American Bio Medica Corporation (the “Company”) was incorporated on April 2, 1986 under the laws of the State of New York under the name American Micro Media, Inc. On September 9, 1992, we filed an amendment to our Articles of Incorporation and changed our name to American Bio Medica Corporation.

We manufacture and sell lateral flow immunoassay tests, primarily for the immediate detection of drugs in urine and oral fluid. Our products are accurate, self-contained, cost-effective and user-friendly products that are capable of accurately identifying the presence or absence of drugs in a sample within minutes. The products we manufacture are made 100% in in the United States while our competitors manufacture their products outside the United States, primarily in China. One of our drug testing lines is private labeled for another diagnostic company.

We also provide strip manufacturing, andproduct assembly and packaging services for a diagnostic test to an unaffiliated third party;party related to a diagnostic test that sells this productthey sell outside the United States and, we manufacture a diagnostic product that is sold under a private label by an unaffiliated third party.

Beginning in March 2020 and throughout the year ended December 31, 2019 (“Fiscal 2019”),2021, we did not derivealso continued to distribute, on a significant portion of our revenues from these additional products.

In Fiscal 2019,2021, we manufacturedcontinued to market various Covid-19 rapid tests via non-exclusive distribution relationships. Currently we are offering a Covid-19 IgG/IgM Rapid Test to detect Covid-19 antibodies in whole blood, serum or plasma (via a distribution agreement with Healgen Scientific, LLC), the Co-Diagnostics Logix Smart Covid-19 test, forvarious Covid-19 rapid antigen tests, a Covid-19-Influenza A/B combination test, and in late Fiscal 2021, we started to offer an “at home” Covid-19 rapid antigen test. All of the detection of RSV (Respiratory Syncytial Virus;Covid-19 tests we are offering are being marketed in full compliance with an Emergency Use Authorization (“EUA”) issued by the most common cause of lower respiratory tract infectionsUS Food and Drug Administration (“FDA”) and in children worldwide), a test for Malaria (a disease transmitted to humans through bites from infected mosquitoes) andcompliance with each specific product’s EUA issued by FDA. In Fiscal 2021, we manufactured a special custom panelsold $54,000 in Covid-19 testing products; which was 2.4% of our Rapid TOX as a private label.net sales in Fiscal 2019 contract manufacturing sales did not represent a significant portion2021. In the year ended December 31, 2020 (“Fiscal 2020”), we sold $1,572,000 in Covid-19 testing products; which was 37.9% of our revenue.

Drug testing in pain management is one of the major tools of adherence monitoring in the assessment of a patient’s predisposition to, and patterns of, misuse/abuse; a vital first step towards establishing and maintaining the safe and effective use of drugs in the treatment of chronic pain. There are many benefits of using an ABMC drug test; these include reducing the risk for toxicity in patients vulnerable to adverse drug effects, detecting patient non-compliance, reducing the risk of therapeutic failure, and avoiding or detecting drug-drug interaction. Additionally, drug testing enhances the physician’s ability to use drugs effectively and minimize costs. We currently sell our urine drug tests in this market primarily through our direct sales force and also through a number of distributors.

Other Clinical markets include emergency rooms/hospitals, family physician offices and laboratories. There are a number of medical emergencies associated with adverse reactions, accidental drug ingestions, and misuse or abuse of prescription drugs and over-the-counter medications. To address this issue, drug testing is performed so healthcare professionals are able to ascertain the drug status of a patient before they administer pharmaceuticals or other treatment. We currently sell our urine drug tests in this market primarily through our direct sales force and also through a number of distributors. We also have a long-term relationship with one of the world’s largest clinical laboratories.

The Government market includes federal, state, county and local agencies, including police departments, adult and juvenile correctional facilities, pretrial agencies, probation, drug courts and parole departments at the federal and state levels. A significant number of individuals on parole or probation, or within federal, state, county and local correctional facilities and jails, have one or more conditions to their sentence, including but not limited to, periodic drug-testing and substance abuse treatment. We sell our products in this market through our direct sales force.

The Workplace market consists of pre-employment testing of job applicants, as well as random, cause and post-accident testing of employees. Many employers recognize the financial and safety benefits of implementing drug-free workplace programs, of which drug testing is an integral part. In some states, there are workers’ compensation and unemployment insurance premium reductions, tax deductions and other incentives for adopting these programs. We sell our products in this market through our direct sales force and through a select network of distributors.

