-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, K84sDYnxHIJdUuLznwkGoOpYOwQ/FbUjQNLYYzRN6ccEwR49z7XrBKSBLadbzVWf ksuB4DTjk5ZPjFKpWAMnuA== 0000950137-00-001045.txt : 20000317 0000950137-00-001045.hdr.sgml : 20000317 ACCESSION NUMBER: 0000950137-00-001045 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000131 FILED AS OF DATE: 20000316 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN BIO MEDICA CORP CENTRAL INDEX KEY: 0000896747 STANDARD INDUSTRIAL CLASSIFICATION: MEASURING & CONTROLLING DEVICES, NEC [3829] IRS NUMBER: 141702188 STATE OF INCORPORATION: NY FISCAL YEAR END: 0430 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-28666 FILM NUMBER: 571637 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 10QSB 1 QUARTERLY REPORT 1 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 January 31, 2000. [ ] 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) ---------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) 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: 16,343,221 Common Shares as of March 7, 2000 Transitional Small Business Disclosure Format: Yes [ ] No [X] 2 PART I FINANCIAL INFORMATION AMERICAN BIO MEDICA CORPORATION BALANCE SHEETS
APRIL 30, JANUARY 31, 1999 2000 (UNAUDITED) ---------------- ----------------- ASSETS Current assets Cash and cash equivalents $ 131,000 $ 46,000 Investments - available for sale 719,000 350,000 Accounts and notes receivable - net of allowance 1,021,000 1,796,000 Inventory 1,834,000 1,776,000 Prepaid expenses 97,000 466,000 ---------------- ----------------- Total current assets 3,802,000 4,434,000 Property, plant and equipment, net 351,000 411,000 Due from officer 280,000 338,000 Other assets 2,000 6,000 ---------------- ----------------- Total assets $ 4,435,000 $ 5,189,000 ================ ================= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable and accrued expenses $ 1,149,000 $ 2,119,000 Payable to preferred stockholder 130,000 22,000 Note payable - stockholder 125,000 137,000 Current portion of capital lease obligations 11,000 13,000 ---------------- ----------------- Total current liabilities 1,415,000 2,291,000 Long term portion of capital lease obligations 47,000 36,000 ---------------- ----------------- Total liabilities 1,462,000 2,327,000 ---------------- ----------------- Stockholders' equity: Preferred stock; par value $.01 per share; 5,000,000 shares authorized; 1,536 and 276 shares Series D, 8% cumulative, convertible, issued and outstanding (face values $1,536,000 and $276,000 at April 30,1999 and January 31, 2000) 0 0 Common stock; par value $.01 per share; 30,000,000 shares authorized; 14,875,190 and 16,343,221 shares issued and outstanding at April 30, 1999 and January 31, 2000 149,000 163,000 Additional paid-in capital 12,326,000 12,733,000 Subscription receivable (9,000) (9,000) Unearned portion of compensatory options (13,000) (13,000) Unrealized loss on investments available for sale (56,000) (60,000) Accumulated deficit (9,424,000) (9,952,000) ---------------- ----------------- Total stockholders' equity 2,973,000 2,862,000 ---------------- ----------------- ---------------- ----------------- Total liabilities and stockholders' equity $ 4,435,000 $ 5,189,000 ================ =================
See accompanying notes to financial statements 3 AMERICAN BIO MEDICA CORPORATION STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE NINE MONTHS ENDED JANUARY 31, ------------------------------------------ 1999 2000 ------------------- ------------------- Net sales $ 4,644,000 $ 6,046,000 Cost of goods sold 2,225,000 2,948,000 ------------------- ------------------- Gross profit 2,419,000 3,098,000 ------------------- ------------------- Operating expenses: Selling, general and administrative 2,839,000 2,604,000 Legal fees 162,000 477,000 Depreciation 66,000 27,000 Research and development 266,000 500,000 Write-off of bad debts 0 37,000 ------------------------------------------ 3,333,000 3,645,000 ------------------- ------------------- Operating loss (914,000) (547,000) ------------------- ------------------- Other income and (expense): Gain on sale of marketable securities 0 10,000 Gain on discontinued operations 31,000 41,000 Interest income 47,000 61,000 Interest expense 0 (19,000) ------------------- ------------------- 78,000 93,000 ------------------- ------------------- Net loss $ (836,000) $ (454,000) Adjustments: Preferred stock beneficial conversion feature (123,000) (123,000) Preferred stock dividends (521,000) (76,000) ------------------- ------------------- Net loss attributable to common shareholders $ (1,480,000) $ (653,000) =================== =================== Basic and diluted net loss per common share $ (0.10) $ (0.04) Weighted average shares outstanding - basic and diluted 14,454,883 15,091,417 =================== =================== AMERICAN BIO MEDICA CORPORATION STATEMENT OF COMPREHENSIVE LOSS Net loss $ (836,000) $ (454,000) Other comprehensive loss: Unrealized loss on investments 0 (3,000) ------------------- ------------------- Comprehensive loss $ (836,000) $ (457,000) =================== ===================
