
402(v) PAY VERSUS PERFORMANCE
The
disclosure included in this section is prescribed by SEC rules and does not necessarily align with how the Company or the Compensation
Committee view the link between the Company’s performance and named executive officer pay. This disclosure is intended to comply
with the requirements of Item 402(v) of Regulation S-K applicable to “smaller reporting companies.” The Tabular Disclosure
of Pay Versus Performance As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(v)
of Regulation S-K, are being provided pertaining to the relationship between executive compensation actually paid and certain financial
performance of the Company. The following table sets forth information concerning Compensation Actually Paid (“CAP”) to our
Principal Executive Officer (“PEO”) and our non-PEO named executive officers (“NEOs”) versus our total shareholder
return (“TSR”) and net income (loss) performance results for the fiscal years ended May 31, 2023, 2022, and 2021. The amounts
set forth below under the headings “Compensation Actually Paid to PEO” and “Average Compensation Actually Paid to Non-PEO
NEOs” have been calculated in a manner consistent with Item 402(v) of Regulation S-K. Use of the term CAP is required by the SEC’s
rules and as a result of the calculation methodology required by the SEC, such amounts differ from compensation actually received by
the individuals and the compensation decisions described in the “Executive Compensation Information” section above.
Fiscal Year | |
Summary Compensation Table Total for PEO ($) (1) | | |
Compensation Actually Paid to PEO ($) (3) | | |
Average Summary Compensation Table Total for Non-PEO NEOs ($) (2) | | |
Average Compensation Actually Paid to Non-PEO NEOs ($) (3) | | |
Value of Initial Fixed $100 Investment Based On: Total Shareholder Return (TSR) ($) (4) | | |
Net Income (Loss) ($) (5) | |
(a) | |
(b) | | |
(c) | | |
(d) | | |
(e) | | |
(f) | | |
(g) | |
2023 | |
| 141,250 | | |
| (108,437 | ) | |
$ | 174,027 | | |
| 110,778 | | |
| 0.00 | | |
| (7,140,000 | ) |
2022 | |
| 491,333 | | |
| 416,627 | | |
$ | 351,744 | | |
| 318,143 | | |
| 95.89 | | |
| (4,531,000 | ) |
(1) |
The
dollar amounts reported in column (b) are the amounts of total compensation reported for our CEO Zack Irani, (our PEO) for each corresponding
year in the “Total” column of the Summary Compensation Table. Refer to “Executive Compensation – Summary
Compensation Table” |
|
|
(2) |
The
dollar amounts reported in column (d) represent the average of the amounts reported for the Non-PEO NEOs (excluding our PEO) in the
“Total” column of the Summary Compensation Table in each applicable year. The Non-PEO NEOs included in the table above
were as follows: |
|
● |
For
2023: Allen Barbieri, Gary Lu and Steve Sloan |
|
● |
For
2022: Allen Barbieri and Steven Sloan |
(3) |
The
dollar amounts reported in columns (c) and (e) represent the amount of CAP to Mr. Irani, and the average amount of CAP to our non-PEO
NEOs, respectively, as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual amount
of compensation earned by or paid to our NEOs during the applicable year. In accordance with the requirements of Item 402(v) of Regulation
S-K, to calculate CAP, compensation related to equity awards was remeasured based on the following: For stock options, a Black-Scholes
(“BSM”) option-pricing model was used as of the applicable year-end date, or, in the case of vested options, the vesting
date. The BSM model requires us to make assumptions and judgments regarding the variables used in the calculation, including the
expected remaining term, expected volatility, and the expected risk-free rate. The valuation assumptions used to calculate the CAP
shown in the table were materially consistent with those used to calculate our share-based compensation expense, as disclosed in
our 2023 Annual Report on Form 10-K. |
The
2023 CAP to our PEO and the average CAP to our non-PEO NEOs reflects the following adjustments required by the applicable SEC rules from
the total compensation reported in the Summary Compensation Table (“SCT”):
| |
PEO | | |
Average of Non-PEO NEOs | |
Total Reported in 2023 SCT | |
| 141,250 | | |
| 174,027 | |
Less: value of equity awards reported in SCT | |
| - | | |
| (46,699 | ) |
Add: year-end value of equity awards granted in 2023 that are unvested and outstanding | |
| - | | |
| 35,934 | |
Add: change in fair value (from prior year-end) of prior year equity awards that are unvested and outstanding | |
| (264,287 | ) | |
| - | |
Add: fair market value of equity awards granted in 2023 and that vested in 2023 | |
| - | | |
| - | |
Add: change in fair value (from prior year-end) of prior year equity awards that vested in 2023 | |
| 14,600 | | |
| 4,840 | |
Less: fair market value of equity awards deemed to fail to meet the applicable vesting conditions during 2023 | |
| - | | |
| (57,323 | ) |
Compensation Actually Paid for 2023 | |
| (108,437 | ) | |
| 110,778 | |
The
2022 CAP to our PEO and the average CAP to our non-PEO NEOs reflects the following adjustments required by the applicable SEC rules from
the total compensation reported in the Summary Compensation Table (“SCT”):
| |
PEO | | |
Average of Non-PEO NEOs | |
Total Reported in 2022 SCT | |
| 491,333 | | |
| 351,744 | |
Less: value of equity awards reported in SCT | |
| (356,333 | ) | |
| (150,263 | ) |
Add: year-end value of equity awards granted in 2022 that are unvested and outstanding | |
| 272,496 | | |
| 113,811 | |
Add: change in fair value (from prior year-end) of prior year equity awards that are unvested and outstanding | |
| (32,588 | ) | |
| (7,158 | ) |
Add: fair market value of equity awards granted in 2022 and that vested in 2022 | |
| - | | |
| - | |
Add: change in fair value (from prior year-end) of prior year equity awards that vested in 2022 | |
| 41,720 | | |
| 10,009 | |
Compensation Actually Paid for 2022 | |
| 416,627 | | |
| 318,143 | |
(4) |
TSR
is determined based on the value of an initial fixed investment of $100 on December 31, 2021. Cumulative TSR is calculated by dividing
the sum of the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and the difference between
the Company’s share price at the end of the measurement period and the Company’s share price at the beginning of the
measurement period. |
|
|
(5) |
The
dollar amounts reported in column (g) represent the amount of net loss reflected in the Company’s audited financial statements
for the applicable year. |
Required
Disclosure of the Relationship between Compensation Actually Paid and Financial Performance Measures
In
accordance with Item 402(v) of Regulation S-K, we are providing the following description of the relationship between (1) information
presented in the Pay Versus Performance table above and (2) the executive compensation actually paid to its PEO and, on average, to its
other NEOs over the registrant’s three most recently completed fiscal years.
