0001654954-23-007911.txt : 20230612 0001654954-23-007911.hdr.sgml : 20230612 20230612161911 ACCESSION NUMBER: 0001654954-23-007911 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 57 CONFORMED PERIOD OF REPORT: 20230331 FILED AS OF DATE: 20230612 DATE AS OF CHANGE: 20230612 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN BIO MEDICA CORP CENTRAL INDEX KEY: 0000896747 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 141702188 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-28666 FILM NUMBER: 231008331 BUSINESS ADDRESS: STREET 1: 122 SMITH ROAD CITY: KINDERHOOK STATE: NY ZIP: 12106 BUSINESS PHONE: 5187588158 MAIL ADDRESS: STREET 1: 122 SMITH ROAD CITY: KINDERHOOK STATE: NY ZIP: 12106 10-Q 1 abmc_10q.htm FORM 10-Q abmc_10q.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

 

FORM 10-Q

 

Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the quarterly period ended March 31, 2023

 

 

 

Transition report pursuant to 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 registrant as specified in its charter)

 

New York

 

14-1702188

(State or other jurisdiction of incorporation or organization)

 

(I.R.S. Employer Identification No.)

 

122 Smith Road, Kinderhook, New York

 

12106

(Address of principal executive offices)

 

(Zip Code)

 

518-758-8158

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock

ABMC

OTC Markets Pink

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or 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 ☐ No

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files) ☒ Yes ☐ No

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act

 

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

 

 

Emerging growth company 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act   ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes ☒ No

 

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date:

 

48,098,476 Common Shares as of June 12, 2023

 

 

 

American Bio Medica Corporation

 

Index to Quarterly Report on Form 10-Q

For the quarter ended March 31, 2023

 

 

PAGE

PART I – FINANCIAL INFORMATION

 

 

Item 1.

Condensed Financial Statements

3

 

Condensed Balance Sheets as of March 31, 2023 (unaudited) and December 31, 2022

3

 

Condensed Unaudited Statements of Operations for the three months ended March 31, 2023 and March 31, 2022

4

 

Statements of Changes in Stockholders’ Deficit for the three months ended March 31, 2023 and March 31, 2022

5

 

Condensed Unaudited Statements of Cash Flows for the three months ended March 31, 2023 and March 31, 2022

6

 

Notes to Condensed Financial Statements (unaudited)

7

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

18

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

23

Item 4.

Controls and Procedures

23

 

 

 

PART II – OTHER INFORMATION

 

 

 

Item 1.

Legal Proceedings

24

Item 1A.

Risk Factors

24

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

24

Item 3.

Defaults Upon Senior Securities

24

Item 4.

Mine Safety Disclosures

24

Item 5.

Other Information

24

Item 6.

Exhibits

25

 

 

 

Signatures

 

26

 

 
2

Table of Contents

 

PART I - FINANCIAL INFORMATION

Item 1. Condensed Financial Statements

 

American Bio Medica Corporation

Condensed Balance Sheets

 

 

March 31,

 

 

December 31,

 

 

 

  2023

 

 

2022

 

ASSETS

 

  (Unaudited)

 

 

 

Current assets

 

 

 

 

 

 

Cash and cash equivalents

 

$68,000

 

 

$34,000

 

Accounts receivable, net of allowance for doubtful accounts of $2,000 at March 31, 2023 and at December 31, 2022

 

 

89,000

 

 

 

82,000

 

Inventory, net of allowance of $0 at March 31, 2023 and $235,000 at December 31, 2022

 

 

0

 

 

 

379,000

 

Employee retention credit receivable

 

 

202,000

 

 

 

202,000

 

Retention fund receivable-asset sale

 

 

300,000

 

 

 

 

 

Prepaid expenses and other current assets

 

 

0

 

 

 

72,000

 

Total current assets

 

 

659,000

 

 

 

769,000

 

Property, plant and equipment, net

 

 

0

 

 

 

466,000

 

Right of use asset – operating leases

 

 

0

 

 

 

13,000

 

Other assets

 

 

0

 

 

 

21,000

 

Total assets

 

$659,000

 

 

$1,269,000

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ (DEFICIT)

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

Accounts payable

 

$572,000

 

 

$760,000

 

Accrued expenses and other current liabilities

 

 

338,000

 

 

 

514,000

 

Right of use liability – operating leases

 

 

0

 

 

 

4,000

 

Wages payable

 

 

32,000

 

 

 

94,000

 

Current portion of long-term debt

 

 

175,000

 

 

 

2,230,000

 

Total current liabilities

 

 

1,117,000

 

 

 

3,602,000

 

Right of use liability – operating leases

 

 

0

 

 

 

6,000

 

Total liabilities

 

 

1,117,000

 

 

 

3,608,000

 

COMMITMENTS AND CONTINGENCIES

 

 

 

 

 

 

 

 

Stockholders' deficit:

 

 

 

 

 

 

 

 

Preferred stock; par value $.01 per share; 5,000,000 shares authorized, none issued and outstanding at March 31, 2023 and December 31, 2022

 

 

0

 

 

 

0

 

Common stock; par value $.01 per share; 75,000,000 shares authorized; 48,098,476 issued and outstanding at March 31, 2023 and at December 31, 2022

 

 

481,000

 

 

 

481,000

 

Additional paid-in capital

 

 

22,403,000

 

 

 

22,403,000

 

Deficit

 

 

(23,342,000)

 

 

(25,223,000)

Total stockholders’ (deficit)

 

 

(458,000)

 

 

(2,339,000)

Total liabilities and stockholders’ (deficit)

 

$659,000

 

 

$1,269,000

 

 

The accompanying notes are an integral part of the condensed financial statements

 

 
3

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American Bio Medica Corporation

 Condensed Statements of Operations

(Unaudited)

 

 

For The Three Months Ended

 

 

 

March 31,

 

 

 

2023

 

 

2022

 

 

 

 

 

 

 

 

Net sales

 

$164,000

 

 

$351,000

 

 

 

 

 

 

 

 

 

 

Cost of goods sold

 

 

90,000

 

 

 

323,000

 

 

 

 

 

 

 

 

 

 

Gross profit

 

 

74,000

 

 

 

28,000

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

Research and development

 

 

28,000

 

 

 

22,000

 

Selling and marketing

 

 

20,000

 

 

 

42,000

 

General and administrative

 

 

238,000

 

 

 

295,000

 

 

 

 

286,000

 

 

 

359,000

 

 

 

 

 

 

 

 

 

 

Operating loss

 

 

(212,000)

 

 

(331,000)

 

 

 

 

 

 

 

 

 

Other income/ (expense):

 

 

 

 

 

 

 

 

Loss on asset valuation

 

 

(921,000)

 

 

0

 

Other income – asset sale

 

 

3,035,000

 

 

 

0

 

Interest expense

 

 

(21,000)

 

 

(48,000)

 

 

 

2,093,000

 

 

 

(48,000)

 

 

 

 

 

 

 

 

 

Net income / (loss) before tax

 

 

1,881,000

 

 

 

(379,000)

 

 

 

 

 

 

 

 

 

Income tax expense

 

 

0

 

 

 

0

 

 

 

 

 

 

 

 

 

 

Net income / (loss)

 

$1,881,000

 

 

$(379,000)

 

 

 

 

 

 

 

 

 

Basic and diluted income / (loss) per common share

 

$0.04

 

 

$(0.01)

 

 

 

 

 

 

 

 

 

Weighted average number of shares outstanding – basic & diluted

 

 

48,098,476

 

 

 

47,770,698

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of the condensed financial statements

 

 
4

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American Bio Medica Corporation

 Statements of Changes in Stockholders’ Deficit

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

 

Additional Paid-in

 

 

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Total

 

Balance – January 1, 2023

 

 

48,098,476

 

 

$481,000

 

 

$22,403,000

 

 

$(25,223,000)

 

$(2,339,000)

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,881,000

 

 

 

1,881,000

 

Balance – March 31, 2023

 

 

48,098,476

 

 

$481,000

 

 

$22,403,000

 

 

$(23,342,000)

 

$(458,000)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance January 1, 2022

 

 

47,598,476

 

 

$476,000

 

 

$22,393,000

 

 

$(22,813,000)

 

$(944,000)

Shares issued in connection with Landmark consulting agreement

 

 

500,000

 

 

 

5,000

 

 

 

10,000

 

 

 

 

 

 

 

15,000

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(379,000)

 

 

(379,000)

Balance – March 31, 2022

 

 

48,098,476

 

 

$481,000

 

 

$22,403,000

 

 

$(24,192,000)

 

$(1,308,000)

 

 
5

Table of Contents

 

American Bio Medica Corporation

 Condensed Statements of Cash Flows

(Unaudited)

 

 

For The Three Months Ended

 

 

 

March 31,

 

 

 

2023

 

 

2022

 

Cash flows from operating activities:

 

 

 

 

 

 

Net income / (loss)

 

$1,881,000

 

 

$(379,000)

Adjustments to reconcile net income / (loss) to net cash used in operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

8,000

 

 

 

13,000

 

Asset Sale to Healgen

 

 

(2,114,000)

 

 

0

 

Provision for bad debt

 

 

0

 

 

 

(1,000)

Consulting fee paid with restricted stock

 

 

0

 

 

 

15,000

 

Changes in:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(7,000)

 

 

186,000

 

Inventory

 

 

0

 

 

 

24,000

 

Prepaid expenses and other current assets

 

 

83,000

 

 

 

(11,000)

Right of use asset

 

 

0

 

 

 

9,000

 

Accounts payable

 

 

24,000

 

 

 

161,000

 

Accrued expenses and other current liabilities

 

 

(176,000)

 

 

(17,000)

Right of use liability

 

 

0

 

 

 

(9,000)

Wages payable

 

 

(62,000)

 

 

(4,000)

Net cash used in operating activities

 

 

(363,000)

 

 

(13,000)

Cash Flows from investing activities

 

 

 

 

 

 

 

 

Business Sale, net proceeds

 

 

247,000

 

 

 

0

 

Net cash provided by investing activities

 

 

247,000

 

 

 

0

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Payments on debt financing

 

 

(100,000)

 

 

0

 

Proceeds from debt financing

 

 

250,000

 

 

 

0

 

Proceeds from lines of credit

 

 

0

 

 

 

462,000

 

Payments on lines of credit

 

 

0

 

 

 

(547,000)

Net cash provided by / (used in) financing activities

 

 

150,000

 

 

 

(85,000)

Net change in cash and cash equivalents

 

 

34,000

 

 

 

(98,000)

Cash and cash equivalents - beginning of period

 

 

34,000

 

 

 

115,000

 

Cash and cash equivalents - end of period

 

$68,000

 

 

$17,000

 

Supplemental disclosures of cash flow information

 

 

 

 

 

 

 

 

Non-Cash transactions:

 

 

 

 

 

 

 

 

Consulting fee paid with restricted stock

 

$0

 

 

$15,000

 

Cash paid for interest

 

$41,000

 

 

$46,000

 

 

The accompanying notes are an integral part of the condensed financial statements

 

 
6

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Notes to condensed financial statements (unaudited)

 

March 31, 2023

Note A - Basis of Reporting

 

The accompanying unaudited interim condensed financial statements of American Bio Medica Corporation (the “Company”) have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Regulation S-X. Accordingly, these unaudited interim condensed financial statements do not include all information and footnotes required by U.S. GAAP for complete financial statement presentation. These unaudited interim condensed financial statements should be read in conjunction with audited financial statements and related notes contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. In the opinion of management, the interim condensed financial statements include all normal, recurring adjustments which are considered necessary for a fair presentation of the financial position of the Company at March 31, 2023, and the results of operations and cash flows for the three month periods ended March 31, 2023 (the “First Quarter 2023”) and March 31, 2022 (the “First Quarter 2022”).

 

Operating results for the First Quarter 2023 are not indicative of results that will be reported for the year ending December 31, 2023 as the Company sold substantially all of its assets on February 28, 2023 to Healgen Scientific, LLC (“Healgen”). Amounts at December 31, 2022 are derived from audited financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

 

During the First Quarter 2023, there were no significant changes to the Company’s critical accounting policies, which are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

 

The preparation of these interim condensed financial statements requires the Company to make estimates and judgments that affect the reported amounts of liabilities, expenses, and related disclosure of contingent liabilities. On an on-going basis, the Company evaluates estimates, including those related to bad debts, income taxes, warranty obligations, contingencies and litigation. The Company bases estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

 

These unaudited interim condensed financial statements have been prepared assuming that the Company will continue as a going concern and, accordingly, do not include any adjustments that might result from the outcome of this uncertainty. The independent registered public accounting firm’s report on the financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, contained an explanatory paragraph regarding the Company’s ability to continue as a going concern. As of the date of this report, the Company’s current cash balances and amounts expected from its receivables (including the Employee retention Credit receivable and the retention (escrow) proceeds from the asset sale) may not be sufficient to fund the Company through May 2024.

 

The Company’s credit facilities with Cherokee Financial, LLC (“Cherokee”) were paid in full with proceeds from the asset sale on February 28, 2023.

 

Recently Adopted Accounting Standards

 

ASU 2022-04, Liabilities – Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations, issued in September 2022, requires entities that use supplier finance programs in connection with the purchase of goods and services to disclose the key terms of the programs and information about obligations outstanding at the end of the reporting period, including a rollforward of those obligations. The guidance does not affect the recognition, measurement or financial statement presentation of supplier finance program obligations. ASU 2022-04 became effective on January 1, 2023. The Company adopted ASU 2022-04 on January 1, 2023 and the adoption did not have an impact on the Company’s financial condition or results of operations as the Company does not (and has not historically) utilized supplier finance programs in connection with the purchase of goods and services.

 

 
7

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ASU 2016-13, Financial Instruments—Credit Losses (Topic 326); Measurement of Credit Losses on Financial Instruments, issued in June 2016, requires companies to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. The Company adopted ASU 2016-13 on January 1, 2023 and the adoption did not have a material impact on the Company’s financial condition or results of operations.

 

Accounting Standards Issued; Not Yet Adopted

 

ASU 2022-03, Fair Value Measurement (Topic 820), Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions, issued in June 2022, clarifies that a contractual restriction on the sale of an equity security is not considered in measuring the security's fair value. The standard also requires certain disclosures for equity securities that are subject to contractual restrictions. ASU 2022-03 becomes effective on January 1, 2024. Early adoption is permitted. The Company is evaluating the impact of ASU 2022-03.

 

Any other new accounting pronouncements recently issued, but not yet effective, have been reviewed and determined to be not applicable or were related to technical amendments or codification. As a result, the adoption of such new accounting pronouncements, when effective, is not expected to have a material effect on the Company’s financial position or results of operations.

 

Note B – Inventory

 

Inventory is comprised of the following:

 

 

 

March 31, 2023*

 

 

December 31, 2022

 

 

 

 

 

 

 

 

Raw Materials

 

$0

 

 

$444,000

 

Work In Process

 

 

0

 

 

 

110,000

 

Finished Goods

 

 

0

 

 

 

60,000

 

Allowance for slow moving and obsolete inventory

 

 

0

 

 

 

(235,000)

 

 

$0

 

 

$379,000

 

 

*On February 28, 2023, the Company sold substantially all of its assets to Healgen, including its inventory.

 

Note C – Property, Plant and Equipment

 

Property, plant and equipment, is comprised of the following:

 

 

 

March 31, 2023*

 

 

December 31, 2022

 

 

 

 

 

 

 

 

Land

 

$0

 

 

$102,000

 

Buildings and improvements

 

 

0

 

 

 

1,352,000

 

Manufacturing and warehouse equipment

 

 

0

 

 

 

2,110,000

 

Office equipment (incl. furniture and fixtures)

 

 

0

 

 

 

412,000

 

 

 

 

0

 

 

 

3,976,000

 

Less accumulated depreciation

 

 

0

 

 

 

(3,510,000)

 

 

$0

 

 

$466,000

 

 

*On February 28, 2023, the Company sold substantially all of its assets to Healgen, including its property, plant and equipment.

 

 
8

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Note D – Accrued Expenses

 

Accrued expenses and other current liabilities consisted of the following as of March 31, 2023 and December 31, 2022:

 

 

 

March 31, 2023

 

 

December 31, 2022

 

Accounting fees

 

$16,000

 

 

$87,000

 

Interest payable

 

 

20,000

 

 

 

39,000

 

Accounts receivable credit balances

 

 

0

 

 

 

1,000

 

Sales tax payable

 

 

188,000

 

 

 

188,000

 

Deferred compensation

 

 

114,000

 

 

 

109,000

 

Other current liabilities

 

 

0

 

 

 

90,000

 

 

 

$338,000

 

 

$514,000

 

 

Note E – Net Income / (Loss) Per Common Share

 

Basic net income / (loss) per common share is calculated by dividing the net income / (loss) by the weighted average number of outstanding common shares during the period. Diluted net income / (loss) per common share includes the weighted average dilutive effect of stock options and warrants. When the Company has a loss, option and warrants are not included as they would be anti-dilutive. In the three months ended March 31, 2023, although the Company had net income, there were no options in the money at March 31, 2023. Potential common shares outstanding as of March 31, 2023 and 2022:

 

 

 

March 31, 2023

 

 

March 31, 2022

 

Options

 

 

1,690,000

 

 

 

1,937,000

 

Total

 

 

1,690,000

 

 

 

1,937,000

 

 

Note F – Litigation/Legal Matters

 

From time to time, the Company may be involved in immaterial legal proceedings in connection with matters that arise during the normal course of business. While the ultimate outcome of any such immaterial litigation cannot be predicted, if the Company is unsuccessful in defending any such litigation, the resulting financial losses are not expected to have a material adverse effect on the financial position, results of operations or cash flows of the Company.

 

Note G – Debt

 

The Company’s Line of Credit and Debt consisted of the following as of March 31, 2023 and December 31, 2022:

 

 

 

March 31, 2023

 

 

December 31, 2022

 

Loan and Security Agreement with Cherokee Financial, LLC: Secured note executed on February 15, 2015, at a fixed annual interest rate of 8% plus a 1% annual oversight fee, interest and oversight fee paid quarterly with principal due on February 15, 2020. Loan was extended for one year (until February 15, 2021) under the same terms and conditions as the original loan. The loan was further extended in February 2021 to February 15, 2022 with $100,000 added to the loan principal as a penalty and the annual interest rate increased to 10%. Loan was further extended in June 2022 (until February 15, 2023). Loan was paid in full on February 28, 2023.

 

$0

 

 

$1,000,000

 

2019 Term Loan with Cherokee Financial, LLC: Note at an annual fixed interest rate of 18% paid quarterly in arrears and a balloon payment due on February 15, 2020. Loan was extended in February 2020, until February 15, 2021 with a penalty of $20,000 added to the loan principal and, extended again in February 2021 to February 15, 2022 with another penalty of $20,000 added to the loan principal. Loan was extended in June 2022 (until February 15, 2023). Loan was paid in full on February 28, 2023.

 

 

0

 

 

 

240,000

 

November 2020 Shareholder Note: Term loan at 7% interest with the first interest only payment being made on February 4, 2021 and the final interest and $50,000 principal due on November 4, 2023.

 

 

50,000

 

 

 

50,000

 

December 2021 Shareholder Notes: Term loan with one non-affiliated shareholder at 7% interest until the loan is paid in full. Loan was amended to address additional amounts provided under the loan.

 

 

125,000

 

 

 

225,000

 

September 2022 Healgen Loan & Promissory Note: Term Loan with Healgen at a fixed rate of 1% per month compounded monthly. Loan was collateralized by first security interest in receivables, inventory, and all other assets with the exception of assets already encumbered. The Healgen loan was paid in full on February 28, 2023 (the closing of the Asset Sale to Healgen) and all interest was waived by Healgen.

 

 

0

 

 

 

715,000

 

Total Debt

 

$175,000

 

 

$2,230,000

 

Current portion

 

$175,000

 

 

$2,230,000

 

 

 
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LOAN AND SECURITY AGREEMENT (“LSA”) WITH CHEROKEE FINANCIAL, LLC (“CHEROKEE”)

 

On March 26, 2015, the Company entered into a LSA with Cherokee (the “Cherokee LSA”) in the amount of $1,200,000, which was collateralized by a first security interest in real estate and machinery and equipment. The Cherokee LSA reached maturity on February 15, 2020 with a balance of $900,000 (after 4 principal reduction payments of $75,000 each were made over the course of the initial term). In February 2020, the Cherokee LSA was extended for one year, or until February 15, 2021. No terms of the facility were changed under the February 2020 extension.

 

In February 2021, the Cherokee LSA was further extended for another year, or until February 15, 2022 (the “February 2021 Extension”). Under the February 2021 Extension, the principal of the Cherokee LSA was increased to $1,000,000 to include a $100,000 penalty that was due as a result of the Company being unable to pay back the principal balance to Cherokee on February 15, 2021. The annual interest rate on the Cherokee LSA was also increased to a fixed rate of 10% (the prior fixed rate was 8%) plus a 1% annual oversight fee (that remained unchanged). Interest and the oversight fee were still due quarterly.

 

Under the terms of the February 2021 Extension, if the Company didn’t pay off the principal on or before February 15, 2022, Cherokee could charge an 8% delinquent fee on the principal balance ($1,000,000) on February 15, 2022. The Company was not able to pay off the facility on February 15, 2022; however, on June 14, 2022 Cherokee agreed that they would defer the principal amounts due under the Cherokee LSA until February 15, 2023 and that any applicable penalties would also be deferred as long as the Company remained current on the quarterly interest payments.

 

On February 28, 2023, with proceeds from the Asset Sale to Healgen, the Company paid all amounts due to Cherokee under the LSA for principal and interest.

 

The Company recognized $13,000 in interest expense related to the Cherokee LSA in the First Quarter 2023 and $25,000 in interest expense related to the Cherokee LSA in the First Quarter 2022

 

As of March 31, 2023 and December 31, 2022, the balance of the Cherokee LSA was $0 and $1,000,000, respectively.

 

 
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2019 TERM LOAN WITH CHEROKEE

 

In February 2019, the Company entered into an agreement with Cherokee under which Cherokee provided the Company with a loan in the amount of $200,000 (the “2019 Cherokee Term Loan”). The annual interest rate under the 2019 Cherokee Term Loan was 18% (fixed) paid quarterly in arrears.

 

In February 2020, the 2019 Cherokee Term Loan was extended for one year, or until February 15, 2021. No terms of the facility were changed under the February 2020 extension. The Company incurred a penalty in the amount of $20,000 which was added to the principal balance of the 2019 Cherokee Term Loan; bringing the principal to $220,000.

 

In February 2021, the 2019 Cherokee Term Loan was further extended to February 15, 2022. Under the terms of this additional extension, the 2019 Cherokee Term Loan was increased to $240,000 to include a $20,000 penalty that was due as a result of the Company being unable to pay back the principal balance to Cherokee on February 15, 2021. In addition, if the Company didn’t pay off the principal on or before February 15, 2022, Cherokee could charge an 8% delinquent fee on the principal balance ($240,000) on February 15, 2022. The Company was not able to pay off the facility on February 15, 2022; however, on June 14, 2022 Cherokee agreed that they would defer the principal amounts due under the 2019 Cherokee Term Loan until February 15, 2023 and that any applicable penalties would also be deferred as long as the Company remained current on the quarterly interest payments.

 

The Company recognized $4,000 in interest expense in the First Quarter 2023 and $11,000 in interest expense in the First Quarter 2022. The Company paid all principal and interest due to Cherokee on February 28, 2023 with proceeds from the Asset Sale to Healgen. The balance of the 2019 Cherokee Term Loan was $0 at March 31, 2023 and $240,000 at December 31, 2022.

 

NOVEMBER 2020 TERM LOAN

 

On November 4, 2020, the Company entered into a loan agreement with an individual shareholder in the principal amount of $50,000. There were no expenses related to the term loan and the interest rate is 7%. The first interest only payment was made on February 4, 2021 and the final interest payment and principal was due on May 4, 2021. On May 4, 2021, the Company extended this loan for another 6 months, or until November 4, 2021. The interest rate and all other terms of the note remained unchanged under this extension.

 

On November 4, 2021, the November 2020 Term Loan was extended again. Under this extension, the principal was due on November 4, 2022. The last interest payment made to the shareholder was in November 2021 and was for the period of August 5, 2021 through November 4, 2021. The shareholder agreed to defer the quarterly interest payments due on the extended facility. The facility was further extended on November 4, 2022, under the same terms and conditions, for another 6 months, or until May 4, 2023.

 

The Company recognized less than $1,000 in interest expense related to the November 2020 Term Loan in the First Quarter 2023 and $1,000 in interest expense in the First Quarter 2022. The balance on the November 2020 Term Loan was $50,000 at March 31, 2023 and December 31, 2022. (See Note M – Subsequent Events for more information on the November 2020 Term Loan)

 

DECEMBER 2021 SHAREHOLDER LOANS

 

On December 14, 2021, the Company entered into Loan Agreements with two non-affiliated shareholders resulting in gross (and net) proceeds of $75,000 as there were no costs associated with the loans. Interest on the loans was 7% per annum until principal and interest were due in full, or until June 15, 2022. The first interest payments were due March 15, 2022 and payment of final interest and principal was due June 15, 2022.

 

One of the loans (in the amount of $25,000) was paid in full on June 13, 2022 along with the final interest payment due.

 

On April 6, 2022, the Company amended the loan with the other non-affiliated shareholder. This amendment (No.1; hereinafter referred to in this paragraph as “Amendment No. 1”) increased the principal due to the shareholder by $25,000; bringing their total principal to $75,000. No other terms of the loan were changed under Amendment No. 1.