See accompanying notes to financial statements 4 AMERICAN BIO MEDICA CORPORATION STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE THREE MONTHS ENDED JANUARY 31, ------------------------------------------ 1999 2000 ------------------- ------------------- Net sales $ 1,912,000 $ 1,797,000 Cost of goods sold 1,055,000 833,000 ------------------- ------------------- Gross profit 857,000 964,000 ------------------- ------------------- Operating expenses: Selling, general and administrative 1,140,000 837,000 Legal fees 109,000 287,000 Depreciation 22,000 9,000 Research and development 164,000 242,000 Write-off of bad debts 45,000 0 ------------------- ------------------- 1,480,000 1,375,000 ------------------- ------------------- Operating loss (623,000) (411,000) ------------------- ------------------- Other income and (expense): Loss on sale of marketable securities 0 (5,000) Gain on discontinued operations 25,000 9,000 Interest income 30,000 17,000 Interest expense 0 (7,000) ------------------- ------------------- 55,000 14,000 ------------------- ------------------- Net loss $ (568,000) $ (397,000) Adjustments: Preferred stock beneficial conversion feature 0 0 Preferred stock dividends (262,000) (22,000) ------------------- ------------------- Net loss attributable to common shareholders $ (830,000) $ (419,000) =================== =================== Basic and diluted net loss per common share $ (0.06) $ (0.03) Weighted average shares outstanding - basic and diluted 14,454,883 15,091,417 =================== =================== AMERICAN BIO MEDICA CORPORATION STATEMENT OF COMPREHENSIVE LOSS Net loss $ (568,000) $ (397,000) Other comprehensive loss: Unrealized gain on investments 0 10,000 ------------------- ------------------- Comprehensive loss $ (568,000) $ (387,000) =================== ===================
See accompanying notes to financial statements 5 AMERICAN BIO MEDICA CORPORATION STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE NINE MONTHS ENDED JANUARY 31, ----------------------------------- 1999 2000 ---------------- ---------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (836,000) $ (454,000) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation 66,000 76,000 Compensatory stock and stock options 162,000 Changes in: Accounts and notes receivable (552,000) (775,000) Inventory (448,000) 58,000 Prepaid expenses and other current assets (200,000) (31,000) Other assets (6,000) (4,000) Accounts payable and accrued expenses 326,000 984,000 ---------------- ---------------- Net cash used in operating activities (1,488,000) (146,000) ---------------- ---------------- CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property, plant and equipment (222,000) (136,000) Purchase of investments (73,000) Sale and maturity of investments 451,000 Gain on sale of investments (12,000) Loans to officer (40,000) (58,000) ---------------- ---------------- Net cash (used in) provided by investing activities (262,000) 172,000 ---------------- ---------------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from exercise of warrants and options 105,000 Settlement of registration rights agreement (100,000) Capital lease payments (11,000) ---------------- ---------------- Net cash provided by (used in) financing activities 105,000 (111,000) ---------------- ---------------- NET DECREASE IN CASH AND CASH EQUIVALENTS (1,645,000) (85,000) Cash and cash equivalents - beginning of period 3,239,000 131,000 ---------------- ---------------- CASH AND CASH EQUIVALENTS - END OF PERIOD $ 1,594,000 $ 46,000 ================ ================ NONCASH ACTIVITIES: Stock dividends paid to holders of preferred stock 48,000 76,000 Dividend accrued not yet paid 45,000 22,000
