0000950116-01-500953.txt : 20011018
0000950116-01-500953.hdr.sgml : 20011018
ACCESSION NUMBER: 0000950116-01-500953
CONFORMED SUBMISSION TYPE: 424B3
PUBLIC DOCUMENT COUNT: 2
FILED AS OF DATE: 20011010
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: AMERICAN BIO MEDICA CORP
CENTRAL INDEX KEY: 0000896747
STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834]
IRS NUMBER: 141702188
STATE OF INCORPORATION: NY
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: 424B3
SEC ACT: 1933 Act
SEC FILE NUMBER: 333-50230
FILM NUMBER: 1756402
BUSINESS ADDRESS:
STREET 1: 122 SMITH ROAD
CITY: KINDERHOOK
STATE: NY
ZIP: 12106
BUSINESS PHONE: 8002271243
MAIL ADDRESS:
STREET 1: 122 SMITH ROAD
CITY: KINDERHOOK
STATE: NY
ZIP: 12106
424B3
1
four24b3.txt
424B3
Filed Pursuant to Rule 424(b)(3)
Registration No. 333-50230
Prospectus Supplement No. 4
Dated September 14, 2001 (to Prospectus November 30, 2000)
AMERICAN BIO MEDICA CORPORATION
This Prospectus Supplement is part of the Prospectus dated November 30,
2000 related to an offering of up to 2,361,733 shares of our common stock by the
persons identified as the "selling shareholder" in the Prospectus.
Quarterly Report.
A copy of our Quarterly Report on Form 10-QSB for the period ended July
31, 2001 is attached hereto.
Current Reports.
A copy of our Current Report on Form 8-K, filed on October 5, 2001 is
attached hereto.
A copy of our Current Report on Form 8-K, filed on October 9, 2001 is
attached hereto.
The date of this Prospectus Supplement is October 10, 2001.
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-QSB
[x] Quarterly report under Section 13 or 15(d) of the Securities Exchange Act
of 1934. For the quarterly period ended July 31, 2001.
[ ] Transition report under Section 13 or 15(d) of the Securities Exchange
Act of 1934.
For the transition period from to
Commission File Number: 0-28666
AMERICAN BIO MEDICA CORPORATION
-----------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
New York 14-1702188
-------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
122 Smith Road, Kinderhook, New York 12106
-------------------------------------------
(Address of principal executive offices)
800-227-1243
---------------------------
(Issuer's telephone number)
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes [X] No [ ]
State the number of shares outstanding of each of the issuer's classes of
common equity as of the latest practicable date:
20,519,548 Common Shares as of September 14, 2001
Transitional Small Business Disclosure Format: Yes [ ] No [X]
PART I
FINANCIAL INFORMATION
American Bio Medica Corporation
Balance Sheets
July 31, April 30,
2001 2001
(Unaudited)
------------ ------------
Assets
Current assets:
Cash and cash equivalents $ 187,000 $ 265,000
Investments 28,000
Accounts receivable, net 883,000 1,010,000
Inventory 1,684,000 1,444,000
Other receivables 261,000 270,000
Prepaid expenses and other current assets 40,000 41,000
------------ ------------
Total current assets 3,083,000 3,030,000
Property, plant and equipment, net 391,000 348,000
Restricted cash 120,000 146,000
Other receivables 32,000 80,000
Other assets 67,000 36,000
------------ ------------
$ 3,693,000 $ 3,640,000
============ ============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued expenses $ 2,544,000 $ 2,381,000
Current portion of capital lease obligations 18,000 25,000
------------ ------------
Total current liabilities 2,562,000 2,406,000
Long term portion of capital lease obligations 20,000 21,000
------------ ------------
Total liabilities 2,582,000 2,427,000
------------ ------------
Stockholders' equity:
Preferred stock; par value $.01 per share; 5,000,000
shares authorized; none issued and outstanding
Common stock; par value $.01 per share;
30,000,000 shares authorized; 17,995,548 and
shares issued and outstanding at July 31, 2001
and April 30, 2001 180,000 180,000
Additional paid-in capital 15,272,000 15,052,000
Unearned compensation (116,000) (19,000)
Subscription receivable (5,000) (5,000)
Due from officer/director/shareholder (collateralized by
1,000,000 shares of the Company's common stock) (485,000) (472,000)
Accumulated deficit (13,735,000) (13,523,000)
------------ ------------
1,111,000 1,213,000
------------ ------------
$ 3,693,000 $ 3,640,000
============ ============