 

 
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On April 14, 2022, the loan was amended again (under Amendment No. 2; hereinafter referred to in this paragraph as “Amendment No. 2”) increasing the principal again by $50,000; bringing their total principal to $125,000. No other terms of the loan were changed under Amendment No. 2.

 

On May 11, 2022, the loan was amended again (under Amendment No. 3; hereinafter referred to in this paragraph as “Amendment No. 3”) increasing the principal again by $75,000; bringing their total principal to $200,000. The loan was further amended to include a specific payment schedule based on receipt of anticipated ERC refunds.

 

On June 13, 2022, the Company made a principal reduction payment to this shareholder in the amount of $25,000 from proceeds from the ERC refund received on June 2, 2022; bringing the principal amount owed on the loan to $175,000.

 

On July 13, 2022, the loan was amended again (under Amendment No. 4; hereinafter referred to in this paragraph as “Amendment No. 4”) increasing the principal by $25,000; bringing their total principal to $200,000 again. The loan agreement was also amended to revise the maturity date from June 15, 2022 to no specific maturity date.

 

On September 13, 2022, the loan was amended again (under Amendment No. 5; hereinafter referred to in this paragraph as “Amendment No. 5”) increasing the principal by $25,000; bringing their total principal to $225,000 again.

 

On September 28, 2022, the shareholder provided the Company with additional funds, $40,000, under this loan with the understanding that the amount would be paid back once the Healgen Loan funds were received and there would be no interest charged on this additional amount. This increased the amount due to the shareholder under the facility to $265,000. The Company did pay this additional amount in full on October 4, 2022; bringing the balance of the loan back to $225,000.

 

The Company incurred $4,000 in interest expense related to these loans in the First Quarter 2023 and $1,000 in interest expense related to these loans in the First Quarter 2022.

 

The balance on these loans was $125,000 on March 31, 2023 and $225,000 at December 31, 2022. (See Note M – Subsequent Events for more information on the December 2021 Shareholder Loans)

 

SEPTEMBER 2022 HEALGEN LOAN & PROMISSORY NOTE

 

On September 28, 2022, the Company entered into a Loan and Promissory with Healgen Scientific Limited Liability Company (the “Healgen Loan”) at a fixed rate of 1% per month, (compounded monthly) and received initial gross/net proceeds of $40,000 and subsequent gross/net proceeds of $360,000; for a total of $400,000. The Company utilized $34,000 of the loan proceeds to pay off the Crestmark Line of Credit and the balance was used for working capital. The Healgen Loan was collateralized by a first security interest in the Company’s receivables, inventory, and all other assets with the exception of those assets already encumbered. The first payment under the Healgen Loan was due on January 28, 2023 and was in the amount of $140,000.

 

The Healgen Loan was amended on November 15, 2022 to increase the principal due under the loan to $700,000. Under this first amendment, the loan maturity date was extended to April 15, 2023 and the first payment date was extended to February 15, 2023 and changed to $246,000.

 

The Healgen loan was amended again on December 19, 2022 to increase the principal due under the loan to $715,000. Under this second amendment, the amount of the first payment was changed to $251,000 with payments of the same amount due on March 15, 2023 and April 15, 2023.

 

The Healgen Loan was amended again on January 6, 2023 to increase the principal due under the loan to $815,000. Under this third amendment, the amount of the first payment (due February 15, 2023) was changed to $286,000 with payments of the same amount due on March 15, 2023 and April 15, 2023. No other terms of the Healgen Loan were changed.

 

The Healgen Loan was amended again on February 9, 2023 to increase the principal due under the loan to $965,000. Under this fourth amendment, the amount of the first payment (due February 15, 2023) was changed to $337,000 with payments of the same amount due on March 15, 2023 and April 15, 2023. No other terms of the Healgen Loan were changed.

 

 
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On February 28, 2023, with proceeds from the Asset Sale to Healgen, the Company made a payment in the amount of $965,000 to Healgen for all principal due under the Healgen Loan. Healgen waived all interest due under the Healgen Loan.

 

The balance on the Healgen Loan was $0 at March 31, 2023 and $715,000 at December 31, 2022.

 

OTHER DEBT INFORMATION

 

In addition to the debt indicated previously, previous debt facilities (paid in full via refinance or conversion into equity) had financial impact on the First Quarter 2022. More specifically:

 

LINE OF CREDIT WITH CRESTMARK BANK (“CRESTMARK”)

 

On June 29, 2015, the Company entered into a Loan and Security Agreement (“LSA”) with Crestmark related to a revolving line of credit (the “Crestmark LOC”). The Crestmark LOC was used for working capital and general corporate purposes. Upon completion of the initial 5 year term, the Crestmark LOC automatically renewed for additional one (1) year terms unless notice of termination from the Company was received by Crestmark not less than sixty (60) days prior to the end of the renewal term. On September 29, 2022, the Company made a payment to Crestmark in the amount of $34,000 which paid off the balance on the Crestmark LOC.

 

The Company incurred $0 in interest expense in the First Quarter 2023 and $10,000 in interest expense in the First Quarter 2022.

 

NOTE H – Employee Retention Credit

 

The employee retention credit (“ERC”), as originally enacted on March 27, 2020 by the CARES Act, was a refundable tax credit against certain employment taxes equal to 50% of the qualified wages an eligible employer paid to employees and allowed claims through December 31, 2021 by eligible employers who retained employees during the Covid-19 pandemic. However, in November 2021, the ERC was terminated as of September 30, 2021 instead of December 31, 2021.

 

The maximum qualified wages for each employee under the ERC was $10,000 per quarter. Also, because the Company has 100 or fewer full-time employees, health plan expenses borne by the Company could also be included as qualified wages in addition to salary. In August 2021, the Company’s payroll service provider processed and mailed a Form 941-X to claim a refund in the amount of $202,000 on qualified wages paid in the first quarter of 2021. Due to a change in the Form 941-X, the Company’s payroll service provider did not process and mail its Form 941-X to claim a refund in the amount of $198,000 on qualified wages paid in the second quarter of 2021 until October 28, 2021.

 

The Company was informed that the IRS did not have record of receiving the Company’s Form 941-X for the first quarter of 2021 (which was mailed by the Company’s service provider in August 2021). The Company re-sent the Form 941-X for the first quarter of 2021 via overnight service on December 31, 2021 and the IRS received it on January 5, 2022. This lack of receipt resulted in a delay in receiving the expected refund in the amount of $202,000.

 

On June 2, 2022, the Company received a refund for the second quarter of 2021 in the amount of $199,000. This amount represents the $198,000 claimed as a refund and $1,000 in interest. The Company has had a number of discussions with the IRS and has been given a number of time frames in which the refund for the first quarter of 2021 could be expected. As of March 31, 2023, the Company had not yet received the refund. (See Note M – Subsequent Events for updated information on the ERC refund)

 

Note I – Asset Sale to Healgen

 

Over the last several years, the Company has retained financial consultants to seek out alternative solutions; most recently in early Fiscal 2022. The consultants were seeking solutions including but not limited to potential mergers, acquisitions, investment in the Company, and strategic relationships. Simultaneously, the Company’s management was seeking alternative solutions and began discussions with Healgen. With the current financial condition of the Company, the Company was not able to find a suitable alternative apart from the Asset Sale to Healgen.

 

After carefully weighing the facts and circumstances associated with the Asset Sale to Healgen as well as alternative courses of action, the Company’s Board of Directors (the “Board”) unanimously concluded that the proposed sale of substantially all of the Company’s assets was the best available alternative to maximize value for shareholders.

 

 
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The Board believes the Company’s status as a fully reporting public company is an asset which may be sufficiently attractive to induce others to enter into business combinations with the Company. The Company is exploring strategic transactions which may result in entering into a new line of business (subject to specific competitive limitations under the Asset Sale to Healgen). The Company believes strategic acquisitions using the Company’s publicly traded stock as transaction consideration could enhance shareholder value. Nonetheless, the Board may later determine to dissolve the Company and distribute any remaining assets to the Company’s shareholders if the Company is unable to make any strategic acquisitions or enter into any strategic transactions.

 

On December 19, 2022, the Company entered into an Asset Purchase Agreement (“APA”) with Healgen, pursuant to which the Company agreed, subject to the approval of its shareholders, to sell substantially all of the Company’s operating assets (excluding its cash, accounts receivables arising prior to the closing date, and certain other assets). The Company submitted the Asset Sale to Healgen to a shareholder vote via a preliminary Proxy Statement filed on December 22, 2022. On January 5, 2023, the Company filed an amendment to its Preliminary Proxy Statement and on January 11, 2023, the Company filed its Definitive Proxy Statement with the SEC.

 

On February 15, 2023, the Company held the 2023 Special Meeting of Shareholders (the “Special Meeting”) at the Company’s corporate offices in Kinderhook, New York, at which a quorum (27,863,899 shares of common stock of the 47,098,476 shares of common stock outstanding) was present in person or represented by proxy.

 

Approval of the Asset Sale to Healgen required the affirmative vote of the holders of a majority of the outstanding shares of the Company’s common stock (par value $0.01). 26,381,832, or 54.84% of the total outstanding shares of the Company, voted in favor of the Asset Sale to Healgen. 1,476,077, or 3.06% of the total outstanding shares, voted against the Asset Sale to Healgen. 5,990, or 0.01% of the total shares outstanding, withheld voting on the Asset Sale to Healgen. Given the majority of total outstanding shares voted in favor of the Asset Sale to Healgen, the Asset Sale to Healgen was approved.

 

On February 28, 2023, the Company completed the Asset Sale to Healgen and disposition of substantially all of the Company’s assets. In connection with the closing of the Asset Sale to Healgen, and in accordance with the terms of the Asset Purchase Agreement, Healgen paid an aggregate purchase price of $3 million (“Purchase Price”). $300,000 of the Purchase Price is being held back in a retention fund to cover potential indemnification claims during the six months following the close. Net proceeds in the amount of $247,000 were received by the Company after satisfaction of 1) a loan with Healgen in the amount of $965,000, 2) the Cherokee LSA, (totaling $1,031,000 for principal and interest through February 27, 2023), 3) the 2019 Cherokee Term Loan (totaling $252,000 for principal and interest through February 27, 2023), 4) delinquent property related taxes in the amount of $193,000 and 5) $12,000 for current property related taxes.

 

NOTE J – Stock Options and Warrants

 

The Company has two non-statutory stock option plans, the Fiscal 2001 Non-statutory Stock Option Plan (the “2001 Plan”) and the 2013 Equity Compensation Plan (the “2013 Plan”). Both plans have been adopted by the Board of Directors and approved by shareholders. Both the 2001 Plan and the 2013 Plan have options available for future issuance. Any common shares issued as a result of the exercise of stock options would be new common shares issued from our authorized issued shares.

 

During the First Quarter 2023 and the First Quarter 2022, the Company issued 0 options to purchase shares of common stock.

 

Stock option activity for the First Quarter 2023 and the First Quarter 2022 is summarized as follows (the figures contained within the tables below have been rounded to the nearest thousand):

 

 
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First Quarter 2023

 

 

First Quarter 2022

 

 

 

Shares

 

 

Weighted

Average Exercise Price

 

 

Aggregate

Intrinsic Value as

 of

March 31, 2023

 

 

Shares

 

 

Weighted Average Exercise Price

 

 

Aggregate Intrinsic Value as of

March 31, 2022

 

Options outstanding at beginning of year

 

 

1,736,000

 

 

$0.12

 

 

 

 

 

 

1,937,000

 

 

$0.13

 

 

 

 

Granted

 

 

0

 

 

NA

 

 

 

 

 

 

0

 

 

NA

 

 

 

 

Exercised

 

 

0

 

 

NA

 

 

 

 

 

 

0

 

 

NA

 

 

 

 

Cancelled/expired

 

 

46,000

 

 

$0.26

 

 

 

 

 

 

0

 

 

NA

 

 

 

 

Options outstanding at end of quarter

 

 

1,690,000

 

 

$0.12

 

 

$0

 

 

 

1,937,000

 

 

$0.13

 

 

$0

 

Options exercisable at end of quarter

 

 

1,690,000

 

 

$0.12

 

 

 

 

 

 

 

1,937,000

 

 

$0.13

 

 

 

 

 

 

The Company recognized $0 in share based payment expense in the First Quarter 2023 and the First Quarter 2022. At March 31, 2023, there was $0 of unrecognized share based payment expense related to stock options.

 

NOTE K – Changes in Stockholders’ Deficit

 

LANDMARK CONSULTING AGREEMENT

 

On March 7, 2022, the Company entered into a Financial Advisory Agreement (the “Agreement”) with Landmark Pegasus, Inc. (‘Landmark”). The Agreement provided that Landmark would provide certain financial advisory services for a minimum period of 3 months (which period commenced on February 28, 2022), and as consideration for these services, the Company would pay Landmark (a) a retainer fee consisting of 500,000 restricted shares of common stock and a warrant to purchase 2.75 million shares of the Company’s common stock at a strike price equal to the average closing price of the Company’s common shares for the 30 days preceding the Agreement, or $0.035 per share, resulting in gross proceeds to the Company in the amount of $96,250. The warrant would vest upon the closing of a transaction involving Landmark or upon the invocation of a “Breakup Fee”.

 

In a subsequent amendment, the terms of the warrant were changed to reflect that the warrant would be issued immediately preceding the closing of a transaction involving Landmark or immediately upon the invocation of the Breakup Fee. In each case, the warrant would vest immediately (i.e. the warrant would be 100% immediately exercisable).

 

The Breakup Fee would be invoked upon the generation of a specific transaction to ABMC which meets certain criteria agreed upon by both the Company and Landmark; which transaction is then rejected by the Company. The Company would also pay to Landmark a “Success Fee” for the consummation of a transaction closing during the term of the Agreement and for 12 months thereafter, between the Company and any party first introduced to the Company by Landmark, or with any party the Company has specifically requested Landmark’s assistance with the transaction. Upon invocation of the Breakup Fee or payment of the Success Fee, the Company would also issue an additional 250,000 restricted shares of the Company’s common stock. In the event that the Company consummated a transaction involving the provision of services to any party introduced to the Company by Landmark or with any party the Company has specifically requested Landmark’s assistance with, the Company would pay Landmark 10% of any revenues received from the transaction, unless this percentage is modified by both the Company and Landmark in writing. There is no material relationship between the Company and Landmark, other than with respect to the Agreement.

 

Apart from the initial 500,000 restricted common shares, no additional stock was issued to Landmark and no further amounts were paid to Landmark.

 

Note L- Income Taxes

 

The Company follows ASC 740 “Income Taxes” (“ASC 740”) which prescribes the asset and liability method whereby deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities, and are measured using the enacted laws and tax rates that will be in effect when the differences are expected to reverse. The measurement of deferred tax assets is reduced, if necessary, by a valuation allowance for any tax benefits that are not expected to be realized. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that such tax rate changes are enacted. Under ASC 740, tax benefits are recorded only for tax positions that are more likely than not to be sustained upon examination by tax authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely to be realized upon ultimate settlement. Unrecognized tax benefits are tax benefits claimed in the Company’s tax returns that do not meet these recognition and measurement standards.

 

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted in response to the COVID-19 pandemic. The CARES Act, among other things, permits NOL carryovers and carrybacks to offset 100% of taxable income for taxable years beginning before 2021. With regards to the use of net losses incurred for 2018 and later, such net operating losses have no expiration, while taxable income can only be offset up to 80% of taxable income. Net operating losses incurred prior to 2018 may be fully utilized to offset taxable income.

 

 
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A reconciliation of the U.S. Federal statutory income tax rate to the effective income tax rate is as follows:

 

 

 

Quarter Ended

March 31, 2023

 

 

Quarter Ended

March 31, 2022

 

Tax expense at federal statutory rate

 

(21%)

 

 

(21%)

 

State tax expense, net of federal tax effect

 

 

0%

 

 

0%

Increase in valuation allowance

 

 

21%

 

 

21%

Effective income tax rate

 

(0%)

 

 

(0%)

 

 

Significant components of the Company’s deferred income tax assets are as follows:

 

 

 

March 31, 2023

 

 

December 31, 2022

 

 

 

 

 

 

 

13,

 

Inventory allowance

 

$0

 

 

$61,000

 

Allowance for doubtful accounts

 

 

1,000

 

 

 

1,000

 

Stock based compensation

 

 

138,000

 

 

 

149,000

 

Deferred wages payable

 

 

30,000

 

 

 

21,000

 

Depreciation – Property, Plant & Equipment

 

 

0

 

 

 

(19,000)

Research and development credits

 

 

26,000

 

 

 

24,000

 

Net operating loss carry-forward

 

 

2,482,000

 

 

 

2,972,000

 

Total gross deferred income tax assets

 

 

2,677,000

 

 

 

3,209,000

 

Less deferred income tax assets valuation allowance

 

 

(2,677,000)

 

 

(3,209,000)

Net deferred income tax assets

 

$0

 

 

 

0

 

 

The valuation allowance for net deferred income tax assets as of March 31, 2023 and December 31, 2022 was $2,677,000 and $3,209,000, respectively. The net change in the valuation allowance was $532,000 at March 31, 2023 and $91,000 at March 31, 2022. The Company believes that it is more likely than not that the net deferred tax assets will not be realized.

 

As of March 31, 2023, the prior three years remain open for examination by the federal or state regulatory agencies for purposes of an audit for tax purposes.

 

At March 31, 2023, the Company had Federal net operating loss carry-forwards for income tax purposes of approximately $11,427,000 and research and development credits of $26,000. The Company’s net operating loss carry-forwards began to expire in 2022 and continue to expire through 2038. Net operating losses incurred from 2018 to date have no expiration. In assessing the reliability of deferred income tax assets, management considers whether or not it is more likely than not that some portion or all deferred income tax assets will be realized. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the projected future taxable income and tax planning strategies in making this assessment.

 

The Company’s ability to utilize the operating loss carry-forwards and research and development credits may be subject to an annual limitation in future periods pursuant to Section 382 and Section 383 of the Internal Revenue Code of 1986, as amended, if future changes in ownership occur.

 

The Company recognizes potential interest and penalties related to income tax positions as a component of the provision for income taxes on operations. The Company does not anticipate that total unrecognized tax benefits will materially change in the next twelve months.

 

 
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Note M – Subsequent Events

 

ERC Refund

 

The Company has been expecting an ERC refund in the amount of $202,000. On April 17, 2023, the Company received payments in the amount of $156,000 and $2,000 from the IRS. There was not any communication with either of the payments. As of the date of this report, the Company is making efforts to speak with the IRS to determine the reason behind the lower refund being received and to determine if additional payments can be expected.

 

November 2020 Term Loan

 

Upon receipt of the payment from the IRS, the Company paid the principal balance due ($50,000) on this shareholder loan.

 

December 2021 Shareholder Loan

 

Upon receipt of the payment from the IRS, the Company made a payment in the amount of $25,000 on this shareholder loan. As of the date of this report, the balance on the December 2021 Shareholder Loan is $175,000.

 

Current Salary owed to Melissa Waterhouse

 

Upon receipt of the payment from the IRS, the Company made a payment in the amount of $32,000 to Melissa Waterhouse to pay current salary owed. As of the date of this report, the amount due to Melissa Waterhouse for deferred compensation is $92,000. Ms. Waterhouse is also owed $12,000 for consulting services from March 2023 through May 2023.

 

 
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

General

 

The following discussion and analysis provides information, which we believe is relevant to an assessment and understanding of our financial condition and results of operations. The discussion should be read in conjunction with the Interim Condensed Financial Statements contained herein and the notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q. Certain statements contained in this Quarterly Report on Form 10-Q, including, without limitation, statements containing the words “believes”, “anticipates”, “estimates”, “expects”, “intends”, “projects”, and words of similar import, are forward-looking as that term is defined by the Private Securities Litigation Reform Act of 1995 (“1995 Act”), and in releases issued by the United State Securities and Exchange Commission (the “Commission”). These statements are being made pursuant to the provisions of the 1995 Act and with the intention of obtaining the benefits of the “Safe Harbor” provisions of the 1995 Act. We caution that any forward-looking statements made herein are not guarantees of future performance and that actual results may differ materially from those in such forward-looking statements as a result of various factors, including, but not limited to, any risks detailed herein, in our “Risk Factors” section of our Form 10-K for the year ended December 31, 2022, in our most recent reports on Form 10-Q and Form 8-K and from time to time in our other filings with the Commission, and any amendments thereto. Any forward-looking statement speaks only as of the date on which such statement is made, and we are not undertaking any obligation to publicly update any forward-looking statements. Readers should not place undue reliance on these forward-looking statements.

 

Overview

 

Throughout the last several years, our products sales have been negatively impacted as customer pricing continues to decrease as a result of our markets being saturated with products made outside of the United States; primarily products made in China. This has resulted in a commoditization of the onsite drug testing market at a time when costs associated with labor, utilities, materials, insurance, etc. keep rising. In attempts to retain current customers and/or attract new customers that require lower pricing, we have been offering customers two drug test product lines that are manufactured in China.

 

Other efforts to offset declines in our manufactured product sales involved selling various diagnostic product lines, including but not limited to, various Covid-19 rapid tests. In addition to increased costs, materials used in the manufacture of our drug test products are the same materials used in the manufacture of lateral flow Covid-19 tests as well as lateral flow tests for Influenza and RSV, both of which surged in the latter part of Fiscal 2022. This increased need for the same materials has resulted in supply chain delays; some of which negatively impacted our customer relationships. One of those customers was our largest customer which severely negatively impacted our sales.

 

 
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Gross margin has continually declined over the last several years due to the increased costs of manufacturing in the United States and the fact that overhead costs associated with both of our facilities could not be decreased any further. As sales continued to decline, these costs cannot be adjusted downward, thereby creating greater manufacturing inefficiencies. Manufacturing inefficiencies continued to increase despite our efforts to mitigate them. Efforts were also made to control operational expenses to ensure they remained in line with sales, however, as a reporting public company; there is a certain level of expenses that much be maintained.

 

From August 2013 until June 2020 we maintained a salary deferral program for our sole executive officer, our Chief Executive Officer/Principal Financial Officer Melissa Waterhouse. The salary deferral program was initiated by Ms. Waterhouse voluntarily in both August 2013 and April 2022. In the First Quarter of 2022, we did make payments to Ms. Waterhouse totaling $10,000. We stopped making payments on Ms. Waterhouse’s deferred compensation in April 2022 when Ms. Waterhouse again voluntarily deferred her salary by 20%. This deferral remained in place through February 28, 2023.

 

As of March 31, 2023, we had deferred compensation owed to Ms. Waterhouse in the amount of $92,000 and $7,000 in payroll taxes that are due as payments are made to Ms. Waterhouse; for a total of $99,000 in deferred compensation owed to Ms. Waterhouse. In addition, as of March 31, 2023, we owed Ms. Waterhouse $32,000 in current salary that was not paid. (See Note M – Subsequent Events for updated information on the currently salary owed to Ms. Waterhouse)

 

Beginning in April 2022, another member of senior management participated in the salary deferral program. As of March 31, 2023, we had deferred compensation owed to this individual in the amount of $14,000 and $1,000 in payroll taxes that are due as payments are made to this individual; for a total of $15,000 in deferred compensation. This individual ceased participating in the salary deferral program on December 9, 2022 and received their full salary through February 28, 2023 (the closing date of the Asset Sale to Healgen).

 

Asset Sale to Healgen/Outlook

 

On February 28, 2023, we completed the Asset Sale to Healgen and disposition of substantially all of the Company’s assets. In connection with the closing of the Asset Sale to Healgen, and in accordance with the terms of the Asset Purchase Agreement, Healgen paid an aggregate purchase price of $3 million (“Purchase Price”). $300,000 of the Purchase Price is being held back in a retention fund to cover potential indemnification claims during the six months following the close. Net proceeds in the amount of $247,000 were received by the Company after satisfaction of 1) a loan with the Healgen in the amount of $965,000, 2) the Cherokee LSA, (totaling $1,031,000 for principal and interest through February 27, 2023), 3) the 2019 Cherokee Term Loan (totaling $252,000 for principal and interest through February 27, 2023), 4) delinquent property related taxes in the amount of $193,000 and 5) $12,000 for current property related taxes.

 

The Board believes our status as a fully reporting public company is an asset which may be sufficiently attractive to induce others to enter into business combinations. The Board is exploring strategic transactions which may result in entering into a new line of business (subject to specific competitive limitations under the Asset Sale to Healgen). The Board believes strategic acquisitions using the Company’s publicly traded stock as transaction consideration could enhance shareholder value. Nonetheless, the Board may later determine to dissolve the Company and distribute any remaining assets to the Company’s shareholders if the Company is unable to make any strategic acquisitions or enter into any strategic transactions.

 

Results of operations for the First Quarter 2023 compared to the First Quarter 2022

 

NET SALES:Net sales for the First Quarter 2023 decreased 53.3% when compared to net sales in the First Quarter 2022 primarily as a result in a decline in sales of drugs of abuse (“DOA”) test that we manufacture and the fact that our last product sale was recorded on February 28, 2023. The decline in DOA sales stems almost entirely from decreased sales to our largest customer who has historically been a significant portion of our revenues. This customer had two segments of their business for which we supplied products. They informed us in February 2022 that sales to one of those segments (which we supplied exclusively) would decrease as a result of their desire to have multiple vendors supplying the segment. They indicated this was to ensure uninterrupted supply as they had experienced periodic supply interruptions with us in 2021 (as a result of the supply chain issues we experienced in 2021 and continued to experience into 2022).

