10QSB/A

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-QSB/A

x Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of 1934.

  For the quarterly period ended June 30, 2006.

oTransition 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

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(Exact name of small business issuer as specified in its charter)

New York 14-1702188

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(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

122 Smith Road, Kinderhook, New York 12106

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(Address of principal executive offices)

800-227-1243

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(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 o

State the number of shares outstanding of each of the issuer's classes of common equity as of the latest practicable date:

21,719,768 Common Shares as of March 2, 2007

Transitional Small Business Disclosure Format: Yes [ ] No [X]

PART I

FINANCIAL INFORMATION

American Bio Medica Corporation
Balance Sheets	June 30,			December 31,
	2006			2005
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	591,000		$	446,000
Accounts receivable, net of allowance of $105,000 at both June 30, 2006 and December 31, 2005		1,811,000			1,370,000
Inventory-net of reserve for slow moving and obsolete inventory of $250,000 at both June 30, 2006 and December 31, 2005		3,706,000			4,444,000
Prepaid and other current assets		238,000			109,000
Total current assets		6,346,000			6,369,000
Property, plant and equipment, net		1,376,000			1,562,000
Other assets		107,000			7,000
Total assets	$	7,829,000		$	7,938,000
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	776,000		$	1,380,000
Accrued liabilities		113,000			130,000
Wages payable		180,000			177,000
Line of credit		230,000
Current portion of mortgages and notes payable		23,000			36,000
Current portion of unearned grant		10,000			10,000
Total current liabilities		1,332,000			1,733,000
Long term portion of mortgages and notes payable		582,000			592,000
Long term portion of unearned grant		60,000			60,000
Other long term liabilities		104,000
Total liabilities		2,078,000			2,385,000
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; 50,000,000 shares authorized; 21,459,768 and 21,359,768 shares issued and outstanding at June 30, 2006 and December 31, 2005, respectively		215,000			214,000
Additional paid-in capital		18,942,000			18,853,000
Accumulated deficit		(13,406,000	)		(13,514,000	)
Total stockholders’ equity		5,751,000			5,553,000
Total liabilities and stockholders’ equity	$	7,829,000		$	7,938,000
The accompanying notes are an integral part of the financial statements

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American Bio Medica Corporation
Statements of Operations
(Unaudited)
	For The Six Months Ended June 30,
	2006			2005
Net sales	$	7,093,000		$	6,736,000
Cost of goods sold		3,677,000			3,338,000
Gross profit		3,416,000			3,398,000
Operating expenses:
Research and development		311,000			332,000
Selling and marketing		1,630,000			1,681,000
General and administrative		1,327,000			1,146,000
		3,268,000			3,159,000
Operating income		148,000			239,000
Other income (expense):
Other income					14,000
Interest income		2,000			2,000
Interest expense		(36,000	)		(27,000	)
		(34,000	)		(11,000	)
Income before provision for income taxes		114,000			228,000
Income taxes		6,000			6,000
Net income	$	108,000		$	222,000
Basic income per common share	$	0.01		$	0.01
Diluted income per common share	$	0.00		$	0.01
Weighted average shares outstanding -
basic		21,338,635			21,284,768
Dilutive effect of stock options and warrants		138,935			71,550
Weighted average shares outstanding -
diluted		21,477,570			21,356,318
The accompanying notes are an integral part of the financial statements

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American Bio Medica Corporation
Statements of Operations
(Unaudited)
		For The Three Months Ended  June 30,
		2006		2005
Net sales	$	3,670,000	$	3,614,000
Cost of goods sold		1,897,000		1,858,000
Gross profit		1,773,000		1,756,000
Operating expenses:
Research and development		156,000		174,000
Selling and marketing		847,000		924,000
General and administrative		654,000		490,000
		1,657,000		1,588,000
Operating income		116,000		168,000
Other income (expense):
Interest income		1,000		1,000
Interest expense		(20,000)		(16,000)
		(19,000)		(15,000)
Income before provision for income taxes		97,000		153,000
Income taxes				(5,000)
Net income	$	97,000	$	148,000
Basic income per common share	$	0.00	$	0.01
Diluted income per common share	$	0.00	$	0.01
Weighted average shares outstanding -
basic		21,317,735		21,284,768
Dilutive effect of stock options and warrants		145,233		7,397
Weighted average shares outstanding -
diluted		21,462,968		21,292,165
The accompanying notes are an integral part of the financial statements

