10-Q 1 c57464e10-q.txt FORM 10-Q 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 July 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) 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: 18,045,548 Common Shares as of September 6, 2000 Transitional Small Business Disclosure Format: Yes [ ] No [X] 2 PART I FINANCIAL INFORMATION AMERICAN BIO MEDICA CORPORATION BALANCE SHEETS
JULY 31, APRIL 30, 2000 2000 (UNAUDITED) ------------ ------------ ASSETS ------ Current assets: Cash and cash equivalents $ 630,000 $ 1,207,000 Investments 84,000 74,000 Accounts receivable, net 1,369,000 1,150,000 Inventory 1,372,000 1,332,000 Prepaid expenses 87,000 46,000 ------------ ------------ Total current assets 3,542,000 3,809,000 Property, plant and equipment, net 377,000 388,000 Due from director/stockholder 465,000 335,000 Restricted cash 116,000 112,000 Other assets 110,000 114,000 Loan receivables - BioSys, Inc. 380,000 280,000 ------------ ------------ $ 4,990,000 $ 5,038,000 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY ------------------------------------ Current liabilities: Accounts payable and accrued expenses $ 1,813,000 $ 1,655,000 Note payable - stockholder 125,000 Current portion of capital lease obligations 13,000 13,000 ------------ ------------ Total current liabilities 1,826,000 1,793,000 Long term portion of capital lease obligations 31,000 34,000 ------------ ------------ Total liabilities 1,857,000 1,827,000 ------------ ------------ 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; 18,045,548 shares issued and outstanding at April 30, 2000 and July 31, 2000 180,000 180,000 Additional paid-in capital 15,210,000 15,210,000 Subscription receivable (5,000) (5,000) Unearned portion of compensation (272,000) (454,000) Unrealized loss on investments available for sale (64,000) (77,000) Accumulated deficit (11,916,000) (11,643,000) ------------ ------------ 3,133,000 3,211,000 ------------ ------------ $ 4,990,000 $ 5,038,000 ============ ============
See accompanying notes to financial statements 2 3 AMERICAN BIO MEDICA CORPORATION STATEMENTS OF OPERATIONS (UNAUDITED)
JULY 31, ---------------------------- 2000 1999 ------------ ----------- Net sales $ 2,155,000 $ 2,127,000 Cost of goods sold 742,000 1,067,000 ------------ ----------- Gross profit 1,413,000 1,060,000 ------------ ----------- Operating expenses: Selling, general and administrative 1,391,000 907,000 Non-cash compensation 182,000 Depreciation 29,000 24,000 Research and development 119,000 235,000 ------------ ----------- 1,721,000 1,166,000 ------------ ----------- Operating loss (308,000) (106,000) ------------ ----------- Other income (expense): Gain on sale of marketable securities 58,000 Interest income 37,000 27,000 Interest expense (2,000) (6,000) ------------ ----------- 35,000 79,000 ------------ ----------- Net loss $ (273,000) $ (27,000) Adjustments: Preferred stock beneficial conversion feature (123,000) Preferred stock dividends (32,000) ------------ ----------- Net loss attributable to common shareholders $ (273,000) $ (182,000) ============ =========== Basic and diluted net loss per common share $ (0.02) $ (0.01) Weighted average shares outstanding - basic and diluted 18,045,548 14,875,190 ============ =========== AMERICAN BIO MEDICA CORPORATION STATEMENT OF COMPREHENSIVE LOSS Net loss $ (273,000) $ (27,000) Other comprehensive loss: Unrealized gain(loss) on investments 13,000 (44,000) ------------ ----------- Comprehensive loss $ (260,000) $ (71,000) ============ ===========
See accompanying notes to financial statements 3 4 AMERICAN BIO MEDICA CORPORATION STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE THREE MONTHS ENDED JULY 31, ---------------------------- 2000 1999 ------------ ----------- CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (273,000) $ (27,000) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation 29,000 24,000 Provision for bad debts 9,000 17,000 Amortization of compensatory stock and stock options 182,000 Accrued interest (12,000) (4,000) Gain on sale of marketable securities (39,000) Changes in: Accounts receivable (228,000) (347,000) Inventory (40,000) 107,000 Prepaid expenses and other current assets (41,000) 7,000 Other assets 4,000 (5,000) Restricted cash (4,000) Accounts payable and accrued expenses 158,000 41,000 ------------ ----------- Net cash used in operating activities (216,000) (226,000) ------------ ----------- CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property, plant and equipment (18,000) (31,000) Purchase of investments (73,000) Sales and maturity of investments 3,000 342,000 Loan to Biosys, Inc. (100,000) Loan to director/stockholder (118,000) ------------ ----------- Net cash provided by (used in) operating activities (233,000) 238,000 ------------ ----------- CASH FLOWS FROM FINANCING ACTIVITIES: Settlement of registration rights agreement (125,000) (100,000) Capital lease payments (3,000) (4,000) ------------ ----------- Net cash used in financing activities (128,000) (104,000) ------------ ----------- NET DECREASE IN CASH AND CASH EQUIVALENTS (577,000) (92,000) Cash and cash equivalents - beginning of period 1,207,000 131,000 ------------ ----------- CASH AND CASH EQUIVALENTS - END OF PERIOD $ 630,000 $ 39,000 =========== =========== SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Cash paid during year for: Interest $ 2,000 $ 6,000 NON-CASH ACTIVITIES: Common stock dividends paid to holders of preferred stock $ 31,000 Dividend accrued not yet paid $ 32,000