 

 
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GROSS PROFIT:Gross profit increased to 45.1% of net sales in the First Quarter 2023 from 8% of net sales in the First Quarter 2022. This increase in gross profit stems from the timing of the closing of the Asset Sale to Healgen and the fact that the bulk of the sales in the First Quarter 2023 were higher margin sales of the private labeled RSV product we supplied to an unaffiliated third party.

 

OPERATING EXPENSES: Operating expenses decreased in the First Quarter 2023 compared to the First Quarter 2022. Selling and Marketing and General and Administrative expenses decreased while Research and Development expenses increased. More specifically:

 

Research and development (“R&D”)

 

R&D expense increased 27.3%, when comparing the First Quarter 2023 with the First Quarter 2022. FDA compliance costs (the cost of facility registrations and their timing) were the primary cause of the increase. The increase was partially offset by decreased salary expense since payroll ceased on February 28, 2023; closing of the Asset Sale to Healgen.

 

Selling and marketing

 

Selling and marketing expense in the First Quarter 2023 decreased 52.4% when compared to the First Quarter 2022. Reductions in sales salary expense and benefits (due to the closing of the Asset Sale to Healgen on February 28, 2023) offset by increased costs associated with shipping were the primary reason for the decline in expenses.

 

General and administrative (“G&A”)

 

G&A expense decreased 19.3% in the First Quarter 2023 compared to the First Quarter 2022. G&A salary expense and benefits (related to purchasing, warehouse, quality assurance and administrative personnel) decreased as a result of the closing of the Asset Sale to Healgen on February 28, 2023. Consulting fees also decreased when comparing the two periods. These declines were partially offset by increased costs associated with the Asset Sale to Healgen (legal fees, taxes, and insurance). There was no expense related to share based payments in either the First Quarter 2023 or the First Quarter 2022.

 

Other income / (expense):

 

Other income in the First Quarter 2023 consisted of other income of $3,035,000 (which is the $3,000,000 purchase price paid for the Company’s assets and $35,000 in amounts reimbursed by Healgen in connection with the Asset Sale; pro-rated real estate taxes and payment of 50% of the payout related to employee vacation expense). This income was offset by a loss on the sale of assets ($921,000) and interest expense associated with our debt.

 

Other expense in the First Quarter 2022 consisted of interest expense associated with our credit facilities (our (now former) line of credit with Crestmark Bank, our loans with Cherokee Financial, LLC and our loans with two shareholders).

 

Liquidity and Capital Resources as of March 31, 2023

 

Until the closing of the Asset Sale to Healgen on February 28, 2023, our cash requirements depend on numerous factors, including but not limited to manufacturing costs (such as labor and overhead costs, raw materials, equipment, etc.), selling and marketing initiatives, product development activities, regulatory costs, legal costs, and effective management of inventory levels and production levels in response to sales history and forecasts (if available). Since the closing of the Asset Sale to Healgen, our cash requirements depend on the costs we will need to incur to maintain our status as a fully reporting public entity and the time it will take to either bring another business into the public shell or dissolve the Company and distribute any remaining assets to the shareholders; along with management of amounts due to vendors and receipt of additional customer receivables and receipt of the retention fund.

 

The following transactions materially impacted our liquidity and cash flow in the First Quarter 2023 and/or the First Quarter 2022 or are expected to have an impact on our cash flow in the year ending December 31, 2023:

 

Asset Sale to Healgen

 

 
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On December 19, 2022, we entered into an Asset Purchase Agreement (“APA”) with Healgen, pursuant to which the Company agreed, subject to the approval of its shareholders, to sell substantially all of our operating assets (excluding cash, accounts receivables arising prior to the closing date, and certain other assets). On February 15, 2023, we held the 2023 Special Meeting of Shareholders (the “Special Meeting”) at our corporate offices in Kinderhook, New York, at which a quorum (27,863,899 shares of common stock of the 47,098,476 shares of common stock outstanding) was present in person or represented by proxy. Approval of the Asset Sale to Healgen required the affirmative vote of the holders of a majority of the outstanding shares of the Company’s common stock (par value $0.01) and 26,381,832, or 54.84% of the total outstanding shares of the Company, voted in favor of the Asset Sale to Healgen.

 

On February 28, 2023, we completed the Asset Sale to Healgen and disposition of substantially all of our assets. In connection with the closing of the Asset Sale to Healgen, and in accordance with the terms of the Asset Purchase Agreement, Healgen paid an aggregate purchase price of $3 million (“Purchase Price”). $300,000 of the Purchase Price is being held back in a retention fund to cover potential indemnification claims during the six months following the close. Net proceeds in the amount of $247,000 were received after satisfaction of 1) a loan with Healgen in the amount of $965,000, 2) the Cherokee LSA, (totaling $1,031,000 for principal and interest through February 27, 2023), 3) the 2019 Cherokee Term Loan (totaling $252,000 for principal and interest through February 27, 2023), 4) delinquent property related taxes in the amount of $193,000 and 5) $12,000 for current property related taxes.

 

Healgen Loan Promissory Note

 

On September 28, 2022, we entered into a Loan Promissory Note with Healgen (the “Healgen Loan”) and received gross/net proceeds of $400,000. We utilized $34,000 of the loan proceeds to pay off the Crestmark Line of Credit. On November 15, 2022, we amended the Healgen Loan to address an additional $300,000 in principal received under the Healgen Loan; bringing the total principal due under the Healgen Loan to $700,000. The Healgen Loan was further amended on December 19, 2022 to address an additional $15,000 in principal received under the Healgen Loan; bringing the total principal due under the Healgen Loan to $715,000. (See Note E – Line of Credit and Debt)

 

The Healgen Loan was amended again on January 6, 2023 to increase the principal due under the loan to $815,000. Under this third amendment, the amount of the first payment (due February 15, 2023) was changed to $286,000 with payments of the same amount due on March 15, 2023 and April 15, 2023. No other terms of the Healgen Loan were changed.

 

The Healgen Loan was amended again on February 9, 2023 to increase the principal due under the loan to $965,000. Under this fourth amendment, the amount of the first payment (due February 15, 2023) was changed to $337,000 with payments of the same amount due on March 15, 2023 and April 15, 2023. No other terms of the Healgen Loan were changed.

 

On February 28, 2023, with proceeds from the Asset Sale to Healgen, we made a payment in the amount of $965,000 to Healgen for all principal due under the Healgen Loan. Healgen waived all interest due under the Healgen Loan.

 

ERC Refund

 

As discussed in Note F, as of March 31, 2023 we were still awaiting the refund for the first quarter of 2021; expected to be $202,000. (See Note M – Subsequent Events for updated information on the ERC refund)

 

Loans from CEO Melissa Waterhouse

 

Over the course of the First Quarter 2022, via expense reports, Ms. Waterhouse extended various amounts to the Company for expenses including, but not limited to, amounts for manufacturing materials, services, patent maintenance fees, office supplies, and equipment. Upon closing of the Asset Sale to Healgen, we made a payment to Ms. Waterhouse in the amount of $43,000 to pay all amounts due in connection with these loans.

 

In addition, at March 31, 2023, we owed Ms. Waterhouse $32,000 in current salary (which is 13 weeks of her non-deferred salary). (see Note M – Subsequent Events for updated information on the Waterhouse loans)

 

Going Concern

 

Our financial statements for the First Quarter 2023 were prepared assuming we will continue as a going concern, which assumes the satisfaction of liabilities in the normal course of business. Our current cash balances, together with amounts from accounts receivable, ERC refunds and the receipt of the retention fund associated with the Asset Sale to Healgen, may not be sufficient to fund operations through May 2024. At March 31, 2023, we have Stockholders’ Deficit of $(458,000).

 

 
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Debt

 

Our loan and security agreement and 2019 Term Note with Cherokee for $1,000,000 and $240,000, respectively, expired on February 15, 2022. On June 14, 2022, Cherokee agreed that they would defer the principal amounts due under the Cherokee LSA until February 15, 2023 and that any applicable penalties would also be deferred as long as we remained current on the quarterly interest payments. We used proceeds from the Asset Sale to Healgen to pay off the Cherokee facilities on February 28, 2023.

 

Throughout most of the year ended December 31, 2022, we had a line of credit with Crestmark Bank. On September 29, 2022, using proceeds from the Healgen Loan, we made a payment to Crestmark Bank in the amount of $34,000 which paid off the balance on the Crestmark LOC. The payoff of the Crestmark Line of Credit resulted in lower interest costs.

 

As of March 31, 2023, we had the following debt/credit facilities:

 

Facility

 

Debtor

 

Balance as of

March 31, 2023

 

 

Due Date

 

Term Loan

 

Individual

 

 

50,000

 

 

May 4, 2023(1)

 

Term Loan

 

Individual

 

 

125,000

 

 

NA(2)

 

Total Debt

 

 

 

$175,000

 

 

 

 

 

(1) See Note M – Subsequent Events for updated information on this loan balance.

 

(2) The loan agreement was amended on July 13, 2022; one of the revisions made was changing the maturity date from June 15, 2022 to no specific maturity date.

 

Working Capital Deficit

 

At March 31, 2023, we were operating at a working capital deficit of $458,000. This compares to a working capital deficit of $2,833,000 at December 31, 2022. The improvement in the working capital deficit is primarily due to the payment of debt with the proceeds from the Asset Sale to Healgen and the retention fund receivable in connection with the Asset Sale to Healgen. We historically satisfied working capital requirements through cash from operations, bank debt and equity financings.

 

Dividends

 

We have never paid any dividends on our common shares and anticipate that all future earnings, if any, will be retained for use in our business, and therefore, we do not anticipate paying any cash dividends.

 

Cash Flow, Outlook/Risk

 

In the First Quarter 2023, we had net income of $1,881,000 and net cash used in operating activities of $363,000. Our cash position increased to $68,000 at March 31, 2023 from $34,000 at December 31, 2022.

 

Over the last several years and through February 28, 2023 (the closing date of the Asset Sale to Healgen), we decreased cash requirements by implementing cost cutting initiatives. This included expense reductions in selling and marketing (which included reduced and deferred salaries of a number of employees) and no additional contributions in research and development to develop new products. Such reductions, although necessary to maintain operations, were not compatible with growing or even maintaining our business both in the short and the long term. Our cash position has deteriorated, and continued to deteriorate, due to gross losses, fixed labor and overhead costs and payments required under our debt facilities.

 

We believed the losses we reported over the last several years and most recently the significant loss reported for in the year ended December 31, 2022 would continue as (i) our primary business (onsite drugs of abuse tests) has become a commoditized market and we cannot compete with the low pricing offered by our competitors who manufacture outside of the U.S. and (ii) we have not been able to obtain new business to replace the significant loss of business from our largest customer.

 

 
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Over the last several years, we have been able to access loans from shareholders and raise funds via private equity financings. As time went on and the financial results continued to deteriorate, these options were no longer available. Ms. Waterhouse also extended loans to the Company and deferred her salary.

 

Given the above, on December 19, 2022, we agreed, subject to the approval of our shareholders, to sell substantially all of our operating assets to Healgen (excluding cash, accounts receivables and certain other assets). We closed on the Asset Sale to Healgen on February 28, 2023.

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

As a smaller reporting company, we are not required to provide the information required by this item.

 

Item 4. Controls and Procedures

 

(a) Evaluation of Disclosure Controls and Procedures

 

Our Chief Executive Officer (Principal Executive Officer)/Chief Financial Officer (Principal Financial Officer), together with other members of management, has reviewed and evaluated the effectiveness of our “disclosure controls and procedures” (as defined in the Securities Exchange Act of 1934 Rule 13a-15(e) and 15d-15(e)) as of the end of the period covered by this report. Based on this review and evaluation, our Principal Executive Officer/Principal Financial Officer concluded that our disclosure controls and procedures are effective to ensure that material information relating to the Company is recorded, processed, summarized, and reported in a timely manner.

 

(b) Changes in Internal Control Over Financial Reporting

 

There have been no changes in our internal control over financial reporting during the last quarterly period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

 
23

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PART II – OTHER INFORMATION

 

Item 1. Legal Proceedings

 

See Part I, Item 1, Note D in the Notes to interim condensed Financial Statements included in this report for a description of pending legal proceedings in which we may be a party.

 

Item 1A. Risk Factors

 

There have been no material changes to our risk factors set forth in Part I, Item 1A, in our Annual Report on Form 10-K for the year ended December 31, 2022.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

None that have not been previously disclosed in a Current Report on Form 8-K.

 

Item 3. Defaults Upon Senior Securities

 

None.

 

Item 4. Mine Safety Disclosures

 

Not applicable.

 

Item 5. Other Information

 

None.

 

 
24

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Item 6. Exhibits

 

31.1/31.2

 

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

 

 

 

32.1/32.2

 

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

 

 

 

101

 

The following materials from our Quarterly Report on Form 10-Q for the quarter ended March 31, 2023, formatted in XBRL (Extensible Business Reporting Language): (i) Condensed Balance Sheets, (ii) Condensed Statements of Income (iii) Statements of Change in Stockholders’ Equity, (iv) Condensed Statements of Cash Flows, and (v) Notes to Condensed Financial Statements.

 

 
25

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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/ Melissa A. Waterhouse

 

 

Melissa A. Waterhouse 
  

Chief Executive Officer (Principal Executive Officer)

Principal Financial Officer

Principal Accounting Officer

 

 

 

 

 

Dated: June 12, 2023   

 

 
26

 

EX-31.1 2 abmc_ex311.htm CERTIFICATION abmc_ex311.htm

EXHIBIT 31.1/EXHIBIT 31.2

 

CERTIFICATION

 

I, Melissa A. Waterhouse, certify that:

 

1.

I have reviewed this quarterly report on Form 10-Q of American Bio Medica Corporation;

 

 

2.

Based on my knowledge, this 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 registrant as of, and for, the periods presented in this report;

 

 

4.

I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant 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 registrant, 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.

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

 

 

 

c.

Evaluated the effectiveness of the registrant’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 registrant's internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

 

5.

I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant'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 registrant’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 registrant’s internal control over financial reporting.

 

/s/ Melissa A. Waterhouse

Melissa A. Waterhouse

Chief Executive Officer (Principal Executive Officer)

Principal Financial Officer

Principal Accounting Officer

 
 
Date: June 12, 2023  

 

EX-32.1 3 abmc_ex321.htm CERTIFICATION abmc_ex321.htm

EXHIBIT 32.1/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-Q for the period ending March 31, 2023 as filed with the Securities and Exchange Commission on June 12, 2023 (the “Report”), I, Melissa A. Waterhouse, Chief Executive Officer and Principal Financial 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/ Melissa A. Waterhouse

 

Melissa A. Waterhouse

Chief Executive Officer (Principal Executive Officer) Principal Financial Officer

Principal Accounting Officer

 

 

 

 

June 12, 2023  

 

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on Disposition of Other Assets] Provision for bad debt Consulting fee paid with restricted stock Changes in: Accounts receivable Inventory [Increase (Decrease) in Inventories] Prepaid expenses and other current assets [Increase (Decrease) in Prepaid Expense and Other Assets] Right of use asset Accounts payable [Increase (Decrease) in Accounts Payable] Accrued expenses and other current liabilities [Increase (Decrease) in Accrued Liabilities and Other Operating Liabilities] Right of use liability [Right-of-Use Asset Obtained in Exchange for Finance Lease Liability] Wages payable [Increase (Decrease) in Employee Related Liabilities] Net cash used in operating activities [Net Cash Provided by (Used in) Operating Activities] Cash Flows from investing activities Business Sale, net proceeds Net cash provided by investing activities [Net Cash Provided by (Used in) Investing Activities] Cash flows from financing activities: Payments on debt financing [Repayments of Debt] Proceeds from debt financing Proceeds from lines of credit Payments on lines of credit [Repayments of Lines of Credit] Net cash provided by / (used in) financing activities [Net Cash Provided by (Used in) Financing Activities] Net change in cash and cash equivalents [Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents, Period Increase (Decrease), Excluding Exchange Rate Effect] Cash and cash equivalents - beginning of period [Cash, Cash Equivalents, Restricted Cash, and Restricted Cash Equivalents] Cash and cash equivalents - end of period Supplemental disclosures of cash flow information Non-Cash transactions: Non-Cash transactions: Consulting fee paid with restricted stock Cash paid for interest Basis of Reporting Basis of Reporting Basis of Accounting [Text Block] Inventory Inventory Inventory Disclosure [Text Block] Property, Plant and Equipment Property, Plant and Equipment Property, Plant and Equipment Disclosure [Text Block] Accrued Expenses Accrued Expenses Accounts Payable, Accrued Liabilities, and Other Liabilities Disclosure, Current [Text Block] Net Income (Loss) Per Common Share Net Income / (Loss) Per Common Share LitigationLegal Matters Litigation/Legal Matters Debt Debt Debt Disclosure [Text Block] Employee Retention Credit Employee Retention Credit [Employee Retention Credit] Asset Sale to Healgen Asset Sale to Healgen [Asset Sale to Healgen] Stock Options and Warrants Stock Options and Warrants [Stock Options and Warrants] Changes in Stockholders Deficit Changes in Stockholders' Deficit Income Taxes Income Taxes Income Tax Disclosure [Text Block] Subsequent Events Subsequent Events Subsequent Events [Text Block] Recently Adopted Accounting Standards Accounting Standards Issued Not Yet Adopted Inventory Schedule of Inventory, Current [Table Text Block] Property, plant and equipment Accrued Expenses [Accrued Expenses] Net Income / (Loss) Per Common Share Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] Debt Schedule of Long-Term Debt Instruments [Table Text Block] Stock option/warrant activity Effective income tax rate reconciliation Deferred tax assets and liabilities Raw materials Work in process Finished goods Allowance for slow moving and obsolete inventory [Inventory Valuation Reserves] Inventory, net Land Buildings and improvements Manufacturing and warehouse equipment Office equipment (incl. furniture and fixtures) Property, plant and equipment, gross Less accumulated depreciation [Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment] Property, plant and equipment, net Accounting fees Other current liabilities Accrued expenses Interest payable Accounts receivable credit balances Sales tax payable Deferred compensation Financial Instrument Axis Equity Option [Member] Options Long-Term Debt, Type [Axis] Loan and Security Agreement with Cherokee Financial, LLC 2019 Term Loan with Cherokee Financial, LLC November 2020 Shareholder Note December 2021 Shareholder Notes September 2022 Healgen Loan & Promissory note Total debt, net Long-term debt, gross Current portion Debt Instrument Axis Crestmark Line of Credit 2019 Cherokee Loan and Security Agreement November 2020 Term Loan SEPTEMBER 2022 HEALGEN LOAN & PROMISSORY NOTE [Member] December 2021 Shareholder Loans Principal balance Delinquent fee charged Loan amount Interest expense [Interest Expense, Debt] Penalty Annual interest rate on loan Penalty [Penalty] Annual oversight fee percentage Fixed rate Principal amount Initial term Annual principal reduction payments Increased agreement extension amount Payment for line of credit Term Loan Loan interest rate Extended loan maturity Debt payments Additional funds Loan agreement amount Increase in principal loan Description of amendment Principal reduction payment Promissory Note Total amount Payment for line of credit [Payment for line of credit] Net proceeds Balance of Healgen loan Payment to healgen against due amount Refund of wages Claimed as a refund amount Refund as interest amount Refund Total Related Party Transaction [Axis] Cherokee LSA [Member] Cherokee Term Loan [Member] Principal amount for interest Purchase price retention fund to cover potential indemnification claims Shares of common stock issued Shares of common stock outstanding Common stock par value Shares of common stock sales description Total consideration for sale of assets Net proceed Net proceed from loans Property related taxes Current property related taxes Shares, beginning balance [Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Number] Granted Share exercised Cancelled Shares, ending balance Option Exercisable qat end of quarter [Option Exercisable qat end of quarter] Options outstanding at end of quarter Aggregate Intrinsic [Options outstanding at end of quarter Aggregate Intrinsic] Weighted average exercise price, beginning balance [Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Weighted Average Exercise Price] Weighted average exercise price, cancelled/expired Weighted average exercise price, ending balance Weighted average exercise price, exercisable [Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Exercisable, Weighted Average Exercise Price] Share based payment Unrecognized share based payment expense related to stock options Plan Name Axis LANDMARK CONSULTING AGREEMENT [Member] Restricted shares Warrant to purchase Gross proceeds common shares Additional restricted shares Initial restricted common stock shares Tax expense at federal statutory rate [Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent] State tax expense, net of federal tax effect Increase in valuation allowance Effective income tax rate Inventory allowance Allowance for doubtful accounts Stock based compensation Deferred wages payable Depreciation - property, plant and equipment [Deferred Tax Liabilities, Property, Plant and Equipment] Research and development credits Net operating loss carry-forward Total gross deferred income tax assets Less deferred income tax assets valuation allowance [Deferred Tax Assets, Valuation Allowance] Net deferred income tax assets Net deferred income tax assets valuation allowance Valuation allowance, deferred tax asset, change in amount Research and development [Other Research and Development Expense] Operating loss carryforwards Expire date Carry overs Operating losses Carry overs Operating losses taxabale income percentage Subsequent Event Type Axis Related Party [Axis] Subsequent Event [Member] ERC Refund [Member] December 2021 Shareholder Loan [Member] Melissa Waterhouse [Member] November 2020 Term Loan [Member] Principal loan amount Balance due on Short term loan to shareholders Consulting services, amount ERC refund amount Payment received from IRS Payment received Deferred compensation [Increase (Decrease) in Deferred Compensation] Tabular disclosure of accrued expenses and other current liabilities. EX-101.CAL 6 abmc-20230331_cal.xml XBRL TAXONOMY EXTENSION CALCULATION LINKBASE EX-101.PRE 7 abmc-20230331_pre.xml XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE EX-101.DEF 8 abmc-20230331_def.xml XBRL TAXONOMY EXTENSION DEFINITION LINKBASE XML 9 R1.htm IDEA: XBRL DOCUMENT v3.23.1
Cover - shares
3 Months Ended
Mar. 31, 2023
Jun. 12, 2023
Cover [Abstract]    
Entity Registrant Name AMERICAN BIO MEDICA CORPORATION  
Entity Central Index Key 0000896747  
Document Type 10-Q  
Amendment Flag false  
Current Fiscal Year End Date --12-31  
Entity Small Business true  
Entity Shell Company false  
Entity Emerging Growth Company false  
Entity Current Reporting Status Yes  
Document Period End Date Mar. 31, 2023  
Entity Filer Category Non-accelerated Filer  
Document Fiscal Period Focus Q1  
Document Fiscal Year Focus 2023  
Entity Common Stock Shares Outstanding   48,098,476
Document Quarterly Report true  
Document Transition Report false  
Entity File Number 0-28666  
Entity Incorporation State Country Code NY  
Entity Tax Identification Number 14-1702188  
Entity Interactive Data Current Yes  
Entity Address Address Line 1 122 Smith Road  
Entity Address City Or Town Kinderhook  
Entity Address State Or Province NY  
Entity Address Postal Zip Code 12106  
Security 12b Title Common Stock  
Trading Symbol ABMC  
City Area Code 518  
Local Phone Number 758-8158  
XML 10 R2.htm IDEA: XBRL DOCUMENT v3.23.1
Condensed Balance Sheets - USD ($)
Mar. 31, 2023
Dec. 31, 2022
Current assets    
Cash and cash equivalents $ 68,000 $ 34,000
Accounts receivable, net of allowance for doubtful accounts of $2,000 at March 31, 2023 and at December 31, 2022 89,000 82,000
Inventory, net of allowance of $0 at March 31, 2023 and $235,000 at December 31, 2022 0 379,000
Employee retention credit receivable 202,000 202,000
Retention fund receivable-asset sale 300,000  
Prepaid expenses and other current assets 0 72,000
Total current assets 659,000 769,000
Property, plant and equipment, net 0 466,000
Right of use asset - operating leases 0 13,000
Other assets 0 21,000
Total assets 659,000 1,269,000
Current liabilities    
Accounts payable 572,000 760,000
Accrued expenses and other current liabilities 338,000 514,000
Right of use liability - operating leases 0 4,000
Wages payable 32,000 94,000
Current portion of long-term debt 175,000 2,230,000
Total current liabilities 1,117,000 3,602,000
Right of use liability - operating leases 0 6,000
Total liabilities 1,117,000 3,608,000
Stockholders' deficit:    
Preferred stock; par value $.01 per share; 5,000,000 shares authorized, none issued and outstanding at March 31, 2023 and December 31, 2022 0 0
Common stock; par value $.01 per share; 75,000,000 shares authorized; 48,098,476 issued and outstanding at March 31, 2023 and at December 31, 2022 481,000 481,000
Additional paid-in capital 22,403,000 22,403,000
Deficit (23,342,000) (25,223,000)
Total stockholders' (deficit) (458,000) (2,339,000)
Total liabilities and stockholders' (deficit) $ 659,000 $ 1,269,000
XML 11 R3.htm IDEA: XBRL DOCUMENT v3.23.1
Condensed Balance Sheets (Parenthetical) - USD ($)
Mar. 31, 2023
Dec. 31, 2022
Condensed Balance Sheets    
Allowance for doubtful accounts receivable, current $ 2,000 $ 2,000
Inventory, net of allowance $ 0 $ 235,000
Preferred stock, par value $ 0.01 $ 0.01
Preferred stock, shares authorized 5,000,000 5,000,000
Preferred stock, shares issued 0 0
Preferred stock, shares outstanding 0 0
Common stock, par value $ 0.01 $ 0.01
Common stock, shares authorized 75,000,000 75,000,000
Common stock, shares issued 48,098,476 48,098,476
Common stock, shares outstanding 48,098,476 48,098,476
XML 12 R4.htm IDEA: XBRL DOCUMENT v3.23.1
Condensed Statements of Operations (Unaudited) - USD ($)
3 Months Ended
Mar. 31, 2023
Mar. 31, 2022
Condensed Statements of Operations (Unaudited)    
Net sales $ 164,000 $ 351,000
Cost of goods sold 90,000 323,000
Gross profit 74,000 28,000
Operating expenses:    
Research and development 28,000 22,000
Selling and marketing 20,000 42,000
General and administrative 238,000 295,000
Operating expenses 286,000 359,000
Operating loss (212,000) (331,000)
Other income/ (expense):    
Loss on asset valuation (921,000) 0
Other income - asset sale 3,035,000 0
Interest expense (21,000) (48,000)
Other non operating expenses 2,093,000 (48,000)
Net income / (loss) before tax 1,881,000 (379,000)
Income tax expense 0 0
Net income / (loss) $ 1,881,000 $ (379,000)
Basic and diluted income / (loss) per common share $ 0.04 $ (0.01)
Weighted average number of shares outstanding - basic & diluted 48,098,476 47,770,698
XML 13 R5.htm IDEA: XBRL DOCUMENT v3.23.1
Statements of Changes in Stockholders Deficit (Unaudited) - USD ($)
Total
Common Stock
Additional Paid-In Capital
Retained Earnings (Accumulated Deficit)
Balance, shares at Dec. 31, 2021   47,598,476    
Balance, amount at Dec. 31, 2021 $ (944,000) $ 476,000 $ 22,393,000 $ (22,813,000)
Shares issued in connection with Landmark consulting agreement, shares   500,000    
Shares issued in connection with Landmark consulting agreement, amount 15,000 $ 5,000 10,000  
Net loss (379,000)     (379,000)
Balance, shares at Mar. 31, 2022   48,098,476    
Balance, amount at Mar. 31, 2022 (1,308,000) $ 481,000 22,403,000 (24,192,000)
Balance, shares at Dec. 31, 2022   48,098,476    
Balance, amount at Dec. 31, 2022 (2,339,000) $ 481,000 22,403,000 (25,223,000)
Net loss 1,881,000     1,881,000
Balance, shares at Mar. 31, 2023   48,098,476    
Balance, amount at Mar. 31, 2023 $ (458,000) $ 481,000 $ 22,403,000 $ (23,342,000)
XML 14 R6.htm IDEA: XBRL DOCUMENT v3.23.1
Condensed Statements of Cash Flows (Unaudited) - USD ($)
3 Months Ended
Mar. 31, 2023
Mar. 31, 2022
Cash flows from operating activities:    
Net income / (loss) $ 1,881,000 $ (379,000)
Adjustments to reconcile net income / (loss) to net cash used in operating activities:    
Depreciation and amortization 8,000 13,000
Asset Sale to Healgen (2,114,000) 0
Provision for bad debt 0 (1,000)
Consulting fee paid with restricted stock 0 15,000
Changes in:    
Accounts receivable (7,000) 186,000
Inventory 0 24,000
Prepaid expenses and other current assets 83,000 (11,000)
Right of use asset 0 9,000
Accounts payable 24,000 161,000
Accrued expenses and other current liabilities (176,000) (17,000)
Right of use liability 0 (9,000)
Wages payable (62,000) (4,000)
Net cash used in operating activities (363,000) (13,000)
Cash Flows from investing activities    
Business Sale, net proceeds 247,000 0
Net cash provided by investing activities 247,000 0
Cash flows from financing activities:    
Payments on debt financing (100,000) 0
Proceeds from debt financing 250,000 0
Proceeds from lines of credit 0 462,000
Payments on lines of credit 0 (547,000)
Net cash provided by / (used in) financing activities 150,000 (85,000)
Net change in cash and cash equivalents 34,000 (98,000)
Cash and cash equivalents - beginning of period 34,000 115,000
Cash and cash equivalents - end of period 68,000 17,000
Non-Cash transactions:    
Non-Cash transactions: Consulting fee paid with restricted stock 0 15,000
Cash paid for interest $ 41,000 $ 46,000
XML 15 R7.htm IDEA: XBRL DOCUMENT v3.23.1
Basis of Reporting
3 Months Ended
Mar. 31, 2023
Basis of Reporting  
Basis of Reporting