Compensation
Actually Paid and Net Income (Loss)
Due
to the nature of our Company’s consolidated financials and primary focus on research and development of diagnostic-guided therapy
products to treat gastrointestinal diseases, our company has not historically utilized net income (loss) as a performance measure for
our executive compensation program. However, as the inFoods product has now launched, the Board will evaluate the relationship between
our total revenues and net income (loss) and compensation actually to be paid to our PEO and NEOs going forward.
Compensation
Actually Paid and TSR
The
following graph sets forth the relationship between CAP to our PEO, the average CAP for our Non-PEOs, and the Company’s TSR over
the period covering 2023 and 2022.
All
information provided above under the “Item 402(v) Pay Versus Performance” heading will not be deemed to be incorporated by
reference into any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended,
whether made before or after the date hereof and irrespective of any general incorporation language in any such filing, except to the
extent the Company specifically incorporates such information by reference.
INDEPENDENT
DIRECTOR COMPENSATION
Our
non-employee (Independent) directors receive a cash component in addition to an equity component as part of their annual Board retainer
fee. The cash component of Board retainer fees is paid quarterly, while stock options typically vest on the one-year anniversary date
of issuance. The compensation of directors is subject to review and adjustment from time to time by the Board.
The
annual cash retainer fees are paid according to the following schedule:
DIRECTOR COMPENSATION | |
| | |
Annual Cash Retainer | |
$ | 45,000 | |
Committee Chair Stipends: | |
| | |
Audit | |
$ | 15,000 | |
Compensation | |
$ | 7,500 | |
Nominating and Corporate Governance | |
$ | 7,500 | |
Dr.
Jane Emerson is also paid an additional advisory fee of $7,500 per year pertaining to assistance with the Company’s research and
development and regulatory activities.
The
following table presents the compensation of non-employee directors for the fiscal year ended May 31, 2023.
DIRECTOR
COMPENSATION
Name | |
Fees Earned or Paid in Cash ($) | | |
Stock Awards ($) | | |
Option Awards Value ($) (1) | | |
Non-Equity Incentive Plan Compensation ($) | | |
Change in Pension Value and Nonqualified Deferred Compensation Earnings | | |
All Other Compensation ($) | | |
Total Value ($) | |
Ms. Catherine Coste | |
| 60,000 | | |
| 0 | | |
| 87,773 | | |
| 0 | | |
| 0 | | |
| 0 | | |
| 147,773 | |
Jane Emerson, M.D., Ph.D. | |
| 45,000 | | |
| 0 | | |
| 87,773 | | |
| 0 | | |
| 0 | | |
| 7,500 | | |
| 140,273 | |
David Moatazedi | |
| 26,250 | | |
| 0 | | |
| 87,773 | | |
| 0 | | |
| 0 | | |
| 0 | | |
| 114,023 | |
Jack Kenny | |
| - | | |
| 0 | | |
| 87,773 | | |
| 0 | | |
| 0 | | |
| 0 | | |
| 87,773 | |
Mark Sirgo, Pharm D. | |
| 26,250 | | |
| 0 | | |
| 87,773 | | |
| 0 | | |
| 0 | | |
| 0 | | |
| 114,023 | |
(1)
The table above does not reflect the value or issuance of certain stock options granted to outside directors in April 2023, that are
subject to and conditioned upon the approval by our stockholders of the 2023 Stock Incentive Plan, and as such the value of which is
not currently determinable.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
The
Board reviews, approves, and/or ratifies all transactions involving related persons. The purpose of the review is to determine that such
transactions are conducted on terms not materially less favorable to the Company than what would be usual and customary in transactions
between unrelated persons and, in the case of transactions involving Directors, to determine whether such transactions affect the independence
of a Director in accordance with the relevant rules and standards issued by the Securities and Exchange Commission.
For
the fiscal year ended May 31, 2023, there were no reportable related party transactions or relationships.
LEGAL
PROCEEDINGS
There
are no legal proceedings related to any of our directors, director nominees, or executive officers which are required to be disclosed
pursuant to applicable Securities and Exchange Commission rules.
PROPOSAL
NO. 2
ADVISORY
VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION
In
accordance with Section 14A of the Exchange Act, the Company is providing stockholders with an advisory, non-binding vote on the Company’s
compensation paid to its Named Executive Officers as disclosed in this Proxy Statement.
Accordingly,
in accordance with the rules adopted by the Securities and Exchange Commission, the following resolution, commonly known as a “say-on-pay”
vote, is being submitted for a stockholder vote at the Annual Meeting:
“RESOLVED,
that the compensation paid to the Named Executive Officers of Biomerica, Inc., as disclosed pursuant to Item 402 of Regulation S-K, including
the compensation tables and narrative discussion is hereby APPROVED.”
Stockholders
are encouraged to read the accompanying compensation tables and the related narrative disclosure for more information about the Company’s
executive compensation program.
Vote
Required and Board Recommendation
Because
your vote is advisory, it will not be binding on our Compensation Committee or our Board. However, the Board intends to consider the
outcome of the vote when making future executive compensation decisions and, in particular, to consider any significant negative voting
results to the extent they can determine the cause or causes for such votes. The Board has determined that the Company will hold future
advisory votes on executive compensation every year.
The
affirmative vote of a majority of the shares present, in person or by proxy at the Annual Meeting, and entitled to vote on the subject
matter is required to approve, on an advisory basis, the Named Executive Officers’ compensation.
Our
Board Recommends that the Stockholders Vote “FOR” the Approval, on an Advisory Basis, of the Compensation of Our Named Executive
Officers.
PROPOSAL
NO. 3
RATIFICATION
OF SELECTION OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTING FIRM
Under
applicable law and the procedures adopted by the Company’s Board, the Audit Committee selects the Company’s independent public
accounting firm for each fiscal year. The Audit Committee has selected Haskell & White LLP (“H&W”) to serve as the
Company’s independent public accounting firm for the fiscal year ending May 31, 2024. H&W has previously served as the Company’s
independent public accounting firm commencing with the fiscal year ended May 31, 2023.
