<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-QSB
[x] Quarterly report under Section 13 or 15(d) of the Securities Exchange Act
of 1934. For the quarterly period ended October 31, 1999.
[ ] Transition report under Section 13 or 15 (d) of the Securities
Exchange Act of 1934.
For the transition period from to
Commission File Number: 0-28666
AMERICAN BIO MEDICA CORPORATION
-----------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
New York 14-1702188
-------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
122 Smith Road, Kinderhook, New York 12106
-------------------------------------------
(Address of principal executive offices)
800-227-1243
---------------------------
(Issuer's telephone number)
300 Fairview Avenue, Hudson, New York 12534
----------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer: (1)filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes [X] No [ ]
State the number of shares outstanding of each of the issuer's classes of
common equity as of the latest practicable date:
15,258,896 Common Shares as of December 6,1999
Transitional Small Business Disclosure Format: Yes [ ] No [X]
<PAGE> 2
PART I
FINANCIAL INFORMATION
AMERICAN BIO MEDICA CORPORATION
BALANCE SHEETS
<TABLE>
<CAPTION>
APRIL 30 OCTOBER 31,
1999 1999
(UNAUDITED)
-------------- ----------------
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 131,000 $ 63,000
Investments - available for sale 719,000 333,000
Accounts receivable - net of allowance 1,021,000 1,676,000
Inventory 1,834,000 1,623,000
Prepaid expenses 97,000 259,000
-------------- ----------------
Total current assets 3,802,000 3,954,000
Property, plant and equipment, net 351,000 409,000
Due from officer 280,000 290,000
Other assets 2,000 7,000
============== ================
Total assets $ 4,435,000 $ 4,660,000
============== ================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued expenses $ 1,149,000 $ 1,541,000
Payable to preferred stockholder 130,000 22,000
Note payable - stockholder 125,000 132,000
Current portion of capital lease obligations 11,000 12,000
-------------- ----------------
Total current liabilities 1,415,000 1,707,000
Long term portion of capital lease obligations 47,000 40,000
-------------- ----------------
Total liabilities 1,462,000 1,747,000
-------------- ----------------
Stockholders' equity:
Preferred stock; par value $.01 per share; 5,000,000 shares
authorized; 1,536 and 1,100 shares Series D, 8% cumulative
convertible, issued and outstanding (face values $1,536,000
and $1,100,000 at April 30,1999 and October 31, 1999) 0 0
Common stock; par value $.01 per share; 30,000,000 shares authorized;
14,875,190 and 15,260,396 shares issued
and outstanding at April 30, 1999 and October 31, 1999 149,000 153,000
Additional paid-in capital 12,326,000 12,386,000
Subscription receivable (9,000) (9,000)
Unearned portion of compensatory options (13,000) (13,000)
Unrealized loss on investments available for sale (56,000) (69,000)
Accumulated deficit (9,424,000) (9,535,000)
-------------- ----------------
Total stockholders' equity 2,973,000 2,913,000
-------------- ----------------
============== ================
Total liabilities and stockholders' equity $ 4,435,000 $ 4,660,000
============== ================
</TABLE>
See accompanying notes to financial statements
2
<PAGE> 3
AMERICAN BIO MEDICA CORPORATION
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED
OCTOBER 31,
------------------------------------------
1998 1999
------------------- -------------------
<S> <C> <C>
Net Sales $ 3,081,000 $ 4,249,000
Cost of goods sold 1,236,000 2,115,000
------------------- -------------------
Gross profit 1,845,000 2,134,000
------------------- -------------------
Operating expenses:
Selling, general and administrative 1,984,000 1,957,000
Depreciation 43,000 18,000
Research and development 103,000 258,000
Write-off of bad debts 0 37,000
------------------- -------------------
2,130,000 2,270,000
------------------- -------------------
Operating loss (285,000) (136,000)
------------------- -------------------
Other income and expense:
Gain on sale of marketable securities 0 15,000
Gain on sale of assets 32,000
Interest income 17,000 44,000
Interest expense 0 (12,000)
------------------- -------------------
17,000 79,000
------------------- -------------------
Net loss $ (268,000) $ (57,000)
Adjustments:
Preferred stock beneficial conversion feature (123,000) (123,000)
Preferred stock dividends (259,000) (54,000)
=================== ===================
Net loss attributable to common shareholders $ (650,000) $ (234,000)
=================== ===================
Basic and diluted net loss
per common share $ (0.05) $ (0.02)
Weighted average shares outstanding -
basic and diluted 14,346,669 14,923,341
=================== ===================
AMERICAN BIO MEDICA CORPORATION
STATEMENT OF COMPREHENSIVE LOSS
Net loss $ (268,000) $ (57,000)
Other comprehensive loss:
Unrealized loss on investments 0 (13,000)
=================== ===================
Comprehensive loss $ (268,000) $ (70,000)
=================== ===================
</TABLE>
See accompanying notes to financial statements
3
<PAGE> 4
AMERICAN BIO MEDICA CORPORATION
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED
OCTOBER 31,
------------------------------------------
1998 1999
------------------- -------------------
<S> <C> <C>
Net Sales $ 1,773,000 $ 2,122,000
Cost of goods sold 722,000 1,033,000
------------------- -------------------
Gross profit 1,051,000 1,089,000
------------------- -------------------
Operating expenses:
Selling, general and administrative 953,000 1,067,000
Depreciation 25,000 9,000
Research and development 52,000 23,000
Write-off of bad debts 0 20,000
------------------- -------------------
1,030,000 1,119,000
------------------- -------------------
Operating loss 21,000 (30,000)
------------------- -------------------
Other income and expense:
Loss on sale of marketable securities FIX (43,000)
Gain on sale of assets 32,000
Interest income (12,000) 17,000
Interest expense 0 (6,000)
------------------- -------------------
(12,000) 0
------------------- -------------------
Net income (loss) $ 9,000 $ (30,000)
Adjustments:
Preferred stock dividends (205,000) (22,000)
------------------- -------------------
Net loss attributable to common shareholders $ (196,000) $ (52,000)
=================== ===================
Basic and diluted net loss
per common share $ (0.01) $ (0.00)
Weighted average shares outstanding -
basic and diluted 14,346,669 14,923,341
=================== ===================
AMERICAN BIO MEDICA CORPORATION
STATEMENT OF COMPREHENSIVE LOSS
Net loss $ 9,000 $ (30,000)
Other comprehensive loss:
Unrealized gain on investments 31,000
------------------- -------------------
Comprehensive loss $ 9,000 $ 1,000
=================== ===================
</TABLE>
See accompanying notes to financial statements
4
<PAGE> 5
AMERICAN BIO MEDICA CORPORATION
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED
OCTOBER 31,
-----------------------------------
1998 1999
---------------- ----------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (268,000) $ (57,000)
Adjustments to reconcile net loss
to net cash used in operating activities:
Depreciation 43,000 49,000
Provision for bad debts 35,000
Accrued interest (10,000)
Changes in:
Accounts and notes receivable (716,000) (690,000)
Inventory (787,000) 211,000
Prepaid expenses and other current assets (360,000) (162,000)
Other assets (12,000) (5,000)
Accounts payable and accrued expenses 588,000 402,000
---------------- ----------------
Net cash used in operating activities (1,512,000) (227,000)
---------------- ----------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and equipment (217,000) (107,000)
Purchase of investments (73,000)
Sale and maturity of investments 442,000
Gain on sale of investments 4,000
Loans to officer (19,000)
---------------- ----------------
Net cash (used in) provided by investing activities (236,000) 266,000
---------------- ----------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of warrants and options 105,000
Settlement of registration rights agreement (100,000)
Capital lease payments (7,000)
---------------- ----------------
Net cash provided by (used in) financing activities 105,000 (107,000)
---------------- ----------------
NET DECREASE IN CASH AND
CASH EQUIVALENTS (1,643,000) (68,000)
Cash and cash equivalents - beginning of period 3,239,000 131,000
---------------- ----------------
CASH AND CASH EQUIVALENTS - END OF PERIOD $ 1,596,000 $ 63,000
================ ================
NONCASH ACTIVITIES:
Stock dividends paid to holders of preferred stock 48,000 60,000
Dividend accrued not yet paid 45,000 22,000
</TABLE>
See accompanying notes to financial statements