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American Bio Medica Corporation
Statements of Cash Flows
(Unaudited)
	For The Six Months Ended
	June 30,
	2006			2005
Cash flows from operating activities:
Net income	$	108,000		$	222,000
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation		188,000			185,000
Provision for doubtful accounts		24,000			12,000
Non cash compensation expense		5,000
Changes in:
Accounts receivable		(464,000	)		(498,000	)
Inventory		744,000			363,000
Prepaid and other current assets		(130,000	)		(32,000	)
Accounts payable		(602,000	)		(717,000	)
Accrued liabilities		(14,000	)		13,000
Unearned Grant					(5,000	)
Wages payable		2,000			(8,000	)
Net cash used in operating activities		(139,000	)		(465,000	)
Cash flows from investing activities:
Purchase of property, plant and equipment		(12,000	)		(99,000	)
Net cash used in investing activities		(12,000	)		(99,000	)
Cash flows from financing activities:
Proceeds from exercise of warrants					3,000
Proceeds from exercise of options		85,000
Debt payments		(19,000	)		(38,000	)
Proceeds from line of credit		230,000			176,000
Line of credit payments
Proceeds from grant					25,000
Net cash provided by financing activities		296,000			166,000
Net increase / (decrease) in cash and cash equivalents		145,000			(398,000	)
Cash and cash equivalents - beginning of period		446,000			995,000
Cash and cash equivalents - end of period	$	591,000		$	597,000
Supplemental disclosures of cash flow information
Cash paid during period for interest	$	36,000		$	27,000
Issuance of note payable for purchase of equipment				$	85,000
The accompanying notes are an integral part of the financial statements

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Notes to financial statements (unaudited)

June 30, 2006

Note A – Basis of Reporting

The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America 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 accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, such statements include all adjustments, which are considered necessary for a fair presentation of the financial position of American Bio Medica Corporation (the "Company" or "ABMC") at June 30, 2006, and the results of its operations, and cash flows for the six-month and three-month periods ended June 30, 2006 and 2005. The results of operations for the six-month and three-month periods ended June 30, 2006 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 December 31, 2005 included in the Company's Form 10-KSB.

During the year ended December 31, 2005, the Company incurred a net loss of $376,000 from net sales of $13,015,000, and had net cash used in operating activities of $372,000. During the six months ended June 30, 2006, the Company earned a net income of $108,000 from net sales of $7,093,000. The Company had net cash outflows from operating activities of $139,000 for the first six months of 2006 primarily as a result of increases in accounts receivable and prepaid expenses, and reductions in accrued expenses and accounts payable offset by reductions in inventory. The reduction in accounts payable stems from payments for inventory purchases made in the first quarter of 2006. During the first half of 2006, the Company continued to take steps to improve its financial prospects including focusing on research and development and selling and marketing.

The Company's continued existence is dependent upon several factors, including its ability to raise revenue levels and reduce costs to generate positive cash flows, and to sell additional shares of the Company's common stock to fund operations, if necessary.

NEW ACCOUNTING STANDARDS

In December 2004, the FASB issued FAS No. 123 (revised 2004), “Share-Based Payment”, ("FAS No. 123(R)"), which amends FAS No. 123, Accounting for Stock-Based Compensation, and supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees. FAS No. 123(R) requires compensation expense to be recognized for all share-based payments made to employees based on the fair value of the award at the date of grant, eliminating the intrinsic value alternative allowed by FAS No. 123. Generally, the approach to determining fair value under the original pronouncement has not changed. However, there are revisions to the accounting guidelines established, such as accounting for forfeitures, which will change our accounting for stock-based awards in the future.

FAS No. 123(R) must be adopted in the first interim or annual period beginning after December 15, 2005. The statement allows companies to adopt its provisions using either of the following transition alternatives:

(i) The modified prospective method, which results in the recognition of compensation expense using FAS 123(R) for all share-based awards granted after the effective date and the recognition of compensation expense using FAS 123 for all previously granted share-based awards that remain unvested at the effective date; or

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(ii) The modified retrospective method, which results in applying the modified prospective method and restating prior periods by recognizing the financial statement impact of share-based payments in a manner consistent with the pro forma disclosure requirements of FAS No. 123. The modified retrospective method may be applied to all prior periods presented or previously reported interim periods of the year of adoption.

ABMC adopted FAS No. 123(R) on January 1, 2006 using the modified prospective method. Because we previously accounted for share-based payments to our employees using the intrinsic value method, our results of operations have not included the recognition of compensation expense for the issuance of stock option awards. The Company accelerated the vesting of all outstanding stock options to December 14, 2005. Options granted to two employees during the second quarter of 2006 were accounted for in accordance with FAS No. 123(R).

FAS No. 123(R) also requires the benefits of tax deductions in excess of recognized compensation cost to be reported as a financing cash flow, rather than as an operating cash flow as required under current literature. This requirement may reduce our net operating cash inflows and increase our net financing cash flows in periods after adoption. The impact that this change in reporting will have on future periods cannot be determined at this time because the benefit recognized is dependent upon attributes that vary for each option exercise.