See accompanying notes to financial statements
American Bio Medica Corporation
Statements of Operations
(Unaudited)
For The Three Months Ended
July 31,
---------------------------------
2001 2000
------------ ------------
Net sales $ 1,550,000 $ 2,155,000
Cost of goods sold 463,000 742,000
------------ ------------
Gross profit 1,087,000 1,413,000
------------ ------------
Operating expenses:
Selling, general and administrative (including
non-cash compensation of $123,000 in 2001 and
$182,000 in 2000) 1,172,000 1,573,000
Depreciation 29,000 29,000
Research and development 100,000 119,000
------------ ------------
1,301,000 1,721,000
------------ ------------
Operating loss (214,000) (308,000)
------------ ------------
Other income (expense):
Gain on sale of assets (5,000)
Interest income 16,000 37,000
Interest expense (9,000) (2,000)
------------ ------------
2,000 35,000
------------ ------------
------------ ------------
Net loss $ (212,000) $ (273,000)
============ ============
Basic and diluted net loss
per common share $ (0.01) $ (0.02)
Weighted average shares outstanding-
basic and diluted 17,995,548 18,045,548
============ ============
American Bio Medica Corporation
Statement of Comprehensive Loss
Net loss $ (212,000) $ (273,000)
Other comprehensive loss:
Unrealized gain on investments 13,000
------------ ------------
Comprehensive loss $ (212,000) $ (260,000)
============ ============
See accompanying notes to financial statements
American Bio Medica Corporation
Statements of Cash Flows
(Unaudited)
For The Three Months Ended
July 31,
-------------------------------
2001 2000
----------- -----------
Cash flows from operating activities:
Net loss $ (212,000) $ (273,000)
Adjustments to reconcile net loss to net cash provided by (used
in) operating activities:
Depreciation 29,000 29,000
Provision for bad debts (16,000) 9,000
Amortization of compensatory stock and stock options 123,000 182,000
Accrued interest (13,000) (12,000)
Changes in:
Accounts receivable (and notes receivable in 2000) 143,000 (228,000)
Other receivables 57,000
Inventory (240,000) (40,000)
Prepaid expenses and other current assets 1,000 (41,000)
Restricted cash (2,000) (4,000)
Other assets (31,000) 4,000
Accounts payable and accrued expenses 163,000 158,000
----------- -----------
Net cash provided by (used in) operating activities 2,000 (216,000)
----------- -----------
Cash flows from investing activities:
Purchase of property, plant and equipment (72,000) (18,000)
Loan to BioSys, Inc. (100,000)
Loan to officer/director/stockholder (118,000)
Sales and maturity of investments 3,000
----------- -----------
Net cash used in investing activities (72,000) (233,000)
----------- -----------
Cash flows from financing activities:
Settlement of registration rights agreement (125,000)
Capital lease payments (8,000) (3,000)
----------- -----------
Net cash used in financing activities (8,000) (128,000)
----------- -----------
Net decrease in cash and cash equivalents (78,000) (577,000)
Cash and cash equivalents - beginning of period 265,000 1,207,000
----------- -----------
Cash and cash equivalents - end of period $ 187,000 $ 630,000
=========== ===========
Supplemental disclosures of cash flow information
Cash paid during year for:
Interest $ 9,000 $ 2,000
Non-cash activities:
Restricted asset relieved $ 28,000
Non-employee options granted fully vested $ 220,000
See accompanying notes to financial statements
Notes to financial statements (unaudited)
July 31, 2001
Note A - Basis of Reporting
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-QSB. Accordingly, they do not
include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, such statements include all adjustments (consisting only of normal
recurring items), which are considered necessary for a fair presentation of the
financial position of American Bio Medica Corporation (the "Company" or "ABMC")
at July 31, 2001, and the results of its operations, and cash flows for the
three-month period then ended. The results of operations for the three-month
period ended July 31, 2001 are not necessarily indicative of the operating
results for the full year. These financial statements should be read in
conjunction with the Company's audited financial statements and related
disclosures for the year ended April 30, 2001 included in the Company's Form
10-KSB.