Note A - Basis of Reporting

 

The accompanying unaudited interim condensed financial statements of American Bio Medica Corporation (the “Company”) have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Regulation S-X. Accordingly, these unaudited interim condensed financial statements do not include all information and footnotes required by U.S. GAAP for complete financial statement presentation. These unaudited interim condensed financial statements should be read in conjunction with audited financial statements and related notes contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. In the opinion of management, the interim condensed financial statements include all normal, recurring adjustments which are considered necessary for a fair presentation of the financial position of the Company at March 31, 2023, and the results of operations and cash flows for the three month periods ended March 31, 2023 (the “First Quarter 2023”) and March 31, 2022 (the “First Quarter 2022”).

 

Operating results for the First Quarter 2023 are not indicative of results that will be reported for the year ending December 31, 2023 as the Company sold substantially all of its assets on February 28, 2023 to Healgen Scientific, LLC (“Healgen”). Amounts at December 31, 2022 are derived from audited financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

 

During the First Quarter 2023, there were no significant changes to the Company’s critical accounting policies, which are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

 

The preparation of these interim condensed financial statements requires the Company to make estimates and judgments that affect the reported amounts of liabilities, expenses, and related disclosure of contingent liabilities. On an on-going basis, the Company evaluates estimates, including those related to bad debts, income taxes, warranty obligations, contingencies and litigation. The Company bases estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

 

These unaudited interim condensed financial statements have been prepared assuming that the Company will continue as a going concern and, accordingly, do not include any adjustments that might result from the outcome of this uncertainty. The independent registered public accounting firm’s report on the financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, contained an explanatory paragraph regarding the Company’s ability to continue as a going concern. As of the date of this report, the Company’s current cash balances and amounts expected from its receivables (including the Employee retention Credit receivable and the retention (escrow) proceeds from the asset sale) may not be sufficient to fund the Company through May 2024.

 

The Company’s credit facilities with Cherokee Financial, LLC (“Cherokee”) were paid in full with proceeds from the asset sale on February 28, 2023.

 

Recently Adopted Accounting Standards

 

ASU 2022-04, Liabilities – Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations, issued in September 2022, requires entities that use supplier finance programs in connection with the purchase of goods and services to disclose the key terms of the programs and information about obligations outstanding at the end of the reporting period, including a rollforward of those obligations. The guidance does not affect the recognition, measurement or financial statement presentation of supplier finance program obligations. ASU 2022-04 became effective on January 1, 2023. The Company adopted ASU 2022-04 on January 1, 2023 and the adoption did not have an impact on the Company’s financial condition or results of operations as the Company does not (and has not historically) utilized supplier finance programs in connection with the purchase of goods and services.

ASU 2016-13, Financial Instruments—Credit Losses (Topic 326); Measurement of Credit Losses on Financial Instruments, issued in June 2016, requires companies to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. The Company adopted ASU 2016-13 on January 1, 2023 and the adoption did not have a material impact on the Company’s financial condition or results of operations.

 

Accounting Standards Issued; Not Yet Adopted

 

ASU 2022-03, Fair Value Measurement (Topic 820), Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions, issued in June 2022, clarifies that a contractual restriction on the sale of an equity security is not considered in measuring the security's fair value. The standard also requires certain disclosures for equity securities that are subject to contractual restrictions. ASU 2022-03 becomes effective on January 1, 2024. Early adoption is permitted. The Company is evaluating the impact of ASU 2022-03.

 

Any other new accounting pronouncements recently issued, but not yet effective, have been reviewed and determined to be not applicable or were related to technical amendments or codification. As a result, the adoption of such new accounting pronouncements, when effective, is not expected to have a material effect on the Company’s financial position or results of operations.

XML 16 R8.htm IDEA: XBRL DOCUMENT v3.23.1
Inventory
3 Months Ended
Mar. 31, 2023
Inventory  
Inventory

Note B – Inventory

 

Inventory is comprised of the following:

 

 

 

March 31, 2023*

 

 

December 31, 2022

 

 

 

 

 

 

 

 

Raw Materials

 

$0

 

 

$444,000

 

Work In Process

 

 

0

 

 

 

110,000

 

Finished Goods

 

 

0

 

 

 

60,000

 

Allowance for slow moving and obsolete inventory

 

 

0

 

 

 

(235,000)

 

 

$0

 

 

$379,000

 

 

*On February 28, 2023, the Company sold substantially all of its assets to Healgen, including its inventory.

XML 17 R9.htm IDEA: XBRL DOCUMENT v3.23.1
Property, Plant and Equipment
3 Months Ended
Mar. 31, 2023
Property, Plant and Equipment  
Property, Plant and Equipment

Note C – Property, Plant and Equipment

 

Property, plant and equipment, is comprised of the following:

 

 

 

March 31, 2023*

 

 

December 31, 2022

 

 

 

 

 

 

 

 

Land

 

$0

 

 

$102,000

 

Buildings and improvements

 

 

0

 

 

 

1,352,000

 

Manufacturing and warehouse equipment

 

 

0

 

 

 

2,110,000

 

Office equipment (incl. furniture and fixtures)

 

 

0

 

 

 

412,000

 

 

 

 

0

 

 

 

3,976,000

 

Less accumulated depreciation

 

 

0

 

 

 

(3,510,000)

 

 

$0

 

 

$466,000

 

 

*On February 28, 2023, the Company sold substantially all of its assets to Healgen, including its property, plant and equipment.

XML 18 R10.htm IDEA: XBRL DOCUMENT v3.23.1
Accrued Expenses
3 Months Ended
Mar. 31, 2023
Accrued Expenses  
Accrued Expenses

Note D – Accrued Expenses

 

Accrued expenses and other current liabilities consisted of the following as of March 31, 2023 and December 31, 2022:

 

 

 

March 31, 2023

 

 

December 31, 2022

 

Accounting fees

 

$16,000

 

 

$87,000

 

Interest payable

 

 

20,000

 

 

 

39,000

 

Accounts receivable credit balances

 

 

0

 

 

 

1,000

 

Sales tax payable

 

 

188,000

 

 

 

188,000

 

Deferred compensation

 

 

114,000

 

 

 

109,000

 

Other current liabilities

 

 

0

 

 

 

90,000

 

 

 

$338,000

 

 

$514,000

 

XML 19 R11.htm IDEA: XBRL DOCUMENT v3.23.1
Net Income (Loss) Per Common Share
3 Months Ended
Mar. 31, 2023
Net Income (Loss) Per Common Share  
Net Income / (Loss) Per Common Share

Note E – Net Income / (Loss) Per Common Share

 

Basic net income / (loss) per common share is calculated by dividing the net income / (loss) by the weighted average number of outstanding common shares during the period. Diluted net income / (loss) per common share includes the weighted average dilutive effect of stock options and warrants. When the Company has a loss, option and warrants are not included as they would be anti-dilutive. In the three months ended March 31, 2023, although the Company had net income, there were no options in the money at March 31, 2023. Potential common shares outstanding as of March 31, 2023 and 2022:

 

 

 

March 31, 2023

 

 

March 31, 2022

 

Options

 

 

1,690,000

 

 

 

1,937,000

 

Total

 

 

1,690,000

 

 

 

1,937,000

 

XML 20 R12.htm IDEA: XBRL DOCUMENT v3.23.1
LitigationLegal Matters
3 Months Ended
Mar. 31, 2023
LitigationLegal Matters  
Litigation/Legal Matters

Note F – Litigation/Legal Matters

 

From time to time, the Company may be involved in immaterial legal proceedings in connection with matters that arise during the normal course of business. While the ultimate outcome of any such immaterial litigation cannot be predicted, if the Company is unsuccessful in defending any such litigation, the resulting financial losses are not expected to have a material adverse effect on the financial position, results of operations or cash flows of the Company.

XML 21 R13.htm IDEA: XBRL DOCUMENT v3.23.1
Debt
3 Months Ended
Mar. 31, 2023
Debt  
Debt

Note G – Debt

 

The Company’s Line of Credit and Debt consisted of the following as of March 31, 2023 and December 31, 2022:

 

 

 

March 31, 2023

 

 

December 31, 2022

 

Loan and Security Agreement with Cherokee Financial, LLC: Secured note executed on February 15, 2015, at a fixed annual interest rate of 8% plus a 1% annual oversight fee, interest and oversight fee paid quarterly with principal due on February 15, 2020. Loan was extended for one year (until February 15, 2021) under the same terms and conditions as the original loan. The loan was further extended in February 2021 to February 15, 2022 with $100,000 added to the loan principal as a penalty and the annual interest rate increased to 10%. Loan was further extended in June 2022 (until February 15, 2023). Loan was paid in full on February 28, 2023.

 

$0

 

 

$1,000,000

 

2019 Term Loan with Cherokee Financial, LLC: Note at an annual fixed interest rate of 18% paid quarterly in arrears and a balloon payment due on February 15, 2020. Loan was extended in February 2020, until February 15, 2021 with a penalty of $20,000 added to the loan principal and, extended again in February 2021 to February 15, 2022 with another penalty of $20,000 added to the loan principal. Loan was extended in June 2022 (until February 15, 2023). Loan was paid in full on February 28, 2023.

 

 

0

 

 

 

240,000

 

November 2020 Shareholder Note: Term loan at 7% interest with the first interest only payment being made on February 4, 2021 and the final interest and $50,000 principal due on November 4, 2023.

 

 

50,000

 

 

 

50,000

 

December 2021 Shareholder Notes: Term loan with one non-affiliated shareholder at 7% interest until the loan is paid in full. Loan was amended to address additional amounts provided under the loan.

 

 

125,000

 

 

 

225,000

 

September 2022 Healgen Loan & Promissory Note: Term Loan with Healgen at a fixed rate of 1% per month compounded monthly. Loan was collateralized by first security interest in receivables, inventory, and all other assets with the exception of assets already encumbered. The Healgen loan was paid in full on February 28, 2023 (the closing of the Asset Sale to Healgen) and all interest was waived by Healgen.

 

 

0

 

 

 

715,000

 

Total Debt

 

$175,000

 

 

$2,230,000

 

Current portion

 

$175,000

 

 

$2,230,000

 

LOAN AND SECURITY AGREEMENT (“LSA”) WITH CHEROKEE FINANCIAL, LLC (“CHEROKEE”)

 

On March 26, 2015, the Company entered into a LSA with Cherokee (the “Cherokee LSA”) in the amount of $1,200,000, which was collateralized by a first security interest in real estate and machinery and equipment. The Cherokee LSA reached maturity on February 15, 2020 with a balance of $900,000 (after 4 principal reduction payments of $75,000 each were made over the course of the initial term). In February 2020, the Cherokee LSA was extended for one year, or until February 15, 2021. No terms of the facility were changed under the February 2020 extension.

 

In February 2021, the Cherokee LSA was further extended for another year, or until February 15, 2022 (the “February 2021 Extension”). Under the February 2021 Extension, the principal of the Cherokee LSA was increased to $1,000,000 to include a $100,000 penalty that was due as a result of the Company being unable to pay back the principal balance to Cherokee on February 15, 2021. The annual interest rate on the Cherokee LSA was also increased to a fixed rate of 10% (the prior fixed rate was 8%) plus a 1% annual oversight fee (that remained unchanged). Interest and the oversight fee were still due quarterly.

 

Under the terms of the February 2021 Extension, if the Company didn’t pay off the principal on or before February 15, 2022, Cherokee could charge an 8% delinquent fee on the principal balance ($1,000,000) on February 15, 2022. The Company was not able to pay off the facility on February 15, 2022; however, on June 14, 2022 Cherokee agreed that they would defer the principal amounts due under the Cherokee LSA until February 15, 2023 and that any applicable penalties would also be deferred as long as the Company remained current on the quarterly interest payments.

 

On February 28, 2023, with proceeds from the Asset Sale to Healgen, the Company paid all amounts due to Cherokee under the LSA for principal and interest.

 

The Company recognized $13,000 in interest expense related to the Cherokee LSA in the First Quarter 2023 and $25,000 in interest expense related to the Cherokee LSA in the First Quarter 2022

 

As of March 31, 2023 and December 31, 2022, the balance of the Cherokee LSA was $0 and $1,000,000, respectively.

2019 TERM LOAN WITH CHEROKEE

 

In February 2019, the Company entered into an agreement with Cherokee under which Cherokee provided the Company with a loan in the amount of $200,000 (the “2019 Cherokee Term Loan”). The annual interest rate under the 2019 Cherokee Term Loan was 18% (fixed) paid quarterly in arrears.

 

In February 2020, the 2019 Cherokee Term Loan was extended for one year, or until February 15, 2021. No terms of the facility were changed under the February 2020 extension. The Company incurred a penalty in the amount of $20,000 which was added to the principal balance of the 2019 Cherokee Term Loan; bringing the principal to $220,000.

 

In February 2021, the 2019 Cherokee Term Loan was further extended to February 15, 2022. Under the terms of this additional extension, the 2019 Cherokee Term Loan was increased to $240,000 to include a $20,000 penalty that was due as a result of the Company being unable to pay back the principal balance to Cherokee on February 15, 2021. In addition, if the Company didn’t pay off the principal on or before February 15, 2022, Cherokee could charge an 8% delinquent fee on the principal balance ($240,000) on February 15, 2022. The Company was not able to pay off the facility on February 15, 2022; however, on June 14, 2022 Cherokee agreed that they would defer the principal amounts due under the 2019 Cherokee Term Loan until February 15, 2023 and that any applicable penalties would also be deferred as long as the Company remained current on the quarterly interest payments.

 

The Company recognized $4,000 in interest expense in the First Quarter 2023 and $11,000 in interest expense in the First Quarter 2022. The Company paid all principal and interest due to Cherokee on February 28, 2023 with proceeds from the Asset Sale to Healgen. The balance of the 2019 Cherokee Term Loan was $0 at March 31, 2023 and $240,000 at December 31, 2022.

NOVEMBER 2020 TERM LOAN

 

On November 4, 2020, the Company entered into a loan agreement with an individual shareholder in the principal amount of $50,000. There were no expenses related to the term loan and the interest rate is 7%. The first interest only payment was made on February 4, 2021 and the final interest payment and principal was due on May 4, 2021. On May 4, 2021, the Company extended this loan for another 6 months, or until November 4, 2021. The interest rate and all other terms of the note remained unchanged under this extension.

 

On November 4, 2021, the November 2020 Term Loan was extended again. Under this extension, the principal was due on November 4, 2022. The last interest payment made to the shareholder was in November 2021 and was for the period of August 5, 2021 through November 4, 2021. The shareholder agreed to defer the quarterly interest payments due on the extended facility. The facility was further extended on November 4, 2022, under the same terms and conditions, for another 6 months, or until May 4, 2023.

 

The Company recognized less than $1,000 in interest expense related to the November 2020 Term Loan in the First Quarter 2023 and $1,000 in interest expense in the First Quarter 2022. The balance on the November 2020 Term Loan was $50,000 at March 31, 2023 and December 31, 2022. (See Note M – Subsequent Events for more information on the November 2020 Term Loan)

DECEMBER 2021 SHAREHOLDER LOANS

 

On December 14, 2021, the Company entered into Loan Agreements with two non-affiliated shareholders resulting in gross (and net) proceeds of $75,000 as there were no costs associated with the loans. Interest on the loans was 7% per annum until principal and interest were due in full, or until June 15, 2022. The first interest payments were due March 15, 2022 and payment of final interest and principal was due June 15, 2022.

 

One of the loans (in the amount of $25,000) was paid in full on June 13, 2022 along with the final interest payment due.

 

On April 6, 2022, the Company amended the loan with the other non-affiliated shareholder. This amendment (No.1; hereinafter referred to in this paragraph as “Amendment No. 1”) increased the principal due to the shareholder by $25,000; bringing their total principal to $75,000. No other terms of the loan were changed under Amendment No. 1.

On April 14, 2022, the loan was amended again (under Amendment No. 2; hereinafter referred to in this paragraph as “Amendment No. 2”) increasing the principal again by $50,000; bringing their total principal to $125,000. No other terms of the loan were changed under Amendment No. 2.

 

On May 11, 2022, the loan was amended again (under Amendment No. 3; hereinafter referred to in this paragraph as “Amendment No. 3”) increasing the principal again by $75,000; bringing their total principal to $200,000. The loan was further amended to include a specific payment schedule based on receipt of anticipated ERC refunds.

 

On June 13, 2022, the Company made a principal reduction payment to this shareholder in the amount of $25,000 from proceeds from the ERC refund received on June 2, 2022; bringing the principal amount owed on the loan to $175,000.

 

On July 13, 2022, the loan was amended again (under Amendment No. 4; hereinafter referred to in this paragraph as “Amendment No. 4”) increasing the principal by $25,000; bringing their total principal to $200,000 again. The loan agreement was also amended to revise the maturity date from June 15, 2022 to no specific maturity date.

 

On September 13, 2022, the loan was amended again (under Amendment No. 5; hereinafter referred to in this paragraph as “Amendment No. 5”) increasing the principal by $25,000; bringing their total principal to $225,000 again.

 

On September 28, 2022, the shareholder provided the Company with additional funds, $40,000, under this loan with the understanding that the amount would be paid back once the Healgen Loan funds were received and there would be no interest charged on this additional amount. This increased the amount due to the shareholder under the facility to $265,000. The Company did pay this additional amount in full on October 4, 2022; bringing the balance of the loan back to $225,000.

 

The Company incurred $4,000 in interest expense related to these loans in the First Quarter 2023 and $1,000 in interest expense related to these loans in the First Quarter 2022.

 

The balance on these loans was $125,000 on March 31, 2023 and $225,000 at December 31, 2022. (See Note M – Subsequent Events for more information on the December 2021 Shareholder Loans)

SEPTEMBER 2022 HEALGEN LOAN & PROMISSORY NOTE

 

On September 28, 2022, the Company entered into a Loan and Promissory with Healgen Scientific Limited Liability Company (the “Healgen Loan”) at a fixed rate of 1% per month, (compounded monthly) and received initial gross/net proceeds of $40,000 and subsequent gross/net proceeds of $360,000; for a total of $400,000. The Company utilized $34,000 of the loan proceeds to pay off the Crestmark Line of Credit and the balance was used for working capital. The Healgen Loan was collateralized by a first security interest in the Company’s receivables, inventory, and all other assets with the exception of those assets already encumbered. The first payment under the Healgen Loan was due on January 28, 2023 and was in the amount of $140,000.

 

The Healgen Loan was amended on November 15, 2022 to increase the principal due under the loan to $700,000. Under this first amendment, the loan maturity date was extended to April 15, 2023 and the first payment date was extended to February 15, 2023 and changed to $246,000.

 

The Healgen loan was amended again on December 19, 2022 to increase the principal due under the loan to $715,000. Under this second amendment, the amount of the first payment was changed to $251,000 with payments of the same amount due on March 15, 2023 and April 15, 2023.

 

The Healgen Loan was amended again on January 6, 2023 to increase the principal due under the loan to $815,000. Under this third amendment, the amount of the first payment (due February 15, 2023) was changed to $286,000 with payments of the same amount due on March 15, 2023 and April 15, 2023. No other terms of the Healgen Loan were changed.

 

The Healgen Loan was amended again on February 9, 2023 to increase the principal due under the loan to $965,000. Under this fourth amendment, the amount of the first payment (due February 15, 2023) was changed to $337,000 with payments of the same amount due on March 15, 2023 and April 15, 2023. No other terms of the Healgen Loan were changed.

On February 28, 2023, with proceeds from the Asset Sale to Healgen, the Company made a payment in the amount of $965,000 to Healgen for all principal due under the Healgen Loan. Healgen waived all interest due under the Healgen Loan.

 

The balance on the Healgen Loan was $0 at March 31, 2023 and $715,000 at December 31, 2022.

 

OTHER DEBT INFORMATION

 

In addition to the debt indicated previously, previous debt facilities (paid in full via refinance or conversion into equity) had financial impact on the First Quarter 2022. More specifically:

 

LINE OF CREDIT WITH CRESTMARK BANK (“CRESTMARK”)

 

On June 29, 2015, the Company entered into a Loan and Security Agreement (“LSA”) with Crestmark related to a revolving line of credit (the “Crestmark LOC”). The Crestmark LOC was used for working capital and general corporate purposes. Upon completion of the initial 5 year term, the Crestmark LOC automatically renewed for additional one (1) year terms unless notice of termination from the Company was received by Crestmark not less than sixty (60) days prior to the end of the renewal term. On September 29, 2022, the Company made a payment to Crestmark in the amount of $34,000 which paid off the balance on the Crestmark LOC.

 

The Company incurred $0 in interest expense in the First Quarter 2023 and $10,000 in interest expense in the First Quarter 2022.

XML 22 R14.htm IDEA: XBRL DOCUMENT v3.23.1
Employee Retention Credit
3 Months Ended
Mar. 31, 2023
Employee Retention Credit  
Employee Retention Credit

NOTE H – Employee Retention Credit

 

The employee retention credit (“ERC”), as originally enacted on March 27, 2020 by the CARES Act, was a refundable tax credit against certain employment taxes equal to 50% of the qualified wages an eligible employer paid to employees and allowed claims through December 31, 2021 by eligible employers who retained employees during the Covid-19 pandemic. However, in November 2021, the ERC was terminated as of September 30, 2021 instead of December 31, 2021.