See accompanying notes to financial statements 6 Notes to Financial Statements January 31, 2000 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") at January 31, 2000, and the results of its operations, and cash flows for the nine-month period then ended. The results of operations for the nine-month period ended January 31, 2000 are not necessarily indicative of the operating results for the full year. It is suggested that these financial statements be read in conjunction with the financial statements and related disclosures for the year ended April 30, 1999 included in the Company's Form 10-KSB. During the year ended April 30, 1999, the Company sustained a net loss of $1,691,000 and had net cash outflows from operating activities of $2,008,000. The Company is in the process of taking a number of steps to improve its financial prospects including focusing its efforts on sales of existing products, implementing certain cost reductions and production efficiencies and taking other measures to enhance profit margins. As a result the Company was able to reduce its net loss to $454,000 and its net cash outflows to $85,000 for the nine-month period ended January 31, 2000. Note B - Net Loss Per Share of Common Stock The Company adopted Statement of Financial Accounting Standards ("SFAS") No. 128, Earnings Per Share," in the year ended April 30, 1998. Accordingly, the presentation of per share information includes calculations of basic and dilutive loss per share. The effect of potential common shares such as warrants, options, and convertible preferred stock has not been included, as the effect would be anti-dilutive. When preferred stock is convertible to common stock at a conversion rate that is the lower of a rate fixed at issuance or a fixed discount from the common stock market price at the time of conversion, the discounted amount is an assured incremental yield, the "beneficial conversion feature", to the preferred shareholders and should be accounted for as an embedded dividend to preferred shareholders. As such, the loss per common share was adjusted for this feature. Note C - Litigation In June 1995, the Company filed a lawsuit against Jackson Morris, the lawyer who was in charge of drafting and advising it on the Share Exchange Agreement. Mr. Morris, who had been recommended to the Company by Dr. Friedenberg, is alleged by the Company to have breached his fiduciary duty to the Company by later advising Dr. Friedenberg, individually, on how to rescind the Share Exchange Agreement. Mr. 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. Mr. Morris has counterclaimed as a party to the Share Exchange Agreement and seeks common shares. Whatever claim Morris has came from the Friedenberg claim. No trial date has been set. The Company is vigorously contesting the Morris claim. On January 26, 1999, the Company was granted a U.S. Patent for the design of the Multiple Test Card. On April 7, 1999, the Company filed suit in the federal court in Delaware against Phamatech, Inc. of California, Peninsula Drug Analysis Co., Inc. and James T. Ramsey of Virginia, as well as Dipro Diagnostic Products, Inc. and Dipro Diagnostic Products of North America claiming patent infringement, trademark dilution, and unfair competition. On the following day, Phamatech Inc. filed suit in the federal court in San Diego, California asking for a declaration that the Company's patent is invalid. It also claimed breach of contract damages for an alleged non-payment of invoices by the Company. The competing claims have been consolidated for trial in San Diego. 7 In June 1999, an individual filed suit in New York claiming that two private placement memoranda dated respectively September 15, 1992 and February 5, 1993, obligated the Company to issue him 1,555,601 common shares of the Company. The claim is that he is entitled to the common shares in consideration of brokering the acquisitions subject to the Share Exchange Agreement with Dr. Friedenburg. In addition, the individual is claiming a finder's fee of five percent of the funds raised by the September 1992 private placement. He alleges that a sum of one million dollars was raised. Finally, he claims that he is entitled to a consulting fee of $24,000. Management denies the claims and intends to vigorously contest the suit. Note D - Registration Penalty On May 28, 1999, the Company entered into a definitive Agreement with CC Investments, LDC, holders of the Company's Series D preferred shares dated April 30, 1999 (the "1999 Agreement") to settle all claims against the Company, including the late registration penalty and certain other claims under the Securities Purchase Agreement dated April 24, 1998. Pursuant to the 1999 Agreement, the Company gave as consideration $225,000 on June 1, 1999 ($100,000 in cash and a one-year promissory note in the principal amount of $125,000 accruing interest at the rate of 14% annually). Note E - Discontinued Operation On September 1, 1999 the Company sold its book sales business including all inventories and accounts receivable to a third party in exchange for a $250,000 five year secured promissory note. As a result, for comparative purposes, the company has re-stated its prior year statements of operations to reflect the book business as a discontinued operation. 