In addition, on August 22, 2001, the Company raised gross proceeds of
$2,549,000, with net proceeds of $2,333,000 after placement, legal, transfer
agent and accounting fees, in a private placement consisting of 2,549,000 units.
Each unit was comprised of one share of the Company's common stock at a price of
$1.00 per unit together with a warrant to purchase 0.5 shares of the Company's
common stock at a price equal to the closing price of the common stock on the
Nasdaq SmallCap Market on the date immediately preceding the closing of the
private placement, or $1.05 per share. The proceeds from this financing will be
used for working capital and general corporate purposes.
Note B - Loss Per Common Share
Basic loss per share is calculated by dividing the net loss
attributable to common stockholders by the weighted average number of
outstanding common shares during the period. No effect has been given to
potential issuances of common stock including outstanding options and warrants
in the diluted computation, as their effect would be antidilutive.
Note C - Litigation
In June 1999, Richard Davidson filed a lawsuit against the Company in
New York. Davidson claims that two placement memoranda dated September 15, 1992
and February 5, 1993, obligates the Company to issue him 1,155,601 ABMC common
shares. He claims he is entitled to the common shares in consideration of
brokering the acquisitions subject to the Share Exchange Agreement with Dr.
Robert Friedenberg (Friedenberg also filed suit against the Company and the case
was dismissed in September 1999). In addition, Davidson is claiming a finder's
fee of 5% of the funds raised by the September 1992 private placement. He
alleges that a sum of $1 million was raised. He also claims he is entitled to a
consulting fee of $24,000. Management denies the claims and is vigorously
contesting the suit. A trial date was set for November 2000; however, the
Company filed a motion for summary judgment against Davidson and Davidson
cross-moved for summary judgment. In August 2001, the Company's motion for
summary judgment was denied and the court is currently considering Davidson's
cross-motion for summary judgment. Management believes based on consultation
with counsel, that it has substantial and compelling defenses to Davidson's
claims and there is a reasonable chance that the Company would prevail if the
matter were to go to trial. A trial date has been set for October 22, 2001.
In June 1995 the Company filed a lawsuit against Jackson Morris, the
lawyer engaged to draft and advise the Company on the Share Exchange Agreement
with Dr. Robert Friedenberg. Morris, who had been recommended to the Company by
Dr. Friedenberg and whose fees were paid by the Company, is alleged to have
breached his fiduciary duty to the Company in several ways, including by later
advising Friedenberg, individually, on how to rescind the Share Exchange
Agreement as well as testifying for Friedenberg over the Company's objections
and in violation of his obligations to the Company. Morris is also charged with
negligence in drafting the Share Exchange Agreement. The Company's lawsuit
demands damages in the amount of $1,000,000. Morris has counterclaimed as a
party to the Share Exchange Agreement and seeks common shares. The basis of all
of Mr. Morris' claims stem from the Friedenberg claim. The Company vigorously
contests the Morris claim. No trial date has been set.
The Company has been named in legal proceedings in connection with
matters that arose during the normal course of its business. While the ultimate
result of any litigation cannot be determined, it is management's opinion based
upon consultation with counsel, that it has adequately provided for losses that
may be incurred related to these claims.
Note D - Reclassifications
Certain items have been restated to conform to the current
presentation.
Note E - Other matters
None.
Item 2. Management's Discussion and Analysis or Plan of Operation
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED JULY 31, 2001 AND 2000
The following discussion of the Company's financial condition and the
results of operations should be read in conjunction with the Financial
Statements and Notes thereto appearing elsewhere in this document.