5
<PAGE> 6
Notes to Financial Statements
October 31, 1999
Note A - Basis of Reporting
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-QSB. Accordingly, they do not
include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, such statements include all adjustments (consisting only of normal
recurring items) which are considered necessary for a fair presentation of the
financial position of American Bio Medica Corporation (the "Company") at October
31, 1999, and the results of its operations, and cash flows for the six-month
period then ended. The results of operations for the six-month period ended
October 31, 1999 are not necessarily indicative of the operating results for the
full year. It is suggested that these financial statements be read in
conjunction with the financial statements and related disclosures for the year
ended April 30, 1999 included in the Company's Form 10-KSB.
During the year ended April 30, 1999, the Company sustained a net loss of
$1,691,000 and had net cash outflows from operating activities of $2,008,000.
The Company is in the process of taking a number of steps to improve its
financial prospects including focusing its efforts on sales of existing
products, implementing certain cost reductions and production efficiencies and
taking other measures to enhance profit margins. As a result the Company was
able to reduce its net loss to $57,000 and its net cash outflows to $68,000 for
the six-month period ended October 31, 1999.
Note B - Net Loss Per Share of Common Stock
The Company adopted Statement of Financial Accounting Standards ("SFAS")
No. 128, Earnings Per Share," in the year ended April 30, 1998. Accordingly, the
presentation of per share information includes calculations of basic and
dilutive loss per share. The effect of potential common shares such as warrants,
options, and convertible preferred stock has not been included, as the effect
would be anti-dilutive.
When preferred stock is convertible to common stock at a conversion rate that is
the lower of a rate fixed at issuance or a fixed discount from the common stock
market price at the time of conversion, the discounted amount is an assured
incremental yield, the "beneficial conversion feature", to the preferred
shareholders and should be accounted for as an embedded dividend to preferred
shareholders. As such, the loss per common share was adjusted for this feature.
Note C - Litigation
In February 1994, Robert Friedenberg, as former owner of the two medical
technology companies. MDI and Gendex, acquired by the Company, in the name of
these corporations, filed for a declaratory judgment in Maryland that a Share
Exchange Agreement had been rescinded. In order to make a claim for damages, the
Company filed a third-party claim against Dr. Friedenberg for breach of the
Share Exchange Agreement and fraud. In November 1995, after a trial, the court
denied Dr. Friedenberg's request for a declaration of rescission and allowed the
Company's third-party claim to proceed to trial. In September 1996, Dr.
Friedenberg died.
The Company's third party claim was decided by a jury on May 5, 1997. The
verdict determined that Dr. Friedenberg breached the Share Exchange Agreement
when he failed to deliver drug screening know how technology to the Company. The
jury also found in favor of the Company on two of three fraud claims against Dr.
Friedenberg and awarded the Company approximately $321,000 in damages. Dr.
Friedenberg's estate, just prior to the jury trial, filed a supplemental claim
for the shares of the Company which he would have received under the Share
Exchange Agreement. The trial judge on July 17, 1998, ruled that the estate of
Dr. Friedenberg is entitled to 5,907,154 common shares of the Company. The
Company appealed that ruling and on September 15, 1999, the Court of Special
Appeals in Maryland ruled in favor of the Company and reversed a Maryland
circuit court's ruling that the estate of Dr. Robert Friedenberg was entitled to
5,907,154 common shares of the Company. The case was remanded to the circuit
court with directions to enter a judgment for the Company. The Friedenberg
estate has petitioned the Court of Appeals, Maryland's highest court, to
consider the case. The Company has opposed any further proceeding. The Court of
Appeals agrees to review only a small fraction of the cases decided by the Court
of Special Appeals.