 

The maximum qualified wages for each employee under the ERC was $10,000 per quarter. Also, because the Company has 100 or fewer full-time employees, health plan expenses borne by the Company could also be included as qualified wages in addition to salary. In August 2021, the Company’s payroll service provider processed and mailed a Form 941-X to claim a refund in the amount of $202,000 on qualified wages paid in the first quarter of 2021. Due to a change in the Form 941-X, the Company’s payroll service provider did not process and mail its Form 941-X to claim a refund in the amount of $198,000 on qualified wages paid in the second quarter of 2021 until October 28, 2021.

 

The Company was informed that the IRS did not have record of receiving the Company’s Form 941-X for the first quarter of 2021 (which was mailed by the Company’s service provider in August 2021). The Company re-sent the Form 941-X for the first quarter of 2021 via overnight service on December 31, 2021 and the IRS received it on January 5, 2022. This lack of receipt resulted in a delay in receiving the expected refund in the amount of $202,000.

 

On June 2, 2022, the Company received a refund for the second quarter of 2021 in the amount of $199,000. This amount represents the $198,000 claimed as a refund and $1,000 in interest. The Company has had a number of discussions with the IRS and has been given a number of time frames in which the refund for the first quarter of 2021 could be expected. As of March 31, 2023, the Company had not yet received the refund. (See Note M – Subsequent Events for updated information on the ERC refund)

XML 23 R15.htm IDEA: XBRL DOCUMENT v3.23.1
Asset Sale to Healgen
3 Months Ended
Mar. 31, 2023
Asset Sale to Healgen  
Asset Sale to Healgen

Note I – Asset Sale to Healgen

 

Over the last several years, the Company has retained financial consultants to seek out alternative solutions; most recently in early Fiscal 2022. The consultants were seeking solutions including but not limited to potential mergers, acquisitions, investment in the Company, and strategic relationships. Simultaneously, the Company’s management was seeking alternative solutions and began discussions with Healgen. With the current financial condition of the Company, the Company was not able to find a suitable alternative apart from the Asset Sale to Healgen.

 

After carefully weighing the facts and circumstances associated with the Asset Sale to Healgen as well as alternative courses of action, the Company’s Board of Directors (the “Board”) unanimously concluded that the proposed sale of substantially all of the Company’s assets was the best available alternative to maximize value for shareholders.

The Board believes the Company’s status as a fully reporting public company is an asset which may be sufficiently attractive to induce others to enter into business combinations with the Company. The Company is exploring strategic transactions which may result in entering into a new line of business (subject to specific competitive limitations under the Asset Sale to Healgen). The Company believes strategic acquisitions using the Company’s publicly traded stock as transaction consideration could enhance shareholder value. Nonetheless, the Board may later determine to dissolve the Company and distribute any remaining assets to the Company’s shareholders if the Company is unable to make any strategic acquisitions or enter into any strategic transactions.

 

On December 19, 2022, the Company entered into an Asset Purchase Agreement (“APA”) with Healgen, pursuant to which the Company agreed, subject to the approval of its shareholders, to sell substantially all of the Company’s operating assets (excluding its cash, accounts receivables arising prior to the closing date, and certain other assets). The Company submitted the Asset Sale to Healgen to a shareholder vote via a preliminary Proxy Statement filed on December 22, 2022. On January 5, 2023, the Company filed an amendment to its Preliminary Proxy Statement and on January 11, 2023, the Company filed its Definitive Proxy Statement with the SEC.

 

On February 15, 2023, the Company held the 2023 Special Meeting of Shareholders (the “Special Meeting”) at the Company’s corporate offices in Kinderhook, New York, at which a quorum (27,863,899 shares of common stock of the 47,098,476 shares of common stock outstanding) was present in person or represented by proxy.

 

Approval of the Asset Sale to Healgen required the affirmative vote of the holders of a majority of the outstanding shares of the Company’s common stock (par value $0.01). 26,381,832, or 54.84% of the total outstanding shares of the Company, voted in favor of the Asset Sale to Healgen. 1,476,077, or 3.06% of the total outstanding shares, voted against the Asset Sale to Healgen. 5,990, or 0.01% of the total shares outstanding, withheld voting on the Asset Sale to Healgen. Given the majority of total outstanding shares voted in favor of the Asset Sale to Healgen, the Asset Sale to Healgen was approved.

 

On February 28, 2023, the Company completed the Asset Sale to Healgen and disposition of substantially all of the Company’s assets. In connection with the closing of the Asset Sale to Healgen, and in accordance with the terms of the Asset Purchase Agreement, Healgen paid an aggregate purchase price of $3 million (“Purchase Price”). $300,000 of the Purchase Price is being held back in a retention fund to cover potential indemnification claims during the six months following the close. Net proceeds in the amount of $247,000 were received by the Company after satisfaction of 1) a loan with Healgen in the amount of $965,000, 2) the Cherokee LSA, (totaling $1,031,000 for principal and interest through February 27, 2023), 3) the 2019 Cherokee Term Loan (totaling $252,000 for principal and interest through February 27, 2023), 4) delinquent property related taxes in the amount of $193,000 and 5) $12,000 for current property related taxes.

XML 24 R16.htm IDEA: XBRL DOCUMENT v3.23.1
Stock Options and Warrants
3 Months Ended
Mar. 31, 2023
Stock Options and Warrants  
Stock Options and Warrants

NOTE J – Stock Options and Warrants

 

The Company has two non-statutory stock option plans, the Fiscal 2001 Non-statutory Stock Option Plan (the “2001 Plan”) and the 2013 Equity Compensation Plan (the “2013 Plan”). Both plans have been adopted by the Board of Directors and approved by shareholders. Both the 2001 Plan and the 2013 Plan have options available for future issuance. Any common shares issued as a result of the exercise of stock options would be new common shares issued from our authorized issued shares.

 

During the First Quarter 2023 and the First Quarter 2022, the Company issued 0 options to purchase shares of common stock.

 

Stock option activity for the First Quarter 2023 and the First Quarter 2022 is summarized as follows (the figures contained within the tables below have been rounded to the nearest thousand):

 

 

First Quarter 2023

 

 

First Quarter 2022

 

 

 

Shares

 

 

Weighted

Average Exercise Price

 

 

Aggregate

Intrinsic Value as

 of

March 31, 2023

 

 

Shares

 

 

Weighted Average Exercise Price

 

 

Aggregate Intrinsic Value as of

March 31, 2022

 

Options outstanding at beginning of year

 

 

1,736,000

 

 

$0.12

 

 

 

 

 

 

1,937,000

 

 

$0.13

 

 

 

 

Granted

 

 

0

 

 

NA

 

 

 

 

 

 

0

 

 

NA

 

 

 

 

Exercised

 

 

0

 

 

NA

 

 

 

 

 

 

0

 

 

NA

 

 

 

 

Cancelled/expired

 

 

46,000

 

 

$0.26

 

 

 

 

 

 

0

 

 

NA

 

 

 

 

Options outstanding at end of quarter

 

 

1,690,000

 

 

$0.12

 

 

$0

 

 

 

1,937,000

 

 

$0.13

 

 

$0

 

Options exercisable at end of quarter

 

 

1,690,000

 

 

$0.12

 

 

 

 

 

 

 

1,937,000

 

 

$0.13

 

 

 

 

 

 

The Company recognized $0 in share based payment expense in the First Quarter 2023 and the First Quarter 2022. At March 31, 2023, there was $0 of unrecognized share based payment expense related to stock options.

XML 25 R17.htm IDEA: XBRL DOCUMENT v3.23.1
Changes in Stockholders Deficit
3 Months Ended
Mar. 31, 2023
Changes in Stockholders Deficit  
Changes in Stockholders' Deficit

NOTE K – Changes in Stockholders’ Deficit

 

LANDMARK CONSULTING AGREEMENT

 

On March 7, 2022, the Company entered into a Financial Advisory Agreement (the “Agreement”) with Landmark Pegasus, Inc. (‘Landmark”). The Agreement provided that Landmark would provide certain financial advisory services for a minimum period of 3 months (which period commenced on February 28, 2022), and as consideration for these services, the Company would pay Landmark (a) a retainer fee consisting of 500,000 restricted shares of common stock and a warrant to purchase 2.75 million shares of the Company’s common stock at a strike price equal to the average closing price of the Company’s common shares for the 30 days preceding the Agreement, or $0.035 per share, resulting in gross proceeds to the Company in the amount of $96,250. The warrant would vest upon the closing of a transaction involving Landmark or upon the invocation of a “Breakup Fee”.

 

In a subsequent amendment, the terms of the warrant were changed to reflect that the warrant would be issued immediately preceding the closing of a transaction involving Landmark or immediately upon the invocation of the Breakup Fee. In each case, the warrant would vest immediately (i.e. the warrant would be 100% immediately exercisable).

 

The Breakup Fee would be invoked upon the generation of a specific transaction to ABMC which meets certain criteria agreed upon by both the Company and Landmark; which transaction is then rejected by the Company. The Company would also pay to Landmark a “Success Fee” for the consummation of a transaction closing during the term of the Agreement and for 12 months thereafter, between the Company and any party first introduced to the Company by Landmark, or with any party the Company has specifically requested Landmark’s assistance with the transaction. Upon invocation of the Breakup Fee or payment of the Success Fee, the Company would also issue an additional 250,000 restricted shares of the Company’s common stock. In the event that the Company consummated a transaction involving the provision of services to any party introduced to the Company by Landmark or with any party the Company has specifically requested Landmark’s assistance with, the Company would pay Landmark 10% of any revenues received from the transaction, unless this percentage is modified by both the Company and Landmark in writing. There is no material relationship between the Company and Landmark, other than with respect to the Agreement.

 

Apart from the initial 500,000 restricted common shares, no additional stock was issued to Landmark and no further amounts were paid to Landmark.

XML 26 R18.htm IDEA: XBRL DOCUMENT v3.23.1
Income Taxes
3 Months Ended
Mar. 31, 2023
Income Taxes  
Income Taxes

Note L- Income Taxes

 

The Company follows ASC 740 “Income Taxes” (“ASC 740”) which prescribes the asset and liability method whereby deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities, and are measured using the enacted laws and tax rates that will be in effect when the differences are expected to reverse. The measurement of deferred tax assets is reduced, if necessary, by a valuation allowance for any tax benefits that are not expected to be realized. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that such tax rate changes are enacted. Under ASC 740, tax benefits are recorded only for tax positions that are more likely than not to be sustained upon examination by tax authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely to be realized upon ultimate settlement. Unrecognized tax benefits are tax benefits claimed in the Company’s tax returns that do not meet these recognition and measurement standards.

 

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted in response to the COVID-19 pandemic. The CARES Act, among other things, permits NOL carryovers and carrybacks to offset 100% of taxable income for taxable years beginning before 2021. With regards to the use of net losses incurred for 2018 and later, such net operating losses have no expiration, while taxable income can only be offset up to 80% of taxable income. Net operating losses incurred prior to 2018 may be fully utilized to offset taxable income.

A reconciliation of the U.S. Federal statutory income tax rate to the effective income tax rate is as follows:

 

 

 

Quarter Ended

March 31, 2023

 

 

Quarter Ended

March 31, 2022

 

Tax expense at federal statutory rate

 

(21%)

 

 

(21%)

 

State tax expense, net of federal tax effect

 

 

0%

 

 

0%

Increase in valuation allowance

 

 

21%

 

 

21%

Effective income tax rate

 

(0%)

 

 

(0%)

 

 

Significant components of the Company’s deferred income tax assets are as follows:

 

 

 

March 31, 2023

 

 

December 31, 2022

 

 

 

 

 

 

 

13,

 

Inventory allowance

 

$0

 

 

$61,000

 

Allowance for doubtful accounts

 

 

1,000

 

 

 

1,000

 

Stock based compensation

 

 

138,000

 

 

 

149,000

 

Deferred wages payable

 

 

30,000

 

 

 

21,000

 

Depreciation – Property, Plant & Equipment

 

 

0

 

 

 

(19,000)

Research and development credits

 

 

26,000

 

 

 

24,000

 

Net operating loss carry-forward

 

 

2,482,000

 

 

 

2,972,000

 

Total gross deferred income tax assets

 

 

2,677,000

 

 

 

3,209,000

 

Less deferred income tax assets valuation allowance

 

 

(2,677,000)

 

 

(3,209,000)

Net deferred income tax assets

 

$0

 

 

 

0

 

 

The valuation allowance for net deferred income tax assets as of March 31, 2023 and December 31, 2022 was $2,677,000 and $3,209,000, respectively. The net change in the valuation allowance was $532,000 at March 31, 2023 and $91,000 at March 31, 2022. The Company believes that it is more likely than not that the net deferred tax assets will not be realized.

 

As of March 31, 2023, the prior three years remain open for examination by the federal or state regulatory agencies for purposes of an audit for tax purposes.

 

At March 31, 2023, the Company had Federal net operating loss carry-forwards for income tax purposes of approximately $11,427,000 and research and development credits of $26,000. The Company’s net operating loss carry-forwards began to expire in 2022 and continue to expire through 2038. Net operating losses incurred from 2018 to date have no expiration. In assessing the reliability of deferred income tax assets, management considers whether or not it is more likely than not that some portion or all deferred income tax assets will be realized. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the projected future taxable income and tax planning strategies in making this assessment.

 

The Company’s ability to utilize the operating loss carry-forwards and research and development credits may be subject to an annual limitation in future periods pursuant to Section 382 and Section 383 of the Internal Revenue Code of 1986, as amended, if future changes in ownership occur.

 

The Company recognizes potential interest and penalties related to income tax positions as a component of the provision for income taxes on operations. The Company does not anticipate that total unrecognized tax benefits will materially change in the next twelve months.

XML 27 R19.htm IDEA: XBRL DOCUMENT v3.23.1
Subsequent Events
3 Months Ended
Mar. 31, 2023
Subsequent Events  
Subsequent Events

Note M – Subsequent Events

 

ERC Refund

 

The Company has been expecting an ERC refund in the amount of $202,000. On April 17, 2023, the Company received payments in the amount of $156,000 and $2,000 from the IRS. There was not any communication with either of the payments. As of the date of this report, the Company is making efforts to speak with the IRS to determine the reason behind the lower refund being received and to determine if additional payments can be expected.

 

November 2020 Term Loan

 

Upon receipt of the payment from the IRS, the Company paid the principal balance due ($50,000) on this shareholder loan.

 

December 2021 Shareholder Loan

 

Upon receipt of the payment from the IRS, the Company made a payment in the amount of $25,000 on this shareholder loan. As of the date of this report, the balance on the December 2021 Shareholder Loan is $175,000.

 

Current Salary owed to Melissa Waterhouse

 

Upon receipt of the payment from the IRS, the Company made a payment in the amount of $32,000 to Melissa Waterhouse to pay current salary owed. As of the date of this report, the amount due to Melissa Waterhouse for deferred compensation is $92,000. Ms. Waterhouse is also owed $12,000 for consulting services from March 2023 through May 2023.

XML 28 R20.htm IDEA: XBRL DOCUMENT v3.23.1
Basis of Reporting (Policies)
3 Months Ended
Mar. 31, 2023
Basis of Reporting  
Recently Adopted Accounting Standards

ASU 2022-04, Liabilities – Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations, issued in September 2022, requires entities that use supplier finance programs in connection with the purchase of goods and services to disclose the key terms of the programs and information about obligations outstanding at the end of the reporting period, including a rollforward of those obligations. The guidance does not affect the recognition, measurement or financial statement presentation of supplier finance program obligations. ASU 2022-04 became effective on January 1, 2023. The Company adopted ASU 2022-04 on January 1, 2023 and the adoption did not have an impact on the Company’s financial condition or results of operations as the Company does not (and has not historically) utilized supplier finance programs in connection with the purchase of goods and services.

ASU 2016-13, Financial Instruments—Credit Losses (Topic 326); Measurement of Credit Losses on Financial Instruments, issued in June 2016, requires companies to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. The Company adopted ASU 2016-13 on January 1, 2023 and the adoption did not have a material impact on the Company’s financial condition or results of operations.

Accounting Standards Issued Not Yet Adopted

ASU 2022-03, Fair Value Measurement (Topic 820), Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions, issued in June 2022, clarifies that a contractual restriction on the sale of an equity security is not considered in measuring the security's fair value. The standard also requires certain disclosures for equity securities that are subject to contractual restrictions. ASU 2022-03 becomes effective on January 1, 2024. Early adoption is permitted. The Company is evaluating the impact of ASU 2022-03.

 

Any other new accounting pronouncements recently issued, but not yet effective, have been reviewed and determined to be not applicable or were related to technical amendments or codification. As a result, the adoption of such new accounting pronouncements, when effective, is not expected to have a material effect on the Company’s financial position or results of operations.

XML 29 R21.htm IDEA: XBRL DOCUMENT v3.23.1
Inventory (Tables)
3 Months Ended
Mar. 31, 2023
Inventory  
Inventory

 

 

March 31, 2023*

 

 

December 31, 2022

 

 

 

 

 

 

 

 

Raw Materials

 

$0

 

 

$444,000

 

Work In Process

 

 

0

 

 

 

110,000

 

Finished Goods

 

 

0

 

 

 

60,000

 

Allowance for slow moving and obsolete inventory

 

 

0

 

 

 

(235,000)

 

 

$0

 

 

$379,000

 

XML 30 R22.htm IDEA: XBRL DOCUMENT v3.23.1
Property, Plant and Equipment (Tables)
3 Months Ended
Mar. 31, 2023
Property, Plant and Equipment  
Property, plant and equipment

 

 

March 31, 2023*

 

 

December 31, 2022

 

 

 

 

 

 

 

 

Land

 

$0

 

 

$102,000

 

Buildings and improvements

 

 

0

 

 

 

1,352,000

 

Manufacturing and warehouse equipment

 

 

0

 

 

 

2,110,000

 

Office equipment (incl. furniture and fixtures)

 

 

0

 

 

 

412,000

 

 

 

 

0

 

 

 

3,976,000

 

Less accumulated depreciation

 

 

0

 

 

 

(3,510,000)

 

 

$0

 

 

$466,000

 

XML 31 R23.htm IDEA: XBRL DOCUMENT v3.23.1
Accrued Expenses (Tables)
3 Months Ended
Mar. 31, 2023
Accrued Expenses  
Accrued Expenses

 

 

March 31, 2023

 

 

December 31, 2022

 

Accounting fees

 

$16,000

 

 

$87,000

 

Interest payable

 

 

20,000

 

 

 

39,000

 

Accounts receivable credit balances

 

 

0

 

 

 

1,000

 

Sales tax payable

 

 

188,000

 

 

 

188,000

 

Deferred compensation

 

 

114,000

 

 

 

109,000

 

Other current liabilities

 

 

0

 

 

 

90,000

 

 

 

$338,000

 

 

$514,000

 

XML 32 R24.htm IDEA: XBRL DOCUMENT v3.23.1
Net Income (Loss) Per Common Share (Tables)
3 Months Ended
Mar. 31, 2023
Net Income (Loss) Per Common Share  
Net Income / (Loss) Per Common Share

 

 

March 31, 2023

 

 

March 31, 2022

 

Options

 

 

1,690,000

 

 

 

1,937,000

 

Total

 

 

1,690,000

 

 

 

1,937,000

 

XML 33 R25.htm IDEA: XBRL DOCUMENT v3.23.1
DEBT (Tables)
3 Months Ended
Mar. 31, 2023
Debt  
Debt

 

 

March 31, 2023

 

 

December 31, 2022

 

Loan and Security Agreement with Cherokee Financial, LLC: Secured note executed on February 15, 2015, at a fixed annual interest rate of 8% plus a 1% annual oversight fee, interest and oversight fee paid quarterly with principal due on February 15, 2020. Loan was extended for one year (until February 15, 2021) under the same terms and conditions as the original loan. The loan was further extended in February 2021 to February 15, 2022 with $100,000 added to the loan principal as a penalty and the annual interest rate increased to 10%. Loan was further extended in June 2022 (until February 15, 2023). Loan was paid in full on February 28, 2023.

 

$0

 

 

$1,000,000

 

2019 Term Loan with Cherokee Financial, LLC: Note at an annual fixed interest rate of 18% paid quarterly in arrears and a balloon payment due on February 15, 2020. Loan was extended in February 2020, until February 15, 2021 with a penalty of $20,000 added to the loan principal and, extended again in February 2021 to February 15, 2022 with another penalty of $20,000 added to the loan principal. Loan was extended in June 2022 (until February 15, 2023). Loan was paid in full on February 28, 2023.

 

 

0

 

 

 

240,000

 

November 2020 Shareholder Note: Term loan at 7% interest with the first interest only payment being made on February 4, 2021 and the final interest and $50,000 principal due on November 4, 2023.

 

 

50,000

 

 

 

50,000

 

December 2021 Shareholder Notes: Term loan with one non-affiliated shareholder at 7% interest until the loan is paid in full. Loan was amended to address additional amounts provided under the loan.

 

 

125,000

 

 

 

225,000

 

September 2022 Healgen Loan & Promissory Note: Term Loan with Healgen at a fixed rate of 1% per month compounded monthly. Loan was collateralized by first security interest in receivables, inventory, and all other assets with the exception of assets already encumbered. The Healgen loan was paid in full on February 28, 2023 (the closing of the Asset Sale to Healgen) and all interest was waived by Healgen.

 

 

0

 

 

 

715,000

 

Total Debt

 

$175,000

 

 

$2,230,000

 

Current portion

 

$175,000

 

 

$2,230,000

 

XML 34 R26.htm IDEA: XBRL DOCUMENT v3.23.1
Stock Options and Warrants (Tables)
3 Months Ended
Mar. 31, 2023
Stock Options and Warrants  
Stock option/warrant activity

 

 

First Quarter 2023

 

 

First Quarter 2022

 

 

 

Shares

 

 

Weighted

Average Exercise Price

 

 

Aggregate

Intrinsic Value as

 of

March 31, 2023

 

 

Shares

 

 

Weighted Average Exercise Price

 

 

Aggregate Intrinsic Value as of

March 31, 2022

 

Options outstanding at beginning of year

 

 

1,736,000

 

 

$0.12

 

 

 

 

 

 

1,937,000

 

 

$0.13

 

 

 

 

Granted

 

 

0

 

 

NA

 

 

 

 

 

 

0

 

 

NA

 

 

 

 

Exercised

 

 

0

 

 

NA

 

 

 

 

 

 

0

 

 

NA

 

 

 

 

Cancelled/expired

 

 

46,000

 

 

$0.26

 

 

 

 

 

 

0

 

 

NA

 

 

 

 

Options outstanding at end of quarter

 

 

1,690,000

 

 

$0.12

 

 

$0

 

 

 

1,937,000

 

 

$0.13

 

 

$0

 

Options exercisable at end of quarter

 

 

1,690,000

 

 

$0.12

 

 

 

 

 

 

 

1,937,000

 

 

$0.13

 

 

 

 

 

XML 35 R27.htm IDEA: XBRL DOCUMENT v3.23.1
Income Taxes (Tables)
3 Months Ended
Mar. 31, 2023
Income Taxes  
Effective income tax rate reconciliation

 

 

Quarter Ended

March 31, 2023

 

 

Quarter Ended

March 31, 2022

 

Tax expense at federal statutory rate

 

(21%)

 

 

(21%)

 

State tax expense, net of federal tax effect

 

 

0%

 

 

0%

Increase in valuation allowance

 

 

21%

 

 

21%

Effective income tax rate

 

(0%)

 

 

(0%)

 

Deferred tax assets and liabilities

 

 

March 31, 2023

 

 

December 31, 2022

 

 

 

 

 

 

 

13,

 

Inventory allowance

 

$0

 

 

$61,000

 

Allowance for doubtful accounts

 

 

1,000

 

 

 

1,000

 

Stock based compensation

 

 

138,000

 

 

 

149,000

 

Deferred wages payable

 

 

30,000

 

 

 

21,000

 

Depreciation – Property, Plant & Equipment

 

 

0

 

 

 

(19,000)

Research and development credits

 

 

26,000

 

 

 

24,000

 

Net operating loss carry-forward

 

 

2,482,000

 

 

 

2,972,000

 

Total gross deferred income tax assets

 

 

2,677,000

 

 

 

3,209,000

 

Less deferred income tax assets valuation allowance

 

 

(2,677,000)

 

 

(3,209,000)

Net deferred income tax assets

 

$0

 

 

 

0

 