Although
shareholder ratification of the Audit Committee’s selection of the independent registered public accounting firm is not required
by law or the procedures adopted by the Company’s Board, the Audit Committee’s selection of H&W as the Company’s
independent public accounting firm for the fiscal year ending May 31, 2024 is being submitted for ratification by the shareholders at
the Annual Meeting because the Company’s Board has determined that such ratification is a matter of good corporate governance practice.
If this proposal is not approved at the Annual Meeting, the Audit Committee may reconsider its selection of H&W. Even if the selection
of H&W is ratified, the Audit Committee, in its discretion, may select a different registered public accounting firm at any time
during the year if it determines that such a change would be in the best interests of the Company and its shareholders.
Representatives
of H&W are expected to be present at the Annual Meeting, will have the opportunity to make a statement if they desire, and are expected
to be available to respond to appropriate questions.
AUDIT
FEES
The
approximate aggregate fees billed for professional services by our auditors in the fiscal years ended May 31, 2023 and 2022 were as follows:
FEES | |
FISCAL YEAR 2023 ($) | | |
FISCAL YEAR 2022 ($) | |
Audit Fees(1) | |
| 132,805 | | |
| 81,000 | |
Audit and review of the financial statements | |
| | | |
| | |
Tax Fees(2) | |
| 8,100 | | |
| 9,000 | |
Tax Consulting Services | |
| | | |
| | |
All Other Fees(3) | |
| 31,800 | | |
| 15,000 | |
Total | |
| 172,705 | | |
| 105,000 | |
(1)
Audit Fees consist of the aggregate fees billed for professional services rendered for the audit of our annual consolidated financial
statements, the reviews of the consolidated financial statements included in our Forms 10-Q, and for any other services that are normally
provided by our auditors in connection with our statutory and regulatory filings or engagements.
(2)
Tax Fees consist of the aggregate fees billed for professional services rendered for tax compliance, tax advice, and tax planning. Included
in such Tax Fees were fees for preparation of our tax returns and consultancy and advice on other tax planning matters.
(3)
All Other Fees consist of the aggregate fees billed for products and services provided by our auditors and not otherwise included in
Audit Fees, Audit Related Fees, or Tax Fees.
The
Audit Committee has considered that the provision of the above services has not impaired the principal accountant’s ability to
maintain independence.
It
is the policy of the Audit Committee that all audit and permissible non-audit services provided by our independent registered public
accounting firm and related fees paid to our independent registered public accounting firm must be approved in advance by the Audit Committee
on a case-by-case basis. All of the above-described services provided by our auditors were approved in advance by the Audit Committee.
Vote
Required and Board Recommendation
The
vote on this proposal is advisory in nature, so it will not be binding on the Board. However, the Board will consider the outcome of
the vote along with other factors, when making its decision about the selection of H&W as the Company’s independent public
accounting firm for the fiscal year ending May 31, 2024.
The
affirmative vote of a majority of the shares present, in person or by proxy at the Annual Meeting, and entitled to vote on the subject
matter is required to ratify, on an advisory basis, the selection of Haskell & White LLP as the Company’s independent public
accounting firm for the fiscal year ending May 31, 2024.
Our
Board Recommends that the Stockholders Vote “FOR” the Proposal to Ratify H&W as the Company’s Certified Public
Accounting Firm for the fiscal year ending May 31, 2024.
PROPOSAL
NO. 4
APPROVAL
OF THE COMPANY’S 2023 STOCK INCENTIVE PLAN
On
April 20, 2023, the Board adopted the Company’s 2023 Stock Incentive Plan (the “Plan”) that provides for the issuance
of 1,200,000 shares of restricted stock or stock options, subject to stockholder approval. The Board believes that it is in the best
interests of the Company and its stockholders to approve the Plan. The Board believes the Plan will enhance the Company’s ability
to recruit and maintain qualified directors, managers, and personnel by including stock options as part of compensation packages. Options
provide an incentive to employees to contribute to the success of the Company which would provide a benefit to employees as well as to
the shareholders. The last stock plan (the 2020 Stock Incentive Plan) approved by shareholders was approved in December 2020. The following
summary description of the Plan is qualified in its entirety by reference to the Plan, a copy of which is attached hereto as Exhibit
A.
PURPOSE.
The Plan is intended to provide incentive to employees, officers, directors and others expected to provide significant services to the
Company, to encourage proprietary interest in the Company, to encourage such employees to remain in the employ of the Company, to attract
new employees with outstanding qualifications, and to afford additional incentive to others to increase their efforts in providing significant
services to the Company.
ADMINISTRATION.
The Plan will be administered by the Company’s Board or a committee of the Board (the “Stock Option Committee”) which
may be established by the Board. Any such Stock Option Committee will at all times be composed of “non-employee directors”.
TYPES
OF AWARDS. The Company’s Plan provides for the grant of (i) incentive stock options (“ISOs”) within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”) and (ii) stock options that are not intended to
qualify under Section 422 of the Code (“NQSOs”; collectively with ISOs, “Options”). The Plan also authorizes
the award of shares of restricted Common Stock (“Restricted Stock”).
TERMS
AND CONDITIONS OF AWARDS. Options granted under the Plan will vest and become exercisable as determined by the Stock Option Committee
or the Board. Awards will be subject to the terms and restrictions of the awards made by the Stock Option Committee or the Board. Option
and Restricted Stock award recipients shall enter into a written stock option or Restricted Stock agreement with the Company. The Stock
Option Committee or the Board has discretionary authority to select participants from among eligible persons and to determine, at the
time an Option or Restricted Stock award is granted, when and in what increments shares covered by the Option or Restricted Stock award
will vest and may be purchased. In the case of an Option, the Stock Option Committee or the Board also has the discretionary authority
to determine, at the time such Option is granted, whether the Option is intended to be an ISO or a NQSO, provided, however, that certain
restrictions applicable to ISOs are mandatory, including a requirement that ISOs not be issued for less than 100% of the then fair market
value of the Common Stock (110% in the case of a grantee who holds more than 10% of the outstanding Common Stock) and a maximum exercise
period of ten (10) years or five (5) years in the case of a grantee who holds more than 10% of the outstanding Common Stock). Fair market
value is determined by the Board or the Stock Option Committee in good faith, for which the Board or Committee may refer to the price
at which the shares traded at the close of business on the date of valuation as quoted on Yahoo.Finance.com. Such determination will
be conclusive and binding on all persons.