In June 1995, the Company filed a lawsuit against Jackson Morris, the lawyer who
was in charge of drafting and advising it on the Share Exchange Agreement. Mr.
Morris, who
6
<PAGE> 7
had been recommended to the Company by Dr. Friedenberg, is alleged by the
Company to have breached his fiduciary duty to the Company by later advising Dr.
Friedenberg, individually, on how to rescind the Share Exchange Agreement. Mr.
Morris is also charged with negligence in drafting the Share Exchange Agreement.
The Company's lawsuit demands damages in the amount of $1,000,000. Mr. Morris
has counterclaimed as a party to the Share Exchange Agreement and seeks common
shares. Whatever claim Morris has came from the Friedenberg claim. No trial date
has been set. The Company is vigorously contesting the Morris claim.
On January 26, 1999, the Company was granted a U.S. Patent for the design of the
Multiple Test Card. On April 7, 1999, the Company filed suit in the federal
court in Delaware against Phamatech, Inc. of California, Peninsula Drug Analysis
Co., Inc. and James T. Ramsey of Virginia, as well as Dipro Diagnostic Products,
Inc. and Dipro Diagnostic Products of North America claiming patent
infringement, trademark dilution, and unfair competition.
On the following day, Phamatech Inc. filed suit in the federal court in San
Diego, California asking for a declaration that the Company's patent is invalid.
It also claimed breach of contract damages for an alleged non-payment of
invoices by the Company. The competing claims have been consolidated for trial
in San Diego.
In June 1999, an individual filed suit in New York claiming that two private
placement memoranda dated respectively September 15, 1992 and February 5, 1993,
obligated the Company to issue him 1,555,601 common shares of the Company. The
claim is that he is entitled to the common shares in consideration of brokering
the acquisitions subject to the Share Exchange Agreement with Dr. Friedenburg.
In addition, the individual is claiming a finder's fee of five percent of the
funds raised by the September 1992 private placement. He alleges that a sum of
one million dollars was raised. Finally, he claims that he is entitled to a
consulting fee of $24,000. Management denies the claims and intends to
vigorously contest the suit.
Note D - Registration Penalty
On May 28, 1999, the Company entered into a definitive Agreement as of
April 30, 1999 (the "1999 Agreement") to settle all claims against the Company,
including the late registration penalty and certain other claims under the
Securities Purchase Agreement dated April 24, 1998. Pursuant to the 1999
Agreement, the Company gave as consideration $225,000 on June 1, 1999 ($100,000
in cash and a one-year promissory note in the principal amount of $125,000
accruing interest at the rate of 14% annually).
7
<PAGE> 8
Item 2. Management's Discussion and Analysis or Plan of Operation
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
for the six months ended October 31, 1999 and 1998
The following discussion of the Company's financial condition and results
of operations should be read in conjunction with the Financial Statements and
Notes thereto appearing elsewhere in this document.
The Private Securities Litigation Reform Act of 1995 provides a
safe harbor for forward-looking statements. In order to comply with the terms of
the safe harbor, the Company notes that except for the description of historical
facts contained herein, the Registration Statement contains certain
forward-looking statements that involve risks and uncertainties as detailed
herein and from time to time in the Company's filings with the Securities and
Exchange Commission and elsewhere. Such statements are based on Management's
current expectations and are subject to a number of factors and uncertainties
which could cause actual results to differ materially from those described in
the forward-looking statements. These factors include, among others: (a) the
Company's fluctuations in sales and operating results, risks associated with
international operations and regulatory, competitive and contractual risks and
product development; (b) the ability to achieve strategic initiatives, including
but not limited to the ability to achieve sales growth across the business
segments through a combination of enhanced sales force, new products, and
customer service; and (c) acquisitions.
