Edgar Filing: BIOMERICA INC

SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934

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[ ] Preliminary Proxy Statement
[ ] Confidential, for use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12

BIOMERICA, INC.
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(Name of Registrant as specified in Its Charter)

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(Name of Person(s) Filing Proxy Statement)

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[ ] Fee paid previously with preliminary materials.
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paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.

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BIOMERICA, INC.
1533 MONROVIA AVENUE
NEWPORT BEACH, CALIFORNIA 92663

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NOTICE OF 2001 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON NOVEMBER 13, 2001

----------------

To Our Stockholders:

NOTICE IS HEREBY GIVEN that the annual meeting of the stockholders of
BIOMERICA, INC., a Delaware corporation (herein called the "Company"), will be
held at the offices of the Company located at 1533 Monrovia Avenue, Newport
Beach, California 92663 on Tuesday, November 13, 2001, at 10:00 a.m.

At the meeting, you will be asked to consider and vote upon the
following matters:

1. The election of seven 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;

2. Amendment to our certificate of incorporation, as set forth in
Annex A to the attached proxy statement, which will effect a
reverse split of our outstanding common stock at an exchange
ratio of one-to-three; and,

3. Transaction of such other business which may properly come
before the annual meeting and any adjournment thereof.

In accordance with the provisions of the Company's Bylaws, the Board of
Directors has fixed the close of business on September 20, 2001, as the record
date for the determination of the holders of the Company's common stock, $0.08
par value entitled to notice of and to vote at said Annual Meeting. To assure
that your shares will be represented at the Annual Meeting, please complete,
sign, date and promptly return the accompanying proxy card in the enclosed
envelope. You may revoke your proxy at any time before it is voted.

By Order of the Board of Directors,

/S/ Zackary S. Irani
--------------------
ZACKARY S. IRANI, Chairman of the Board and
Chief Executive Officer
Newport Beach, California
September 18, 2001

BIOMERICA, INC.
1533 Monrovia Avenue
Newport Beach, CA 92663
----------------

PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS

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GENERAL INFORMATION

This Proxy Statement is furnished by the Board of Directors of
BIOMERICA, INC., a Delaware corporation (together with its subsidiaries, the
"Company"), in connection with the solicitation of proxies for use at the
Company's Annual Meeting of Stockholders to be held on November 13, 2001, at the
offices of the Company located at 1533 Monrovia Avenue, Newport Beach,
California 92663 at 10:00 a.m, and at any and all adjournments thereof (the
"Annual Meeting"). The Annual Meeting has been called for the purposes set forth
in the accompanying Notice of the Annual Meeting of Stockholders (the "Notice").
This Proxy Statement, and the Annual Report of the Company for the year ended
May 31, 2001, will be mailed on or about October 1, 2001, to each stockholder of
record as of the close of business on September 20, 2001.

RECORD DATE AND OUTSTANDING SHARES

At the close of business on September 20, 2001, the record date for the
determination of stockholders entitled to notice of and to vote at the Annual
Meeting (the "Record Date"), there was outstanding and entitled to vote an
aggregate of approximately 5,035,920 shares of the Company's common stock, $0.08
par value per share (the "Common Stock"), held of record by approximately 1,220
stockholders. However, brokers and other institutions hold many shares on behalf
of the Company's stockholders and the Company has been informed that there are
approximately 2,831 beneficial owners.

QUORUM

The presence at the Annual Meeting, in person or by proxy, of the
holders of a majority of the outstanding shares of Common Stock held of record
on the Record Date is necessary to constitute a quorum for the purposes of
electing directors and each other items of business. The holder of each share of
Common Stock held of record on the Record Date is entitled to vote on each
matter to be considered at the Annual Meeting.

VOTES REQUIRED

The affirmative vote of holders representing a majority of the shares
of Common Stock present and entitled to vote at the meeting is required to elect
the directors and to amend the Company's Certificate of Incorporation to effect
a reverse stock split.

VOTING RIGHTS

Holders of our Common Stock are entitled to one vote for each share
held as of the Record Date.

EFFECT OF ABSTENTIONS AND BROKER NON-VOTES

If the stockholder or his, her or its broker marks "Abstain" on a duly
submitted proxy card representing such stockholder's shares, or if the
stockholders attend the Annual Meeting in person, but elect not to vote on a
particular proposal or proposals, then such shares will be considered present at
the meeting for purposes of determining the required quorums and (i) will not be
taken into account in determining the outcome of the election of directors, and
(ii) will be considered shares entitled to vote with respect to Proposal 2, and
therefore will have the effect of a vote against that proposal.