ELIGIBLE
PERSONS. All officers, directors, and employees of the Company as well as certain consultants, advisors and other persons expected to
provide bona fide services to the Company are eligible to participate in the Plan. ISOs and Restricted Stock may be granted to the officers
and employees of the Company. NQSOs and Restricted Stock awards may be granted to the directors, officers, employees, agents, and consultants
of the Company or any of its subsidiaries.
Under
current law, ISOs may not be granted to any director or consultant of the Company who is not an employee.
SHARES
SUBJECT TO THE PLAN. Subject to anti-dilution provisions for stock splits, stock dividends and similar events, the Plan authorizes the
grant of Restricted Stock and or Options to purchase up to One Million Two Hundred Thousand (1,200,000) shares of the Company’s
Common Stock.
TERM
OF THE PLAN. Unless previously terminated by the Board, the Plan will terminate on December 7, 2033, and no Options or Restricted Stock
may be granted under the Plan thereafter, but existing options and Restricted Stock will remain in effect until the Options or Restricted
Stock are exercised or vested or terminated by their terms.
TERM
OF OPTIONS. Each stock option must terminate no more than ten (10) years from the date it is granted or five (5) years in the case of
ISOs granted to an employee who is deemed to own in excess of ten percent (10%) of the combined voting power of the Company’s outstanding
equity stock). Stock Options may be granted on terms providing for exercise either in whole or in part at any time or times during their
restrictive terms, or only in specified percentages at the stated time periods or intervals during the term of the stock option.
OPTION
EXERCISE. The exercise price of any Stock Option granted under the Plan is payable in full in cash. The Company may provide for other
payment mechanisms, including making loans available to option holders to exercise stock options evidenced by a promissory note executed
by the option holder, which notes may, but are not required to be secured by a pledge of Common Stock issued upon exercise of the option.
AMENDMENT
AND TERMINATION OF THE PLAN. The Board may, without affecting any outstanding stock options, from time-to-time revise or amend the Plan
and may suspend or discontinue it at any time. However, no such revision or amendment may, without stockholder approval, increase the
number of shares of Restricted Stock or Stock Options that may be issued under the Plan.
COMMON
STOCK. The Common Stock reserved for issuance under the Plan is currently traded on the Nasdaq Capital Market systems under the symbol
BMRA. The closing per share market value of the Common Stock on April 20, 2023 (the date of the adoption of the Plan by the Board of
Directors) was $1.63. Based on this valuation, the One Million Two Hundred Thousand (1,200,000) shares reserved for issuance under the
Plan have an aggregate market value of $1,956,000 if all shares were issued at that time as Restricted Stock.
CERTAIN
FEDERAL INCOME TAX CONSEQUENCES. Following is a brief summary of the principal federal income tax consequences of awards under the Plan.
This summary is not an exhaustive description and does not describe all applicable federal, state, or local tax laws.
INCENTIVE
STOCK OPTIONS. A Plan participant is not subject to federal income tax at the time of either the grant or the exercise of an ISO. In
the year in which an ISO is exercised, however, the amount by which the fair market value of the shares of Common Stock received upon
the exercise of an ISO exceeds the exercise price will constitute an adjustment to the option holder’s income in computing alternative
minimum taxable income. Such adjustment could result in the imposition of, or increase the amount of, the option holder’s “alternative
minimum tax” under the Code.
If
an option holder does not dispose of such shares of Common Stock within two (2) years after the ISO was granted or one (1) year after
the ISO was exercised, whichever is later (any such disposition, a “disqualifying event”), then any gain or loss recognized
upon such disposition generally will be treated as long-term capital gain or loss. In such event, the Company will not receive a tax
deduction on either the exercise of the ISO or on the sale of the underlying Common Stock.
If
an option holder makes a “disqualifying disposition,” the option holder will realize ordinary income in an amount equal to
the lesser of (i) the fair market value of the Common Stock on the date the ISO is exercised minus the exercise price, or (ii) the sales
price received by the option holder on the disposition of such Common Stock minus the exercise price. In such event, the Company will
be entitled to a deduction in an amount equal to the ordinary income recognized by the option holder. If a sale is a disqualifying disposition,
the option holder also may realize short-term or long-term capital gain or loss, if such shares constitute capital assets in an option
holder’s hands. The gain or loss will be measured by the difference between the fair market value of the shares on the date of
exercise of the ISO and the sales price of the shares.
NON-QUALIFIED
STOCK OPTIONS. No income is realized by an option holder upon the grant of an NQSO with an exercise price equal to or greater than the
fair market value of the underlying common stock on the date of the grant. Upon the exercise of an NQSO, however, the amount by which
the fair market value of the Common Stock on the date of exercise exceeds the exercise price, will be taxed as ordinary income to an
option holder and the Company will be entitled to a deduction in an equal amount. Upon subsequent sales of Common Stock received upon
exercise of NQSO’s, an option holder may realize short-term or long-term capital gain or loss, depending upon the holding period
of the shares, if such shares constitute capital assets in the option holder’s hands.
RESTRICTED
STOCK. Generally, a participant who has been awarded Restricted Stock will not realize taxable income at the time of the award, and the
Company will not be entitled to a deduction at that time; provided, however, that the participant may elect to treat the value of the
shares as income at the time of receipt (without regard to restrictions) by filing with the IRS (with a copy to the Company) an election
under Section 83(b) of the Code no later than thirty (30) days after the issuance date. In the absence of an election under Section 83(b),
when the restrictions on the Restricted Stock lapse, the participant will have ordinary income and the Company will have a corresponding
deduction. The measure of such income and deduction will be the fair market value of the shares at the time the restrictions lapse.
NEW
PLAN BENEFITS. If our stockholders approve this proposal, the additional shares of our common stock that would become reserved for issuance
under the Plan would be immediately available to grant equity awards to eligible plan participants. The number of awards (if any) that
may be received by individual employees or groups of employees under our Plan is at the discretion of our Board and therefore cannot
be determined in advance.
Vote
Required and Board Recommendation
The
affirmative vote of a majority of the shares present, in person or by proxy at the Annual Meeting, and entitled to vote on the subject
matter is required for the approval of the Company’s 2023 Stock Incentive Plan.
Our
Board Recommends that the Stockholders Vote “FOR” the Proposal to Approve the 2023 Stock Incentive Plan.