See accompanying notes to financial statements 4 5 Notes to Financial statements July 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" or "ABMC") at July 31, 2000, 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, 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, 2000 included in the Company's Form 10-KSB. During the year ended April 30, 2000, the Company sustained a net loss of $2,136,000 and had net cash outflows from operating activities of $846,000. During the 2001 First Quarter, the Company sustained a net loss of $273,000 principally due to an increase in selling, general and administrative expenses and had net cash outflows from operating activities of $216,000. The Company has taken a number of steps to improve its financial prospects including entering into national and international distribution agreements with a number of distributors, completed an in-house strip manufacturing program to reduce costs and other measures to enhance profit margins. In addition, on April 28, 2000 the Company raised $2,000,000 pursuant to a common stock purchase agreement. Note B - Loss Per Common Share Basic loss per share is calculated by dividing net loss 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. 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. This "beneficial conversion feature", to the preferred stockholders is accounted for as an embedded dividend to preferred shareholders. As such, the loss per common share was adjusted for this feature. Note C - Litigation "Patent, Trademark, and Unfair Competition Litigation" On January 26, 1999, the Company was granted a U.S. Patent for the design of the Multiple Test Card, known as the Rapid Drug Screen. On April 7, 1999, the Company filed suit in the federal court in Delaware against Phamatech, Inc. of California. Phamatech, Inc. of California was a former supplier of the Company and in that capacity acquired proprietary information on the Company's Rapid Drug Screen that it used to "knock off" the Company's product. This case was transferred from Delaware to California. In July 2000, the California Court granted ABMC's motion to add Tuan Pham, President of Phamatech, as an individual defendant in the suit. The Court also ordered that Wolfe & Associates (aka Wolfe Data) and James Wolfe, Elite Health Services, LLC and John Polanco (former distributors now selling the alleged infringing product) be joined as defendants. Peninsula Drug Analysis Co., Inc. and James Ramsey (former distributor selling a private label knock off believed by the Company to be manufactured by Phamatech), and Dipro Diagnostics of North America (another party selling the private label knock off (believed to be manufactured by Phamatech) are already parties. The Company is alleging patent infringement, violation of trademark rights, and unfair competition against all parties. On April 8, 1999, one day after the Company filed its Delaware suit, 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 Company's transferred Delaware case and Phamatech's California case have been placed on the same trial docket in San Diego. By Order dated July 24, 2000, the Court ordered the competing California based 5 6 suits be consolidated in one case. In a recent motion, Phamatech sought summary judgment on its declaratory judgment on the Company's patent claims. The trial court denied the motion. Since the ABMC trademark had not been registered, even though the petition for trademark is on appeal within the United States Patent and Trademark Office ("PTO"), the trial court denied the Company's trademark claim. However, the Court did not deal with the Company's trade dress claim. Phamatech has not moved for partial summary judgment on ABMC's trade dress claim even though ABMC's application for trademark protection of its trade dress is still pending before the examiner at the PTO. In October 1999, the Company sued Larry Hartselle, Drug Detection Devices, and Gulf Supply for patent infringement, trademark dilution, and unfair competition. It is alleged that they are also selling the Phamatech knock off. Drug Detection Devices is alleged to be selling yet another private label manufactured by Phamatech. Larry Hartselle d/b/a Instant Drug Detection is a former distributor who was selling the Phamatech knock-off. Gulf Supply is alleged to be selling the private label knock off sold by Drug Detection Devices. The claims against