Brokers holding shares of record for customers generally are not
entitled to vote on some matters unless they receive voting instructions from
their customers. "Broker non-votes" are votes that could have been cast on the
matter in question if the brokers had received their customers' instructions,
and as to which the broker has notified the Company on a proxy form in
accordance with industry practice or has otherwise advised us that it lacks
voting authority. Shares represented by brokers' non-votes (i) will be
considered present at the meeting for purposes of determining the required
quorums, (ii) will not be taken into account in determining the outcome of the
election of directors; and (iii) will not be counted as a vote cast with respect
to Proposal No. 2.

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 only by use of the mails and the cost of
preparing, assembling and mailing these proxy materials will be paid by the
Company. Following the mailing of this Proxy Statement, directors, officers and
regular employees of the Company may solicit proxies by mail, telephone,
telegraph or personal interview. Such persons will receive no additional
compensation for such services. Brokerage houses and other nominees, fiduciaries
and custodians nominally holding shares of the Company's common stock, $0.08 par
value (the "Common Stock"), of record will be requested to forward proxy
soliciting material to the beneficial owners of such shares. The Company will,
upon request, reimburse such parties for their reasonable expenses in forwarding
proxy materials to the beneficial owners.

TERMS OF THE PROXY

The enclosed Proxy indicates the matters to be acted upon at the Annual
Meeting and provides boxes to be marked to indicate the manner in which the
stockholder's shares are to be voted with respect to such matters. By
appropriately marking the boxes, a stockholder may specify whether the proxy
shall vote for or against or shall be without authority to vote the shares
represented by the Proxy. The Proxy also confers upon the proxy discretionary
voting authority with respect to such other business as may properly come before
the Annual Meeting.

If the Proxy is executed properly and is received by the proxy prior to
the Annual Meeting, the shares represented by the Proxy will be voted. Where a
stockholder specifies a choice with respect to the matter to be acted upon, the
shares will be voted in accordance with such specification. Any Proxy which is
executed in such a manner as not to withhold authority to vote for the election
of the specified nominees as directors shall be deemed to confer such authority.
A Proxy may be revoked at any time prior to its exercise by giving written
notice of the revocation thereof to Ms. Janet Moore, Secretary, Biomerica, Inc.,
1533 Monrovia Avenue, Newport Beach, California 92663, by attending the meeting
and electing to vote in person, or by a duly executed Proxy bearing a later
date.

COMMON STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth, as of September 15, 2001, certain
information as to shares of Common Stock owned by (i) each person known to
beneficially own more than 5% of the outstanding Common Stock, (ii) each
director, including nominees for director, and each named executive officer of
the Company, and (iii) all executive officers and directors of the Company as a
group. Unless otherwise indicated, each person listed has sole voting and
investment power over the shares beneficially owned by him or her. Unless
otherwise indicated, the address of each named beneficial owner is the same as
that of the Company's principal executive offices located at 1533 Monrovia
Avenue, Newport Beach, California 92663.

SHARES PERCENTAGE
NAME OF BENEFICIALLY BENEFICIALLY
BENEFICIAL OWNER (1)(2) OWNED OWNED
----------------------- ----------------- ------------

Janet Moore (3) 711,720 13.9%

Zackary Irani (4) 837,949 14.4%

Francis Capitanio(5) 25,500 *

Dr. Carlos St. Aubyn Beharie(6) 239,489 4.6%

Dr. Robert A. Orlando (1)(7) 73,500 1.4%

Allen Barbieri (1)(8) 58,612 1.2%

Francis R. Cano, Ph.D. (1)(9) 13,889 *

David Burrows(1)(10) 13,889 *

All executive officers and directors
as a group (eight persons) 1,949,048 31.7%

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* Less than one percent (1%) of the outstanding shares of Common Stock.

(1) Dr. Orlando's address is 947 West 30th Street, Los Angeles, CA 92034;
Mr. Barbieri's address is 5 Foxboro, Irvine, CA 92614; Dr. Cano's
address is 11 Acorn Lance, Los Altos, CA 94022; and Mr. Burrow's
address is 25 Flores St., Foothill Ranch, CA 92610.

(2) Beneficial ownership is determined in accordance with Rule 13d-3 of the
Securities Exchange Act of 1934. Any shares of Common Stock that each
named person and group has the right to acquire within 60 days pursuant
to options, warrants, conversion privileges or other rights, are deemed
outstanding for purposes of computing shares beneficially owned by and
the percentage ownership of each such person and group. However, such
shares are not deemed outstanding for purposes of computing the shares
beneficially owned by or percentage ownership of any other person or
group. Percentage ownership for each named beneficial owner, and the
ownership of the directors and executive officers as a group, is based
on 5,035,920 plus the shares the named person and group has a right to
acquire within 60 days pursuant to options, warrants, conversion
privileges or other rights.