The International market consists of various markets outside of the United States. Although workplace testing is not as prevalent outside of the United States as within, the international Government and Clinical markets are somewhat in concert with their United States counterparts. One market that is significantly more prevalent outside of the United States is roadside drug testing. We sell in this market through a select network of distributors.

The primary raw materials required for the manufacture of our test strips and our drug tests consist of antibodies, antigens and other reagents, plastic molded pieces, membranes and packaging materials. We maintain an inventory of raw materials. Currently, most raw materials are available from several sources. We own the molds and tooling for our plastic components that are custom and proprietary. The ownership of these molds affords us flexibility and control in managing the supply chain for these components. We do not own the molds and tooling for plastic components that are “stock” items.

One of our customers accounted for 44.8% and 44%57.5% of net sales in Fiscal 20192021 and the year ended December 31, 2018 (“35.2% of net sales in Fiscal, 2018”), respectively.

As of December 31, 2019,2021, we have patented26 patents issued related to our testing products affording protection in 2715 different countries outside the United States and we hold 1110 patents in the United States. As of December 31, 2019,2021, we have 51 foreign patent application pending. We are incurring fees related to these patent applications that will beare being capitalized over the term of the patents.

As of December 31, 2019,2021, we have 15 trademarks registered in the United States and 10 trademarks registered in countries/regions such as Canada, Mexico, and the United Kingdom.

DOA Products

In certain markets, the development, testing, manufacture and sale of our drug tests, and possible additional testing products for other substances or conditions, are subject to regulation by the United States and foreign regulatory agencies. Pursuant to the Federal Food, Drug, and Cosmetic Act, and associated regulations, the United State Food and Drug Administration (“FDA”)FDA regulates the pre-clinical and clinical testing, manufacture, labeling, distribution and promotion of medical devices. When a product is a medical device, a 510(k) marketing application must be submitted to the FDA. A 510(k) is a premarketing submission made to the FDA to demonstrate that the device to be marketed is safe and effective. Applicants must compare their 510(k) device to one or more similar devices currently being marketed in the United States. Most of our urine-based products are marketed and sold in the Clinical market (in addition to other markets) and therefore, we have obtained 510(k) marketing clearance, CLIA waiver (see below) and/or Over-The-Counter (OTC) marketing clearance on our urine based products. Our oral fluid products are not 510(k) cleared; so we can only market and sell these products to the forensic market, the employment market (under a limited exemption issued by FDA in July 2017) and for export outside the United States.

In order to sell our products in Canada, we must comply with ISO 13485:2003, the International Standards Organization’s Directive for Quality Systems for Medical Devices (MDD or Medical Device Directive), and in order to sell our products in the European Union, we must obtain CE marking for our products (in the European Union, a “CE” mark is affixed to the product for easy identification of quality products). Collectively, these standards are similar to FDA regulations, and are a reasonable assurance to the customer that our products are manufactured in a consistent manner to help ensure that quality defect-free goods are produced. As of the date of this report, we have received approval and the right to bear the CE mark on our Rapid Drug Screen, Rapid ONE, Rapid TOX, RDS InCup, Rapid TOX Cup II, Rapid Reader and OralStat. We are currently certified to I.S. EN ISO 13485:2016 with an expiration date of July 31, 2021.

The Clinical Laboratory Improvement Amendments (CLIA) of 1988 established quality standards for laboratory testing to ensure the accuracy, reliability and timeliness of patient test results regardless of where the test was performed. As a result, those using CLIA waived tests are not subject to the more stringent and expensive requirements of moderate or high complexity laboratories. We have received CLIA waiver from the FDA related to our Rapid TOX product line and OTC clearance on our Rapid TOX Cup II product line (The(the OTC clearance of the Rapid TOX Cup II product line means they are CLIA waived products).

Due to the nature of the manufacturing of our drug tests, the products we offer through contract manufacturing and the raw materials used for both, we do not incur any material costs associated with compliance with environmental laws, nor do we experience any material effects of compliance with environmental laws.

Our facility in Kinderhook, New York houses assembly and packaging of the products we manufacture (including the products we supply on a contract manufacturing basis and the products we supply to a third party who markets the products under their own private label). Our warehouse, shipping department and administrative offices are also within our New York facility.