Hartselle and 3DL have been settled by the parties. The terms are confidential. As a non-confidential part of the agreement, Hartselle, without admitting any liability, has agreed to a consent order prohibiting him from selling the knock-off product in all configurations and from infringing any other ABMC property. The remaining defendant is engaged in settlement negotiations with the Company. "Friedenberg-related Litigation" In February 1994, Robert Friedenberg, as former owner of the two medical technology companies, MDI and Gendex, acquired by the Company, in the name of these corporations, filed for a declaratory judgment in Maryland that a Share Exchange Agreement had been rescinded. In order to make a claim for damages, the Company filed a third-party claim against Dr. Friedenberg for breach of the Share Exchange Agreement and fraud. In November 1995, after a trial, the court denied Dr. Friedenberg's request for a declaration of rescission and allowed the Company's third-party claim to proceed to trial. In September 1996, Dr. Friedenberg died. The Company's third party claim was decided by a jury on May 5, 1997. The verdict determined that Dr. Friedenberg breached the Share Exchange Agreement when he failed to deliver drug screening know how technology to the Company. The jury also found in favor of the Company on two of three fraud claims against Dr. Friedenberg and awarded the Company approximately $321,000 in damages. Dr. Friedenberg's estate, just prior to the jury trial, filed a supplemental claim for the shares of the Company which he would have received under the Share Exchange Agreement. The trial judge on July 17, 1998, ruled that the estate of Dr. Friedenberg was entitled to 5,907,154 common shares of the Company. The Company appealed that ruling and on September 15, 1999, the Court of Special Appeals in Maryland ruled in favor of the Company and reversed a Maryland circuit court's ruling that the estate of Dr. Robert Friedenberg was entitled to 5,907,154 common shares of the Company. The case was remanded to the circuit court with directions to enter a judgment for the Company. The Friedenberg estate petitioned the Court of Appeals, Maryland's highest court, to consider the case. The Company opposed any further proceeding. On December 21, 1999, the Court of Appeals denied the Friedenberg estate's petition to review the decision of the Court of Special Appeals. 6 7 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. Robert 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 Dr. Friedenberg, individually, on how to rescind the Share Exchange Agreement as well as testifying for Dr. Friedenberg over the Company's objections and in violation of this obligations to the Company. 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 Mr. Morris has comes from the Friedenberg claim. No trial date has been set. The Company is vigorously contesting the Morris claim. In June 1999, an individual, Richard Davidson, filed suit in New York claiming that two 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. Robert Friedenberg. 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 is vigorously contesting the suit. It is scheduled for a jury trial in the fourth calendar quarter of 2000. Note D - Reclassifications Certain items have been restated to conform with the current presentation. 7 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 three months ended July 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. RESULTS OF OPERATIONS FOR THE FISCAL QUARTER ENDED JULY 31, 2000 (THE "2001 FIRST QUARTER") COMPARED TO THE FISCAL QUARTER ENDED JULY 31, 1999 (THE "2000 FIRST QUARTER") ------------------------------------------------------------------------------- Net sales were $2,155,000 for the 2001 First Quarter as compared to $2,127,000 for the 2000 First Quarter, representing an increase of $28,000 or 1.3%. During the 2001 First Quarter, the Company continued its extensive program to market and distribute its primary product, the Rapid Drug Screen(TM). The Company believes that sales from drug test kits will continue to grow steadily. Cost of goods sold for the 2001 First Quarter was $742,000 or 34.4% of net sales as compared to $1,067,000 or 50.2% of net sales for the 2000 First Quarter. 