Year 2000 Issues
The Company has completed its assessment of Year 2000 compliance with respect to
its products that are currently being sold to customers and has concluded that
all significant products are compliant. With respect to third parties, the
Company maintains on-going contact with its significant suppliers and major
customers to determine the extent to which the Company may be vulnerable to such
third parties' failure to address their own year 2000 issues. As a result, the
Company's assessment will be substantially dependent on information provided by
third parties. The Company expects to materially complete this assessment
process before December 1999. Based upon the Company's current estimates,
additional out-of-pocket costs associated with its Year 2000 compliance are
expected to be minimal. Such costs do not include internal management time,
which is not expected to be material to the Company's results of operations or
financial condition.
The Company believes that its most significant risk with respect to Year 2000
issues relates to the performance and readiness status of third parties. As with
all manufacturing companies, a reasonable worst case Year 2000 scenario would be
the result of failures of third parties (including without limitation,
governmental entities, utilities and entities with which the Company has no
direct involvement) that negatively impact the Company's raw material supply
chain or ability to provide products to customers or the ability of customers to
purchase products, or events affecting regional, national or global economies
generally. The impact of these failures cannot be estimated at this time;
however, the Company is considering contingency plans to limit, to the extent
possible, the financial impact of these failures on the Company's results of
operations. Any such plans would necessarily be limited to matters over which
the Company can reasonably control.
8
<PAGE> 9
Results of operations for the six months ended October 31, 1999 as compared
to the six months ended October 31, 1998.
- --------------------------------------------------------------------------------
During the six months ended October 31, 1999, the Company continued its
extensive program to market and distribute its primary product, the Rapid Drug
Screen(TM). As a result, revenues from the sale of the test kits were $4,249,000
for the six months ended October 31, 1999 as compared to $2,732,000 for the six
months ended October 31, 1998, representing an increase of $1,517,000 or 55.5%
over the preceding year. With respect to drug test kits, cost of goods sold for
the six months ended October 31, 1999 was $2,115,000 or 49.8% of drug test
revenues as compared to $1,170,000 or 42.8% of drug test revenues for the six
months ended October 31, 1998. The Company has undertaken an extensive cost
reduction program aimed specifically at its in-place production process and
expects further savings in the coming year. It is expected that with further
increases to its in-house manufacturing of drug test strips, that further
significant savings can be achieved.
As a result of the continuing growth in the drug test market and the
need to focus its efforts in this market, the Company sold its book sale
operation in September 1999 in exchange for a five-year secured note receivable
in the amount of $250,000.
Selling, general and administrative costs for the six months ended
October 31, 1999 were $1,957,000, a decrease of 1.4% over expenses of $1,984,000
for the six months ended October 31, 1998. As a percent of sales, this cost
decreased 18.3% during the comparable six- month periods. As a percent of sales,
these costs are expected to continue to decrease.
As a result of relocating its marketing department to New York,
marketing and promotion costs amounted to $153,000 or 3.6% of sales for the six
months ended October 31, 1999 compared to $274,000 or 8.9% of sales for the six
months ended October 31, 1998.
Depreciation and amortization ($31,000 in Cost of goods sold and
$18,000 in Selling, general and administrative expense) was $49,000 and $43,000
for the six months ended October 31, 1999 and 1998, respectively.
Research and development expense amounted to $258,000 for the six
months ended October 31, 1999 as compared to $103,000 for the six months ended
October 31,1998. This increase in research and development represents a
continuation of managements' efforts to develop improved methods to reduce the
cost of manufacturing its drug test kits.
Net loss from operations decreased to $(57,000) for the six months
ended October 31, 1999 as compared to $(268,000) for the six months ended
October 31, 1998, due primarily to increased sales revenues.