PROPOSAL
NO. 5
APPROVAL
OF AN ADJOURNMENT OF THE ANNUAL MEETING
To
consider and vote on a proposal to approve any adjournment of the Annual Meeting from time to time, if necessary or appropriate, including
to establish a quorum, which proposal we refer to as the “Adjournment Proposal.”
Vote
Required and Board Recommendation
Approval
of the Adjournment Proposal requires the affirmative vote of a majority of the shares present, in person or by proxy at the Annual Meeting,
and entitled to vote on the subject matter; provided, that in the absence of a quorum, the affirmative vote of the holders of a majority
of the shares present, in person or by proxy at the Annual Meeting, and entitled to vote is required for the Adjournment Proposal.
If you properly authorize your proxy by mail, by telephone or through the Internet, but do not indicate instructions to vote your shares
“FOR,” “AGAINST”, or “ABSTAIN” on the Adjournment Proposal, your shares will be voted in accordance
with the recommendation of our Board, which is “FOR” the Adjournment Proposal. Abstentions will have no effect with respect
to the vote on the Adjournment Proposal (assuming the presence of a quorum), or, in the absence of a quorum, will have the same effect
as a vote “AGAINST” the Adjournment Proposal.
Our
Board recommends that our stockholders vote “FOR” the Adjournment Proposal.
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 Annual 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 has adopted a policy that encourages our directors to attend our annual stockholder meetings. The annual meeting of stockholders
held on December 7, 2022 was attended by all five (5) of the incumbent directors for that year. It is expected that a majority of the
directors will be in attendance at the 2023 Annual Meeting.
ANNUAL
REPORT
The
Annual Report to Stockholders and Form 10-K covering the Company’s fiscal year ended May 31, 2023 are being mailed to stockholders
with this Proxy Statement. The Annual Report on Form 10-K 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, a committee of our Board, or a director by sending a letter addressed to the Board, a committee,
or a director c/o Corporate Secretary, Biomerica Inc., 17571 Von Karman Avenue, Irvine, California 92614. All communications will be
compiled by our corporate Secretary and forwarded to the Board, the committee, or the director accordingly.
CORPORATE
GOVERNANCE
The
Company’s Corporate Governance Policy and its Policy on Business Conduct and Ethics (“Ethics Policy”) for all directors,
officers, and employees of the Company, including executive officers, are available on the Company’s web site at www.biomerica.com.
Stockholders may also obtain free of charge printed copies of this policy by writing to the Secretary of the Company at the Company’s
headquarters.
DELINQUENT
SECTION 16(a) REPORTS
Section
16(a) of the Exchange Act requires our executive officers, directors, and persons who own more than 10% of a registered class of securities
to file initial reports of ownership of our stock and reports of changes in such ownership with the SEC. To our knowledge, all required
filings pursuant to Section 16(a) were timely made during fiscal year 2023 except for the filings identified below:
One
statement of beneficial ownership of securities on Form 3 for David Moatazedi was inadvertently not filed on a timely basis. A Form 3
was filed for Mr. Moatazedi on August 18, 2023.
EMPLOYEE,
DIRECTOR, AND OFFICER HEDGING
We
have not adopted any policy regarding the ability of our employees (including officers) or directors, or any of their designees, to purchase
financial instruments (including prepaid variable forward contracts, equity swaps, collars, and exchange funds), or otherwise engage
in transactions, that hedge or offset, or are designed to hedge or offset, any decrease in the market value of our equity securities.
DATE
FOR SUBMISSION OF STOCKHOLDER PROPOSALS FOR NEXT ANNUAL MEETING
Any
eligible stockholder who desires to have a proposal considered for inclusion in our 2024 proxy solicitation materials, including director
nominations, must cause their proposals to be received in writing by our Secretary at 17571 Von Karman Avenue, Irvine, California 92614
no later than June 30, 2024. The Board will review new proposals from eligible stockholders if they are received in writing by June 30,
2024. 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 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, |
|
|
Irvine,
California |
/S/
ZACKARY S. IRANI |
September
27, 2023 |
Chairperson
and Chief Executive Officer |
EXHIBIT
A
BIOMERICA,
INC.
2023
STOCK INCENTIVE PLAN
ARTICLE
1. INTRODUCTION.
This
Biomerica, Inc. 2023 Stock Incentive Plan (the “Plan”) was adopted by unanimous written consent of the board of directors
of Biomerica Inc., (the “Board”) on April 20, 2023. This Plan supersedes and replaces the Biomerica, Inc. 2022 Stock Incentive
Plan which was previously approved by the Board on August 25, 2022, and subsequently terminated by the Board with no Awards issued or
outstanding. The Plan shall be submitted to stockholders for approval at the Company’s next annual meeting of stockholders. The
Plan is to promote the long-term success of the Company and the creation of stockholder value by (a) encouraging Employees, members of
the Board of Directors and Consultants to focus on critical long-range objectives, (b) encourage the attraction and retention of Employees,
Directors, and Consultants with exceptional qualifications, and (c) linking Employees, Directors, and Consultants directly to stockholder
interests through increased stock ownership. The Plan seeks to achieve this purpose by providing for Awards in the form of Restricted
Shares or Options (which may be issued as an ISO, or an NSO as defined herein).
The
Plan shall be governed by, and construed in accordance with, the laws of the State of Delaware.
ARTICLE
2. ADMINISTRATION.
2.1
COMMITTEE COMPOSITION. The Plan shall be administered by the Board of Directors of the Company, provided the Board may delegate administration
of the Plan to a Committee consisting exclusively of two or more Outside Directors of the Company, who shall be appointed by the Board.
In addition, the composition of the Committee shall satisfy such requirements as the Securities and Exchange Commission may establish
for administrators acting under plans intended to qualify for exemption under Rule 16b-3 (or its successor) under the Exchange Act.
2.2
COMMITTEE RESPONSIBILITIES. The Board (or the Committee, if applicable) shall (a) review management’s recommendation as to the
Employees, Directors and Consultants who are to receive Awards under the Plan, (b) determine the type, number, vesting requirements,
and other features and conditions of such Awards, (c) interpret the Plan, and (d) make all other decisions relating to the operation
of the Plan. The Board and Committee may adopt such rules or guidelines as it deems appropriate to implement the Plan. The Board’s
and Committee’s determinations under the Plan shall be final and binding on all persons.