XML 36 R28.htm IDEA: XBRL DOCUMENT v3.23.1
Inventory (Details) - USD ($)
Mar. 31, 2023
Dec. 31, 2022
Inventory    
Raw materials $ 0 $ 444,000
Work in process 0 110,000
Finished goods 0 60,000
Allowance for slow moving and obsolete inventory 0 (235,000)
Inventory, net $ 0 $ 379,000
XML 37 R29.htm IDEA: XBRL DOCUMENT v3.23.1
Property, Plant and Equipment (Details) - USD ($)
Mar. 31, 2023
Dec. 31, 2022
Property, Plant and Equipment    
Land $ 0 $ 102,000
Buildings and improvements 0 1,352,000
Manufacturing and warehouse equipment 0 2,110,000
Office equipment (incl. furniture and fixtures) 0 412,000
Property, plant and equipment, gross 0 3,976,000
Less accumulated depreciation 0 (3,510,000)
Property, plant and equipment, net $ 0 $ 466,000
XML 38 R30.htm IDEA: XBRL DOCUMENT v3.23.1
Accrued Expenses (Details) - USD ($)
Mar. 31, 2023
Dec. 31, 2022
Accrued Expenses    
Accounting fees $ 16,000 $ 87,000
Other current liabilities 0 90,000
Accrued expenses 338,000 514,000
Interest payable 20,000 39,000
Accounts receivable credit balances 0 1,000
Sales tax payable 188,000 188,000
Deferred compensation $ 114,000 $ 109,000
XML 39 R31.htm IDEA: XBRL DOCUMENT v3.23.1
Net Income (Loss) Per Common Share (Details) - shares
3 Months Ended
Mar. 31, 2023
Mar. 31, 2022
Options 1,690,000 1,937,000
Equity Option [Member]    
Options 1,690,000 1,937,000
XML 40 R32.htm IDEA: XBRL DOCUMENT v3.23.1
Debt (Details) - USD ($)
Mar. 31, 2023
Dec. 31, 2022
Total debt, net $ 175,000 $ 2,230,000
Current portion 175,000 2,230,000
Loan and Security Agreement with Cherokee Financial, LLC    
Long-term debt, gross 0 1,000,000
2019 Term Loan with Cherokee Financial, LLC    
Long-term debt, gross 0 240,000
November 2020 Shareholder Note    
Long-term debt, gross 50,000 50,000
December 2021 Shareholder Notes    
Long-term debt, gross 125,000 225,000
September 2022 Healgen Loan & Promissory note    
Long-term debt, gross $ 0 $ 715,000
XML 41 R33.htm IDEA: XBRL DOCUMENT v3.23.1
Debt (Details Narrative) - USD ($)
1 Months Ended 3 Months Ended
Feb. 09, 2023
Jan. 06, 2023
Sep. 13, 2022
Jul. 13, 2022
Jun. 13, 2022
May 11, 2022
Apr. 14, 2022
Apr. 06, 2022
Dec. 14, 2021
Nov. 04, 2020
Feb. 28, 2023
Dec. 19, 2022
Nov. 15, 2022
Sep. 28, 2022
Feb. 15, 2022
Feb. 28, 2021
Feb. 15, 2021
Feb. 28, 2019
Jun. 29, 2015
Mar. 31, 2023
Mar. 31, 2022
Dec. 31, 2022
Sep. 29, 2022
Dec. 31, 2021
Mar. 26, 2015
Debt payments                                       $ 100,000 $ 0        
2019 Cherokee Loan and Security Agreement                                                  
Principal balance                             $ 240,000   $ 220,000     0   $ 240,000   $ 240,000  
Delinquent fee charged                             8.00%                    
Loan amount                                   $ 200,000              
Interest expense                                       4,000 11,000        
Penalty                                 $ 20,000                
Annual interest rate on loan                                   18.00%              
Loan and Security Agreement with Cherokee Financial, LLC                                                  
Delinquent fee charged                             8.00%                    
Loan amount                                       0   1,000,000     $ 1,200,000
Interest expense                                       13,000 25,000        
Penalty                             $ 100,000                    
Annual oversight fee percentage                               1.00%                  
Fixed rate                               10.00%                  
Principal amount                             $ 1,000,000                    
Annual principal reduction payments                                       75,000          
Increased agreement extension amount                               $ 1,000,000                  
Crestmark Line of Credit                                                  
Interest expense                                       0 10,000        
Initial term                                     5 years            
Payment for line of credit                                             $ 34,000    
November 2020 Term Loan                                                  
Interest expense                                       1,000 1,000        
Term Loan                   $ 50,000                   50,000   50,000      
Loan interest rate                   7.00%                              
Extended loan maturity                   Feb. 04, 2021                              
SEPTEMBER 2022 HEALGEN LOAN & PROMISSORY NOTE [Member]                                                  
Loan interest rate                           1.00%                      
Debt payments                           $ 140,000                      
Increase in principal loan $ 965,000 $ 815,000                   $ 715,000 $ 700,000                        
Description of amendment Under this fourth amendment, the amount of the first payment (due February 15, 2023) was changed to $337,000 with payments of the same amount due on March 15, 2023 and April 15, 2023 Under this third amendment, the amount of the first payment (due February 15, 2023) was changed to $286,000 with payments of the same amount due on March 15, 2023 and April 15, 2023                   Under this second amendment, the amount of the first payment was changed to $251,000 with payments of the same amount due on March 15, 2023 and April 15, 2023 Under this first amendment, the loan maturity date was extended to April 15, 2023 and the first payment date was extended to February 15, 2023 and changed to $246,000                        
Promissory Note                           40,000                      
Total amount                           400,000                      
Payment for line of credit                                       34,000          
Net proceeds                           360,000                      
Balance of Healgen loan                                       0   715,000      
Payment to healgen against due amount                     $ 965,000                            
December 2021 Shareholder Loans                                                  
Interest expense                                       4,000 $ 1,000        
Loan interest rate                 7.00%                                
Additional funds                           40,000                      
Loan agreement amount     $ 225,000 $ 200,000 $ 175,000 $ 200,000 $ 125,000 $ 75,000 $ 75,000                     $ 125,000   $ 225,000      
Increase in principal loan     $ 25,000 $ 25,000   $ 75,000 $ 50,000 $ 25,000           $ 265,000                      
Principal reduction payment         $ 25,000                                        
XML 42 R34.htm IDEA: XBRL DOCUMENT v3.23.1
Employee Retention Credit (Details Narrative) - USD ($)
3 Months Ended 6 Months Ended
Jun. 02, 2022
Mar. 31, 2021
Jun. 30, 2021
Mar. 31, 2023
Employee Retention Credit        
Refund of wages $ 199,000 $ 202,000 $ 198,000  
Claimed as a refund amount 198,000      
Refund as interest amount $ 1,000      
Refund Total       $ 202,000
XML 43 R35.htm IDEA: XBRL DOCUMENT v3.23.1
Asset Sale to Healgen (Details Narrative) - USD ($)
1 Months Ended 3 Months Ended
Feb. 28, 2023
Feb. 15, 2023
Mar. 31, 2023
Mar. 31, 2022
Dec. 31, 2022
Purchase price retention fund to cover potential indemnification claims $ 300,000        
Shares of common stock issued   27,863,899      
Shares of common stock outstanding   47,098,476      
Common stock par value   $ 0.01 $ 0.01   $ 0.01
Shares of common stock sales description   the Asset Sale to Healgen required the affirmative vote of the holders of a majority of the outstanding shares of the Company’s common stock (par value $0.01). 26,381,832, or 54.84% of the total outstanding shares of the Company, voted in favor of the Asset Sale to Healgen. 1,476,077, or 3.06% of the total outstanding shares, voted against the Asset Sale to Healgen. 5,990, or 0.01% of the total shares outstanding, withheld voting on the Asset Sale to Healgen.      
Total consideration for sale of assets 3,000,000   $ (2,114,000) $ 0  
Net proceed 247,000        
Net proceed from loans 965,000        
Property related taxes 193,000        
Current property related taxes 12,000        
Cherokee LSA [Member]          
Principal amount for interest 1,031,000        
Cherokee Term Loan [Member]          
Principal amount for interest $ 252,000        
XML 44 R36.htm IDEA: XBRL DOCUMENT v3.23.1
Stock Options and Warrants (Details) - Equity Option [Member] - $ / shares
3 Months Ended
Mar. 31, 2023
Mar. 31, 2022
Shares, beginning balance 1,736,000 1,937,000
Granted 0 0
Share exercised 0 0
Cancelled 46,000 0
Shares, ending balance 1,690,000 1,937,000
Option Exercisable qat end of quarter 1,690,000 1,937,000
Options outstanding at end of quarter Aggregate Intrinsic $ 0 $ 0
Weighted average exercise price, beginning balance 0.12 0.13
Weighted average exercise price, cancelled/expired 0.26 0
Weighted average exercise price, ending balance 0.12 0.13
Weighted average exercise price, exercisable $ 0.12 $ 0.13
XML 45 R37.htm IDEA: XBRL DOCUMENT v3.23.1
Stock Options and Warrants (Details Narrative) - Equity Option [Member] - USD ($)
3 Months Ended
Mar. 31, 2023
Mar. 31, 2022
Share based payment $ 0 $ 0
Unrecognized share based payment expense related to stock options $ 0  
XML 46 R38.htm IDEA: XBRL DOCUMENT v3.23.1
Changes in Stockholders Deficit (Details Narrative) - LANDMARK CONSULTING AGREEMENT [Member]
3 Months Ended
Mar. 31, 2023
$ / shares
shares
Restricted shares 500,000
Warrant to purchase 2,750,000
Gross proceeds 96,250,000,000
common shares | $ / shares $ 0.035
Additional restricted shares 250,000
Initial restricted common stock shares 500,000
XML 47 R39.htm IDEA: XBRL DOCUMENT v3.23.1
Income Taxes (Details)
3 Months Ended
Mar. 31, 2023
Mar. 31, 2022
Income Taxes    
Tax expense at federal statutory rate (21.00%) (21.00%)
State tax expense, net of federal tax effect 0.00% 0.00%
Increase in valuation allowance 21.00% 21.00%
Effective income tax rate 0.00% 0.00%
XML 48 R40.htm IDEA: XBRL DOCUMENT v3.23.1
Income Taxes (Details 1) - USD ($)
Mar. 31, 2023
Dec. 31, 2022
Income Taxes    
Inventory allowance $ 0 $ 61,000
Allowance for doubtful accounts 1,000 1,000
Stock based compensation 138,000 149,000
Deferred wages payable 30,000 21,000
Depreciation - property, plant and equipment 0 (19,000)
Research and development credits 26,000 24,000
Net operating loss carry-forward 2,482,000 2,972,000
Total gross deferred income tax assets 2,677,000 3,209,000
Less deferred income tax assets valuation allowance (2,677,000) (3,209,000)
Net deferred income tax assets $ 0 $ 0
XML 49 R41.htm IDEA: XBRL DOCUMENT v3.23.1
Income Taxes (Details Narrative) - USD ($)
3 Months Ended
Mar. 31, 2023
Mar. 31, 2022
Dec. 31, 2022
Income Taxes      
Net deferred income tax assets valuation allowance $ 2,677,000   $ 3,209,000
Valuation allowance, deferred tax asset, change in amount 532,000 $ 91,000  
Research and development 26,000    
Operating loss carryforwards $ 11,427,000    
Expire date expire in 2022 and continue to expire through 2038    
Carry overs Operating losses 100.00%    
Carry overs Operating losses taxabale income percentage 80.00%    
XML 50 R42.htm IDEA: XBRL DOCUMENT v3.23.1
Subsequent Events (Details Narrative) - USD ($)
1 Months Ended 3 Months Ended
Apr. 17, 2023
Mar. 31, 2023
Consulting services, amount   $ 12,000
Deferred compensation   92,000
November 2020 Term Loan [Member]    
Principal loan amount   50,000
Melissa Waterhouse [Member]    
Principal loan amount   32,000
December 2021 Shareholder Loan [Member]    
Principal loan amount   25,000
Balance due on Short term loan to shareholders   175,000
ERC Refund [Member]    
ERC refund amount   $ 202,000
Subsequent Event [Member]    
Payment received from IRS $ 2,000  
Payment received $ 156,000  
XML 51 abmc_10q_htm.xml IDEA: XBRL DOCUMENT 0000896747 2023-01-01 2023-03-31 0000896747 us-gaap:SubsequentEventMember 2023-04-01 2023-04-17 0000896747 abmc:ERCRefundMember 2023-01-01 2023-03-31 0000896747 abmc:DecemberTwoThousandTwentyOneShareholderLoanMember 2023-03-31 0000896747 abmc:NovemberTwoThousandTwentyTermLoanMember 2023-03-31 0000896747 abmc:MelissaWaterhouseMember 2023-03-31 0000896747 abmc:LANDMARKCONSULTINGAGREEMENTMember 2023-01-01 2023-03-31 0000896747 us-gaap:StockOptionMember 2023-03-31 0000896747 us-gaap:StockOptionMember 2022-03-31 0000896747 us-gaap:StockOptionMember 2022-12-31 0000896747 us-gaap:StockOptionMember 2021-12-31 0000896747 2023-02-15 0000896747 2023-02-01 2023-02-15 0000896747 2023-02-01 2023-02-28 0000896747 abmc:CherokeeTermLoanMember 2023-02-01 2023-02-28 0000896747 abmc:CherokeeLSAMember 2023-02-01 2023-02-28 0000896747 2021-01-01 2021-06-30 0000896747 2022-06-01 2022-06-02 0000896747 2021-01-01 2021-03-31 0000896747 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iso4217:USD shares pure 0000896747 false --12-31 Q1 2023 2000 0.01 0.01 5000000 0 0 0 0 0.01 0.01 75000000 48098476 48098476 48098476 50000 0.01 0 0 10-Q true 2023-03-31 false 0-28666 AMERICAN BIO MEDICA CORPORATION NY 14-1702188 122 Smith Road Kinderhook NY 12106 518 758-8158 Common Stock ABMC Yes Yes Non-accelerated Filer true false false 48098476 68000 34000 2000 89000 82000 0 235000 0 379000 202000 202000 300000 0 72000 659000 769000 0 466000 0 13000 0 21000 659000 1269000 572000 760000 338000 514000 0 4000 32000 94000 175000 2230000 1117000 3602000 0 6000 1117000 3608000 5000000 0 0 75000000 48098476 481000 481000 22403000 22403000 -23342000 -25223000 -458000 -2339000 659000 1269000 164000 351000 90000 323000 74000 28000 28000 22000 20000 42000 238000 295000 286000 359000 -212000 -331000 921000 0 -3035000 0 21000 48000 2093000 -48000 1881000 -379000 0 0 1881000 -379000 0.04 -0.01 48098476 47770698 48098476 481000 22403000 -25223000 -2339000 1881000 1881000 48098476 481000 22403000 -23342000 -458000 47598476 476000 22393000 -22813000 -944000 500000 5000 10000 15000 -379000 -379000 48098476 481000 22403000 -24192000 -1308000 1881000 -379000 8000 13000 -2114000 0 0 -1000 0 15000 -7000 186000 0 24000 83000 -11000 0 9000 24000 161000 -176000 -17000 0 9000 -62000 -4000 -363000 -13000 247000 0 247000 0 100000 0 250000 0 0 462000 0 547000 150000 -85000 34000 -98000 34000 115000 68000 17000 0 15000 41000 46000 <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"><strong>Note A - Basis of Reporting</strong></p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 45px; text-align:justify;">The accompanying unaudited interim condensed financial statements of American Bio Medica Corporation (the “Company”) have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Regulation S-X. Accordingly, these unaudited interim condensed financial statements do not include all information and footnotes required by U.S. GAAP for complete financial statement presentation. These unaudited interim condensed financial statements should be read in conjunction with audited financial statements and related notes contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. In the opinion of management, the interim condensed financial statements include all normal, recurring adjustments which are considered necessary for a fair presentation of the financial position of the Company at March 31, 2023, and the results of operations and cash flows for the three month periods ended March 31, 2023 (the “First Quarter 2023”) and March 31, 2022 (the “First Quarter 2022”).</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 45px; text-align:justify;">Operating results for the First Quarter 2023 are not indicative of results that will be reported for the year ending December 31, 2023 as the Company sold substantially all of its assets on February 28, 2023 to Healgen Scientific, LLC (“Healgen”). Amounts at December 31, 2022 are derived from audited financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 45px; text-align:justify;">During the First Quarter 2023, there were no significant changes to the Company’s critical accounting policies, which are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 45px; text-align:justify;">The preparation of these interim condensed financial statements requires the Company to make estimates and judgments that affect the reported amounts of liabilities, expenses, and related disclosure of contingent liabilities. On an on-going basis, the Company evaluates estimates, including those related to bad debts, income taxes, warranty obligations, contingencies and litigation. The Company bases estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 45px; text-align:justify;">These unaudited interim condensed financial statements have been prepared assuming that the Company will continue as a going concern and, accordingly, do not include any adjustments that might result from the outcome of this uncertainty. The independent registered public accounting firm’s report on the financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, contained an explanatory paragraph regarding the Company’s ability to continue as a going concern. As of the date of this report, the Company’s current cash balances and amounts expected from its receivables (including the Employee retention Credit receivable and the retention (escrow) proceeds from the asset sale) may not be sufficient to fund the Company through May 2024.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 45px; text-align:justify;">The Company’s credit facilities with Cherokee Financial, LLC (“Cherokee”) were paid in full with proceeds from the asset sale on February 28, 2023.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 45px; text-align:justify;"><strong>Recently Adopted Accounting Standards</strong></p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 45px; text-align:justify;"><span style="text-decoration:underline">ASU 2022-04, Liabilities – Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations,</span> issued in September 2022, requires entities that use supplier finance programs in connection with the purchase of goods and services to disclose the key terms of the programs and information about obligations outstanding at the end of the reporting period, including a rollforward of those obligations. The guidance does not affect the recognition, measurement or financial statement presentation of supplier finance program obligations. ASU 2022-04 became effective on January 1, 2023. The Company adopted ASU 2022-04 on January 1, 2023 and the adoption did not have an impact on the Company’s financial condition or results of operations as the Company does not (and has not historically) utilized supplier finance programs in connection with the purchase of goods and services.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 45px; text-align:justify;"><span style="text-decoration:underline">ASU 2016-13, Financial Instruments—Credit Losses (Topic 326)</span>; <span style="text-decoration:underline">Measurement of Credit Losses on Financial Instruments</span>, issued in June 2016, requires companies to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. The Company adopted ASU 2016-13 on January 1, 2023 and the adoption did not have a material impact on the Company’s financial condition or results of operations.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 45px; text-align:justify;"><strong>Accounting Standards Issued; Not Yet Adopted</strong></p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 45px; text-align:justify;"><span style="text-decoration:underline">ASU 2022-03, Fair Value Measurement (Topic 820), Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions</span>, issued in June 2022, clarifies that a contractual restriction on the sale of an equity security is not considered in measuring the security's fair value. The standard also requires certain disclosures for equity securities that are subject to contractual restrictions. ASU 2022-03 becomes effective on January 1, 2024. Early adoption is permitted. The Company is evaluating the impact of ASU 2022-03.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 45px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 45px; text-align:justify;">Any other new accounting pronouncements recently issued, but not yet effective, have been reviewed and determined to be not applicable or were related to technical amendments or codification. As a result, the adoption of such new accounting pronouncements, when effective, is not expected to have a material effect on the Company’s financial position or results of operations.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 45px; text-align:justify;"><span style="text-decoration:underline">ASU 2022-04, Liabilities – Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations,</span> issued in September 2022, requires entities that use supplier finance programs in connection with the purchase of goods and services to disclose the key terms of the programs and information about obligations outstanding at the end of the reporting period, including a rollforward of those obligations. The guidance does not affect the recognition, measurement or financial statement presentation of supplier finance program obligations. ASU 2022-04 became effective on January 1, 2023. The Company adopted ASU 2022-04 on January 1, 2023 and the adoption did not have an impact on the Company’s financial condition or results of operations as the Company does not (and has not historically) utilized supplier finance programs in connection with the purchase of goods and services.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 45px; text-align:justify;"><span style="text-decoration:underline">ASU 2016-13, Financial Instruments—Credit Losses (Topic 326)</span>; <span style="text-decoration:underline">Measurement of Credit Losses on Financial Instruments</span>, issued in June 2016, requires companies to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. The Company adopted ASU 2016-13 on January 1, 2023 and the adoption did not have a material impact on the Company’s financial condition or results of operations.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 45px; text-align:justify;"><span style="text-decoration:underline">ASU 2022-03, Fair Value Measurement (Topic 820), Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions</span>, issued in June 2022, clarifies that a contractual restriction on the sale of an equity security is not considered in measuring the security's fair value. The standard also requires certain disclosures for equity securities that are subject to contractual restrictions. ASU 2022-03 becomes effective on January 1, 2024. Early adoption is permitted. The Company is evaluating the impact of ASU 2022-03.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 45px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 45px; text-align:justify;">Any other new accounting pronouncements recently issued, but not yet effective, have been reviewed and determined to be not applicable or were related to technical amendments or codification. As a result, the adoption of such new accounting pronouncements, when effective, is not expected to have a material effect on the Company’s financial position or results of operations.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"><strong>Note B – Inventory</strong></p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 0.5in; text-align:justify;">Inventory is comprised of the following:</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><table cellpadding="0" style="border-spacing:0;text-align:left;font:10pt times new roman;margin-left:auto;margin-right:auto;width:85%"><tbody><tr style="height:15px"><td><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:center;"><strong>March 31, 2023*</strong></p></td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:center;"><strong>December 31, 2022</strong></p></td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px"><td><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" colspan="2" style="width:9%;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" colspan="2" style="width:9%;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px;text-indent:8.15pt">Raw Materials</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">0</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">444,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px;text-indent:8.15pt">Work In Process</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">0</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">110,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 9.35pt; text-align:justify;">Finished Goods </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">0</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">60,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px 0px 0px 9.35pt">Allowance for slow moving and obsolete inventory </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">0</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">(235,000</td><td style="PADDING-BOTTOM: 1px;width:1%;vertical-align:bottom;white-space: nowrap;">)</td></tr><tr style="height:15px;background-color:#cceeff"><td><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">0</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">379,000</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr></tbody></table><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 45px; text-align:justify;">*On February 28, 2023, the Company sold substantially all of its assets to Healgen, including its inventory.</p> <table cellpadding="0" style="border-spacing:0;text-align:left;font:10pt times new roman;margin-left:auto;margin-right:auto;width:85%"><tbody><tr style="height:15px"><td><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:center;"><strong>March 31, 2023*</strong></p></td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:center;"><strong>December 31, 2022</strong></p></td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px"><td><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" colspan="2" style="width:9%;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" colspan="2" style="width:9%;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px;text-indent:8.15pt">Raw Materials</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">0</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">444,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px;text-indent:8.15pt">Work In Process</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">0</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">110,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 9.35pt; text-align:justify;">Finished Goods </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">0</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">60,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px 0px 0px 9.35pt">Allowance for slow moving and obsolete inventory </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">0</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">(235,000</td><td style="PADDING-BOTTOM: 1px;width:1%;vertical-align:bottom;white-space: nowrap;">)</td></tr><tr style="height:15px;background-color:#cceeff"><td><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">0</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">379,000</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr></tbody></table> 0 444000 0 110000 0 60000 0 235000 0 379000 <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"><strong>Note C – Property, Plant and Equipment</strong></p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 0.5in; text-align:justify;">Property, plant and equipment, is comprised of the following:</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><table cellpadding="0" style="border-spacing:0;text-align:left;font:10pt times new roman;margin-left:auto;margin-right:auto;width:85%"><tbody><tr style="height:15px"><td><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:center;"><strong>March 31, 2023*</strong></p></td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:center;"><strong>December 31, 2022</strong></p></td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px"><td><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" colspan="2" style="width:9%;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" colspan="2" style="width:9%;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px 0px 0px 15px">Land</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">0</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">102,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px 0px 0px 15px">Buildings and improvements</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">0</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">1,352,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px 0px 0px 15px">Manufacturing and warehouse equipment</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">0</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">2,110,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px 0px 0px 15px">Office equipment (incl. furniture and fixtures)</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">0</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">412,000</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#cceeff"><td><p style="font-size:10pt;font-family:times new roman;margin:0px 0px 0px 15px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">0</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">3,976,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px 0px 0px 15px">Less accumulated depreciation</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">0</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">(3,510,000</td><td style="PADDING-BOTTOM: 1px;width:1%;vertical-align:bottom;white-space: nowrap;">)</td></tr><tr style="height:15px;background-color:#cceeff"><td><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">0</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">466,000</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr></tbody></table><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 45px; text-align:justify;">*On February 28, 2023, the Company sold substantially all of its assets to Healgen, including its property, plant and equipment.</p> <table cellpadding="0" style="border-spacing:0;text-align:left;font:10pt times new roman;margin-left:auto;margin-right:auto;width:85%"><tbody><tr style="height:15px"><td><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:center;"><strong>March 31, 2023*</strong></p></td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:center;"><strong>December 31, 2022</strong></p></td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px"><td><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" colspan="2" style="width:9%;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" colspan="2" style="width:9%;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px 0px 0px 15px">Land</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">0</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">102,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px 0px 0px 15px">Buildings and improvements</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">0</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">1,352,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px 0px 0px 15px">Manufacturing and warehouse equipment</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">0</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">2,110,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px 0px 0px 15px">Office equipment (incl. furniture and fixtures)</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">0</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">412,000</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#cceeff"><td><p style="font-size:10pt;font-family:times new roman;margin:0px 0px 0px 15px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">0</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">3,976,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px 0px 0px 15px">Less accumulated depreciation</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">0</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">(3,510,000</td><td style="PADDING-BOTTOM: 1px;width:1%;vertical-align:bottom;white-space: nowrap;">)</td></tr><tr style="height:15px;background-color:#cceeff"><td><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">0</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">466,000</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr></tbody></table> 0 102000 0 1352000 0 2110000 0 412000 0 3976000 0 3510000 0 466000 <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"><strong>Note D – Accrued Expenses</strong></p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 45px; text-align:justify;">Accrued expenses and other current liabilities consisted of the following as of March 31, 2023 and December 31, 2022:</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><table cellpadding="0" style="border-spacing:0;text-align:left;font:10pt times new roman;margin-left:auto;margin-right:auto;width:85%"><tbody><tr style="height:15px"><td><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:center;"><strong>March 31, 2023</strong></p></td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:center;"><strong>December 31, 2022</strong></p></td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px">Accounting fees</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">16,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">87,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px">Interest payable</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">20,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">39,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px">Accounts receivable credit balances</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">0</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">1,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px">Sales tax payable</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">188,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">188,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px">Deferred compensation</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">114,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">109,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px">Other current liabilities</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">0</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">90,000</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#cceeff"><td><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">338,000</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">514,000</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr></tbody></table> <table cellpadding="0" style="border-spacing:0;text-align:left;font:10pt times new roman;margin-left:auto;margin-right:auto;width:85%"><tbody><tr style="height:15px"><td><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:center;"><strong>March 31, 2023</strong></p></td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:center;"><strong>December 31, 2022</strong></p></td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px">Accounting fees</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">16,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">87,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px">Interest payable</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">20,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">39,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px">Accounts receivable credit balances</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">0</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">1,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px">Sales tax payable</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">188,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">188,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px">Deferred compensation</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">114,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">109,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px">Other current liabilities</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">0</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">90,000</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#cceeff"><td><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">338,000</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">514,000</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr></tbody></table> 16000 87000 20000 39000 0 1000 188000 188000 114000 109000 0 90000 338000 514000 <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; text-align:justify;"><strong>Note E – Net Income / (Loss) Per Common Share</strong></p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 45px; text-align:justify;">Basic net income / (loss) per common share is calculated by dividing the net income / (loss) by the weighted average number of outstanding common shares during the period. Diluted net income / (loss) per common share includes the weighted average dilutive effect of stock options and warrants. When the Company has a loss, option and warrants are not included as they would be anti-dilutive. In the three months ended March 31, 2023, although the Company had net income, there were no options in the money at March 31, 2023. Potential common shares outstanding as of March 31, 2023 and 2022:</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><table cellpadding="0" style="border-spacing:0;text-align:left;font:10pt times new roman;margin-left:auto;margin-right:auto;width:60%"><tbody><tr style="height:15px"><td><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:right;"><strong>March 31, 2023</strong></p></td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="hdcell" colspan="2" style="width:9%;vertical-align:bottom;text-align:center;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:center;"><strong>March 31, 2022</strong></p></td><td style="white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px">Options</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">1,690,000</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">1,937,000</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px"><strong>Total</strong></p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">1,690,000</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">1,937,000</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr></tbody></table> <table cellpadding="0" style="border-spacing:0;text-align:left;font:10pt times new roman;margin-left:auto;margin-right:auto;width:60%"><tbody><tr style="height:15px"><td><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:right;"><strong>March 31, 2023</strong></p></td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="hdcell" colspan="2" style="width:9%;vertical-align:bottom;text-align:center;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:center;"><strong>March 31, 2022</strong></p></td><td style="white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px">Options</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">1,690,000</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">1,937,000</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px"><strong>Total</strong></p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">1,690,000</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">1,937,000</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr></tbody></table> 1690000 1937000 1690000 1937000 <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; text-align:justify;"><strong>Note F – Litigation/Legal Matters </strong></p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 45px; text-align:justify;">From time to time, the Company may be involved in immaterial legal proceedings in connection with matters that arise during the normal course of business. While the ultimate outcome of any such immaterial litigation cannot be predicted, if the Company is unsuccessful in defending any such litigation, the resulting financial losses are not expected to have a material adverse effect on the financial position, results of operations or cash flows of the Company.