BioMerica Inc. (BMRA)

[Sheeple O Plenty]

Excellent question. Here's what I do in the very order, as I investigate a company.

1. OTCMarkets.com and look at company info to see what the SS is, see if website is listed and current. In this case the SS is super low, and the website is current.

2. OTCMarkets Financials page. Look at current Q for the following:

a. Revenue. In this case BMRA shows $1.7 million Gross sales, with a cost of just over 960k, for a gross profit of $700k. Bottom line profit of roughly $260k. That shows its a productive, working business.

b. Assets. This can be tricky. In some cases the company can show "mystery" assets, such as name recognition. In the case of BMRA we have slightly less than $5 million in assets including cash on hand of $1.3 million and inventories of $1.8 million. TWO VERY NICE NUMBERS.

c. Share Structure Changes. This is THE most important part of reading financials to me. It indicates what the Outstanding share count was at the date of the financials and what it was the quarter before. In this case we have the exact same share structure 6,952,339 on both 8/31 and 5/31. ZERO additional shares produced. You can go back quarter by quarter to see what dilution has occurred, with BMRA there has been virtually none.

d. Toxic Financing. This is number 2 to me in importance. If you dig thru the financials you'll see Convertible Debentures or other forms of toxic financing in some companies. BMRA has none.

3. 8k filings if the company is SEC fully reporting, Press Releases if not. Has the company followed through with promises that they've made? Or does the company rely on notifying shareholders of what they've DONE not what they INTEND to do. In this case, the company does not make promises and "we're gonna's."


So in a nutshell we have a company that has gross sales of $1.7m for the last quarter, with $260k net profit. Over $5 million in assets, including over $1m in both cash and inventory. Zero toxic funding and no Share Structure changes.

In my very humble opinion you're correct not to trust ANYONE in penny stocks. It's much safer that way. Trust the numbers and your instinct. If it smells funny, you're probably going to get burned.