In our Logan Township, New Jersey facility, we manufacture our drug test strips and test strips for unaffiliated third parties. We also perform research and development in our New Jersey facility.

Unaffiliated third parties manufacture the adulteration, alcohol and certain forensic drug testing products we offer.offer as well as the Covid-19 testing products we distribute. We continue to primarily outsource the printing of the plastic components used in our products, and we outsource the manufacture of the plastic components used in our products.

As of December 31, 2019,2021, we had 4837 employees, of which 4232 were full-time and 65 were part-time. None of our employees are covered by collective bargaining agreements.

Before you make a decision to invest in our securities, you should consider carefully the companyrisks described below, together with other information within this Annual Report on Form 10-K and other periodic reports filed with the US Securities and Exchange Commission (“SEC”). If any of the following events actually occur, our business, even though weoperating results, prospects or financial condition could be materially and adversely affected. This could cause the trading price of our common stock to decline and you may lose all or part of your investment. The risks described below are not requiredthe only ones that we face. Additional risks not presently known to provide this information dueus or that we currently deem immaterial may also significantly impair our business operations and could result in a complete loss of your investment.

Risks Related to our status asFinancial Condition

We have a smaller reporting company.

Since our inception and they produce their products outside the United State at a lower cost. Somethroughout most of our competitorshistory, we have greater financial resources, allowing themincurred net losses, including but not limited to, devote substantially more resources to business and product developmenta net loss of $463,000 incurred in Fiscal 2021. As of December 31, 2021, we also reported negative stockholders’ equity of $944,000. We incur substantial expenditures for sales and marketing, efforts.general and administrative and research and development purposes. Our inabilityability to successfully address any competitive risk factors could negatively impact sales andachieve profitability in the future will primarily depend on our ability to achieve profitability.

We may need additional funding for our existing and future operations.

Our financial statements for Fiscal 2021 were prepared assuming we will continue as a going concern. If sales continue to decline, our current cash balances and cash generated from future operations may not be sufficient to fund operations through April 2023. In addition, in February 2022, we were not able to repay certain loans when they were due and we are currently in discussions with the lender related to possible payoff (via a refinance) of the loans or to extend the due date of the loans. Future events, including the expenses and difficulties which may be encountered in maintaining a market for our products could make cash on hand and cash available under our line of credit facility insufficient to fund operations. If this happens, we may be required to sell equity or debt securities or obtain additional credit facilities. There can be no assurance that any of these financings will be available or that we will be able to complete such financing on satisfactory terms.

The Covid-19 pandemic has had a negative impact on our drug testing markets and our company operations; the degree to which the pandemic will continue to adversely affect our business, revenues, financial condition and results of operations.

One of our customers accounted for 44.8%57.5% and 44%35.2% of our net sales in Fiscal 20192021 and in Fiscal 2018,2020, respectively. We currently have a contract in place with this long-standing customer that does not expire in the near future. However, there can be no assurance that this customer, or any of our current customers will continue to place orders, or that orders by existing customers will continue at current or historical levels.

We are dependent on the expertise and experience of senior management forone individual to manage all aspects of our future success. Thebusiness, the loss of senior management personnelwhom could negatively impact our business and results of operations. Melissa A. Waterhouse serves as our sole executive officer. She serves as our Chief Executive Officer, President and Principal Financial Officer. We have an employment agreement in place with Ms. Waterhouse, but there can be no assurance that Ms. Waterhouse will continue her employment. The loss of Ms. Waterhouse could disrupt the business and have a negative impact on business results. We also have a limited number of other individuals in senior management positions. There can be no assurance that they too will continue their employment. We do not currently maintain key man insurance on Ms. Waterhouse.

We currently have approximately 4544 suppliers that provide us with the raw materials necessary to manufacture our drug-testing strips, our drug test kits and the products we supply third parties on a contract manufacturing basis.basis as well as the products we sell to our customers via distribution arrangements. For most of our raw materials, we have multiple suppliers, but there are a few raw materials for which we only have one supplier. The loss of one or more of these suppliers, the non-performance of one or more of their materials or the lack of availability of raw materials could suspend our manufacturing process for one or more product lines. This interruption of the manufacturing process could impair our ability to fill customers’ orders as they are placed, putting us at a competitive disadvantage.