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 drug test strips. Although net sales of drug test kits in the 2001 First Quarter increased 1.3% compared to the 2000 First Quarter, the 2001 First Quarter percentage increase in net sales was significantly less than the 74.3% increase in the 2000 First Quarter compared to the 1999 First Quarter. Management believes that the Company's net sales were significantly impacted by the production and sale of a "knock-off" product by a former supplier. Certain of the Company's former distributors also began selling the knock-off product in the 2000 Fiscal Year. The Company has filed a lawsuit against the former supplier and certain of the former distributors alleging patent infringement, trademark dilution and unfair competition. As of September 8, 2000, the Company has settled the claims against two former distributors and is in the final stages of settlement negotiations with a third former distributor. See "Note C - Litigation" to the Company's unaudited financial statements. Management believes that as the Company successfully settles these lawsuits or the courts' rule in favor of the Company following the trial of these lawsuits, the Company's net sales will significantly increase. While revenues increased 1.3% in the 2001 First Quarter, selling, general and administrative costs increased $484,000 or 53.4% to $1,391,000 for the 2001 First Quarter compared to $907,000 for the 2000 First Quarter. The following table sets forth the percentage relationship of selling, general and administrative costs to net sales for both fiscal quarters: 8 9
2001 PERCENT 2000 PERCENT FIRST QUARTER OF SALES FIRST QUARTER OF SALES ------------- -------- ------------- -------- Sales salaries & commissions 187,000 8.7% 250,000 11.8% Sales travel 99,000 4.6% 99,000 4.7% Consulting and other selling 122,000 5.7% 80,000 3.8% Marketing & promotion 141,000 6.5% 54,000 2.5% Investor relations costs 95,000 4.4% 40,000 1.9% Legal fees 323,000 15.0% 104,000 4.9% Accounting fees 81,000 3.8% 20,000 0.9% Offices salaries 176,000 8.2% 126,000 5.9% Payroll taxes & insurance 48,000 2.2% 38,000 1.8% Telephone 38,000 1.8% 28,000 1.3% Insurance 13,000 0.6% 11,000 0.5% Bad debts 9,000 0.4% 17,000 0.8% Other administrative costs 59,000 2.7% 40,000 1.9% --------- ------- Total selling, general and administrative costs 1,391,000 64.6% 907,000 42.7% ========= =======
Management believes that the amount of selling, general and administrative costs will increase as the Company continues to create the necessary infrastructure to meet the Company's worldwide drug test marketing and production goals. These costs will also increase as the Company increases its marketing efforts relating to over-the-counter sales of the Drug Detector and increases its direct selling efforts in connection with all of the Company's products. Legal fees for the 2001 First Quarter were $323,000 or 15.0% of net sales, an increase of $219,000, compared to legal fees of $104,000 or 4.9% of net sales for the 2000 First Quarter. This increase in legal fees is primarily due to the substantial legal fees incurred in connection with the lawsuits filed against a former supplier and certain former distributors in connection with the production and sale of a knock-off product. Management believes that the Company's successful prosecution of these lawsuits will result in a significant increase in the Company's sales revenue. As a result of expenses associated with an internal restructuring of its marketing department, marketing and promotion costs increased $87,000 to $141,000 or 6.5% of net sales for the 2001 First Quarter compared to $54,000 or 2.5% of net sales for the 2000 First Quarter. Office salaries for the 2001 First Quarter were $176,000 or 8.2% of net sales, an increase of $50,000, compared to office salaries of $126,000 or 5.9% of net sales for the 2000 First Quarter. This increase was primarily due to an increase in staff in purchasing and quality assurance. Accounting fees for the 2001 First Quarter were $81,000 or 3.8% of net sales, an increase of $61,000, compared to accounting fees of $20,000 or 0.9% of net sales. This was primarily due to an under accrual from the prior fiscal period. 9 10 The increases in legal fees, marketing and promotion costs, office salaries and accounting fees during the 2001 First Quarter were partially offset by decreases in sales salaries and commissions. Sales salaries and commissions for the 2001 First Quarter were $187,000 or 8.7% of net sales, a decrease of $63,000, compared to sales salaries and commissions of $250,000 or 11.8% of net sales for the 2000 First Quarter. This decrease was primarily due to a reduction in staff. Depreciation expense increased $5,000 to $29,000 or 1.3% of net sales for the 2001 First Quarter compared to depreciation of $24,000 or 1.1% of net sales for the 2000 First Quarter. The Company incurred a non-cash compensation charge of $182,000 or 8.4% of net sales associated with the issuance of common shares and grants of options to purchase common shares in fiscal 2000 as compensation for consulting and professional services. No non-cash compensation charge was incurred in the 2000 First Quarter. Research and development expenses for the 2001 First Quarter were $119,000 compared to $235,000 for the 2000 First Quarter. This decrease was primarily due to the Company's successful implementation of certain quality standards in the manufacturing of the Rapid Drug Screen(TM) product during Fiscal 2000. Net loss from operations increased to $308,000 for the 2001 First Quarter compared to $106,000 for the 2000 First Quarter. LIQUIDITY AND CAPITAL