2.3
COMMITTEE FOR NON-OFFICER GRANTS. The Board may also appoint a secondary committee of the Board, which shall be composed of one or more
Directors of the Company who need not satisfy the requirements of Section 2.1. Such secondary committee may administer the Plan with
respect to Employees and Consultants who are not considered officers or Directors of the Company under section 16 of the Exchange Act,
may grant Awards under the Plan to such Employees and Consultants, and may determine all features and conditions of such Awards. Within
the limitations of this Section 2.3, any reference in the Plan to the Committee shall include such secondary committee.
ARTICLE
3. SHARES AVAILABLE FOR GRANTS.
3.1
BASIC LIMITATION. Common Shares issued pursuant to the Plan may be authorized but unissued shares or treasury shares. The aggregate number
of Common Shares reserved and available for issuance under the Plan shall not exceed 1,200,000. Pursuant to this overall limitation,
the maximum aggregate number of Common Shares available for issuance under Awards that qualify as NSOs or ISOs shall not exceed 1,200,000
shares. The limitations of this Section 3.1 and Section 3.2 shall be subject to adjustment pursuant to Article 9.
3.2
ADDITIONAL SHARES. If Options are forfeited or terminate for any reason before being exercised, then the corresponding Common Shares
shall again become available for the grant of Options or Restricted Shares under the Plan. If Restricted Shares, or Common Shares issued
upon the exercise of Options, are forfeited, then such Common Shares shall again become available for the grant of NSOs and Restricted
Shares under the Plan. The aggregate number of Common Shares that may be issued under the Plan upon the exercise of ISOs shall not be
increased when Restricted Shares or other Common Shares are forfeited.
ARTICLE
4. ELIGIBILITY.
4.1
NON-STATUTORY STOCK OPTIONS (“NSOs”) AND RESTRICTED SHARES. Employees, Directors, and Consultants shall be eligible for the
grant of NSOs and Restricted Shares.
4.2
INCENTIVE STOCK OPTIONS (“ISOs”). Only Employees who are employees of the Company, a Parent, or a Subsidiary shall be eligible
for the grant of ISOs. In addition, an Employee who is a10% Stockholder shall not be eligible for the grant of an ISO unless the requirements
set forth in section 422(c)(5) of the Code are satisfied.
ARTICLE
5. OPTIONS.
5.1
STOCK OPTION AGREEMENT. Each grant of an Option under the Plan shall be evidenced by a Stock Option Agreement between the Optionee and
the Company. Such Option shall be subject to all applicable terms of the Plan and may be subject to any other terms that are not inconsistent
with the Plan. The provisions of the various Stock Option Agreements entered into under the Plan need not be identical.
5.2
NUMBER OF SHARES. Each Stock Option Agreement shall specify the number of Common Shares subject to the Option and shall provide for the
adjustment of such number in accordance with Article 9.
5.3
EXERCISE PRICE. Each Stock Option Agreement shall specify the Exercise Price; provided that the Exercise Price under any Stock Option
Award shall in no event be less than 100% of the Fair Market Value of a Common Share on the date of grant, and if the Participant to
whom an ISO is granted is a 10% Stockholder on the date of grant, the Exercise Price shall not be less than 110% of Fair Market Value
on the date the ISO is granted.
5.4
VESTING, EXERCISABILITY AND TERM. Unless otherwise approved by the Board of Directors and provided in the Stock Option Agreement, an
Optionee’s right to exercise the Option shall vest pro rata over a period of four (4) years, with 25% of the Option vesting on
each of the first, second, third and fourth anniversaries of the date of grant. The Stock Option Agreement shall also specify the term
or expiration of the Option; provided that the term of any Stock Option shall in no event exceed 10 years from the date of the grant.
A Stock Option Agreement may provide for accelerated exercisability in the event of the Optionee’s death, disability or retirement
or other events and may provide for expiration prior to the end of its term in the event of the termination of the Optionee’s service.
Unless stated otherwise in the Stock Option Agreement, all vested options shall expire 90 days following the optionee’s termination
from the Company. Options issued to members of the Board of Directors shall be governed by ARTICLE 7 below.
5.5
EFFECT OF CHANGE IN CONTROL. Notwithstanding Section 5.4 above, all unvested portions of each outstanding Stock Option grant shall fully
vest (e.g., become exercisable) automatically in the event that a Change in Control (as defined in Section 14.4 below) occurs with respect
to the Company.
ARTICLE
6. PAYMENT FOR OPTION SHARES.
6.1
GENERAL RULE. The entire Exercise Price of Common Shares issued upon exercise of Options shall be payable in cash or cash equivalents
at the time when such Common Shares are purchased, except as follows:
(a)
In the case of an ISO granted under the Plan, payment shall be made only pursuant to the express provisions of the applicable Stock Option
Agreement. The Stock Option Agreement may specify that payment may be made in any form(s) described in this Article 6.
(b)
In the case of an NSO, the Committee may at any time accept payment in any form(s) described in this Article 6.
6.2
EXERCISE/SALE. To the extent that this Section 6.2 is applicable, all or any part of the Exercise Price and any withholding taxes may
be paid by delivering (on a form prescribed by the Company) an irrevocable direction to a securities broker approved by the Company to
sell all or part of the Common Shares being purchased under the Plan and to deliver all or part of the sales proceeds to the Company.
6.3
EXERCISE/PLEDGE. To the extent that this Section 6.3 is applicable, all or any part of the Exercise Price and any withholding taxes may
be paid by delivering (on a form prescribed by the Company) an irrevocable direction to pledge all or part of the Common Shares being
purchased under the Plan to a securities broker or lender approved by the Company, as security for a loan, and to deliver all or part
of the loan proceeds necessary to cover the Exercise Price to the Company.
6.4
OTHER FORMS OF PAYMENT. To the extent that this Section 6.4 is applicable, all or any part of the Exercise Price and any withholding
taxes may be paid in any other form that is consistent with applicable laws, regulations, and rules, and that is deemed acceptable by
the Committee or the Board in writing.
ARTICLE
7. DIRECTOR OPTION GRANTS.
7.1
ACCELERATED EXERCISABILITY. All NSOs granted to a Director shall become exercisable in full in the event of the termination of such Director’s
service because of death, or total and permanent disability.
7.2
EXERCISE PRICE. The Exercise Price under all NSOs granted to an Outside Director under this Article 7 shall be equal to 100% of the Fair
Market Value of a Common Share on the date of grant.