(3) Includes 50,033 shares underlying options exercisable by Ms. Moore at
or within 60 days after the date of the Proxy, 45,910 shares underlying
warrants exercisable by The Janet Moore Trust of which Janet Moore is
the sole trustee, at or within 60 days after the date of the Proxy,
607,527 shares owned by The Janet Moore Trust of which Janet Moore is
the sole trustee and 8,250 shares owned by Ms. Moore's minor children.

(4) Includes 792,200 shares underlying options exercisable by Mr. Irani at
or within 60 days after the date of the Proxy.

(5) Includes 25,500 shares underlying options exercisable by Mr. Capitanio
at or within 60 days after the date of the Proxy.

(6) Includes 133,889 shares underlying options exercisable by Dr. Beharie
at or within 60 days after the date of the Proxy.

(7) Includes 36,167 shares underlying options exercisable by Dr. Orlando at
or within 60 days after the date of the Proxy.

(8) Includes 34,723 shares underlying options exercisable by Mr. Barbieri
at or within 60 days after the date of the Proxy.

(9) Includes 13,889 shares underlying options exercisable by Dr. Cano at or
within 60 days after the date of the Proxy.

(10) Includes 13,889 shares underlying options exercisable by Mr. Burrows at
or within 60 days after the date of the Proxy.

PROPOSAL NO. 1: ELECTION OF DIRECTORS

DIRECTORS

The Company's Bylaws give the Board of Directors ("the Board") the
power to set the number of directors at no less than three (3) nor more than
nine (9). The size of the Company's Board is currently set at seven (7). Seven
(7) directors are to be elected at the Annual Meeting to be held on November 13,
2001. The directors so elected will serve until replaced by a vote of the
stockholders. In the event that any of them should become unavailable prior to
the Annual Meeting, the Proxy will be voted for a substitute nominee or nominees
designated by the Board or the number of directors may be reduced accordingly.

The following table sets forth the name and current age of each nominee
for director, the year he or she was first elected a director and his or her
position(s) with the Company.

----------------------------- ----------- ----------- ----------------------------------
Director
Name Age Since Positions Held
----------------------------- ----------- ----------- ----------------------------------

Zackary Irani 35 1997 Chairman of the Board and Chief
Executive Officer
----------------------------- ----------- ----------- ----------------------------------

Janet Moore 50 1997 Secretary, Chief Financial Officer
and Treasurer and Director
----------------------------- ----------- ----------- ----------------------------------

Allen Barbieri 42 1999 Director
----------------------------- ----------- ----------- ----------------------------------

Robert A. Orlando, M.D.,
Ph.D. 62 1986 Director
----------------------------- ----------- ----------- ----------------------------------

Carlos St. Aubyn Beharie, 48 1999 Director
M.D., MBA
----------------------------- ----------- ----------- ----------------------------------

Francis R. Cano, Ph.D. 57 1999 Director
----------------------------- ----------- ----------- ----------------------------------

David Burrows 43 1999 Director
----------------------------- ----------- ----------- ----------------------------------

Mr. Zackary Irani has been a Director of the Company, and has been
serving as the Company's Chairman of the Board and Chief Executive since April
29, 1997. Prior to that time, Mr. Irani served as the Company's Vice President
of Business Development since July 1994. He has been an employee of the Company
since 1986. Mr. Irani also serves as a director of Lancer Orthodontics, Inc. and
Allergy Immuno Technologies, Inc. In addition, Mr. Irani is the President and
Chairman of the Company's subsidiary, ReadyScript, Inc.

Ms. Janet Moore has been a Director of the Company since April 29,
1997, and has been serving as the Company's Secretary and Treasurer since 1985.
She has served as the Company's Chief Financial Officer since 1999. She has been
an employee of the Company since 1976. Ms. Moore also serves as a director of
Lancer Orthodontics, Inc., Allergy Immuno Technologies, Inc. and ReadyScript,
Inc.

Robert A. Orlando, M.D., Ph.D., has served as a Director of the Company
since 1986. Dr. Orlando is a professor of pathology at Southern California
College of Optometry, as well as a biophysicist and immunologist. Dr. Orlando
has served as the Chief Pathologist at Beverly Hospital in Montebello,
California since 1991. Dr. Orlando also serves as a director of Lancer
Orthodontics, Inc. and Allergy Immuno Technologies, Inc. Dr. Orlando earned his
Ph.D. in Pathology from the University of Chicago and his M.D. from New Jersey
University of Medicine.

David Burrows has served as a Director of the Company since June 1999.
Mr. Burrows is presently Regional Director-West for StorageNetworks, Inc. From
1999 to 2001, Mr. Burrows served as Chief Technology Officer at TheBigStore.com.
He served as Director of Information Services for the Orange County Register
from 1996 to 1999 and Director, IS Information Services for FHP, Inc., a major
managed care company from 1989 to 1996.