9
<PAGE> 10
Results of operations for the three months ended October 31, 1999 as
compared to the three months ended October 31, 1998.
- --------------------------------------------------------------------------------
During the three months ended October 31, 1999, the Company continued
its extensive program to market and distribute its primary product, the Rapid
Drug Screen(TM). As a result, revenues from the sale of the test kits were
$2,218,000 for the three months ended October 31, 1999 as compared to $1,567,000
for the three months ended October 31, 1998, representing an increase of
$651,000 or 41.5% over the preceding year. With respect to drug test kits, cost
of goods sold for the three months ended October 31, 1999 was $1,054,000 or
47.5% of drug test revenues as compared to $683,000 or 43.6% of drug test
revenues for the three months ended October 31, 1998. The Company has undertaken
an extensive cost reduction program aimed specifically at its in-place
production process and expects further savings in the coming year. It is
expected that with further increases to its in-house manufacturing of drug test
strips, that further significant savings can be achieved.
As a result of the continuing growth in the drug test market and the
need to focus its efforts in this market, the Company sold its book sale
operation in September 1999 in exchange for a five-year secured note receivable
in the amount of $250,000.
While Net sales increased 19.7% for the three months ended October 31,
1999 over the three months ended October 31, 1998, Selling, general and
administrative costs increased 12.0% over expenses of $953,000 for the three
months ended October 31, 1998. As a percent of sales, these costs decreased 3.5%
for the three months ended October 31, 1999. These costs are expected to
continue to decrease in future.
Marketing and promotion costs amounted to $99,000 or 4.7% of sales for
the three months ended October 31,1999 as compared to $91,000 or 5.1% of sales
for the three months ended October 31, 1998.
Depreciation and amortization was $25,000 and $25,000 for the three
months ended October 31, 1999 and 1998, respectively.
Research and development expense amounted to $23,000 for the three
months ended October 31, 1999 as compared to $52,000 for the three months ended
October 31,1998.
Net loss from operations amounted to $(30,000) for the three months
ended October 31, 1999 as compared to net income of $9,000 for the three months
ended October 31, 1998, due primarily to an increase in Cost of goods sold
resulting from the sale of the book sales business and a loss on sale of
marketable securities. The Company expects to continue to improve its gross
margins on sales in future.
10
<PAGE> 11
Liquidity and capital resources as of the six months ended October 31, 1999.
- --------------------------------------------------------------------------------
The Company's cash and cash equivalents combined with short-term
investments amounted to $396,000 at October 31, 1999 representing a decrease of
$454,000 or 53.4% from $850,000 as of the year ended April 30, 1999. Working
capital decreased $161,000 or 6.7% to $2,247,000 as of October 31, 1999, from
$2,387,000 at April 30, 1999.
The decrease in working capital resulted primarily from increases in
accounts receivable, prepaid expenses and plant and equipment; expenditures
necessary to sustain its increased business growth.
The Company has entered into a one-year lease agreement with option to
purchase a 26,000 square foot fully constructed building in Kinderhook, N.Y. for
$1.3 million subject to the removal of certain existing zoning restrictions.
This move will permit the consolidation of its marketing effort and provide
space necessary for continued growth. The Company expects to substantially
finance the purchase with a 30-year fixed rate mortgage loan.
As a result of strong six-month sales of the Rapid Drug Screen,
accounts and notes receivable increased $655,000 or 64.2% to $1,676,000 as of
October 31, 1999 compared to $1,021,000 as of April 30, 1999.
Inventories decreased $211,000 or 11.5% to $1,623,000 for the six
months ended October 31, 1999.
Prepaid expenses primarily for building rents, future trade
shows and conferences increased $162,000 to $259,000 for the six months ended
October 31, 1999.
Accounts payable and accrued expenses increased $392,000 for the six
months ended October 31, 1999 due primarily to an increase in business volume
and legal fees.