8 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 nine months ended January 31, 2000 and 1999 The following discussion of the Company's financial condition and 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 except for the description of historical facts contained herein, the Registration Statement contains certain forward-looking statements that involve risks and uncertainties as detailed herein and from time to time in the Company's 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, risks associated with international operations and regulatory, competitive and contractual risks and product development; (b) 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 (c) acquisitions. 9 Results of operations for the nine months ended January 31, 2000 as compared to the nine months ended January 31, 1999. - -------------------------------------------------------------------------------- During the nine months ended January 31, 2000, the Company continued its extensive program to market and distribute its primary product, the Rapid Drug Screen(TM). As a result, revenues from the sale of test kits were $6,046,000 for the nine months ended January 31, 2000 as compared to $4,644,000 for the nine months ended January 31, 1999, representing an increase of $1,402,000 or 30.2% over the preceding year. Cost of goods sold for the nine months ended January 31, 2000 was $2,948,000 or 48.8% of drug test revenues as compared to $2,225,000 or 47.9% for the nine months ended January 31, 1999. The Company has undertaken an extensive cost reduction program aimed specifically at its in-place production process and expects further savings in the coming year. It is expected that with further increases to its in-house manufacturing of drug test strips, that significant savings will continue to be achieved. As a result of the continuing growth in the drug test market and the need to focus its efforts in this market, the Company sold its book sales operation in September 1999 in exchange for a five-year secured note receivable in the amount of $250,000. Consequently, the Company has reclassified all book sales revenues and operating costs to gain or loss on discontinued operations. Selling, general and administrative costs for the nine months ended January 31, 2000 were $2,604,000, a decrease of 8.3% over expenses of $2,839,000 for the nine months ended January 31, 1999. As a percent of sales, this cost decreased 18.0% during the comparable nine-month periods and is expected to continue to decrease. The following table reflects the major categories of this cost: NINE MONTHS ENDED NINE MONTHS ENDED JANUARY 31, 1999 JANUARY 31, 2000 % Sales % Sales Sales salaries & commissions 513,000 11.0% 763,000 12.6% Other selling expenses 442,000 9.5% 467,000 7.7% Marketing & promotion 843,000 18.2% 189,000 3.1% Investor relations costs 122,000 2.6% 146,000 2.4% Office salaries 271,000 5.8% 225,000 3.7% Payroll taxes & insurance 109,000 2.3% 106,000 1.8% Telephone 47,000 1.0% 108,000 1.8% Insurance 40,000 0.9% 32,000 0.5% Other administrative costs 452,000 9.7% 568,000 9.4% ----------- ----------- Total Selling, General & Admin costs 2,839,000 61.1% 2,604,000 43.1% =========== =========== As a result of relocating its marketing department to New York, marketing and promotion costs (included in selling, general and administrative costs) declined $654,000 or 15.1% of sales for the nine months ended January 31, 2000 compared to the nine months ended January 31, 1999. Legal fees relating principally to the Phamatech suit, for the nine months ended January 31, 2000 were $477,000 or 7.9% of sales, an increase of $315,000 over fees of $162,000 or 3.5% of sales for the nine months ended January 31, 1999. Depreciation and amortization ($48,000 in Cost of goods sold and $28,000 in Selling, general and administrative expense) was $76,000 and $66,000 for the nine months ended January 31, 2000 and 1999, respectively. Research and development expense amounted to $500,000 for the nine months ended January 31, 2000 as compared to $266,000 for the nine months ended January 31, 1999. This increase in research and development represents a continuation of managements' efforts to develop improved methods to reduce the cost of manufacturing its drug test kits. 10 Net loss from operations decreased to $(454,000) for the nine months ended January 31, 2000 as compared to $(836,000) for the nine months ended January 31, 1999, due primarily to increased sales revenues. 