Francis R. Cano, Ph.D. has served as a Director of the Company since
June 1999. Dr. Cano currently works as a consultant in the biomedical field.
From 1996 to 1997, Dr. Cano served as Senior Vice President - Biotechnology of
BDM, an information technology company. From 1992 to 1996, he served as
President and Chief Operating Officer of Aviron, a public biotechnology company
focused on developing viral vaccines for disease prevention. Dr. Cano was also
involved in developing a vaccine business at a division of American Cynamid
Corporation. Dr. Cano also serves on the board of Lancer Orthodontics,Inc.

Carlos St. Aubyn Beharie, M.D. has served as a Director of the Company
since June 1999. Since 2001 Dr. Beharie has served as Chief Health Officer of
Watts Health Systems. From 1998 until 2001, Dr. Beharie served as the Senior
Vice President and Medical Director for Health Insurance Plan of New York, a
large managed care company in the State of New York. From 1997 to 1998, Dr.
Beharie served as Chief Medical Officer of Physicians Health Services, a
subsidiary of Foundation Health Systems. From 1995 to 1997, he served as acting
President and Chief Executive Officer of Physician Health Care Plan of New
Jersey. Prior to 1995, he was employed for 13 years in various positions at FHP,
Inc. Dr. Beharie is a fellow of the American College of OB/GYN and a senior
member of the American College of Physician Executives.

Mr. Allen Barbieri has served as a Director of the Company since
October 1999. Mr. Barbieri currently is working as a private investor. From 1998
to 1999 he served as President and Chief Financial Officer of Buy.com. From 1994
until 1998 Mr. Barbieri was President and Chief Executive Officer of Pacific
National Bank. Mr. Barbieri also serves on the board of ReadyScript, Inc.

The Board recommends a vote for the election of each of the nominated directors.

EXECUTIVE OFFICERS

Mr. Francis Capitanio, age 57, has served as the President of the
diagnostics division of Biomerica since July 10, 2000. Mr. Capitanio was
President and Chief Executive Officer of Kalisto Biologicals, Inc. from 1997
until 2000. From 1980 until 1996 he was President and Chief Executive Officer of
Diatech Diagnostics.

BOARD OF DIRECTORS MEETINGS AND COMMITTEES

During the fiscal year ended May 31, 2001, there were seven meetings of
the Board of Directors. Drs. Beharie and Orlando were the only board members who
attended less than seventy five percent of such meetings. The board acted by
unanimous written consent eight times during the fiscal year.

COMPENSATION COMMITTEE

The compensation committee of the Board of Directors reviews and makes
recommendations to the Board regarding all forms of compensation and benefits
provided the Company's officers. In addition, the compensation committee
establishes and reviews general policies relating to the compensation and
benefits of all the Company's employees. The compensation committee comprises
Dr. Robert A. Orlando and Ms. Janet Moore. One (1) compensation committee
meeting was held during the fiscal year ended May 31, 2001.

REPORT OF THE AUDIT COMMITTEE

The Audit Committee oversees the Company's financial reporting process
on behalf of the Board of Directors. Management has the primary responsibility
for the financial statements and the reporting process including the systems of
internal controls. In fulfilling its oversight responsibilities, the Committee
reviewed the audited financial statements in the Annual Report with management
including a discussion of the quality, not just the acceptability, of the
accounting principles, the reasonableness of significant judgments, and the
clarity of disclosures in the financial statements.

The Committee reviewed with the independent auditors, who are
responsible for expressing an opinion on the conformity of those audited
financial statements with generally accepted accounting principles, their
judgments as to the quality, not just the acceptability, of the Company's
accounting principles and such other matters as are required to be discussed
with the Committee under generally accepted auditing standards. In addition, the
Committee has discussed with the independent auditors the auditors' independence
from management and the Company including the matters in the written disclosures
required by the Independence Standards Board and considered the compatibility of
non-audit services with the auditors' independence.

The Committee discussed with the Company's independent auditors the
overall scope and plans for their respective audit. The Committee meets with the
independent auditors, with and without management present, to discuss the
results of their examinations, their evaluations of the Company's internal
controls, and the overall quality of the Company's financial reporting. The
audit committee met once during the fiscal year ended May 31, 2001.

In reliance on the reviews and discussions referred to above, the
Committee recommended to the Board of Directors (and the Board has approved)
that the audited financial statements be included in the Annual Report on Form
10-KSB for the year ended May 31, 2001 for filing with the Securities and
Exchange Commission. The Committee and the Board have also recommended the
selection of the Company's independent auditors.

/s/ Francis R. Cano /s/ Allen Barbieri
------------------- ------------------

/s/ Dr. Robert A. Orlando
-------------------------

EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

The following table sets forth the total compensation earned by the
Chief Executive Officer and all other executive officers who earned in excess of
$100,000 per annum during the fiscal years ended May 31, 2001, 2000 and 1999.