The Private Securities Litigation Reform Act of 1995 provides a safe
harbor for forward-looking statements. In order to comply with the terms of the
safe harbor, the Company notes that in addition to the description of historical
facts contained herein, this report contains certain forward-looking statements
that involve risks and uncertainties as detailed herein and from time to time in
the Company's other filings with the Securities and Exchange Commission and
elsewhere. Such statements are based on management's current expectations and
are subject to a number of factors and uncertainties, which could cause actual
results to differ materially from those, described in the forward-looking
statements. These factors include, among others: (a) the Company's fluctuations
in sales and operating results; (b) risks associated with international
operations; (c) regulatory, competitive and contractual risks; (d) product
development risks; (e) the ability to achieve strategic initiatives, including
but not limited to the ability to achieve sales growth across the business
segments through a combination of enhanced sales force, new products, and
customer service; and (f) pending litigation. (see Note C - Litigation in the
notes to the financials statements included in Part I of this report).
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED JULY 31, 2001
AS COMPARED TO THE THREE MONTHS ENDED JULY 31, 2000
--------------------------------------------------------------
Net sales were $1,550,000 for the three months ended July 31, 2001 as
compared to $2,155,000 for the three months ended July 31, 2000, representing a
decrease of $605,000 or 28.1%. Distributor departures following the internal
sales restructuring impacted sales for the first quarter. During the three
months ended July 31, 2001, the Company continued its extensive program to
market and distribute its primary product, the Rapid Drug Screen(TM).
During the three months ended July 31, 2001, the Company sustained a
net loss of $212,000, and had net cash provided by operating activities of
$2,000. The Company continued to take steps to improve its financial prospects
including entering into national and international distribution agreements with
a number of distributors, penetrating the direct sales market with it's recently
restructured sales group, acquiring the technology and resources necessary to
enter the forensic market for testing for abuse of Oxycodone, exploring the
potential of a "CLUB-DRUG" panel that could be a useful tool against the latest
drugs of choice including Rohypnol, Ecstasy, Ketamine, Ritalin, GHB, and
Methamphetamine, entering into an agreement to market a saliva based drug of
abuse test and other measures to enhance profit margins.
The Company has undertaken an aggressive program aimed at rebuilding
relationships with the Company's key distributors and has restructured the
Company's sales group to refocus on ABMC's core business, the sale of the Rapid
Drug Screen test kit. Management believes sales from drug test kits together
with the recent agreement to market a saliva based test will begin to grow
steadily as a result of this restructuring coupled with a refocus on the core
business.
Cost of goods sold for the three months ended July 31, 2001 was
$463,000 or 29.9% of net sales as compared to $742,000 or 34.4% of net sales for
the three months ended July 31, 2000. This decrease resulted primarily from the
Company's extensive cost reduction program aimed specifically at its in-place
production process and the Company's in-house manufacturing of all drug test
strips used in its Rapid Drug Screen product. During the three month period
ended July 31, 2000, some test strips were manufactured at a higher cost to the
Company by an outside supplier.
While revenues decreased 28.1% in the three months ended July 31, 2001,
selling, general and administrative costs decreased $401,000 or 25.5% to
$1,172,000 compared to $1,573,000 for the three months ended July 31, 2000.
The following table sets forth the percentage relationship of selling,
general and administrative costs to net sales for the three months ended July
31, 2001 and July 31, 2000:
Three Months Three Months
Ended Percent Ended Percent
July 31, 2001 Sales July 31, 2000 Sales
------------- ------- ------------- -------
Sales salaries and commissions $ 291,000 18.8% $ 187,000 8.7%
Sales travel 60,000 3.9% 99,000 4.6%
Consulting and other selling
expenses 40,000 2.6% 122,000 5.7%
Marketing and promotion 44,000 2.8% 141,000 6.5%
Investor relations costs 56,000 3.6% 95,000 4.4%
Non cash compensation 123,000 7.9% 182,000 8.4%
Legal fees 44,000 2.8% 323,000 14.9%
Accounting fees 109,000 7.0% 81,000 3.8%
Office salaries 203,000 13.1% 176,000 8.2%
Payroll taxes and insurance 64,000 4.1% 48,000 2.2%
Telephone 29,000 1.9% 38,000 1.8%
Insurance 10,000 0.7% 13,000 0.6%
Other administrative costs 99,000 6.4% 68,000 3.2%
---------- ----------
Total selling, general and
administrative costs $1,172,000 75.6% $1,573,000 73.0%
========== ==========
Management believes that the amount of selling, general and administrative
costs may increase as the Company creates the necessary infrastructure to
achieve the Company's worldwide drug test marketing and sales goals, continues
it's aggressive penetration of the direct sales market, and leverages new
product initiatives underway to develop and market a "club drug" panel and a
saliva based test. However, steps have been taken to rationalize and control the
rate of increase of these costs to be more consistent with the expected sales
growth rate of the Company.