In May 2005, the FASB issued FAS No. 154. “Accounting Changes and Error Corrections” which replaced APB Opinion No. 20 and FASB Statement No. 3, Reporting Accounting Changes in Interim Financial Statements, and changes the requirements for the accounting for and reporting of a change in accounting principle. This statement shall be effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005. FAS No. 154 requires retrospective application to prior periods’ financial statements of changes in accounting principle, unless it is impracticable to determine either the period-specific effects or the cumulative effect of the change. This Statement defines retrospective application as the application of a different accounting principle to prior accounting periods as if that principle had always been used or as the adjustment of previously issued financial statements to reflect a change in the reporting entity. FAS No. 154 also requires that a change in depreciation, amortization, or depletion method for long-lived, non-financial assets be accounted for as a change in accounting estimate effected by a change in accounting principle. The Company does not believe that the adoption of FAS No. 154 will have a significant effect on its financial statements.

In February 2006 the FASB issued FAS No. 155 “Accounting for Certain Hybrid Financial Instruments—an amendment of FASB Statements No. 133 and 140”. This Statement amends FASB Statements No. 133, Accounting for Derivative Instruments and Hedging Activities, and No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities.

This Statement:

a.   Permits fair value remeasurement for any hybrid financial instrument that contains an embedded derivative that otherwise would require bifurcation

b.   Clarifies which interest-only strips and principal-only strips are not subject to the requirements of Statement 133

c.   Establishes a requirement to evaluate interests in securitized financial assets to identify interests that are freestanding derivatives or that are hybrid financial instruments that contain an embedded derivative requiring bifurcation

d.   Clarifies that concentrations of credit risk in the form of subordination are not embedded derivatives

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e.   Amends Statement 140 to eliminate the prohibition on a qualifying special-purpose entity from holding a derivative financial instrument that pertains to a beneficial interest other than another derivative financial instrument.

This Statement is effective for all financial instruments acquired or issued after the beginning of an entity’s first fiscal year that begins after September 15, 2006. The Company does not believe that the adoption of FAS No. 155 will have a significant effect on its financial statements.

In March 2006 the FASB issued FAS No. 156 “Accounting for Servicing of Financial Assets—an amendment of FASB Statement No. 140”. This Statement amends FASB Statement No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, with respect to the accounting for separately recognized servicing assets and servicing liabilities.

This Statement is effective as of the beginning of the Company’s first fiscal year that begins after September 15, 2006. The Company does not have any financial assets requiring servicing accordance with FAS No. 156 and does not believe that the adoption of FAS No. 156 will have a significant effect on its financial statements.

Note B – Net Income Per Common Share

Basic net income or loss per share is calculated by dividing the net income or loss by the weighted average number of outstanding common shares during the period. Diluted net income or loss per share includes the weighted average dilutive effect of stock options and warrants.

Potential common shares outstanding as of June 30, 2006 and 2005 are as follows:

	June 30, 2006	June 30, 2005
Warrants	2,023,420	2,243,420
Options	3,993,080	4,166,080

For the three months and six months ended June 30, 2006 the number of securities not included in the diluted EPS, because the effect would have been anti-dilutive, were 4,474,500 each. For the three months and six months ended June 30, 2005 the number of securities not included in the diluted EPS, because the effect would have been anti-dilutive, were 5,783,000 and 5,284,500 respectively.

ABMC adopted FAS 123(R) (see “New Accounting Standards” above) effective January 1, 2006. FAS 123(R) requires compensation expense to be recognized for all share-based payments made to employees based on the fair value of the award at the date of grant, eliminating the intrinsic value alternative allowed by FAS No. 123. The following pro forma information, presented for 2005, gives effect to fair value of the options on the date of grant using the Black-Scholes option-pricing model with the following assumptions: dividend yield of 0%, volatility of 75% to 77%, risk free interest rates ranging from 4.26% to 4.91%, and an expected life of 10 years. The pro-forma net income represents six months amortization of expense associated with the option grants.

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	Six months ended June 30,	Six months ended June 30,
	2006	2005
Net Income/(loss):
As reported	$ 108,000	$ 222,000
Pro forma	$ 108,000	$ (283,000)
Basic income/(loss) per share
As reported	$ .01	$ .01
Pro forma	$ .01	$ (.01)
Diluted income/(loss) per share
As reported	$ .00	$ .01
Pro forma	$ .00	$ (.01)

Note C – Litigation

The Company has been named in legal proceedings in connection with matters that arose during the normal course of its business, and that in the Company’s opinion are not material. 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. If the Company is unsuccessful in defending any or all of these claims, resulting financial losses could have an adverse effect on the financial position, results of operations and cash flows of the Company.