ANNUAL COMPENSATION LONG TERM COMPENSATION
------------------------------------ -----------------------------------
AWARDS PAYOUTS
------------------------ ----------
RESTRICTED SECURITIES
OTHER ANNUAL STOCK UNDERLYING LTIP ALL OTHER
NAME AND PRINCIPAL SALARY BONUS COMPENSATION AWARD(S) OPTIONS/ PAYOUTS COMPENSATION
POSITION YEAR ($)(1) ($) ($) ($) SARS (#) ($) ($)
-------------------------- ------------ ------------ ------- --------------- ----------- ------------ ---------- -------------------

Zackary Irani, Chairman 2001 91,593 (3) -0- -0- -0- -0- -0- -0-
of the Board and Chief 2000 117,925 -0- -0- -0- 1,000,000(2) -0- -0-
Executive Officer 1999 69,452 -0- -0- -0- 25,700 -0- -0-

Francis Capitanio, President,
Diagnostics Division (4) 2001 111,778 -0- -0- -0- 72,000 -0- -0-

-------------------------- ------------ ------------ ------- --------------- ----------- ------------ ---------- -------------------

(1) The amounts described in the Summary Compensation Table above do not
include other compensation and benefits provided to Mr. Irani or Mr.
Capitanio during the fiscal year ended May 31, 2001, that in the
aggregate did not exceed the lesser of $50,000 or 10% of the
executives' annual salary and bonus.
(2) This grant was for restricted options not covered by any Company stock
option plan.
(3) Mr. Irani was an employee of the Company's subsidiary, ReadyScript,
Inc. from June 2000 through April 2001. The wages shown above for
fiscal 2001 represent wages paid to him by ReadyScript for that period,
plus accrued wages of $41,667 still due him by ReadyScript, plus wages
paid to him by Biomerica, Inc. in May 2001.
(4) Mr. Capitanio began his employment with the Company in July 2000.

STOCK OPTION GRANTS IN LAST FISCAL YEAR

The following table sets forth information concerning stock options
granted in the fiscal year ended May 31, 2001, to the Company's Chief Executive
Officer and President of diagnostics.

INDIVIDUAL GRANTS(1)

Percent of
Total Number
Number of of Securities
Securities Underlying
Underlying Options/ Options/SARs EXERCISE OR BASE
NAME SARs Granted (#) Granted (#) PRICE ($/SH) EXPIRATION DATE
------------------- -------------------- ----------------- ----------------- -------------------

Zackary Irani -0- -0- -0- -0-

Francis Capitanio 72,000 22.3% $1.49 June 15, 2005

OPTION EXERCISES AND FISCAL YEAR-END VALUES

The following table presents information for the named executive
officers in the Summary Compensation Table with respect to options exercised
during fiscal 2001 and unexercised options held as of the end of the fiscal
year.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES

Number of Securities
Underlying Value of Unexercised
Unexercised Options at In-the-Money Options
Shares Fiscal Year End (#) at Fiscal Year End ($)
Acquired Value ------------------- ----------------------
Name On Exercise (#) Realized ($) Exercisable/Unexercisable Exercisable/Unexercisable
---- --------------- --------------- ------------------------- -------------------------

Zackary Irani -0- -0- 456,783/672,917 591/188(1)

Francis Capitanio -0- -0- 18,000/54,000 --

------------
(1) Based on the closing price of $.89 as of the last day of the fiscal
year ended May 31, 2001.

COMPENSATION OF DIRECTORS

Although not prohibited by the Company's Bylaws, directors receive no
direct payment for their services as directors, but they have been, and may in
the future be, granted options to purchase the Company's securities. The
compensation of directors is subject to review and adjustment from time to time
by the Board of Directors.

SECTION 16(a) - BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's executive officers, directors and persons who beneficially own more
than 10% of the Company's stock, to file initial reports of ownership and
reports of changes in ownership with the Securities and Exchange Commission.
Executive officers, directors and greater than 10% beneficial owners are
required by applicable regulations to furnish the Company with copies of all
Section 16(a) forms they file.

Based solely upon a review of the copies of such forms furnished to the
Company and information involving securities transactions of which the Company
is aware, the Company believes that during the fiscal year ended May 31, 2001,
all Section 16(a) filing requirements applicable to its executive officers,
directors and greater than 10% beneficial stockholders were complied with.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

During the fiscal year ended May 31, 2001, the Company leased
approximately 25,000 square feet of space in Newport Beach, California. The
facilities are leased from an individual and JSJ Management, of which Ms. Janet
Moore is a partner. During fiscal 2001, the Company paid a total of $169,440 in
rent. The lease is currently month-to-month. These facilities are currently
being used for the Company's diagnostic test kit research and development,
manufacturing, marketing and administration.