We had approximately $670,000$461,000 in raw material components for the manufacture of our products at December 31, 2019.2021. The non-chemical raw material components may be retained and used in production indefinitely and the chemical raw materials components have lives in excess of 20 years. In addition to the raw material inventory, we had approximately $141,000$109,000 in “work in process” (manufactured testing strips) inventory at December 31, 2019.2021. The components for much of this “work in process” inventory have lives of 12-36 months. If sales orders received are not for products that would utilize the raw material components, or if product developments make the raw materials obsolete, we may be required to dispose of these unused raw materials. In addition, since the components for much of the “work in process” inventory have lives of 12-36 months, if sales orders within the next 12-36 months are not for products that contain the components of the “work in process” inventory, we may need to discard this expired “work in process” inventory. We have established an allowance for obsolete or slow moving inventory. At December 31, 2019,2021, this allowance was $291,000.$278,000. There can be no assurance that this allowance will continue to be adequate for the year ending December 31, 2020 and/2022 or that it will not have to be adjusted in the future.

We incur legal, accounting and other expenses as a result of our required compliance with certain regulations implemented by the United States Securities and Exchange Commission (“SEC”).SEC. Our executive management and other personnel devote a substantial amount of time to these compliance requirements, including but not limited to compliance with the Sarbanes-Oxley Act of 2002 that requires, among other things, that we maintain effective internal controls over financial reporting and disclosure controls and procedures. Our management is required to perform system and process evaluation and testing of the effectiveness of our internal controls over financial reporting, as required by Section 404(a) of the Sarbanes-Oxley Act (as a smaller reporting company, we are exempt from the requirements of Section 404(b) of the Sarbanes-Oxley Act requiring auditor’s attestation related to internal controls over financial reporting). If we are not able to comply with the requirements of Section 404(a), if we identify deficiencies in our internal controls over financial reporting, or if we are unable to comply with any other SEC regulations or requirements, the market price of our common sharesstock could decline, and we could be subject to sanctions or investigations by the SEC or other regulatory authorities, which would require additional financial and management resources.

Risks Related to continue operations.

We currently have 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 our Board of Directors and approved by our shareholders. The shares of common sharesstock underlying the exercise of the stock options under the 2001 Plan have been registered with the SEC;SEC making them freely tradeable when/if exercised by the holder; however, the common shares underlying the exercise of the stock options under the 2013 Plan have not been registered with the SEC.

Both the 2001 Plan and the 2013 Plan have options available for future issuance. As of December 31, 2019,2021, there were 2,252,0001,937,000 options issued and outstanding under the 2001 Plan. There were no options issued under the 2013 Plan, making the total issued and outstanding options 2,252,0001,937,000 as of December 31, 2019.2021. Of the total options issued and outstanding, 2,172,0001,937,000 are fully vested as of December 31, 2019.2021. As of December 31, 2019,2021, there were 1,465,0001,780,000 options available for issuance under the 2001 Plan and 4,000,000 options available for issuance under the 2013 Plan. As of December 31, 2019,2021, we had 2,000,0000 warrants issued and outstanding, however, the 2,000,000 warrants expired on January 16, 2020.

If outstanding stock options are exercised, the common sharesstock issued will be freely tradable, increasing the total number of shares of common sharesstock issued and outstanding. If these shares are offered for sale in the public market, the sales could adversely affect the prevailing market price by lowering the bid price of our securities. The exercise of these stock options could also materially impair our ability to raise capital through the future sale of equity securities because issuance of the shares of common sharesstock underlying the stock options would cause further dilution of our securities. In addition, in the event of any change in the outstanding shares of our common stock by reason of any recapitalization, stock split, reverse stock split, stock dividend, reorganization consolidation, combination or exchange of shares, merger or any other changes in our corporate or capital structure or our common shares,stock, the number and class of shares covered by the stock options and/or the exercise price of the stock options may be adjusted as set forth in their plans.