The Company amortized a non-cash compensation charge of $123,000 or
7.9% of net sales in the three months ended July 31, 2001 associated with the
grants of options to purchase common shares as compensation for consulting and
professional services, and severance related expenses. Non-cash compensation
charges of $182,000 were incurred in the three months ended July 31, 2000.
Legal fees for the three months ended July 31, 2001 were $44,000 or
2.8% of net sales, a decrease of $279,000, compared to legal fees of $323,000 or
14.9% of net sales for the three months ended July 31, 2000. This decrease in
legal fees was primarily due to the settlement of patent litigation in the
fourth quarter of the 2001 fiscal year and the resulting decline in legal
consultation.
As a result of an internal restructuring of its marketing department,
and marketing consulting fees, marketing and promotion costs decreased $97,000
to $44,000 or 2.8% of net sales for the three months ended July 31, 2001,
compared to $141,000 or 6.5% of net sales for the three months ended July 31,
2000.
Office salaries for the three months ended July 31, 2001 were $203,000
or 13.1% of net sales, an increase of $27,000, compared to office salaries of
$176,000 or 8.2% of net sales for the three months ended July 31, 2000. This
increase was primarily due to an increase in staff in purchasing and quality
assurance, as well as the appointment of the new chairman and chief executive
officer in the third quarter of the 2001 fiscal year.
Accounting fees for the three months ended July 31, 2001 were $109,000
or 7.0% of net sales, an increase of $28,000, compared to accounting fees of
$81,000 or 3.8% of net sales for the three months ended July 31, 2000. This
increase was primarily due to the Company's year end audit and reporting for
fiscal year 2001.
Sales salaries and commissions for the three months ended July 31, 2001
were $291,000 or 18.8% of net sales, compared to sales salaries and commissions
of $187,000 or 8.7% of net sales for the three months ended July 31, 2000. This
increase is due to the restructuring of the sales and marketing groups and the
addition of the direct sales force. Consulting and other selling expenses
decreased $82,000 to $40,000 for the three months ended July 31, 2001 compared
to $122,000 for the three months ended July 31, 2000. This decrease was
primarily due to the restructuring of the sales and marketing groups.
Other administrative costs increased $31,000 to $99,000 for the three
months ended July 31, 2001 compared to $68,000 for the three months ended July
31, 2000, primarily due to relocation expense, director and officer insurance
that was not subscribed to in the first quarter of the 2001 fiscal year, rental
increases for both the Bridgeport and Kinderhook facilities, and reserves
established for product returns.
Depreciation expense was unchanged at $29,000 or 1.9% and 1.3% of net
sales for the three months ended July 31, 2001 and 2000 respectively.
Research and development expenses for the three months ended July 31,
2001 were $100,000 compared to $119,000 for the three months ended July 31,
2000. This decrease was primarily due to reduced spending on universal product
research and development, resulting from a focused effort on the in-house
manufacturing of all strips used in the Rapid Drug Screen and reduced consulting
fees previously incurred to supplement the Company's successful implementation
of certain quality standards in the manufacturing of the Rapid Drug Screen
product during Fiscal 2000.
Net loss attributable to common stockholders decreased to $212,000 for
the three months ended July 31, 2001 compared to $273,000 for the three months
ended July 31, 2000.