On June 11, 1999, pursuant to a stock purchase agreement, the Company
sold 50,000 shares each of Common Stock to Mr. Irani and Ms. Moore at a purchase
price of $5.00 per share. On November 9, 2000 and July 10, 2001 the Company sold
22,375 shares plus 11,188 warrants and 69,444 shares plus 34,722 warrants to Ms.
Moore at a purchase price of $1.34 and $.72 per share, respectively. The
exercise price of the warrants is $2.00 and $1.50, respectively. On July 10,
2001 the Company sold 4,166 shares plus 2,083 warrants of Common Stock to Mr.
Irani at a purchase price of $.72 per share. The exercise price of the warrants
is $1.50 per share.

PROPOSAL NO. 2: AMENDMENT TO CERTIFICATE OF INCORPORATION TO EFFECT A REVERSE
STOCK SPLIT OF THE COMPANY'S COMMON STOCK.

Overview

The stockholders are being asked to vote upon amendments to the
Company's certificate of incorporation which would authorize the board of
directors to effect a reverse split of all outstanding shares of the Company's
common stock at an exchange ratio of one-to-three. The board would have the sole
discretion to elect, as it determines to be in the best interests of the Company
and its stockholders, whether or not to effect a reverse stock split, at any
time before the 2002 annual meeting of stockholders. The board of directors
believes that approval of a proposal granting this discretion to the board,
rather than approval of an immediate reverse stock split, provides the board
with maximum flexibility to react to current market conditions and to therefore
act in the best interests of the Company and its stockholders.

The form of amendment to the Company's certificate of incorporation to
effect the proposed reverse split is attached to this proxy statement as Annex
A. If the board elects to implement the approved reverse stock split, the number
of issued and outstanding shares of Common Stock would be reduced in accordance
with the exchange ratio. The par value of the Common Stock would remain
unchanged at $0.08 per share, and the number of authorized shares of Common
Stock would remain unchanged. The reverse stock split would become effective
upon filing the amendment to the Company's certificate of incorporation with the
Delaware Secretary of State. The board may elect not to implement the approved
reverse stock split at its sole discretion, even if the proposed reverse stock
split is approved by our stockholders.

The board of directors has recommended the amendment to the Company's
certificate of incorporation to effect the proposed reverse stock split.

REASONS FOR REVERSE STOCK SPLIT

Due to the fact that the Company's Common Stock has failed to maintain
a closing bid price greater than or equal to $1.00 per share for ten consecutive
days during the last 90 days, the Company was informed by the National
Association of Securities Dealers (NASD) that the Company's stock is subject to
a delisting action from the National Association of Securities Dealers Quotation
System (NASDAQ). To continue listing on the NASDAQ SmallCap Market, the
Company's stock must maintain a minimum bid of $1.00 per share.

On August 31, 2001, the Board of Directors approved an amendment to the
Company's Certificate of Incorporation to effectuate a reverse stock split. The
reverse stock split would be in the ratio of one-to-three. The purpose of the
reverse stock split is to increase the likelihood that the stock price would be
maintained at least at $1.00, and thereby comply with the NASDAQ minimum bid
requirement. However, there can be no assurance that the market price of the
Common Stock will increase in proportion to the reduction in the number of
outstanding shares resulting from the reverse stock split or that the market
price of the Company's Common Stock will remain above $1.00 after the reverse
stock split.

If the stock price does not maintain a minimum bid price of $1.00 by
October 4, 2001, the Company's Common Stock will be subject to a delisting
action. At that time, the Company may appeal that decision to a Nasdaq Listing
Qualifications Panel. Should the Biomerica stock trade at over $1.00 per share
for at least 10 consecutive days before the hearing, and thus be in compliance
with Marketplace Rule 4310(c)(4), the Company may forego the reverse split and
maintain the existing number of outstanding shares. Since July 2, 2001, the
closing bid price of the Common Stock has ranged from $.48 per share to $.86 per
share. If the Company's Common Stock is no longer listed on the Nasdaq SmallCap
Market and is traded on the OTC Bulletin Board, the Company's Common Stock may
be deemed a penny stock and subject to rules that impose additional sales
practices on broker-dealers who sell the Company's securities. This may have an
adverse effect on the liquidity of the Company's Common Stock.

After completing the reverse stock split, the Company will have
approximately 1,678,640 shares of Common Stock issued and outstanding. The
reverse stock split will also similarly impact the number of shares of Common
Stock to be received upon conversion or exercise of outstanding convertible
securities such as options and warrants.