There are 11,254,9186,135,986 shares of common sharesstock presently issued and outstanding as of the date hereofof this Annual Report on Form 10-K that are “restricted securities” as that term is defined under the Securities Act of 1933, as amended, (the “Securities Act”). These securities may be sold in compliance with Rule 144 of the Securities Act (“Rule 144”), or pursuant to a registration statement filed under the Securities Act. Rule 144 addresses sales of restricted securities by affiliates and non-affiliates of an issuer. An “affiliate” is a person, such as an officer, director or large shareholder, in a relationship of control with the issuer. “Control” means the power to direct the management and policies of the company in question, whether through the ownership of voting securities, by contract, or otherwise. If someone buys securities from a controlling person or an affiliate, they take restricted securities, even if they were not restricted in the affiliate's hands.

A person who is not an affiliate of the issuer (and who has not been for at least three months) and has held the restricted securities for at least one year can sell the securities without regard to restrictions. If the non-affiliate had held the securities for at least six months but less than one year, the securities may be sold by the non-affiliate as long as the current public information condition has been met (i.e. that the issuer has complied with the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)).

We are subject to reporting requirements of the Exchange Act. Under Rule 144, if a holder of securities is an affiliate of an issuer subject to Exchange Act reporting requirements, the securities must be held for at least six months. In addition, the number of equity securities sold during any three-month period cannot exceed 1% of the outstanding shares of the same class being sold. The securities must be sold in unsolicited, routine trading transactions and brokers may not receive more than normal commission. Affiliates must also file a notice with the SEC on Form 144 if a sale involves more than 5,000 shares or the aggregate dollar amount is greater than $50,000 in any three-month period. The sale must take place within three months of filing the Form 144 and, if the securities have not been sold, an amended notice must be filed. Investors should be aware that sales under Rule 144 or pursuant to a registration statement filed under the Securities Act might depress the market price of our securities in any market for such shares.

The SEC has adopted regulations that define a “penny stock” to be any equity security that has a market price per share of less than $5.00, subject to certain exceptions, such as any securities listed on a national securities exchange or securities of an issuer in continuous operation for more than three years whose net tangible assets are in excess of $2 million, or an issuer that has average revenue of at least $6 million for the last three years. Our shares of common sharesstock are currently trading on the OTC Markets Group., under their OTC Pink OpenOTCQB Venture Market. As of Fiscal 2019,2021, our net tangible assets did not exceed $2 million, and our average revenue for the last three years was only $4,147,000,$3,340,000, so our securities do not currently qualify for exclusion from the “penny stock” definitions. Therefore, our shares of common sharesstock are subject to “penny stock” rules. For any transaction involving a “penny stock,” unless exempt, the rules impose additional sales practice requirements on broker-dealers, subject to certain exceptions. For these reasons, a broker-dealer may find it more difficult to trade our common stock and an investor may find it more difficult to acquire or dispose of our common stock on the secondary market. Therefore, broker-dealers may be less willing or able to sell or make a market in our securities because of the penny stock disclosure rules. Not maintaining a listing on a major stock market may result in a decrease in the trading price of our securities due to a decrease in liquidity and less interest by institutions and individuals in investing in our securities, and could also make it more difficult for us to raise capital in the future. Furthermore, listingquotation on OTCOTCQB Venture Market Group may make it more difficult to retain and attract market makers. In the event that market makers cease to function as such, public trading of our securities will be adversely affected or may cease entirely.

Not applicable.

We own our property in Kinderhook, New York. The property currently consists of a 30,000 square foot facility with approximately 22 surrounding acres. Our Kinderhook facility houses administration, customer service, inside sales, assembly and packaging, shipping and our warehouse. Our New York facility is encumbered by a lien by Cherokee (as it is collateral for the Loan and Security Agreement with Cherokee).

We lease 5,200 square feet of space in Logan Township, New Jersey that houses our bulk test strip manufacturing and research and development. On December 24, 2019, we amended the term of our lease by extending it through December 31, 2020.2022. Both facilities are currently adequate and meet the needs of all areas of the Company.