Note D – Reclassifications

Certain items have been reclassified to conform to the current presentation.

Note E – Line of Credit

The Company has available a line of credit with First Niagara Financial Group, Inc. ("FNFG") and has a maximum available line of $350,000, not to exceed 70% of accounts receivable less than 60 days. The interest rate is .25% above the FNFG prime rate and the Company is required to pay the principal down to $0 for a 30 consecutive day period in each 12 month period during which the line is available.

The Company obtained an additional line of credit from FNFG for $75,000 during the first quarter of 2006. The line of credit is to be used exclusively for payments on a sublicense agreement entered into during the first quarter of 2006. The interest rate is .50% above the FNFG prime rate and principal may be repaid at any time and borrowed again as needed. There is no requirement for repayment of all principal annually on this line of credit. The Company intends to repay the funds drawn down on this line within one year to allow borrowing of additional amounts related to future payments due under the Sublicense Agreement.

Note F – Sublicense Agreement

On February 28, 2006, the Company entered into a non-exclusive Sublicense Agreement (the "Agreement") related to certain patents to allow the Company to expand its contract manufacturing operations. Under this Agreement, the Company is committed to pay a non-refundable fee of $175,000 over the course of 2 years. The Company would also be required to pay royalties for products the Company manufactures that fall within the scope of these patents. The Company does not currently manufacture any products that fall within the scope of these patents, and therefore, no royalty payments are currently required.

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Note G – Integrated Bio Technology Agreement

On March 29, 2006, the Company entered into a royalty agreement with Integrated Bio Technology Corporation (“IBC”). IBC is the owner of the RSV test and previously purchased the tests from the Company, via a contract manufacturing agreement, for resale to its distributor. At December 31, 2005 IBC had outstanding amounts due to ABMC totaling approximately $119,000. To address this outstanding balance, and to streamline the delivery of product to IBC’s distributor, the Company agreed to work directly with IBC’s distributor to receive orders, manufacture product and execute all invoicing and collection directly from the distributor. Effective January 1, 2006, the Company will pay a royalty equal to 20% of total sales to IBC. The Company will pay only 25% of royalties earned during the first two years, with the remaining 75% applied to amounts currently owed to ABMC by IBC. If the entire amount receivable from IBC is not earned through royalties during the first two years of the term of the royalty Agreement, all payments to IBC will cease until the full amount owed to the Company is satisfied. During the first six months of 2006 ABMC manufactured and sold approximately $413,000 of the RSV tests to IBC’s distributor. The royalties earned on these sales were approximately $83,000. During the six months ended June 30, 2006 ABMC reduced the amounts owed from IBC by $62,000, from $119,000 to $57,000 and made payments to IBC totaling approximately $21,000.

Note H – Stock Option Grants

In June 2006, the Company’s Board of Directors granted a stock option to purchase 72,000 shares of the Company’s common stock to the Company’s Chief Financial Officer, and an option to purchase 3,000 shares of the Company’s common stock to an employee in the Company’s R&D division. Both option grants have exercise prices of $1.05 (the closing price of the Company’s common shares on the date of grant) and vest 100% on the one-year anniversary of the date of the grant. In accordance with FAS 123(R) (see “New Accounting Standards”), the Company will recognize $63,347 in non-cash compensation expense related to these grants over the next twelve months. Included in the three months and six months ended June 30, 2006 is $5,279 of this non-cash compensation expense.

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 AND SIX MONTHS ENDED JUNE 30, 2006 AND 2005

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 business; (c) regulatory, competitive and contractual risks; (d) product development risks; and (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.

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Critical accounting policies

During the six months ended June 30, 2006, except for the adoption of FAS 123(R), there were no significant changes to the Company's critical accounting policies, which are included in the Company's Annual Report on Form 10-KSB for the year ended December 31, 2005.

Results of operations for the six months ended June 30, 2006 as compared to the six months ended June 30, 2005

Net sales were $7,093,000 for the six months ended June 30, 2006 as compared to $6,736,000 for the six months ended June 30, 2005, an increase of $357,000 or 5.3%. Increases in sales of Rapid Drug Screen® (RDS®) InCup®, Oralstat® oral fluid test, Rapid TOX™ (the cassette product introduced by the Company in late 2005), and contract manufacturing were offset by a decrease in RDS sales during the first six months of 2006 compared to the same period a year ago. The Company anticipates continued growth in sales of the Rapid TOX product as it gains market acceptance and continued growth in its contract manufacturing operations as the Company is currently working with several new entities on contract manufacturing projects.