7.3
TERM. Unless otherwise provided in the Stock Option Agreement, all NSOs granted to a member of the Board under this Plan, once vested,
shall remain exercisable until the 10th anniversary of the date of grant, even if such Director leaves the Board before that date. All
unvested NSOs outstanding at the time a director leaves the Board shall be forfeited immediately.
ARTICLE
8. RESTRICTED SHARES.
8.1
RESTRICTED STOCK AGREEMENT. Each Award of Restricted Shares of Common Stock under the Plan shall be evidenced by a Restricted Stock Agreement
between the recipient and the Company. Such Restricted Shares shall be subject to all applicable terms of the Plan and may be subject
to any other terms that are not inconsistent with the Plan. The provisions of the various Restricted Stock Agreements entered into under
the Plan need not be identical.
8.2
PAYMENT FOR AWARDS. Subject to the following sentence, Restricted Shares may be sold or awarded under the Plan for such consideration
as the Board or the Committee may determine, including (without limitation) cash, cash equivalents, full-recourse promissory notes, past
services, and future services. To the extent that an Award consists of newly issued Restricted Shares, the Award recipient shall furnish
consideration with a value not less than the market value of such Restricted Shares on the date awarded in the form of cash, cash equivalents
or past services rendered or future service to be provided to the Company (or a Parent or Subsidiary), as the Committee may determine.
8.3
VESTING CONDITIONS. Unless otherwise approved by the Board of Directors and provided in the Restricted Stock Agreement, the Restricted
Shares shall vest pro rata over a period of four (4) years, with 25% of the Option vesting on each of the first, second, third and fourth
anniversaries of the date of grant. A Restricted Stock Agreement may provide for accelerated vesting in the event of the Participant’s
death, disability or retirement or other events. All Restricted Shares shall become vested in the event that a Change in Control (as
defined in Section 14.4) occurs with respect to the Company, except as provided in the next following sentence.
8.4
VOTING AND DIVIDEND RIGHTS. The holders of Restricted Shares awarded under the Plan shall have the same voting, dividend, and other rights
as the Company’s other stockholders.
ARTICLE
9. PROTECTION AGAINST DILUTION.
9.1
ADJUSTMENTS. In the event of a subdivision of the outstanding Common Shares, a declaration of a dividend payable in Common Shares, a
declaration of a dividend payable in a form other than Common Shares in an amount that has a material effect on the price of Common Shares,
a combination or consolidation of the outstanding Common Shares (by reclassification or otherwise) into a lesser number of Common Shares,
a recapitalization, a spin-off or a similar occurrence (in each case an “Adjustment Event”), the Board or the Committee may
make such adjustments as it, in its sole discretion, deems appropriate to account for such Adjustment Event in one or more of (a) the
number of Options and/or Restricted Shares available for future Awards under Article 3, (b) the number of Common Shares covered by each
outstanding Restricted Stock Agreement, (c) the number of Common Shares covered by each outstanding Stock Option Award or (d) the Exercise
Price under each outstanding Stock Option Award. Unless the Board or the Committee in their sole discretion make adjustments to Stock
Option Awards or Restricted Stock Awards as set forth in this Article 9, a Participant shall have no rights by reason of any Adjustment
Event undertaken or incurred by the Company.
9.2
DISSOLUTION OR LIQUIDATION. To the extent not previously exercised, all outstanding Stock Options shall terminate immediately prior to
the dissolution or liquidation of the Company.
ARTICLE
10. LIMITATION ON RIGHTS.
11.1
RETENTION RIGHTS. Neither the Plan nor any Award granted under the Plan shall be deemed to give any individual a right to remain an Employee,
Outside Director, or Consultant. The Company and its Parents, Subsidiaries, and Affiliates reserve the right to terminate the service
of any Employee, Outside Director, or Consultant at any time, with or without cause, subject to applicable laws, the Company’s
certificate of incorporation and by-laws and a written employment agreement (if any).
11.2
STOCKHOLDERS’ RIGHTS. A Participant shall have no dividend rights, voting rights, or other rights as a stockholder with respect
to any Options awarded prior to the time when a stock certificate for such Common Shares is issued or, the time when he or she becomes
entitled to receive such Common Shares by filing a notice of exercise and paying the Exercise Price. No adjustment shall be made for
cash dividends or other rights for which the record date is prior to such time, except as expressly provided in the Plan.
11.3
REGULATORY REQUIREMENTS. Any other provision of the Plan notwithstanding, the obligation of the Company to issue Common Shares under
the Plan shall be subject to all applicable laws, rules and regulations and such approval by any regulatory body as may be required.
The Company reserves the right to restrict, in whole or in part, the delivery of Common Shares pursuant to any Award prior to the satisfaction
of all legal requirements relating to the issuance of such Common Shares, to their registration, qualification, or listing or to an exemption
from registration, qualification, or listing.
ARTICLE
11. WITHHOLDING TAXES.
12.1
GENERAL. To the extent required by applicable federal, state, local or foreign law, a Participant or his or her successor shall make
arrangements satisfactory to the Company for the satisfaction of any withholding tax obligations that arise in connection with the Plan.
The Company shall not be required to issue any Common Shares or make any cash payment under the Plan until such obligations are satisfied.
ARTICLE
12. FUTURE OF THE PLAN.
13.1
TERM OF THE PLAN. The Plan, as set forth herein, became effective upon approval of the Plan by the Board on April 20, 2023 and shall
remain in effect until the April 20, 2033, unless earlier terminated under Section 13.2. After
the termination of this Plan either upon such stated expiration date or its earlier termination by the Board, no additional Awards may
be granted under this Plan, but previously granted Awards shall remain outstanding in accordance with their applicable terms and conditions
and the terms and conditions of this Plan. Notwithstanding any provisions herein to the contrary, until such time that the Plan has been
approved by the stockholders, the Company (i) may not grant any Common Shares to a Participant; and (ii) any Options granted by the Company
to a Participant pursuant to the Plan may not be exercised prior to the Company obtaining the requisite stockholder approval. If the
Company does not obtain the requisite stockholder approval, the Plan shall be unwound, and any outstanding Options granted hereunder
prior to obtaining the requisite stockholder approval shall be cancelled.
13.2
AMENDMENT OR TERMINATION. The Board may, at any time and for any reason, amend or terminate the Plan. An amendment of the Plan shall
be subject to the approval of the Company’s stockholders only to the extent required by applicable laws, regulations, or rules.