The Company's primary short-term needs are to increase its
manufacturing capabilities, decrease current inventory levels and continue to
support its research and development programs. The Company currently plans to
expend approximately $100,000 for the expansion and development of its
manufacturing facilities in addition to its marketing and general administrative
programs.
The Company expects its capital requirements to increase over the next
several years as it continues its research and development efforts and improves
its manufacturing capabilities and facilities. The Company's future liquidity
and capital funding requirements will depend on numerous factors, including the
extent to which the Company's products under development are successfully
developed and gain market acceptance, the timing of regulatory actions regarding
the Company's potential products, the costs and timing of expansion of sales,
marketing and manufacturing activities, facilities expansion needs, procurement
and enforcement of patents important to the Company's business, results of
clinical investigations and competition.
The Company believes that its available cash and cash from operations
will be sufficient to satisfy its funding needs to April 30, 2000. Thereafter,
if cash generated from operations is insufficient to satisfy the Company's
working capital and capital expenditure requirements, the Company may be
required to sell additional equity or debt securities or obtain additional
credit facilities. There can be no assurance that such financing, if required,
will be available on satisfactory terms, if at all.
11
<PAGE> 12
PART II
OTHER INFORMATION
Item 1. Legal Proceedings:
See Note C - Litigation in the Notes to Financial Statements included in this
Form 10-QSB for a description of pending legal proceedings in which the Company
is a party.
Item 2. Changes in Securities
None.
Item 3. Defaults upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security-Holders
The following matters were voted upon at the Annual Meeting of
Shareholders held at the Company's Headquarters in Kinderhook, N.Y. on September
22, 1999:
1. The election of the following directors, who will serve until their
successors are elected and qualified, or their earlier death or resignation:
Director For Withheld
-------- --- --------
Stan Cipkowski 7,970,723 725,289
Edmund Jaskiewicz 7,970,723 725,289
Jay Bendis 7,970,723 725,289
John F. Murray 7,970,723 725,289
Karen Russo 7,970,723 725,289
Gerald Moore 7,970,723 725,289
2. To approve the issuance of common shares in connection with the conversion
and exercise of outstanding preferred stock and warrants issued in a private
financing transaction.
For Withheld Abstain
--- -------- -------
8,186,748 476,369 38,595
3. To approve the adoption by the Board of Directors of the Fiscal 2000 Stock
Option Plan
For Withheld Abstain
--- -------- -------
7,416,939 1,245,461 38,812
12
<PAGE> 13
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934,
the registrant has caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AMERICAN BIO MEDICA CORPORATION
(Registrant)
By: /s/Stan Cipkowski
------------------
Stan Cipkowski,
President and
Chief Executive Officer
By: /s/John F. Murray
--------------------
John F. Murray,
Treasurer and
Chief Financial Officer
Dated: December 15, 1999
13
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from financial
statements for the six months ended October 31, 1999 and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> APR-30-1999
<PERIOD-END> OCT-31-1999
<CASH> 63,000
<SECURITIES> 333,000
<RECEIVABLES> 1,743,000
<ALLOWANCES> 67,000
<INVENTORY> 1,623,000
<CURRENT-ASSETS> 3,954,000
<PP&E> 576,000
<DEPRECIATION> 167,000
<TOTAL-ASSETS> 4,660,000
<CURRENT-LIABILITIES> 1,707,000
<BONDS> 0
0
0
<COMMON> 153,000
<OTHER-SE> 2,760,000
<TOTAL-LIABILITY-AND-EQUITY> 4,660,000
<SALES> 4,249,000
<TOTAL-REVENUES> 4,249,000
<CGS> 2,115,000
<TOTAL-COSTS> 2,270,000
<OTHER-EXPENSES> (91,000)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 12,000
<INCOME-PRETAX> (57,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> (57,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (57,000)
<EPS-BASIC> (0.02)
<EPS-DILUTED> (0.02)
</TABLE>