RESOURCES AS OF JULY 31, 2000 The Company has working capital of $1,716,000 at July 31, 2000 as compared to working capital of $2,016,000 at April 30, 2000. The Company has historically satisfied its working capital requirements principally through 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. Net cash used in operating activities was $216,000 for the 2001 First Quarter compared to net cash used in operating activities of $226,000 for the 2000 First Quarter. The net cash used in operating activities in the 2001 First Quarter was primarily due to the net loss of $273,000 and an increase in accounts receivable of $228,000 offset by issuance of compensatory stock and stock options of $182,000 and an increase in accounts payable and accrued expenses of $158,000. The net cash used in operating activities in the 2000 First Quarter was primarily due to the net loss of $27,000 and an increase in accounts receivable of $347,000 offset by a decrease in inventory of $107,000. Net cash used in investing activities was $233,000 for the 2001 First Quarter compared to net cash provided by investing activities of $238,000 for the 2000 First Quarter. The net cash used in investing activities for the 2001 First Quarter was due to an additional $100,000 loan to BioSys, Inc. and an additional $118,000 loan to a director/stockholder. The net cash provided by investing activities in the 2000 First Quarter was primarily due to sales and maturities of investments of $342,000 offset by purchases of investments of $73,000 and property plant and equipment of $31,000. Net cash used in financing activities was $128,000 for the 2001 First Quarter compared to net cash used in financing activities of $104,000 for the 2000 First Quarter. The net cash used in financing activities in the 2001 First Quarter and the 2000 First Quarter was primarily due to the settlement of registration rights agreement. At July 31, 2000, the Company had cash and cash equivalents of $630,000. The Company's primary short-term needs are to increase its manufacturing and production capabilities, decrease current inventory levels, continue to support its research and development programs, finance its patent infringement litigation and to increase its direct sales force. 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 expands it research and development efforts, sales and administration infrastructure, manufacturing capabilities and facilities and, if the required 10 11 contingencies are resolved, 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 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 believes that its available cash and cash from operations will be sufficient to satisfy its funding needs through April 30, 2001. 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. 11 12 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 None. Item 5. Other Information None. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits See Index to Exhibits on Page E-1 (b) Reports on Form 8-K None. 12 13 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/ Stan Cipkowski -------------------------------------- Stan Cipkowski Chairman of the Board of Directors President and Chief Executive Officer By: /s/ John F. Murray -------------------------------------- John F. Murray Treasurer and Chief Financial Officer Dated: September 13, 2000 13 14 AMERICAN BIO MEDICA CORPORATION Index to Exhibits Number Description of Exhibits 3.5 Bylaws* 3.6 Fifth Amendment to Certificate of Incorporation (filed as exhibit 3.6 to the Company's Form SB-2 filed on November 21, 1996 and incorporated herein by reference) 4.6 Fiscal 1997 Nonstatutory Stock Option Plan (filed as part of the Company's Proxy Statement for its Fiscal 1997 Annual Meeting and incorporated herein by reference) (a) 4.14 Fiscal 1998 Nonstatutory Stock Option Plan (filed as part of the Company's Proxy Statement for its Fiscal 1998 Annual Meeting and incorporated herein by reference) (a) 4.15 Fiscal 2000 Nonstatutory Stock Option Plan (filed as part of the Company's Proxy Statement for its Fiscal 2000 Annual Meeting and incorporated herein by reference) (a) 4.16 Common Stock Purchase Agreement dated as of April 28, 2000 by and between the Company and Seaside Partners, L.P.** 10.6 Contract of Sale dated May 19, 1999/Kinderhook, New York facility** 10.7 Agreement of Lease dated May 13, 1999/Kinderhook, New York facility** 10.8 Lease dated August 1, 1999/New Jersey facility** 10.9 Consulting Agreement with Robert Aromando (a) Indicates an employee benefit plan, management contract or compensatory plan or arrangement in which a named executive officer participates. * Filed as the exhibit number listed to the Company's Form 10-SB filed on November 21, 1996 and incorporated herein by reference. ** Filed as the exhibit number listed to the Company's Form 10-KSB for the fiscal year ended April 30, 2000 and incorporated herein by reference. 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