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"><strong>Note G – Debt</strong></p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 45px; text-align:justify;">The Company’s Line of Credit and Debt consisted of the following as of March 31, 2023 and December 31, 2022:</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 45px; text-align:justify;"> </p><table cellpadding="0" style="border-spacing:0;text-align:left;font:10pt times new roman;width:100%"><tbody><tr style="height:15px"><td><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: #000000 1px solid;width:9%;vertical-align:bottom;text-align:center;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:right;"><strong>March 31, 2023</strong></p></td><td style="white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: #000000 1px solid;width:9%;vertical-align:bottom;text-align:center;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:right;"><strong>December 31, 2022</strong></p></td><td style="white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"><strong>Loan and Security Agreement with Cherokee Financial, LLC</strong>: Secured note executed on February 15, 2015, at a fixed annual interest rate of 8% plus a 1% annual oversight fee, interest and oversight fee paid quarterly with principal due on February 15, 2020. Loan was extended for one year (until February 15, 2021) under the same terms and conditions as the original loan. The loan was further extended in February 2021 to February 15, 2022 with $100,000 added to the loan principal as a penalty and the annual interest rate increased to 10%. Loan was further extended in June 2022 (until February 15, 2023). Loan was paid in full on February 28, 2023.<strong><sup style="vertical-align:super"/></strong></p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">0</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">1,000,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"><strong>2019 Term Loan with Cherokee Financial, LLC: </strong>Note at an annual fixed interest rate of 18% paid quarterly in arrears and a balloon payment due on February 15, 2020. Loan was extended in February 2020, until February 15, 2021 with a penalty of $20,000 added to the loan principal and, extended again in February 2021 to February 15, 2022 with another penalty of $20,000 added to the loan principal. Loan was extended in June 2022 (until February 15, 2023). Loan was paid in full on February 28, 2023.</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">0</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">240,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"><strong>November 2020 Shareholder Note:</strong> Term loan at 7% interest with the first interest only payment being made on February 4, 2021 and the final interest and $50,000 principal due on November 4, 2023.</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">50,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">50,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"><strong>December 2021 Shareholder Notes:</strong> Term loan with one non-affiliated shareholder at 7% interest until the loan is paid in full. Loan was amended to address additional amounts provided under the loan.</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">125,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">225,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"><strong>September 2022 Healgen Loan &amp; Promissory Note</strong>: Term Loan with Healgen at a fixed rate of 1% per month compounded monthly. Loan was collateralized by first security interest in receivables, inventory, and all other assets with the exception of assets already encumbered. The Healgen loan was paid in full on February 28, 2023 (the closing of the Asset Sale to Healgen) and all interest was waived by Healgen. </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">0</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">715,000</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 6.3pt; text-align:justify;"><strong>Total Debt</strong></p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">175,000</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">2,230,000</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px">Current portion</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 1px solid;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">175,000</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 1px solid;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">2,230,000</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr></tbody></table><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"><strong><span style="text-decoration:underline">LOAN AND SECURITY AGREEMENT (“LSA”) WITH CHEROKEE FINANCIAL, LLC (“CHEROKEE”)</span></strong></p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 0.5in; text-align:justify;">On March 26, 2015, the Company entered into a LSA with Cherokee (the “Cherokee LSA”) in the amount of $1,200,000, which was collateralized by a first security interest in real estate and machinery and equipment. The Cherokee LSA reached maturity on February 15, 2020 with a balance of $900,000 (after 4 principal reduction payments of $75,000 each were made over the course of the initial term). In February 2020, the Cherokee LSA was extended for one year, or until February 15, 2021. No terms of the facility were changed under the February 2020 extension.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 0.5in; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 0.5in; text-align:justify;">In February 2021, the Cherokee LSA was further extended for another year, or until February 15, 2022 (the “February 2021 Extension”). Under the February 2021 Extension, the principal of the Cherokee LSA was increased to $1,000,000 to include a $100,000 penalty that was due as a result of the Company being unable to pay back the principal balance to Cherokee on February 15, 2021. The annual interest rate on the Cherokee LSA was also increased to a fixed rate of 10% (the prior fixed rate was 8%) plus a 1% annual oversight fee (that remained unchanged). Interest and the oversight fee were still due quarterly.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 0.5in; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 0.5in; text-align:justify;">Under the terms of the February 2021 Extension, if the Company didn’t pay off the principal on or before February 15, 2022, Cherokee could charge an 8% delinquent fee on the principal balance ($1,000,000) on February 15, 2022. The Company was not able to pay off the facility on February 15, 2022; however, on June 14, 2022 Cherokee agreed that they would defer the principal amounts due under the Cherokee LSA until February 15, 2023 and that any applicable penalties would also be deferred as long as the Company remained current on the quarterly interest payments.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 0.5in; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 0.5in; text-align:justify;">On February 28, 2023, with proceeds from the Asset Sale to Healgen, the Company paid all amounts due to Cherokee under the LSA for principal and interest.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 0.5in; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 0.5in; text-align:justify;">The Company recognized $13,000 in interest expense related to the Cherokee LSA in the First Quarter 2023 and $25,000 in interest expense related to the Cherokee LSA in the First Quarter 2022</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 0.5in; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 0.5in; text-align:justify;">As of March 31, 2023 and December 31, 2022, the balance of the Cherokee LSA was $0 and $1,000,000, respectively.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; text-align:justify;"><strong><span style="text-decoration:underline">2019 TERM LOAN WITH CHEROKEE</span></strong></p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 45px; text-align:justify;">In February 2019, the Company entered into an agreement with Cherokee under which Cherokee provided the Company with a loan in the amount of $200,000 (the “2019 Cherokee Term Loan”). The annual interest rate under the 2019 Cherokee Term Loan was 18% (fixed) paid quarterly in arrears.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 45px; text-align:justify;">In February 2020, the 2019 Cherokee Term Loan was extended for one year, or until February 15, 2021. No terms of the facility were changed under the February 2020 extension. The Company incurred a penalty in the amount of $20,000 which was added to the principal balance of the 2019 Cherokee Term Loan; bringing the principal to $220,000.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 45px; text-align:justify;">In February 2021, the 2019 Cherokee Term Loan was further extended to February 15, 2022. Under the terms of this additional extension, the 2019 Cherokee Term Loan was increased to $240,000 to include a $20,000 penalty that was due as a result of the Company being unable to pay back the principal balance to Cherokee on February 15, 2021. In addition, if the Company didn’t pay off the principal on or before February 15, 2022, Cherokee could charge an 8% delinquent fee on the principal balance ($240,000) on February 15, 2022. The Company was not able to pay off the facility on February 15, 2022; however, on June 14, 2022 Cherokee agreed that they would defer the principal amounts due under the 2019 Cherokee Term Loan until February 15, 2023 and that any applicable penalties would also be deferred as long as the Company remained current on the quarterly interest payments.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 45px; text-align:justify;">The Company recognized $4,000 in interest expense in the First Quarter 2023 and $11,000 in interest expense in the First Quarter 2022. The Company paid all principal and interest due to Cherokee on February 28, 2023 with proceeds from the Asset Sale to Healgen. The balance of the 2019 Cherokee Term Loan was $0 at March 31, 2023 and $240,000 at December 31, 2022.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; text-align:justify;"><strong><span style="text-decoration:underline">NOVEMBER 2020 TERM LOAN</span></strong></p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 45px; text-align:justify;">On November 4, 2020, the Company entered into a loan agreement with an individual shareholder in the principal amount of $50,000. There were no expenses related to the term loan and the interest rate is 7%. The first interest only payment was made on February 4, 2021 and the final interest payment and principal was due on May 4, 2021. On May 4, 2021, the Company extended this loan for another 6 months, or until November 4, 2021. The interest rate and all other terms of the note remained unchanged under this extension.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 45px; text-align:justify;">On November 4, 2021, the November 2020 Term Loan was extended again. Under this extension, the principal was due on November 4, 2022. The last interest payment made to the shareholder was in November 2021 and was for the period of August 5, 2021 through November 4, 2021. The shareholder agreed to defer the quarterly interest payments due on the extended facility. The facility was further extended on November 4, 2022, under the same terms and conditions, for another 6 months, or until May 4, 2023.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 45px; text-align:justify;">The Company recognized less than $1,000 in interest expense related to the November 2020 Term Loan in the First Quarter 2023 and $1,000 in interest expense in the First Quarter 2022. The balance on the November 2020 Term Loan was $50,000 at March 31, 2023 and December 31, 2022. (See Note M – Subsequent Events for more information on the November 2020 Term Loan)</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; text-align:justify;"><strong><span style="text-decoration:underline">DECEMBER 2021 SHAREHOLDER LOANS</span></strong></p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 45px; text-align:justify;">On December 14, 2021, the Company entered into Loan Agreements with two non-affiliated shareholders resulting in gross (and net) proceeds of $75,000 as there were no costs associated with the loans. Interest on the loans was 7% per annum until principal and interest were due in full, or until June 15, 2022. The first interest payments were due March 15, 2022 and payment of final interest and principal was due June 15, 2022.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 45px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 45px; text-align:justify;">One of the loans (in the amount of $25,000) was paid in full on June 13, 2022 along with the final interest payment due.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 45px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 45px; text-align:justify;">On April 6, 2022, the Company amended the loan with the other non-affiliated shareholder. This amendment (No.1; hereinafter referred to in this paragraph as “Amendment No. 1”) increased the principal due to the shareholder by $25,000; bringing their total principal to $75,000. No other terms of the loan were changed under Amendment No. 1.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 45px; text-align:justify;">On April 14, 2022, the loan was amended again (under Amendment No. 2; hereinafter referred to in this paragraph as “Amendment No. 2”) increasing the principal again by $50,000; bringing their total principal to $125,000. No other terms of the loan were changed under Amendment No. 2.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 45px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 45px; text-align:justify;">On May 11, 2022, the loan was amended again (under Amendment No. 3; hereinafter referred to in this paragraph as “Amendment No. 3”) increasing the principal again by $75,000; bringing their total principal to $200,000. The loan was further amended to include a specific payment schedule based on receipt of anticipated ERC refunds.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 45px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 45px; text-align:justify;">On June 13, 2022, the Company made a principal reduction payment to this shareholder in the amount of $25,000 from proceeds from the ERC refund received on June 2, 2022; bringing the principal amount owed on the loan to $175,000.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 45px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 45px; text-align:justify;">On July 13, 2022, the loan was amended again (under Amendment No. 4; hereinafter referred to in this paragraph as “Amendment No. 4”) increasing the principal by $25,000; bringing their total principal to $200,000 again. The loan agreement was also amended to revise the maturity date from June 15, 2022 to no specific maturity date.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 45px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 45px; text-align:justify;">On September 13, 2022, the loan was amended again (under Amendment No. 5; hereinafter referred to in this paragraph as “Amendment No. 5”) increasing the principal by $25,000; bringing their total principal to $225,000 again.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 45px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 45px; text-align:justify;">On September 28, 2022, the shareholder provided the Company with additional funds, $40,000, under this loan with the understanding that the amount would be paid back once the Healgen Loan funds were received and there would be no interest charged on this additional amount. This increased the amount due to the shareholder under the facility to $265,000. The Company did pay this additional amount in full on October 4, 2022; bringing the balance of the loan back to $225,000.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 45px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 45px; text-align:justify;">The Company incurred $4,000 in interest expense related to these loans in the First Quarter 2023 and $1,000 in interest expense related to these loans in the First Quarter 2022.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 45px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 45px; text-align:justify;">The balance on these loans was $125,000 on March 31, 2023 and $225,000 at December 31, 2022. (See Note M – Subsequent Events for more information on the December 2021 Shareholder Loans)</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; text-align:justify;"><strong><span style="text-decoration:underline">SEPTEMBER 2022 HEALGEN LOAN &amp; PROMISSORY NOTE</span></strong></p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 45px; text-align:justify;">On September 28, 2022, the Company entered into a Loan and Promissory with Healgen Scientific Limited Liability Company (the “Healgen Loan”) at a fixed rate of 1% per month, (compounded monthly) and received initial gross/net proceeds of $40,000 and subsequent gross/net proceeds of $360,000; for a total of $400,000. The Company utilized $34,000 of the loan proceeds to pay off the Crestmark Line of Credit and the balance was used for working capital. The Healgen Loan was collateralized by a first security interest in the Company’s receivables, inventory, and all other assets with the exception of those assets already encumbered. The first payment under the Healgen Loan was due on January 28, 2023 and was in the amount of $140,000.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 45px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 45px; text-align:justify;">The Healgen Loan was amended on November 15, 2022 to increase the principal due under the loan to $700,000. Under this first amendment, the loan maturity date was extended to April 15, 2023 and the first payment date was extended to February 15, 2023 and changed to $246,000.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 45px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 45px; text-align:justify;">The Healgen loan was amended again on December 19, 2022 to increase the principal due under the loan to $715,000. Under this second amendment, the amount of the first payment was changed to $251,000 with payments of the same amount due on March 15, 2023 and April 15, 2023.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 45px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 45px; text-align:justify;">The Healgen Loan was amended again on January 6, 2023 to increase the principal due under the loan to $815,000. Under this third amendment, the amount of the first payment (due February 15, 2023) was changed to $286,000 with payments of the same amount due on March 15, 2023 and April 15, 2023. No other terms of the Healgen Loan were changed.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 45px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 45px; text-align:justify;">The Healgen Loan was amended again on February 9, 2023 to increase the principal due under the loan to $965,000. Under this fourth amendment, the amount of the first payment (due February 15, 2023) was changed to $337,000 with payments of the same amount due on March 15, 2023 and April 15, 2023. No other terms of the Healgen Loan were changed.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 45px; text-align:justify;">On February 28, 2023, with proceeds from the Asset Sale to Healgen, the Company made a payment in the amount of $965,000 to Healgen for all principal due under the Healgen Loan. Healgen waived all interest due under the Healgen Loan.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 45px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 45px; text-align:justify;">The balance on the Healgen Loan was $0 at March 31, 2023 and $715,000 at December 31, 2022.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; text-align:justify;"><strong><span style="text-decoration:underline">OTHER DEBT INFORMATION</span></strong></p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 45px; text-align:justify;">In addition to the debt indicated previously, previous debt facilities (paid in full via refinance or conversion into equity) had financial impact on the First Quarter 2022. More specifically:</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; text-align:justify;"><strong>LINE OF CREDIT WITH CRESTMARK BANK (“CRESTMARK”) </strong></p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 45px; text-align:justify;">On June 29, 2015, the Company entered into a Loan and Security Agreement (“LSA”) with Crestmark related to a revolving line of credit (the “Crestmark LOC”). The Crestmark LOC was used for working capital and general corporate purposes. Upon completion of the initial 5 year term, the Crestmark LOC automatically renewed for additional one (1) year terms unless notice of termination from the Company was received by Crestmark not less than sixty (60) days prior to the end of the renewal term. On September 29, 2022, the Company made a payment to Crestmark in the amount of $34,000 which paid off the balance on the Crestmark LOC.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 45px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 45px; text-align:justify;">The Company incurred $0 in interest expense in the First Quarter 2023 and $10,000 in interest expense in the First Quarter 2022.</p> <table cellpadding="0" style="border-spacing:0;text-align:left;font:10pt times new roman;width:100%"><tbody><tr style="height:15px"><td><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: #000000 1px solid;width:9%;vertical-align:bottom;text-align:center;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:right;"><strong>March 31, 2023</strong></p></td><td style="white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: #000000 1px solid;width:9%;vertical-align:bottom;text-align:center;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:right;"><strong>December 31, 2022</strong></p></td><td style="white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"><strong>Loan and Security Agreement with Cherokee Financial, LLC</strong>: Secured note executed on February 15, 2015, at a fixed annual interest rate of 8% plus a 1% annual oversight fee, interest and oversight fee paid quarterly with principal due on February 15, 2020. Loan was extended for one year (until February 15, 2021) under the same terms and conditions as the original loan. The loan was further extended in February 2021 to February 15, 2022 with $100,000 added to the loan principal as a penalty and the annual interest rate increased to 10%. Loan was further extended in June 2022 (until February 15, 2023). Loan was paid in full on February 28, 2023.<strong><sup style="vertical-align:super"/></strong></p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">0</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">1,000,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"><strong>2019 Term Loan with Cherokee Financial, LLC: </strong>Note at an annual fixed interest rate of 18% paid quarterly in arrears and a balloon payment due on February 15, 2020. Loan was extended in February 2020, until February 15, 2021 with a penalty of $20,000 added to the loan principal and, extended again in February 2021 to February 15, 2022 with another penalty of $20,000 added to the loan principal. Loan was extended in June 2022 (until February 15, 2023). Loan was paid in full on February 28, 2023.</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">0</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">240,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"><strong>November 2020 Shareholder Note:</strong> Term loan at 7% interest with the first interest only payment being made on February 4, 2021 and the final interest and $50,000 principal due on November 4, 2023.</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">50,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">50,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"><strong>December 2021 Shareholder Notes:</strong> Term loan with one non-affiliated shareholder at 7% interest until the loan is paid in full. Loan was amended to address additional amounts provided under the loan.</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">125,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">225,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"><strong>September 2022 Healgen Loan &amp; Promissory Note</strong>: Term Loan with Healgen at a fixed rate of 1% per month compounded monthly. Loan was collateralized by first security interest in receivables, inventory, and all other assets with the exception of assets already encumbered. The Healgen loan was paid in full on February 28, 2023 (the closing of the Asset Sale to Healgen) and all interest was waived by Healgen. </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">0</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">715,000</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 6.3pt; text-align:justify;"><strong>Total Debt</strong></p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">175,000</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">2,230,000</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px">Current portion</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 1px solid;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">175,000</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 1px solid;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">2,230,000</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr></tbody></table> 0 1000000 0 240000 50000 50000 125000 225000 0 715000 175000 2230000 175000 2230000 1200000 75000 1000000 100000 0.10 0.01 0.08 1000000 13000 25000 0 1000000 200000 0.18 220000 240000 20000 0.08 240000 4000 11000 0 240000 50000 0.07 2021-02-04 1000 1000 50000 75000 0.07 25000 25000 75000 50000 125000 75000 200000 25000 175000 25000 200000 225000 40000 265000 4000 1000 125000 225000 0.01 40000 360000 400000 34000 140000 700000 Under this first amendment, the loan maturity date was extended to April 15, 2023 and the first payment date was extended to February 15, 2023 and changed to $246,000 715000 Under this second amendment, the amount of the first payment was changed to $251,000 with payments of the same amount due on March 15, 2023 and April 15, 2023 815000 Under this third amendment, the amount of the first payment (due February 15, 2023) was changed to $286,000 with payments of the same amount due on March 15, 2023 and April 15, 2023 965000 Under this fourth amendment, the amount of the first payment (due February 15, 2023) was changed to $337,000 with payments of the same amount due on March 15, 2023 and April 15, 2023 965000 0 715000 P5Y 34000 0 10000 <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; text-align:justify;"><strong><span style="text-decoration:underline">NOTE H – Employee Retention Credit</span></strong></p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 45px; text-align:justify;">The employee retention credit (“ERC”), as originally enacted on March 27, 2020 by the CARES Act, was a refundable tax credit against certain employment taxes equal to 50% of the qualified wages an eligible employer paid to employees and allowed claims through December 31, 2021 by eligible employers who retained employees during the Covid-19 pandemic. However, in November 2021, the ERC was terminated as of September 30, 2021 instead of December 31, 2021.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 45px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 45px; text-align:justify;">The maximum qualified wages for each employee under the ERC was $10,000 per quarter. Also, because the Company has 100 or fewer full-time employees, health plan expenses borne by the Company could also be included as qualified wages in addition to salary. In August 2021, the Company’s payroll service provider processed and mailed a Form 941-X to claim a refund in the amount of $202,000 on qualified wages paid in the first quarter of 2021. Due to a change in the Form 941-X, the Company’s payroll service provider did not process and mail its Form 941-X to claim a refund in the amount of $198,000 on qualified wages paid in the second quarter of 2021 until October 28, 2021.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 45px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 45px; text-align:justify;">The Company was informed that the IRS did not have record of receiving the Company’s Form 941-X for the first quarter of 2021 (which was mailed by the Company’s service provider in August 2021). The Company re-sent the Form 941-X for the first quarter of 2021 via overnight service on December 31, 2021 and the IRS received it on January 5, 2022. This lack of receipt resulted in a delay in receiving the expected refund in the amount of $202,000.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 45px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 45px; text-align:justify;">On June 2, 2022, the Company received a refund for the second quarter of 2021 in the amount of $199,000. This amount represents the $198,000 claimed as a refund and $1,000 in interest. The Company has had a number of discussions with the IRS and has been given a number of time frames in which the refund for the first quarter of 2021 could be expected. As of March 31, 2023, the Company had not yet received the refund. (See Note M – Subsequent Events for updated information on the ERC refund)</p> 202000 198000 202000 199000 198000 1000 <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; text-align:justify;"><strong>Note I – Asset Sale to Healgen</strong></p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 45px; text-align:justify;">Over the last several years, the Company has retained financial consultants to seek out alternative solutions; most recently in early Fiscal 2022. The consultants were seeking solutions including but not limited to potential mergers, acquisitions, investment in the Company, and strategic relationships. Simultaneously, the Company’s management was seeking alternative solutions and began discussions with Healgen. With the current financial condition of the Company, the Company was not able to find a suitable alternative apart from the Asset Sale to Healgen.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 45px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 45px; text-align:justify;">After carefully weighing the facts and circumstances associated with the Asset Sale to Healgen as well as alternative courses of action, the Company’s Board of Directors (the “Board”) unanimously concluded that the proposed sale of substantially all of the Company’s assets was the best available alternative to maximize value for shareholders.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 45px; text-align:justify;">The Board believes the Company’s status as a fully reporting public company is an asset which may be sufficiently attractive to induce others to enter into business combinations with the Company. The Company is exploring strategic transactions which may result in entering into a new line of business (subject to specific competitive limitations under the Asset Sale to Healgen). The Company believes strategic acquisitions using the Company’s publicly traded stock as transaction consideration could enhance shareholder value. Nonetheless, the Board may later determine to dissolve the Company and distribute any remaining assets to the Company’s shareholders if the Company is unable to make any strategic acquisitions or enter into any strategic transactions.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 45px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 45px; text-align:justify;">On December 19, 2022, the Company entered into an Asset Purchase Agreement (“APA”) with Healgen, pursuant to which the Company agreed, subject to the approval of its shareholders, to sell substantially all of the Company’s operating assets (excluding its cash, accounts receivables arising prior to the closing date, and certain other assets). The Company submitted the Asset Sale to Healgen to a shareholder vote via a preliminary Proxy Statement filed on December 22, 2022. On January 5, 2023, the Company filed an amendment to its Preliminary Proxy Statement and on January 11, 2023, the Company filed its Definitive Proxy Statement with the SEC.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 45px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 45px; text-align:justify;">On February 15, 2023, the Company held the 2023 Special Meeting of Shareholders (the “Special Meeting”) at the Company’s corporate offices in Kinderhook, New York, at which a quorum (27,863,899 shares of common stock of the 47,098,476 shares of common stock outstanding) was present in person or represented by proxy.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 45px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 45px; text-align:justify;">Approval of the Asset Sale to Healgen required the affirmative vote of the holders of a majority of the outstanding shares of the Company’s common stock (par value $0.01). 26,381,832, or 54.84% of the total outstanding shares of the Company, voted in favor of the Asset Sale to Healgen. 1,476,077, or 3.06% of the total outstanding shares, voted against the Asset Sale to Healgen. 5,990, or 0.01% of the total shares outstanding, withheld voting on the Asset Sale to Healgen. Given the majority of total outstanding shares voted in favor of the Asset Sale to Healgen, the Asset Sale to Healgen was approved.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 45px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 45px; text-align:justify;">On February 28, 2023, the Company completed the Asset Sale to Healgen and disposition of substantially all of the Company’s assets. In connection with the closing of the Asset Sale to Healgen, and in accordance with the terms of the Asset Purchase Agreement, Healgen paid an aggregate purchase price of $3 million (“Purchase Price”). $300,000 of the Purchase Price is being held back in a retention fund to cover potential indemnification claims during the six months following the close. Net proceeds in the amount of $247,000 were received by the Company after satisfaction of 1) a loan with Healgen in the amount of $965,000, 2) the Cherokee LSA, (totaling $1,031,000 for principal and interest through February 27, 2023), 3) the 2019 Cherokee Term Loan (totaling $252,000 for principal and interest through February 27, 2023), 4) delinquent property related taxes in the amount of $193,000 and 5) $12,000 for current property related taxes.</p> 27863899 47098476 the Asset Sale to Healgen required the affirmative vote of the holders of a majority of the outstanding shares of the Company’s common stock (par value $0.01). 26,381,832, or 54.84% of the total outstanding shares of the Company, voted in favor of the Asset Sale to Healgen. 1,476,077, or 3.06% of the total outstanding shares, voted against the Asset Sale to Healgen. 5,990, or 0.01% of the total shares outstanding, withheld voting on the Asset Sale to Healgen. 3000000 300000 247000 965000 1031000 252000 193000 12000 <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; text-align:justify;"><strong>NOTE J – Stock Options and Warrants</strong></p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 45px; text-align:justify;">The Company has two non-statutory stock option plans, the Fiscal 2001 Non-statutory Stock Option Plan (the “2001 Plan”) and the 2013 Equity Compensation Plan (the “2013 Plan”). Both plans have been adopted by the Board of Directors and approved by shareholders. Both the 2001 Plan and the 2013 Plan have options available for future issuance. Any common shares issued as a result of the exercise of stock options would be new common shares issued from our authorized issued shares.