LIQUIDITY AND CAPITAL RESOURCES AS OF JULY 31, 2001
The Company has working capital of $521,000 at July 31, 2001 as
compared to working capital of $624,000 at April 30, 2001. The Company has
historically satisfied its net working capital requirements through cash
generated by proceeds from private placements of equity securities with
institutional investors. The Company has never paid any dividends on its Common
Shares. The Company anticipates that all future earnings, if any, will be
retained for use in the Company's business and it does not anticipate paying any
cash dividends.
In addition, on August 22, 2001, the Company raised gross proceeds of
$2,549,000, with net proceeds of $2,333,000 after placement, legal, transfer
agent and accounting fees, in a private placement consisting of 2,549,000 units.
Each unit was comprised of one share of the Company's common stock at a price of
$1.00 per unit together with a warrant to purchase 0.5 shares of the Company's
common stock at a price equal to the closing price of the common stock on the
Nasdaq SmallCap Market on the date immediately preceding the closing of the
private placement, or $1.05 per share. The most significant use of funds from
this offering was a settlement payment to the Company's attorneys that had been
retained to represent them in patent litigation. The table below illustrates the
impact of the offering and the settlement on selected financial data adjusted to
reflect the proceeds at July 31, 2001:
Unaudited
Unaudited Pro Forma
July 31, 2001 July 31, 2001
------------- ------------
Current Assets $3,083,000 $4,741,000
Current Liabilities $2,562,000 $1,627,000
Working Capital $ 521,000 $3,114,000
Stockholders' Equity $1,111,000 $3,704,000
Net cash provided by operating activities was $2,000 for the three
months ended July 31, 2001 compared to net cash used in operating activities of
$216,000 for the three months ended July 31, 2000. The net cash provided by
operating activities in the three months ended July 31, 2001 was primarily due
to a decrease in accounts receivable of $143,000, an increase in accounts
payable and accrued expenses of $163,000, partially offset by the net loss of
$212,000, amortization of compensatory stock and stock options of $123,000, a
decrease in other receivables of $57,000 and an increase in inventory of
$240,000. The net cash used in operating activities in the three months ended
July 31, 2000 was primarily due to the net loss of $273,000 and an increase in
accounts receivable of $228,000, partially offset by a decrease in accounts
payable and accrued expenses of $158,000 and amortization of compensatory stock
and stock options of $182,000.
Net cash used in investing activities was $72,000 for the three months
ended July 31, 2001 compared to net cash used in investing activities of
$233,000 for the three months ended July 31, 2000. The net cash used in
investing activities for the three months ended July 31, 2001 was for the
purchase of property plant and equipment. The net cash used in investing
activities in the three months ended July 31, 2000 was primarily due to $100,000
loaned to BioSys, Inc., a $118,000 loan to a officer/director/shareholder, and
the purchase of property plant & equipment of $18,000.
Net cash used in financing activities was $8,000 for the three months
ended July 31, 2001, consisting of capital lease payments. The net cash used in
financing activities for three months ended July 31, 2000 was primarily due to
the settlement of registration rights agreement of $125,000.
At July 31, 2001 and 2000, the Company had cash and cash equivalents of
$187,000 and $630,000, respectively.
The Company's primary short-term capital and working capital needs are
to increase its manufacturing and production capabilities, establish adequate
inventory levels to support expected sales, continue to support its research and
development programs, open new distribution opportunities and focus sales
efforts on high potential sectors of the drugs of abuse testing market.
The Company expects its capital and working capital requirements to
increase over the next several years as it expands its research and development
efforts, sales and administration infrastructure, manufacturing capabilities and
facilities and purchases the Kinderhook, New York facility. The Company's future
liquidity and capital funding requirements will depend on numerous factors,
including the extent to which the Company's existing products and products under
development gain market acceptance or are successfully developed, the timing of
regulatory actions regarding the Company's potential products, the costs and
timing of expansion of sales, marketing and manufacturing activities, facilities
expansion needs, procurement and enforcement of patents important to the
Company's business, results of clinical investigations and competition.