During the six months ended June 30, 2006, the Company continued its extensive program to market and distribute their urine and oral fluid based point of collection tests for drug of abuse. The Company also continued marketing its Rapid Reader™, the first all inclusive drug screen interpretation and data management system cleared by the Food and Drug Administration (“FDA”).

In the first half of 2006, the Company filed three 510(k) marketing applications with the FDA. One related to a drug screen for Buprenorphine, one for the Company’s Rapid TOX cassette product and one related to a new detection level for the Company’s drug screen for cocaine. In May 2006, the Company received 510(k) clearance from the FDA for its Rapid TOX product and in June 2006, the Company received 510(k) clearance from the FDA for the new detection level for the Company’s drug screen for cocaine. As of the date of this report, the Company is still awaiting a response from the FDA concerning clearance of the Company’s drug screen for Buprenorphine.

The Company continued its contract manufacturing operations for unaffiliated third parties during the first half of 2006. Development continued on the production of a point of collection test for HIV for one of the Company’s contract manufacturing customers, which is currently being evaluated by the FDA. The Company is also evaluating several other requests for contract manufacturing including incorporation of the Company’s drugs of abuse tests into another test manufactured by an unrelated third party that is used in hospitals, emergency rooms and clinics, and development of variations of the Company’s current oral fluid product to meet specific market demands in Europe.

Cost of goods sold for the six months ended June 30, 2006 was $3,677,000 or 51.8% of net sales as compared to $3,338,000 or 49.6% of net sales for the six months ended June 30, 2005. The increase in cost of goods sold is due to increases in the cost of labor in manufacturing, stemming from the greater diversity and complexity of new products. While the cost of labor and overhead rose in 2006 compared to a year ago, cost of materials has remained relatively consistent and the Company continued its efforts to control the costs to produce its products. Increased price pressure in the marketplace has limited the Company’s ability to recover cost increases while maintaining market share. The Company continues to evaluate all aspects of its manufacturing and assembly processes to identify any areas of cost savings to improve gross margins.

Operating expenses increased 3.5% to $3,268,000 in the first six months of 2006, compared to $3,159,000 in the same period in 2005. An increase of $181,000 in general and administrative expense was offset by decreases of $21,000 and $51,000 in research and development and selling and marketing expense respectively. Driving the increase in general and administrative expense were investor relations expense and royalty expense as well as increases in general and administrative salaries and wages. Operating expenses decreased from 46.9% of net sales in the first six months of 2005 to 46.1% for the same period in 2006.

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Research and development

Research and development expenses for the six months ended June 30, 2006 were $311,000, or 4.4%, of net sales compared to $332,000, or 4.9%, of net sales for the six months ended June 30, 2005. The decrease in expense is primarily due to decreases in research and development salaries and wages and supplies resulting from the departure of an R&D manager in late 2005, as well as decreases in spending on supplies, offset by an increase in FDA compliance costs. Management continues its overall strategy to: focus on new product development to meet the changing needs of the point of collection drug of abuse testing market; develop test components for an HIV test currently under development for a third party and being evaluated by the FDA; and develop new uses of immunoassay lateral flow technology.

Selling and marketing expense

Selling and marketing expense was $1,630,000, or 23.0%, of net sales in the first six months of 2006. This represents a decrease of $51,000, from $1,681,000 or 25.0% of net sales in the same six months in 2005. This decrease is primarily attributable to reductions in commissions expense stemming from a restructuring of the commission plan in 2006, savings in travel and travel related expenses and decreases in expenses for trade shows, offset by increases in consulting fees, outside service fees and postage. The increase in postage expense represents postage in excess of amounts received from customers for shipping and handling and was previously reported as general and administrative expense in 2005. During 2006, the Company implemented new internal reporting of this expense in more detail enabling them to attribute these shipping and handling excesses to the appropriate sales division rather than charging them to general and administrative expense. This reclassification allows the Company to evaluate the impact of these charges on the business and more specifically on each of the sales divisions. This reporting was notavailable in 2005.The Company’s sales strategy continues to be a focus on direct sales as well as an inside direct sales group of seven.

General and administrative expense

General and administrative (G&A) expense was $181,000 higher in the first six months of 2006 than the same period in 2005. Total G&A expense for the six months ended June 30, 2006 was $1,327,000, or 18.7%, of net sales compared to $1,146,000, or 17.0%, of net sales in the first six months of 2005. Expenses totaling $179,000 for investor relations and royalty expense were primarily responsible for the increase. The investor relations expense relates to a contract signed in 2005 with an investor relations firm. The contract with this firm is for one year and it expires in September 2006. Royalty expense relates to the agreement entered into with IBC (see note G) and the sublicense agreement entered into during the first quarter of this year (see note F). Also affecting G&A expense in the first six months of 2006 were increases in salaries and wages and outside service fees in the Company’s quality assurance department. Offsetting these increases were savings in insurance costs resulting from changes in insurance carriers during the fourth quarter of 2005 and first quarter of 2006. In addition, a reclassification of postage expense as a selling and marketing expense, described above, resulted in a decrease in warehouse costs. In addition the Company reduced spending in taxes, utilities, accounting fees and insurance in the first half of 2006.