The reverse stock split will become effective at the board's discretion
after approval by the Company's shareholders at the 2001 Annual Stockholders'
Meeting on November 13, 2001. Upon the filing of the Certificate of Amendment to
the Certificate of Incorporation, each three shares of Common Stock will be
combined and converted into one share of Common Stock. No fractional shares of
new Common Stock will be issued for any fractional new share interest. Rather,
each stockholder who would otherwise receive a fractional new share of Common
Stock as a result of the reverse stock split will receive the nearest whole
share rounded up.

If the reverse stock split is implemented, the Company will notify the
stockholders of the filing of the Amendment to the Certificate of Incorporation
with the Secretary of State of the State of Delaware and will furnish
stockholders of record as of the close of business on the effective date with a
letter of transmittal for use in exchanging certificates. The stockholders of
the Company, promptly after the Amendment to the Certificate of Incorporation
becomes effective, will be requested to mail their certificates representing
their shares of Common Stock to the transfer agent named in the letter of
transmittal in order that a new stock certificate giving effect to the reverse
stock split may be issued.

The reverse stock split will not change the proportionate equity
interests of the Company's stockholders, nor will the respective voting rights
and other rights of stockholders be altered, except for possible immaterial
changes due to the Company's purchase of frac- tional shares. The Common Stock
issued pursuant to the reverse stock split will remain fully paid and
non-assessable. The reverse stock split, however, will result in adjustments to
the exercise price, conversion rates and number of shares issuable upon the
exercise or conversion of all outstanding options and warrants.

FEDERAL INCOME TAX CONSEQUENCES OF THE REVERSE STOCK SPLIT

The following is a summary of certain material U.S. federal income tax
consequences of the reverse stock split and does not purport to be complete. It
does not discuss any state, local, foreign or minimum income or other U.S.
federal tax consequences. Also, it does not address the tax consequences to
stockholders that are subject to special tax rules, such as banks, insurance
companies, regulated investment companies, personal holding companies, foreign
entities, non- resident alien individuals, broker-dealers and tax-exempt
entities. The discussion is based on the provisions of the U.S. federal income
tax law as of the date hereof, which is subject to change retroactively as well
as prospectively. This summary also assumes that the Common Stock was and will
be held as a "capital asset", as defined in the Internal Revenue Code of 1986,
as amended. The tax treatment of a stockholder may vary depending upon the
particular facts and circumstances of such stockholder. EACH STOCKHOLDER SHOULD
CONSULT WITH SUCH STOCKHOLDER'S OWN TAX ADVISOR WITH RESPECT TO THE CONSEQUENCES
OF THE REVERSE STOCK SPLIT.

The reverse stock split is an isolated transaction and is not part of a
plan to periodically increase any stockholder's proportionate interest in the
assets or earnings and profits of the Company. As a result, no gain or loss
should be recognized by a stockholder of the Company upon such stockholder's
exchange of its old Common Stock for the new Common Stock pursuant to the
reverse stock split.

NO APPRAISAL RIGHTS

Under the Delaware General Corporation Law, holders of Common Stock are
not entitled to appraisal rights with respect to the reverse stock split.

VOTE REQUIRED

The Board of Directors recommends a vote for approval of the reverse
stock split.

INDEPENDENT PUBLIC ACCOUNTANTS

It is expected that a representative of BDO Seidman, LLP will be
present at the Annual Meeting to respond to appropriate questions or to make a
statement if he or she so desires.

AUDIT FEES

The aggregate fees billed for professional services rendered for the
audit of the Company's and subsidiaries' annual financial statements for the
year ended May 31, 2001 was $59,500. The Company was billed a total of $37,500
for the reviews of the financial statements included in the Company's Form
10-QSB for the three quarters during fiscal year ended May 31, 2001.

FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES

There were no fees billed by the principal accountants for professional
services with respect to financial information systems design and implementation
for the fiscal year ended May 31, 2001.

ALL OTHER FEES

The aggregate fees billed for services rendered during the fiscal year
ended May 31, 2001, for all other services was $13,885 for general consulting
services and $9,900 for income tax return preparation.

The audit committee has considered that the provision of the above
services has not impaired the principal accountant's ability to maintain
independence.

OTHER BUSINESS

Management is not aware of any matters to come before the Annual
Meeting other than those stated in this Proxy Statement. However, inasmuch as
matters of which management is not now aware may come before the meeting or any
adjournment thereof, the Proxy confers discretionary authority with respect to
acting thereon, and the persons named in such Proxy intend to vote, act, and
consent in accordance with their best judgment with respect thereto.

ANNUAL REPORT

The Annual Report to Stockholders and Form 10-KSB covering the
Company's fiscal year ended May 31, 2001 is being mailed to stockholders with
this Proxy Statement. The annual report does not form any part of the material
for the solicitation of the Proxy.