The Company believes that its available cash and cash generated from
operations will be sufficient to satisfy its funding needs for ongoing
operations through April 30, 2002. If cash generated from operations is
insufficient to satisfy the Company's working capital and capital expenditure
requirements, the Company may be required to sell additional equity or debt
securities or obtain additional credit facilities. There is no assurance that
such financing will be available or that the Company will be able to complete
financing on satisfactory terms, if at all.
PART II
OTHER INFORMATION
Item 1. Legal Proceedings:
See Note C - Litigation in the Notes to Financial Statements included in
this report for a description of pending legal proceedings in which the Company
is a party.
Item 2. Changes in Securities
None.
Item 3. Defaults upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security-Holders
None.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 10.12-1 Amendment to employment contract dated March
8, 2001 by and between American Bio Medica Corporation and
Robert L. Aromando Jr.
(b) Reports on Form 8-K
None.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant has
caused this report to be signed on its behalf by the undersigned thereunto duly
authorized.
AMERICAN BIO MEDICA CORPORATION
(Registrant)
By: /s/ Keith E. Palmer
-------------------------------------------
EVP of Finance, Chief Financial Officer and
Treasurer (Principal Accounting Officer and
duly authorized Officer)
Dated: September 14, 2001
EX-10.12-1
3
ex10-12.txt
EX-10.12-1
Exhibit 10.12-1
ABM LOGO
August 14, 2001
Robert L. Aromando, Jr.
22 Homestead Farm Road
Alexandria Township
Milford, New Jersey 08848
Re: Amendment to Employment Contract dated March 8, 2001
Dear Mr. Aromando:
Pursuant to meetings held on July 18, 2001 by the Compensation Committee and the
Board of Directors of American Bio Medica Corporation, we have outlined below
the amended terms and/or conditions of your original contract dated March 8,
2001. Those terms and/or conditions not noted below will remain unchanged from
your original contract.
Salary and Bonus
Your base salary will be $15,000 per month, which is equivalent to $180,000 on
an annualized basis. You will be eligible for your first performance and merit
review by the Board of Directors in May 2001; any merit award will be prorated
for your length of service. In addition, you will be issued options to purchase
300,000 common shares of ABMC at an exercise price determined by the closing
market price on your official start date, March 1, 2001. All of your stock
options will vest over a three-year period in annual increments of 33.3% per
year on the anniversary date of the grant. Also, ABMC will provide you with a
monthly car allowance of $750.00, payable on or about the 1st of each month, and
will also provide reimbursement of all business related expenses including, but
not limited to, gas, tolls, emergency repairs while on ABMC business, telephone
etc.
The bonus plan has been set up to provide rewards to you based on achieving
milestones in both the net sales and net income numbers (as set forth in ABMC's
annual audited financial statements) over a period of time. You will be issued
options to purchase 500,000 common shares of ABMC at an exercise price to be
determined by the closing market price on the date the amendment was approved by
the Compensation Committee, July 18, 2001. The stock options will either vest or
will be cancelled and returned to the option plan, based upon company
performance as indicated below.
Net Net Cash Stock
Year Sales Income Bonus Options
FY 02 $15M $1.5M $ 50,000 125,000
FY 03 $25M $5.0M $250,000 125,000
FY 04 $40M $7.5M $500,000 125,000
The remaining 125,000 options will vest in Fiscal Year 05. Performance criteria
for vesting will be visited at a later date but will not include any additional
large option grants.
Payout of cash bonus and stock options will be contingent upon achieving a
minimum of 90% of the stated goals. Cash bonus will be paid and issued no later
than 30 days after the date ABMC's accountants submit the audited financial
statements to the Board of Directors for its review.
Sincerely,
/s/ Gerald Moore
---------------------------------------------------
Gerald Moore
Director and Chairman of the Compensation Committee
/s/ Stan Cipkowski
---------------------------------------------------
Stan Cipkowski
President
Accepted this 14th day of August, 2001 by:
/s/ Robert L. Aromando Jr.
---------------------------------------------------
Robert L. Aromando, Jr.