Results of operations for the three months ended June 30, 2006 as compared to the three months ended June 30, 2005

Net sales were $3,670,000 for the three months ended June 30, 2006 as compared to $3,614,000 for the three months ended June 30, 2005, representing an increase of $56,000, or 1.6%. Direct sales accounted for 70.6%, or $2,592,000, of sales for the second quarter compared to $2,678,000, or 74.1%, a year ago. Telemarketing, international and other sales contributed $1,078,000, or 29.4%, of the net sales for the second quarter of 2006, compared to $936,000, or 25.9%, of the net sales for the same period in 2005. Also contributing to the increase in sales were contract manufacturing sales of $112,000 during the second quarter of 2006, compared to $74,000 during the same period in 2005.

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During the three months ended June 30, 2006, the Company continued its extensive program to market and distribute their urine and oral fluid based point of collection tests for drug of abuse. The Company also continued marketing its Rapid Reader™, the first all inclusive drug screen interpretation and data management system cleared by the Food and Drug Administration (“FDA”).

In May 2006, the Company received 510(k) clearance from the FDA for its Rapid TOX product and in June 2006, the Company received 510(k) clearance from the FDA for the new detection level for the Company’s drug screen for cocaine. Both of these applications were filed in the first quarter of 2006 along with an application filed for the Company’s drug screen for Buprenorphine. As of the date of this report, the Company is still awaiting a response from the FDA concerning clearance of the Company’s drug screen for Buprenorphine.

The Company continued its contract manufacturing operations for unaffiliated third parties during the second quarter of 2006. Development continued on the production of a point of collection test for HIV for one of the Company’s contract manufacturing customers, which is currently being evaluated by the FDA. The Company is also evaluating several other requests for contract manufacturing including incorporation of the Company’s drugs of abuse tests into another test manufactured by an unrelated third party that is used in hospitals, emergency rooms and clinics, and development of variations of the Company’s current oral fluid product to meet specific market demands in Europe.

Cost of goods sold for the three months ended June 30, 2006 was $1,897,000, or 51.7%, of net sales as compared to $1,858,000, or 51.4%, of net sales for the three months ended June 30, 2005. The increase in cost of goods sold is due to increases in the cost of labor in manufacturing, stemming from the greater diversity and complexity of new products, and the disposal of some obsolete Oralstat inventory components during the second quarter. While the cost of labor and overhead rose in 2006 compared to a year ago, materials have remained relatively consistent and the Company continued its efforts to control the costs to produce its products. Increased price pressure in the marketplace has limited the Company’s ability to recover cost increases while maintaining market share. The Company continues to evaluate all aspects of its manufacturing and assembly processes to identify any areas of cost savings to improve gross margins.

Operating expenses increased $69,000, or 4.3%, to $1,657,000 in the second quarter of 2006, compared to $1,588,000 in the same period in 2005. This is attributable to increases in G&A expense of $164,000, offset by savings in R&D expenses of $18,000 and selling and marketing expenditures of $77,000.

Research and development

Research and development (“R&D”) expenses for the three months ended June 30, 2006 were $156,000, or 4.3%, of net sales compared to $174,000, or 4.8%, of net sales for the three months ended June 30, 2005. The decrease in expense is primarily due to a decrease in research and development salaries and wage expense resulting from the departure of an R&D manager in late 2005, as well as decreases in spending on supplies. The primary focus of the R&D group in the second quarter of 2006 was refining modifications to the Company’s products, including OralStat, and preparing these modifications for production and sale. Management continues its overall strategy to: focus on new product development to meet the changing needs of the point of collection drug of abuse testing market; develop test components for an HIV test currently under development for a third party and being evaluated by the FDA; and develop new uses of immunoassay lateral flow technology.

13

Selling and marketing expense

Selling and marketing expense was $847,000, or 23.1%, of net sales in the second quarter of 2006, a decrease of $77,000, from $924,000, or 25.6%, of net sales in the same three months in 2005. This decrease is primarily attributable to the reductions in commissions expense resulting from a restructuring of the commission plan in 2006, as well as decreases in travel and travel related spending and systems costs. These decreases were offset by increases in postage expense resulting from a change to internal reporting that the Company implemented in 2006. The new reporting of this expense is done in more detail enabling them to attribute these shipping and handling excesses to the appropriate sales division rather than charging them to general and administrative expense. This reclassification allows the Company to evaluate the impact of these charges on the business and more specifically on each of the sales divisions. The primary focus of spending in selling and marketing is to increase coverage through direct sales in the marketplace coordinated with telemarketing efforts through an in-house sales group.