11 Results of operations for the three months ended January 31, 2000 as compared to the three months ended January 31, 1999. - -------------------------------------------------------------------------------- For the three months ended January 31, 2000, sales of drug test kits declined, principally as a result of increased competition from its former supplier, Phamatech Inc. The company has filed a suit in federal court claiming patent infringement, trademark dilution, and unfair competition against Phamatech Inc. Revenues from the sale of the test kits were $1,797,000 for the three months ended January 31, 2000 as compared to $1,912,000 for the three months ended January 31, 1999, representing an decrease of $115,000 or 6.4% over the preceding year. Cost of goods sold for the three months ended January 31, 2000 was $833,000 or 46.4% of drug test revenues as compared to $1,055,000 or 55.2% for the three months ended January 31, 1999. The Company has undertaken an extensive cost reduction program aimed specifically at its in-place production process and expects further savings in the coming year. It is expected that with continued increases in its in-house manufacturing process, that further significant savings can be achieved. As a result of the continuing growth in the drug test market and the need to focus its efforts in this market, the Company sold its book sale operation in September 1999 in exchange for a five-year secured note receivable in the amount of $250,000. While Net sales decreased 6.4% for the three months ended January 31, 2000 over the three months ended January 31, 1999, selling, general and administrative costs including bad debt write-offs decreased 29.4% to $837,000 over expenses of $1,185,000 for the three months ended January 31, 1999. As a percent of sales, this cost decreased 13.4% during the comparable three-month period and is expected to continue to decrease. The following table reflects the major categories of this cost: THREE MONTHS ENDED THREE MONTHS ENDED JANUARY 31, 1999 JANUARY 31, 2000 % Sales % Sales Sales salaries & commissions 203,000 10.6% 241,000 13.4% Other selling expenses 264,000 13.8% 152,000 8.5% Marketing & promotion 484,000 25.3% 35,000 1.9% Investor relations costs 43,000 2.2% 25,000 1.4% Office salaries 93,000 4.9% 78,000 4.3% Payroll taxes & insurance 41,000 2.1% 27,000 1.5% Telephone 13,000 0.7% 44,000 2.4% Insurance 18,000 0.9% 7,000 0.4% Other administrative costs 26,000 1.4% 228,000 12.7% ----------- --------- Total Selling, General & Admin costs 1,185,000 61.9% 837,000 46.5% =========== ========= Marketing and promotion costs (included in selling, general and administrative costs) amounted to $35,000 or 1.9% of sales for the three months ended January 31, 2000 as compared to $484,000 or 25.3% of sales for the three months ended January 31, 1999. Depreciation and amortization was $22,000 and $9,000 for the three months ended January 31, 2000 and 1999, respectively. Research and development expense amounted to $242,000 for the three months ended January 31, 2000 as compared to $164,000 for the three months ended January 31, 1999. Net loss from operations decreased to $(397,000) for the three months ended January 31, 2000 as compared to net loss of $(568,000) for the three months ended January 31, 1999, due primarily to a decrease in Cost of goods sold and a decrease in operating expenses. The Company expects to continue to improve its gross margins and decrease its overheads in future. 