DATE FOR SUBMISSION OF STOCKHOLDER PROPOSALS FOR NEXT ANNUAL MEETING

Any proposal relating to a proper subject which a stockholder may
intend to present for action at the next Annual Meeting of Stockholders and
which such stockholder may wish to have included in the Company's proxy
materials for such meeting must, in accordance with the provisions of Rule 14a-8
promulgated under the Securities Exchange Act of 1934, be received in proper
form by the Company at its principal executive office not later than June 23,
2002. It is suggested that any such proposal be submitted by certified mail,
return receipt requested.

By Order of the Board of Directors,

/S/ ZACKARY S. IRANI,
---------------------
President and Chief Executive Officer

Newport Beach, California
September 18, 2001

REVOCABLE PROXY
BIOMERICA, INC. ANNUAL MEETING OF STOCKHOLDERS
NOVEMBER 13, 2001

The undersigned stockholder(s) of Biomerica, Inc., a Delaware
corporation (the "Company") hereby nominates, constitutes and appoints Janet
Moore, his, her or its true and lawful agent and proxy, with full power of
substitution, to vote all the shares of stock of the Company which the
undersigned is entitled to vote at the Annual Meeting of the Company to be held
at the offices of the Company, 1533 Monrovia Avenue, Newport Beach, California
92663 at 10:00 a.m., and any and all adjournments thereof, with respect to the
matters described in the accompanying Proxy Statement, and, in her discretion,
on such other matters which properly come before the Annual Meeting, as fully
and with the same force and effect as the undersigned might or could do if
personally present thereat, as follows:

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 1.
---

1. _________ FOR all nominees _________ WITHHOLD AUTHORITY TO VOTE
(Except as listed below) (As to all nominees)

Nominees: Dr. Carlos St. Aubyn Beharie; David Burrows;
Dr. Francis R. Cano; Zackary Irani; Allen Barbieri;
Janet Moore; and Dr. Robert A. Orlando.

Instructions: To withhold authority to vote for any individual
nominee, write the nominee's name in the space
provided below.

------------------------------------------------------

2. _________ Amendment to Company's certificate of incorporation to effect a
reverse split of its Common Stock at an exchange ratio of
one-to-three.

_____For ____Against ____Abstain

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND
MAY BE REVOKED PRIOR TO ITS EXERCISE.
PLEASE SIGN AND DATE ON REVERSE SIDE.

THE PROXY CONFERS AUTHORITY TO VOTE AND UNLESS SPECIFIED OTHERWISE
SHALL BE VOTED FOR PROPOSALS 1 AND 2 AND WILL BE VOTED BY THE PROXY HOLDER AT
HIS, HER OR ITS DISCRETION AS TO ANY OTHER MATTERS PROPERLY TRANSACTED AT THE
MEETING.

Dated:
---------------

---------------------------------
(Please Print Name)

---------------------------------
(Signature of Stockholder)

---------------------------------
(Please Print Name)

---------------------------------
(Signature of Stockholder)

(Please date this Proxy and sign your name as it appears on your stock
certificate(s). Executors, administrators, trustees, etc., should give their
full titles. All joint owners should sign.)

I (We) do do not

------- -------

expect to attend the meeting.

ANNEX A

CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
BIOMERICA, INC.
PURSUANT TO SECTION 242 OF THE GENERAL CORPORATION LAW
OF THE STATE OF DELAWARE

The undersigned, pursuant to the provisions of the General Corporation
Law of the State of Delaware, does hereby certify and set forth as follows:

FIRST: The name of the corporation is BIOMERICA, INC.

SECOND: The amendment to the Certificate of Incorporation to be
effected hereby is as follows:

Paragraph IV of the Certificate of Incorporation, relating to the stock
of the corporation is amended to read as follows:

"ARTICLE IV

The corporation is authorized to issue two classes of shares, to be
designated common stock and preferred stock respectively. The total
number of authorized shares of capital stock is Thirty Million
(30,000,000) shares consisting of Twenty five Million (25,000,000)
shares of common stock, $.08 par value and Five Million (5,000,000)
shares of preferred stock, $.08 par value. Upon the date of filing this
amendment to the Certificate of Incorporation, every three (3)
outstanding shares of Common Stock will be combined, reconstituted and
converted into and automatically become one (1) outstanding share of
Common Stock. The Board of Directors may from time to time amend or
restate this Certificate to increase, decrease, or reclassify the
corporation's authorized shares of stock."

THIRD: The amendment effected herein was authorized by the consent of
the holders of a majority of the outstanding shares of Common Stock pursuant to
Sections 228 and 242 of the General Corporation Law of the State of Delaware.

FOURTH: The capital of the corporation will not be reduced under or by
reason of this amendment.

IN WITNESS WHEREOF, we have hereunto set our hands and seal this ___
day of _________ 2001

By:________________________
Its: Zackary Irani, Chief Executive Officer