General and administrative expense

General and administrative expense increased by $164,000 in the second quarter of 2006 compared to the same period in 2005. Total G&A expense in the second quarter of 2006 was $654,000, or 17.8%, of net sales compared to $490,000, or 13.6%, of net sales in the three months ended June 30, 2005. Primarily responsible for the increase in G&A expense in the second quarter is investor relations expense related to contracting with an investor relations firm during 2005, and royalty and sublicense fees related to agreements executed in the first quarter of 2006 (see notes F and G). Increases in bad debts resulting from two account write offs totaling $12,000, directors fees and expenses, outside service fees, accounting fees and general and administrative salaries and wages were offset by savings insurance and a reclassification of postage expenses, described above.

LIQUIDITY AND CAPITAL RESOURCES AS OF JUNE 30, 2006

The Company's cash requirements depend on numerous factors, including product development activities, ability to penetrate the direct sales market, market acceptance of its new products, and effective management of inventory levels in response to sales forecasts. The Company expects to devote substantial capital resources to continue its product development, expand manufacturing capacity, and support its direct sales efforts. The Company will examine other growth opportunities including strategic alliances and expects such activities will be funded from existing cash and cash equivalents, issuance of additional equity or debt securities or additional borrowings subject to market and other conditions. The Company believes that its current cash balances, and cash generated from future operations will be sufficient to fund operations for the next twelve months. 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 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.

Management believes that research and development, selling and marketing and general and administrative costs may increase as the Company continues its investment in long term growth and creates the necessary infrastructure to: achieve its worldwide drug test marketing and sales goals, continue its penetration of the direct sales market, support research and development projects and leverage new product initiatives. However, management has implemented programs to control the rate of increase of these costs to be consistent with the expected sales growth rate of the Company.

The Company has working capital of $5,014,000 at June 30, 2006 compared to working capital of $4,636,000 at December 31, 2005. The Company has historically satisfied its net working capital requirements, if needed, 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 and 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.

14

Net cash used in operating activities was $139,000 for the six months ended June 30, 2006 compared to net cash used in operating activities of $465,000 for the six months ended June 30, 2005. Operating cash flow improved for the six months ended June 30, 2006 primarily because of increases in accounts receivable and prepaid expense, offset by reductions in inventory, accounts payable and accrued expenses. Reductions in accounts payable pertain to purchases of inventory materials in the first quarter of 2006, paid for in the second quarter of 2006.

Net cash used in investing activities was $12,000 for the six months ended June 30, 2006 compared to net cash used in investing activities of $99,000 for the six months ended June 30, 2005. The net cash used in both years was for investment in property plant and equipment. The cash used in 2005 was specifically for costs associated with the completion of the Company’s HIV room and equipment purchases in the Company’s New Jersey facility and additional equipment purchases for new hires. Cash used in 2006 was for equipment purchases.

Net cash provided by financing activities was $296,000 for the six months ended June 30, 2006 consisting of proceeds from the Company’s lines of credit and $85,000 from the exercise of 100,000 options by an employee. Net cash provided in the first six months of 2005 was $166,000 resulting from the exercise of warrants, proceeds from the Company’s line of credit and proceeds of $25,000 from a Columbia County Economic Development Grant offset by payments on mortgage and notes payable.

The Company has available two lines of credit with First Niagara Financial Group, Inc. ("FNFG"). The first line has a maximum available line of $350,000, not to exceed 70% of accounts receivable less than 60 days for general operating use. The interest rate is .25% above the FNFG prime rate and the Company is required to pay the principal down to $0 for a 30 consecutive day period in each 12-month period during which the line is available. The amount outstanding on this line of credit was $174,000 at June 30, 2006 and $176,000 at June 30, 2005. The second line of credit was obtained during the first quarter of 2006 for the limited purpose of paying amounts associated with a sublicense agreement executed during the first quarter. This line is for a maximum of $75,000 with an interest rate of .50% above the FNFG prime rate and the Company is not required to pay the principal down to $0 during each twelve-month period. The amount outstanding on this line of credit at June 30, 2006 was $56,000.

At June 30, 2006, the Company had cash and cash equivalents of $591,000.