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 45px; text-align:justify;">During the First Quarter 2023 and the First Quarter 2022, the Company issued 0 options to purchase shares of common stock.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in; text-align:justify;">Stock option activity for the First Quarter 2023 and the First Quarter 2022 is summarized as follows (the figures contained within the tables below have been rounded to the nearest thousand):</p><table cellpadding="0" style="border-spacing:0;text-align:left;font:10pt times new roman;width:100%"><tbody><tr style="height:15px"><td><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="hdcell" colspan="10" style="BORDER-BOTTOM: 1px solid;width:6%;vertical-align:bottom;text-align:center;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:center;"><strong>First Quarter 2023</strong></p></td><td style="white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="hdcell" colspan="10" style="BORDER-BOTTOM: 1px solid;width:6%;vertical-align:bottom;text-align:center;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:center;"><strong>First Quarter 2022</strong></p></td><td style="white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px"><td><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:6%;vertical-align:bottom;text-align:center;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:center;"><strong>Shares</strong></p></td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:6%;vertical-align:bottom;text-align:center;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:center;"><strong>Weighted </strong></p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:center;"><strong>Average Exercise Price</strong></p></td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:6%;vertical-align:bottom;text-align:center;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:center;"><strong>Aggregate </strong></p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:center;"><strong>Intrinsic Value </strong><strong>as</strong></p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:center;"><strong> of </strong></p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:center;"><strong>March 31, 2023</strong></p></td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:6%;vertical-align:bottom;text-align:center;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:center;"><strong>Shares</strong></p></td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:6%;vertical-align:bottom;text-align:center;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:center;"><strong>Weighted Average Exercise Price</strong></p></td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:6%;vertical-align:bottom;text-align:center;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:center;"><strong>Aggregate Intrinsic Value as of </strong></p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:center;"><strong>March 31, 2022</strong></p></td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px">Options outstanding at beginning of year</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:6%;vertical-align:bottom;text-align:right;">1,736,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:6%;vertical-align:bottom;text-align:right;">0.12</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" colspan="2" style="width:6%;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:6%;vertical-align:bottom;text-align:right;">1,937,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:6%;vertical-align:bottom;text-align:right;">0.13</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" colspan="2" style="width:6%;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px">Granted</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:6%;vertical-align:bottom;text-align:right;">0</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td colspan="2"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:right;">NA</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" colspan="2" style="width:6%;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:6%;vertical-align:bottom;text-align:right;">0</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td colspan="2"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:right;">NA</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" colspan="2" style="width:6%;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px">Exercised</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:6%;vertical-align:bottom;text-align:right;">0</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td colspan="2"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:right;">NA</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" colspan="2" style="width:6%;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:6%;vertical-align:bottom;text-align:right;">0</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td colspan="2"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:right;">NA</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" colspan="2" style="width:6%;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px">Cancelled/expired</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:6%;vertical-align:bottom;text-align:right;">46,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:6%;vertical-align:bottom;text-align:right;">0.26</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" colspan="2" style="width:6%;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:6%;vertical-align:bottom;text-align:right;">0</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td colspan="2"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:right;">NA</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" colspan="2" style="width:6%;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px">Options outstanding at end of quarter</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:6%;vertical-align:bottom;text-align:right;">1,690,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:6%;vertical-align:bottom;text-align:right;">0.12</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:6%;vertical-align:bottom;text-align:right;">0</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:6%;vertical-align:bottom;text-align:right;">1,937,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:6%;vertical-align:bottom;text-align:right;">0.13</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:6%;vertical-align:bottom;text-align:right;">0</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px">Options exercisable at end of quarter</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:6%;vertical-align:bottom;text-align:right;">1,690,000</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 1px solid;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:6%;vertical-align:bottom;text-align:right;">0.12</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:6%;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:6%;vertical-align:bottom;text-align:right;">1,937,000</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 1px solid;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:6%;vertical-align:bottom;text-align:right;">0.13</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:6%;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr></tbody></table><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 45px; text-align:justify;">The Company recognized $0 in share based payment expense in the First Quarter 2023 and the First Quarter 2022. At March 31, 2023, there was $0 of unrecognized share based payment expense related to stock options.</p> <table cellpadding="0" style="border-spacing:0;text-align:left;font:10pt times new roman;width:100%"><tbody><tr style="height:15px"><td><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="hdcell" colspan="10" style="BORDER-BOTTOM: 1px solid;width:6%;vertical-align:bottom;text-align:center;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:center;"><strong>First Quarter 2023</strong></p></td><td style="white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="hdcell" colspan="10" style="BORDER-BOTTOM: 1px solid;width:6%;vertical-align:bottom;text-align:center;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:center;"><strong>First Quarter 2022</strong></p></td><td style="white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px"><td><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:6%;vertical-align:bottom;text-align:center;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:center;"><strong>Shares</strong></p></td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:6%;vertical-align:bottom;text-align:center;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:center;"><strong>Weighted </strong></p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:center;"><strong>Average Exercise Price</strong></p></td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:6%;vertical-align:bottom;text-align:center;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:center;"><strong>Aggregate </strong></p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:center;"><strong>Intrinsic Value </strong><strong>as</strong></p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:center;"><strong> of </strong></p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:center;"><strong>March 31, 2023</strong></p></td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:6%;vertical-align:bottom;text-align:center;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:center;"><strong>Shares</strong></p></td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:6%;vertical-align:bottom;text-align:center;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:center;"><strong>Weighted Average Exercise Price</strong></p></td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:6%;vertical-align:bottom;text-align:center;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:center;"><strong>Aggregate Intrinsic Value as of </strong></p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:center;"><strong>March 31, 2022</strong></p></td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px">Options outstanding at beginning of year</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:6%;vertical-align:bottom;text-align:right;">1,736,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:6%;vertical-align:bottom;text-align:right;">0.12</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" colspan="2" style="width:6%;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:6%;vertical-align:bottom;text-align:right;">1,937,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:6%;vertical-align:bottom;text-align:right;">0.13</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" colspan="2" style="width:6%;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px">Granted</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:6%;vertical-align:bottom;text-align:right;">0</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td colspan="2"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:right;">NA</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" colspan="2" style="width:6%;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:6%;vertical-align:bottom;text-align:right;">0</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td colspan="2"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:right;">NA</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" colspan="2" style="width:6%;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px">Exercised</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:6%;vertical-align:bottom;text-align:right;">0</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td colspan="2"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:right;">NA</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" colspan="2" style="width:6%;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:6%;vertical-align:bottom;text-align:right;">0</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td colspan="2"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:right;">NA</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" colspan="2" style="width:6%;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px">Cancelled/expired</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:6%;vertical-align:bottom;text-align:right;">46,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:6%;vertical-align:bottom;text-align:right;">0.26</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" colspan="2" style="width:6%;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:6%;vertical-align:bottom;text-align:right;">0</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td colspan="2"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:right;">NA</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" colspan="2" style="width:6%;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px">Options outstanding at end of quarter</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:6%;vertical-align:bottom;text-align:right;">1,690,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:6%;vertical-align:bottom;text-align:right;">0.12</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:6%;vertical-align:bottom;text-align:right;">0</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:6%;vertical-align:bottom;text-align:right;">1,937,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:6%;vertical-align:bottom;text-align:right;">0.13</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:6%;vertical-align:bottom;text-align:right;">0</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px">Options exercisable at end of quarter</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:6%;vertical-align:bottom;text-align:right;">1,690,000</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 1px solid;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:6%;vertical-align:bottom;text-align:right;">0.12</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:6%;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:6%;vertical-align:bottom;text-align:right;">1,937,000</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 1px solid;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:6%;vertical-align:bottom;text-align:right;">0.13</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:6%;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr></tbody></table> 1736000 0.12 1937000 0.13 0 0 0 0 46000 0.26 0 1690000 0.12 0 1937000 0.13 0 1690000 0.12 1937000 0.13 0 0 <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"><strong>NOTE K – Changes in Stockholders’ Deficit</strong></p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"><strong><span style="text-decoration:underline">LANDMARK CONSULTING AGREEMENT</span></strong></p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 45px; text-align:justify;">On March 7, 2022, the Company entered into a Financial Advisory Agreement (the “Agreement”) with Landmark Pegasus, Inc. (‘Landmark”). The Agreement provided that Landmark would provide certain financial advisory services for a minimum period of 3 months (which period commenced on February 28, 2022), and as consideration for these services, the Company would pay Landmark (a) a retainer fee consisting of 500,000 restricted shares of common stock and a warrant to purchase 2.75 million shares of the Company’s common stock at a strike price equal to the average closing price of the Company’s common shares for the 30 days preceding the Agreement, or $0.035 per share, resulting in gross proceeds to the Company in the amount of $96,250. The warrant would vest upon the closing of a transaction involving Landmark or upon the invocation of a “Breakup Fee”.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 45px; text-align:justify;">In a subsequent amendment, the terms of the warrant were changed to reflect that the warrant would be issued immediately preceding the closing of a transaction involving Landmark or immediately upon the invocation of the Breakup Fee. In each case, the warrant would vest immediately (i.e. the warrant would be 100% immediately exercisable).</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 45px; text-align:justify;">The Breakup Fee would be invoked upon the generation of a specific transaction to ABMC which meets certain criteria agreed upon by both the Company and Landmark; which transaction is then rejected by the Company. The Company would also pay to Landmark a “Success Fee” for the consummation of a transaction closing during the term of the Agreement and for 12 months thereafter, between the Company and any party first introduced to the Company by Landmark, or with any party the Company has specifically requested Landmark’s assistance with the transaction. Upon invocation of the Breakup Fee or payment of the Success Fee, the Company would also issue an additional 250,000 restricted shares of the Company’s common stock. In the event that the Company consummated a transaction involving the provision of services to any party introduced to the Company by Landmark or with any party the Company has specifically requested Landmark’s assistance with, the Company would pay Landmark 10% of any revenues received from the transaction, unless this percentage is modified by both the Company and Landmark in writing. There is no material relationship between the Company and Landmark, other than with respect to the Agreement.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 45px; text-align:justify;">Apart from the initial 500,000 restricted common shares, no additional stock was issued to Landmark and no further amounts were paid to Landmark.</p> 500000 2750000 0.035 96250000000 250000 500000 <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"><strong><span style="text-decoration:underline">Note L- Income Taxes</span></strong></p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 45px; text-align:justify;">The Company follows ASC 740 “Income Taxes” (“ASC 740”) which prescribes the asset and liability method whereby deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities, and are measured using the enacted laws and tax rates that will be in effect when the differences are expected to reverse. The measurement of deferred tax assets is reduced, if necessary, by a valuation allowance for any tax benefits that are not expected to be realized. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that such tax rate changes are enacted. Under ASC 740, tax benefits are recorded only for tax positions that are more likely than not to be sustained upon examination by tax authorities. The amount recognized is measured as the largest amount of benefit that is greater than 50 percent likely to be realized upon ultimate settlement. Unrecognized tax benefits are tax benefits claimed in the Company’s tax returns that do not meet these recognition and measurement standards.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 45px; text-align:justify;">On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted in response to the COVID-19 pandemic. The CARES Act, among other things, permits NOL carryovers and carrybacks to offset 100% of taxable income for taxable years beginning before 2021. With regards to the use of net losses incurred for 2018 and later, such net operating losses have no expiration, while taxable income can only be offset up to 80% of taxable income. Net operating losses incurred prior to 2018 may be fully utilized to offset taxable income.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in; text-align:justify;">A reconciliation of the U.S. Federal statutory income tax rate to the effective income tax rate is as follows:</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><table cellpadding="0" style="border-spacing:0;text-align:left;font:10pt times new roman;margin-left:auto;margin-right:auto;width:85%"><tbody><tr style="height:15px"><td><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:center;"><strong>Quarter Ended</strong></p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:center;"><strong>March 31, 2023</strong></p></td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:center;"><strong>Quarter Ended</strong></p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:center;"><strong>March 31, 2022</strong></p></td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:bottom;"><p style="font-size:10pt;font-family:times new roman;margin:0px">Tax expense at federal statutory rate </p></td><td style="white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="hdcell" colspan="2" style="width:9%;vertical-align:bottom;text-align:center;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 12.6pt; text-align:right;">(21%)</p></td><td style="white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="hdcell" colspan="2" style="width:9%;vertical-align:bottom;text-align:center;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 12.6pt; text-align:right;">(21%)</p></td><td style="white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px">State tax expense, net of federal tax effect </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">0</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">%</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">0</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">%</td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px">Increase in valuation allowance </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">21</td><td style="PADDING-BOTTOM: 1px;width:1%;vertical-align:bottom;white-space: nowrap;">%</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">21</td><td style="PADDING-BOTTOM: 1px;width:1%;vertical-align:bottom;white-space: nowrap;">%</td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px 0px 0px 0.25in">Effective income tax rate </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td colspan="2" style="BORDER-BOTTOM: 3px double;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 12.6pt; text-align:right;">(0%)</p></td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td colspan="2" style="BORDER-BOTTOM: 3px double;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 12.6pt; text-align:right;">(0%)</p></td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr></tbody></table><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 0.5in; text-align:justify;">Significant components of the Company’s deferred income tax assets are as follows: </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><table cellpadding="0" style="border-spacing:0;text-align:left;font:10pt times new roman;margin-left:auto;margin-right:auto;width:85%"><tbody><tr style="height:15px"><td><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: #000000 1px solid;width:9%;vertical-align:bottom;text-align:center;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:center;"><strong>March 31, 2023</strong></p></td><td style="white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: #000000 1px solid;width:9%;vertical-align:bottom;text-align:center;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:center;"><strong>December 31, 2022</strong></p></td><td style="white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px"><td><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" colspan="2" style="width:9%;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">13,</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Inventory allowance</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">0</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">61,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Allowance for doubtful accounts</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">1,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">1,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Stock based compensation</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">138,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">149,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Deferred wages payable</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">30,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">21,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Depreciation – Property, Plant &amp; Equipment</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">0</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">(19,000</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">)</td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Research and development credits</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">26,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">24,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Net operating loss carry-forward</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">2,482,000</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">2,972,000</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Total gross deferred income tax assets</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">2,677,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">3,209,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Less deferred income tax assets valuation allowance </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">(2,677,000</td><td style="PADDING-BOTTOM: 1px;width:1%;vertical-align:bottom;white-space: nowrap;">)</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">(3,209,000</td><td style="PADDING-BOTTOM: 1px;width:1%;vertical-align:bottom;white-space: nowrap;">)</td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Net deferred income tax assets</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">0</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 3px double;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">0</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr></tbody></table><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in; text-align:justify;">The valuation allowance for net deferred income tax assets as of March 31, 2023 and December 31, 2022 was $2,677,000 and $3,209,000, respectively. The net change in the valuation allowance was $532,000 at March 31, 2023 and $91,000 at March 31, 2022. The Company believes that it is more likely than not that the net deferred tax assets will not be realized.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in; text-align:justify;">As of March 31, 2023, the prior three years remain open for examination by the federal or state regulatory agencies for purposes of an audit for tax purposes.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in; text-align:justify;">At March 31, 2023, the Company had Federal net operating loss carry-forwards for income tax purposes of approximately $11,427,000 and research and development credits of $26,000. The Company’s net operating loss carry-forwards began to expire in 2022 and continue to expire through 2038. Net operating losses incurred from 2018 to date have no expiration. In assessing the reliability of deferred income tax assets, management considers whether or not it is more likely than not that some portion or all deferred income tax assets will be realized. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the projected future taxable income and tax planning strategies in making this assessment.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in; text-align:justify;">The Company’s ability to utilize the operating loss carry-forwards and research and development credits may be subject to an annual limitation in future periods pursuant to Section 382 and Section 383 of the Internal Revenue Code of 1986, as amended, if future changes in ownership occur.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 0.5in; text-align:justify;">The Company recognizes potential interest and penalties related to income tax positions as a component of the provision for income taxes on operations. The Company does not anticipate that total unrecognized tax benefits will materially change in the next twelve months.</p> 1 0.80 <table cellpadding="0" style="border-spacing:0;text-align:left;font:10pt times new roman;margin-left:auto;margin-right:auto;width:85%"><tbody><tr style="height:15px"><td><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:center;"><strong>Quarter Ended</strong></p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:center;"><strong>March 31, 2023</strong></p></td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:center;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:center;"><strong>Quarter Ended</strong></p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:center;"><strong>March 31, 2022</strong></p></td><td style="PADDING-BOTTOM: 1px;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:bottom;"><p style="font-size:10pt;font-family:times new roman;margin:0px">Tax expense at federal statutory rate </p></td><td style="white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="hdcell" colspan="2" style="width:9%;vertical-align:bottom;text-align:center;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 12.6pt; text-align:right;">(21%)</p></td><td style="white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="hdcell" colspan="2" style="width:9%;vertical-align:bottom;text-align:center;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 12.6pt; text-align:right;">(21%)</p></td><td style="white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px">State tax expense, net of federal tax effect </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">0</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">%</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">0</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">%</td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px">Increase in valuation allowance </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">21</td><td style="PADDING-BOTTOM: 1px;width:1%;vertical-align:bottom;white-space: nowrap;">%</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">21</td><td style="PADDING-BOTTOM: 1px;width:1%;vertical-align:bottom;white-space: nowrap;">%</td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;"><p style="font-size:10pt;font-family:times new roman;margin:0px 0px 0px 0.25in">Effective income tax rate </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td colspan="2" style="BORDER-BOTTOM: 3px double;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 12.6pt; text-align:right;">(0%)</p></td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td colspan="2" style="BORDER-BOTTOM: 3px double;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 12.6pt; text-align:right;">(0%)</p></td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr></tbody></table> 0.21 0.21 0 0 0.21 0.21 0 0 <table cellpadding="0" style="border-spacing:0;text-align:left;font:10pt times new roman;margin-left:auto;margin-right:auto;width:85%"><tbody><tr style="height:15px"><td><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: #000000 1px solid;width:9%;vertical-align:bottom;text-align:center;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:center;"><strong>March 31, 2023</strong></p></td><td style="white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="hdcell" colspan="2" style="BORDER-BOTTOM: #000000 1px solid;width:9%;vertical-align:bottom;text-align:center;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:center;"><strong>December 31, 2022</strong></p></td><td style="white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px"><td><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" colspan="2" style="width:9%;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">13,</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Inventory allowance</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">0</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">61,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Allowance for doubtful accounts</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">1,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">1,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Stock based compensation</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">138,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">149,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Deferred wages payable</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">30,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">21,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Depreciation – Property, Plant &amp; Equipment</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">0</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">(19,000</td><td style="width:1%;vertical-align:bottom;white-space: nowrap;">)</td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Research and development credits</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">26,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">24,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Net operating loss carry-forward</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">2,482,000</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">2,972,000</td><td style="PADDING-BOTTOM: 1px;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Total gross deferred income tax assets</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">2,677,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="width:9%;vertical-align:bottom;text-align:right;">3,209,000</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr><tr style="height:15px;background-color:#cceeff"><td style="vertical-align:top;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Less deferred income tax assets valuation allowance </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">(2,677,000</td><td style="PADDING-BOTTOM: 1px;width:1%;vertical-align:bottom;white-space: nowrap;">)</td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 1px solid;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="BORDER-BOTTOM: 1px solid;width:9%;vertical-align:bottom;text-align:right;">(3,209,000</td><td style="PADDING-BOTTOM: 1px;width:1%;vertical-align:bottom;white-space: nowrap;">)</td></tr><tr style="height:15px;background-color:#ffffff"><td style="vertical-align:top;"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Net deferred income tax assets</p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 3px double;width:1%;vertical-align:bottom;white-space: nowrap;">$</td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">0</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td style="BORDER-BOTTOM: 3px double;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td><td class="ffcell" style="BORDER-BOTTOM: 3px double;width:9%;vertical-align:bottom;text-align:right;">0</td><td style="PADDING-BOTTOM: 3px;width:1%;white-space: nowrap;"><p style="font-size:10pt;font-family:times new roman;margin:0px"> </p></td></tr></tbody></table> 0 61000 1000 1000 138000 149000 30000 21000 0 19000 26000 24000 2482000 2972000 2677000 3209000 2677000 3209000 0 0 2677000 3209000 532000 91000 11427000 26000 expire in 2022 and continue to expire through 2038 <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; text-align:justify;"><strong>Note M – Subsequent Events</strong></p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 45px; text-align:justify;"><span style="text-decoration:underline">ERC Refund</span></p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 45px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 45px; text-align:justify;">The Company has been expecting an ERC refund in the amount of $202,000. On April 17, 2023, the Company received payments in the amount of $156,000 and $2,000 from the IRS. There was not any communication with either of the payments. As of the date of this report, the Company is making efforts to speak with the IRS to determine the reason behind the lower refund being received and to determine if additional payments can be expected.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 45px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 45px; text-align:justify;"><span style="text-decoration:underline">November 2020 Term Loan</span></p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 45px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 45px; text-align:justify;">Upon receipt of the payment from the IRS, the Company paid the principal balance due ($50,000) on this shareholder loan. </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 45px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 45px; text-align:justify;"><span style="text-decoration:underline">December 2021 Shareholder Loan</span></p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 45px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 45px; text-align:justify;">Upon receipt of the payment from the IRS, the Company made a payment in the amount of $25,000 on this shareholder loan. As of the date of this report, the balance on the December 2021 Shareholder Loan is $175,000.</p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 45px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 45px; text-align:justify;"><span style="text-decoration:underline">Current Salary owed to Melissa Waterhouse</span></p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 45px; text-align:justify;"> </p><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 0in; TEXT-INDENT: 45px; text-align:justify;">Upon receipt of the payment from the IRS, the Company made a payment in the amount of $32,000 to Melissa Waterhouse to pay current salary owed. As of the date of this report, the amount due to Melissa Waterhouse for deferred compensation is $92,000. Ms. Waterhouse is also owed $12,000 for consulting services from March 2023 through May 2023.</p> 202000 156000 2000 50000 25000 175000 32000 92000 12000 EXCEL 52 Financial_Report.xlsx IDEA: XBRL DOCUMENT begin 644 Financial_Report.xlsx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