12 Liquidity and capital resources as of the nine months ended January 31, 2000. - -------------------------------------------------------------------------------- The Company's cash and cash equivalents combined with short-term investments amounted to $396,000 at January 31, 2000 representing a decrease of $454,000 or 53.4% from $850,000 as of the year ended April 30, 1999. Working capital decreased $244,000 or 10.2% to $2,143,000 as of January 31, 2000, from $2,387,000 at April 30, 1999. The decrease in working capital resulted primarily from increases in accounts receivable, prepaid expenses and plant and equipment; expenditures necessary to sustain its increased business growth. The Company has entered into a one-year lease agreement with option to purchase a 26,000 square foot fully constructed building in Kinderhook, N.Y. for $1.3 million subject to the removal of certain existing zoning restrictions. This move will permit the consolidation of its marketing effort and provide space necessary for continued growth. The Company expects to substantially finance the purchase with a 30-year fixed rate mortgage loan. As a result of strong nine-month sales of the Rapid Drug Screen, accounts and notes receivable increased $775,000 or 75.9% to $1,796,000 as of January 31, 2000 as compared to $1,021,000 as of April 30, 1999. Inventories decreased $58,000 or 3.2% to $1,776,000 for the nine months ended January 31, 2000. Prepaid expenses primarily for building rents, future trade shows and consulting fees increased $369,000 to $466,000 for the nine months ended January 31, 2000. Accounts payable and accrued expenses increased $970,000 for the nine months ended January 31, 2000 due primarily to increases in business volume and legal fees. The Company's primary short-term needs are to increase its manufacturing capabilities, decrease current inventory levels and continue to support its research and development programs. The Company currently plans to expend approximately $100,000 for the expansion and development of its manufacturing facilities in addition to its marketing and general administrative programs. The Company expects its capital requirements to increase over the next several years as it continues its research and development efforts and improves its manufacturing capabilities and facilities. The Company's future liquidity and capital funding requirements will depend on numerous factors, including the extent to which the Company's products under development are successfully developed and gain market acceptance, 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 has obtained a $500,000 line of credit to cover its short-term capital requirements with a local lending institution. The Company believes that its available cash and cash from operations will be sufficient to satisfy its funding needs to September 30, 2000. Thereafter, 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 can be no assurance that such financing, if required, will be available on satisfactory terms, if at all. 13 PART II OTHER INFORMATION Item 1. Legal Proceedings: See Note C - Litigation in the Notes to Financial Statements included in this Form 10-QSB 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 The following matters were voted upon at the Annual Meeting of Shareholders held at the Company's Headquarters in Kinderhook, N.Y. on September 22, 1999: 1. The election of the following directors, who will serve until their successors are elected and qualified, or their earlier death or resignation: Director For Withheld -------- --- -------- Stan Cipkowski 7,970,723 725,289 Edmund Jaskiewicz 7,970,723 725,289 Jay Bendis 7,970,723 725,289 John F. Murray 7,970,723 725,289 Karen Russo 7,970,723 725,289 Gerald Moore 7,970,723 725,289 2. To approve the issuance of common shares in connection with the conversion and exercise of outstanding preferred stock and warrants issued in a private financing transaction. For Withheld Abstain --- -------- ------- 8,186,748 476,369 38,595 3. To approve the adoption by the Board of Directors of the Fiscal 2000 Stock Option Plan For Withheld Abstain --- -------- ------- 7,416,939 1,245,461 38,812 14 SIGNATURES In accordance with the requirements of the Securities Exchange Act of 1934, 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/Stan Cipkowski ------------------ Stan Cipkowski, President and Chief Executive Officer By: /s/John F. Murray -------------------- John F. Murray, Treasurer and Chief Financial Officer Dated: March 16, 2000 15 EXHIBIT INDEX ------------- 27 Financial Data Schedule EX-27 2 FINANCIAL DATA SCHEDULE
5 This schedule contains summary financial information extracted from financial statements for the nine months ended January 31, 2000 and is qualified in its entirety by reference to such financial statements. 9-MOS APR-30-1999 JAN-31-2000 46,000 350,000 1,847,000 51,000 1,776,000 4,434,000 604,000 193,000 5,189,000 2,291,000 0 0 0 163,000 2,699,000 5,189,000 6,046,000 6,046,000 2,948,000 3,645,000 (112,000) 0 19,000 (454,000) 0 (454,000) 0 0 0 (454,000) (0.04) (0.04)
-----END PRIVACY-ENHANCED MESSAGE-----