The Company's primary short-term capital and working capital needs relate to continued support of its research and development programs, opening new distribution opportunities, focusing sales efforts on segments of the drugs of abuse testing market that will yield high volume sales, increasing its manufacturing and production capabilities, establishing adequate inventory levels to support expected sales and instituting controls necessary to comply with financial disclosure controls as necessitated by new regulatory requirements.

ITEM 3. CONTROLS AND PROCEDURES

As of the end of the period covered by this report, American Bio Medica Corporation carried out an evaluation, under the supervision and with the participation of the Chief Financial Officer and the Chief Executive Officer, to evaluate the effectiveness of the disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended ("Exchange Act")). Based on that evaluation, the Chief Financial Officer and the Chief Executive Officer have concluded that American Bio Medica Corporation's disclosure controls and procedures as of the date of this report are effective for recording, processing, summarizing, and reporting information that is required to be disclosed in their reports under the Exchange Act, as amended, within the time periods specified in the Securities and Exchange Commission's rules and forms. Additionally, based upon this most recent evaluation, we have concluded that there were no significant changes in internal controls or other factors that have materially affected or are likely to materially affect the Company’s internal control over financial reporting during the period covered by this report.

15

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

The following matters were voted upon at the Company’s Annual Meeting of Shareholders (the “Meeting”) held at the Holiday Inn, in East Greenbush, New York on June 13, 2006.

PROPOSAL 1 - ELECTION OF DIRECTORS

Total shares in attendance: 19,800,354 Outstanding shares: 21,359,768

Proposal No. 1 - Election of Directors Votes Cast: 19,800,354

Director	For	Pct.	Withheld	Pct.
Anthony Costantino	19,578,976	98.9	221,808	1.1
Carl Florio	19,647,279	99.2	153,505	0.8
Edmund Jaskiewicz	19,638,076	99.2	162,708	0.8
Daniel W. Kollin	17,855,037	90.2	1,945,747	9.8
Stan Cipkowski	19,614,476	99.1	186,308	0.9
Richard Koskey	19,674,286	99.4	126,498	0.6

All six nominees for election to the Board of Directors were elected for staggered terms commencing with the ensuing year and until the years noted below or until their successors shall be elected and duly qualified.

·Anthony G. Costantino, Ph.D. (2007)	·Carl Florio (2007)
·Edmund M. Jaskiewicz (2008)	·Daniel W. Kollin (2008)
·Stan Cipkowski (2009)	·Richard P. Koskey (2009)

16

Proposal No. 2 Classification of Board terms	Votes Cast:		7,128,163
For:		6,564,986		92.1	%
Against:		404,682		5.7	%
Abstain:		158,495		2.2	%
Broker Non-Votes:		12,672,621

Item 5. Other Information

None.

Item 6. Exhibits

31.1 Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer

31.2 Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer

32.1 Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2 Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

17

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: March 2, 2007

18

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Stan Cipkowski, certify that:

1. I have reviewed this quarterly report on Form 10-QSB/A of American Bio Medica Corporation;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report;

4. The small business issuer's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the small business issuer and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) [omitted]; and

c) evaluated the effectiveness of the small business issuer’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the small business issuer’s internal control over financial reporting that occurred during the small business issuer’s most recent fiscal quarter (the small business issuer’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer’s internal control over financial reporting; and

5. The small business issuer’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer’s auditors and the audit committee of the small business issuer’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer’s internal control over financial reporting.

/s/ Stan Cipkowski

Chief Executive Officer

Date: March 2, 2007

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Keith E. Palmer, certify that:

1. I have reviewed this quarterly report on Form 10-QSB/A of American Bio Medica Corporation;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report;

4. The small business issuer's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the small business issuer and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) [omitted]; and

c) evaluated the effectiveness of the small business issuer’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the small business issuer’s internal control over financial reporting that occurred during the small business issuer’s most recent fiscal quarter (the small business issuer’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer’s internal control over financial reporting; and

5. The small business issuer’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer’s auditors and the audit committee of the small business issuer’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer’s internal control over financial reporting.

/s/ Keith E. Palmer

Chief Financial Officer & Executive Vice President

Date: March 2, 2007

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of American Bio Medica Corporation (the "Company") on Form 10-QSB/A for the period ending June 30, 2006 as filed with the Securities and Exchange Commission on March 2, 2007 (the "Report"), I, Stan Cipkowski, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Stan Cipkowski

Chief Executive Officer

March 2, 2007

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of American Bio Medica Corporation (the "Company") on Form 10-QSB/A for the period ending June 30, 2006 as filed with the Securities and Exchange Commission on March 2, 2007 (the "Report"), I, Keith E. Palmer, Chief Financial Officer and Executive Vice President of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Keith E. Palmer

Keith E. Palmer

Chief Financial Officer and

Executive Vice President

March 2, 2007