No Awards shall be granted under the Plan after the termination thereof. The termination of the Plan, or any amendment thereof, shall
not affect any Award previously granted under the Plan.
ARTICLE
14. DEFINITIONS.
14.1
“AFFILIATE” means any entity other than a Subsidiary if the Company and/or one or more Subsidiaries own not less than 50%
of such entity.
14.2
“AWARD” means any award of a Stock Option or Restricted Shares under the Plan.
14.3
“BOARD” means the Company’s Board of Directors, as constituted from time to time.
14.4
“CHANGE IN CONTROL” shall mean:
(a)
the consummation of a merger or consolidation of the Company with or into another entity or any other corporate reorganization, if more
than 50% of the combined voting power of the continuing or surviving entity’s securities outstanding immediately after such merger,
consolidation or other reorganization is owned by persons who were not stockholders of the Company immediately prior to such merger,
consolidation or other reorganization;
(b)
the sale, transfer or other disposition of all or substantially all of the Company’s assets;
(c)
a change in the identity of a majority of the members of the Company’s Board of Directors that becomes effective on a single
date (provided, however, that the appointments of new directors upon the deaths or resignations of directors by the remaining
directors then in office shall not constitute a change in identity with respect to such departed director); or
(d)
any transaction as a result of which any person is the “beneficial owner” (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company representing at least 50% of the total voting power represented by the
Company’s then outstanding voting securities. For purposes of this Subsection (d), the term “person” shall have
the same meaning as when used in sections 13(d) and 14(d) of the Exchange Act but shall exclude (i) a trustee or other fiduciary
holding securities under an employee benefit plan of the Company or of a Parent or Subsidiary and (ii) a corporation owned directly
or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of the common stock of the
Company. A transaction shall not constitute a Change in Control if its sole purpose is to change the state of the Company’s
incorporation or to create a holding company that will be owned in substantially the same proportions by the persons who held the
Company’s securities immediately before such transaction.
14.5
“CODE” means the Internal Revenue Code of 1986, as amended.
14.6
“COMMITTEE” means a committee of the Board, as described in Article 2.
14.7
“COMMON SHARE” means one share of the common stock of the Company.
14.8
“COMPANY” means Biomerica, Inc., a Delaware corporation.
14.9
“CONSULTANT” means a consultant or adviser who provides bona fide services to the Company, a Parent, a Subsidiary, or an
Affiliate as an independent contractor. Service as a Consultant shall be considered employment for all purposes of the Plan, except as
provided in Section 4.2.
14.10
“DIRECTOR” means a member of the Company’s Board of Directors.
14.11
“EMPLOYEE” means an employee of the Company, a Parent, a Subsidiary, or an Affiliate.
14.12
“EXCHANGE ACT” means the Securities Exchange Act of 1934, as amended.
14.13
“EXERCISE PRICE” means the amount for which one Common Share may be purchased upon exercise of such Option, as specified
in the applicable Stock Option Agreement.
14.14
“FAIR MARKET VALUE” means the market price of Common Shares, determined by the Board or the Committee in good faith on such
basis as it deems appropriate. If the Common Shares are then listed or admitted to trading on Nasdaq or another stock exchange which
reports closing sale prices, the Fair Market Value shall be the closing sale price on the date of valuation on Nasdaq or principal stock
exchange on which the Common Shares are then listed or admitted for trading, or, if no closing sale price is quoted on such day, then
the Fair Market Value shall be the closing sale price of the Common Shares on Nasdaq or such exchange on the next preceding day on which
a closing sale price is reported. If the Common Shares are not then listed or admitted to trading on Nasdaq or a stock exchange which
reports closing sale prices, the Fair Market Value shall be the average of the closing bid and asked prices of the Common Shares in the
over-the-counter market on the date of valuation. Such determination shall be conclusive and binding on all persons.
14.15
“ISO” means an incentive stock option Award which meets all of the requirements as described in section 422(b) of the Code.
14.16
“NSO” means a non-qualified or non-statutory stock option Award that does not meet the requirements as described in sections
422 of the Code.
14.17
“OPTION” means an ISO or NSO granted under the Plan and entitling the holder to purchase Common Shares.
14.18
“OPTIONEE” means an individual or estate who holds an Option.
14.19
“OUTSIDE DIRECTOR” shall mean a member of the Board who is not an Employee. Service as an Outside Director shall be considered
employment for all purposes of the Plan, except as provided in Section 4.2.
14.20
“PARENT” means any corporation (other than the Company) in an unbroken chain of corporations ending with the Company, if
each of the corporations other than the Company owns stock possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain. A corporation that attains the status of a Parent on a date after the adoption
of the Plan shall be considered a Parent commencing as
of
such date.
14.21
“PARTICIPANT” means an individual or estate who holds an Award.
14.22
“PLAN” means this Biomerica, Inc. 2023 Stock Incentive Plan, as amended from time to time.
14.23
“RESTRICTED SHARE” means a Common Share awarded under the Plan.
14.24
“RESTRICTED STOCK AGREEMENT” means the agreement between the Company and the recipient of a Restricted Share that contains
the terms, conditions, and restrictions pertaining to such Restricted Share.
14.25
“STOCK OPTION AGREEMENT” means the agreement between the Company and an Optionee that contains the terms, conditions, and
restrictions pertaining to his or her Option.
14.26
“SUBSIDIARY” means any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company,
if each of the corporations other than the last corporation in the unbroken chain owns stock possessing 50% or more of the total combined
voting power of all classes of stock in one of the other corporations in such chain. A corporation that attains the status of a Subsidiary
on a date after the adoption of the Plan shall be considered a Subsidiary commencing as of such date.
14.27
“10% STOCKHOLDER” means a person who, as of a relevant date, owns or is deemed to own (by reason of the attribution rules
applicable under Section 424(d) of the Code) stock possessing more than 10% of the total combined voting power of all classes of stock
of the Company or of a Parent, Subsidiary or Affiliate.
ARTICLE
15. EXECUTION.
To
record the adoption of the Plan by the Board, the Company has caused its duly authorized officer to execute this document in the name
of the Company.
BIOMERICA,
INC. |
|
|
|
|
By:
|
|
|
Name:
|
Allen
Barbieri |
|
Title:
|
Secretary
and Executive Vice Chairman |
|
Date
approved by Board of Directors: April 22, 2023
Biomerica (NASDAQ:BMRA)
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Biomerica (NASDAQ:BMRA)
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