Chief Executive Officer
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): October 2, 2001
AMERICAN BIO MEDICA CORPORATION
(Exact Name of Registrant as Specified in its Charter)
New York 0-28666 14-1702188
---------------------------- ------------------------ ----------------------
(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification Number)
122 Smith Road, Kinderhook, NY 12106
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (800) 227-1243
ITEM 5. OTHER EVENTS
On October 2, 2001 the Board of Directors of the registrant accepted
the resignation of Stan Cipkowski as President and Cipkowski was appointed to
the position of Executive Vice President of the registrant. Cipkowski also
remains a Director of the registrant. Robert L. Aromando Jr. was named President
and remains Chief Executive Officer and resigned from his position of Chairman
of the Board of Directors. Aromando also remains as a Director of the
registrant. Gerald Moore, a current Director of the registrant, was elected
Chairman of the Board of Directors.
On October 2, 2001, the shareholders of the registrant ratified the
proposal to allow the registrant to increase its authorized capital stock from
Thirty Million (30,000,000) shares of $0.01 par value common stock to Fifty
Million (50,000,000) shares of $0.01 par value common stock. There was no change
to the current issued and outstanding stock as a result of this action and all
shareholder rights and preferences remain the same.
ITEM 8. CHANGE IN FISCAL YEAR
On October 2, 2001, the Board of Directors of the registrant determined
to change its fiscal year end from April 30, which was the fiscal year used in
its most recent filing with the Commission, to December 31. The report covering
the eight-month transition period ending December 31, 2001, will be filed with
the Commission on Form 10-KSB.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
AMERICAN BIO MEDICA CORPORATION
(Registrant)
Dated: October 5, 2001 By: /s/ Keith E. Palmer
----------------------------
Keith E. Palmer
Chief Financial Officer
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): October 4, 2001
AMERICAN BIO MEDICA CORPORATION
(Exact Name of Registrant as Specified in its Charter)
New York 0-28666 14-1702188
---------------------------- ------------------------ ----------------------
(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification Number)
122 Smith Road, Kinderhook, NY 12106
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (800) 227-1243
ITEM 4. CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANTS
On October 4, 2001, the registrant selected PricewaterhouseCoopers, LLP
to act as its independent accountants and discharged its prior auditors, Richard
A. Eisner & Company, LLP. In connection with its audits for each of the two
years in the period ended April 30, 2001 and thereafter, there were no
disagreements with the prior auditors on any matters of accounting principles or
practices, financial statement disclosure, or auditing scope or procedures. The
prior auditors' report on the registrant's financial statements for each of the
two years in the period ended April 30, 2001 contained no adverse opinion or
disclaimer of opinion and was not modified or qualified as to uncertainty, audit
scope, or accounting principles. However, their report contained explanatory
language regarding the uncertainty of the Company's ability to continue as a
going concern. The decision to change accountants was approved by the Board of
Directors of the registrant on October 2, 2001. The prior auditors have
furnished the registrant with a letter addressed to the Securities and Exchange
Commission stating their agreement with the above statements. This letter is
attached.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL STATEMENTS AND EXHIBITS.
(b) Exhibits.
The following exhibits are filed with this report on Form 8-K:
10 Letter of Richard A. Eisner & Company, LLP regarding change in
certifying accountant
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
AMERICAN BIO MEDICA CORPORATION
(Registrant)
Dated: October 9, 2001 By: /s/ Keith E. Palmer
-----------------------
Keith E. Palmer
Chief Financial Officer
Exhibit Index
Exhibit No. Description Page No.
----------- ----------- --------
10 Letter of Richard A. Eisner & Company, LLP 5
regarding change in certifying accountant
(Letterhead of Richard A. Eisner & Company, LLP)
October 9, 2001 Exhibit 10
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, DC 20549
Re: American Bio Medica Corporation
Commission File #0-28666
Gentlemen:
We have read the above referenced Registrant's response to Item 4 - Changes in
Registrant's Certifying Accountant with respect to its Current Report on Form
8-K dated October 9, 2001 and concur with the statements made therein.
Sincerely,
/s/ Richard A. Eisner & Company, LLP
------------------------------------
RICHARD A. EISNER & COMPANY, LLP