From time to time, we settledmay be named in legal proceedings in connection with matters that arose during the normal course of business. While the ultimate outcome of any such litigation with Todd Bailey;cannot be predicted, if we are unsuccessful in defending any such litigation, the resulting financial losses are not expected to have a former Vice President, Sales & Marketingmaterial adverse effect on the financial position, results of operations and sales consultantcash flows of the Company until December 23, 2016; hereinafter referred to as “Bailey”). The litigation was filed by the Company in the Northern District of New York in February 2017. Our complaint sought damages related to profits and revenues that resulted from actions taken by Bailey related to our customers. The settlement also addressed a counter-claim filed by Bailey in October 2017 (filed originally in Minnesota but, transferred to the Norther District of New York in January 2019). Bailey was seeking deferred commissions in the amount of $164,000 that he alleged were owed to him by the Company. These amounts were originally deferred under a deferred compensation program initiated in 2013; a program in which Bailey was one of the participants. We believed the amount sought was not due to Bailey given the actions indicated in our litigation.

Our shares of common stock are quoted on the OTCQB Venture Market under the symbol “ABMC”. Prior to December 3, 2020, our common shares are currently tradingwere traded on the OTC Markets Group under their OTC Pink® Open Market under the symbol “ABMC”.

The following table sets forth the high and low closing bid prices of our securities as reported by the OTCQB Venture Market and the OTC Pink Open Market in Fiscal 20192021 and Fiscal 2018.2020. The prices quoted reflect inter-dealer prices, without retail mark-up, markdown, or commission and may not necessarily represent actual transactions.

Based upon the number of record holders and individual participants in security position listings, as of June 26, 2020April 14, 2022, there were approximately 1,8002,400 holders of our securities. As of June 26, 2020,April 14, 2022, there were 35,847,09348,098,476 common shares outstanding.

We have not declared any dividends on our common shares and do not expect to do so in the foreseeable future. Future earnings, if any, will be retained for use in our business.

We currently have 2 Non-statutory Stock Option Plans (the 2001 Plan and the 2013 Plan, collectively the “Plans”) that have been adopted by our Board of Directors and subsequently approved by our shareholders. The Plans provide for the granting of options to employees, directors, and consultants (see Part I, Item 1A, Risk Factor titled, “Potential issuance and exercise…”).

The following table summarizes information as of December 31, 2019,2021, with respect to compensation plans (including individual compensation arrangements) under which our common stock is authorized for issuance:

None that have not been previously reported in a Quarterly Report on April 8, 2020 as compensation to three (3) board members; forForm 10-Q or a total of 23,253 common shares for their attendance at a telephonic meeting of the Board of Directors heldCurrent Report on March 31, 2020. These stock issuances were in accordance with the director compensation structure approved by the Company’s Board of Directors on March 22, 2018 (as indicated our Proxy Statement filed with the SEC on April 18, 2018).

In Fiscal 2019 continued to be2021, sales of drug tests were still being negatively impacted by the price competitive naturecompetitiveness in our core markets (government, employment and clinical) and by the Covid-19 pandemic. Sales related to Covid-19 testing also declined dramatically in Fiscal 2021 compared to sales in Fiscal 2020. In addition to the marketing of our drug tests, in Fiscal 2021, we continued to market various Covid-19 rapid tests. In December 2020, we announced that were distributing a rapid Covid-19 antigen test. Very early in Fiscal 2021, we were informed by the manufacturer (Healgen Scientific, LLC) that we could no longer offer the Covid-19 antigen test for sale in the United States. We were able to secure another distribution relationship for another rapid antigen test in May 2021 along with a few other rapid antigen tests throughout Fiscal 2021.

We are also distributing Covid-19 antibody tests, including but not limited to an antibody test via distribution with Healgen which is for use with whole blood, serum or plasma and can be used by laboratories able to perform moderate or highly complex testing (a more limited market), and an antibody test from another manufacturer which can be performed using finger stick blood at the point of care and by laboratories with a Certificate of CLIA waiver (a larger market). However, the need for rapid Covid-19 antibody tests declined significantly in Fiscal 2021 due to widespread vaccine availability.

In addition to rapid antigen and antibody tests, in Fiscal 2021 we also marketed (via distribution) the Co-Diagnostics Logix Smart Covid-19 test, a Covid-19-Influenza A/B combination test and at home rapid antigen tests (although lack of availability of at-home tests severely limited our ability to achieve sales of the marketsproduct).

All of the Covid-19 tests we are offering are being marketed in which we sell our drug testing products. Products manufactured outsideaccordance with the March 2020 Emergency Use Authorization (“EUA”) policy set forth by the United States continueFood and Drug Administration (FDA) and in accordance with the individual EUAs issued for the products.

Throughout Fiscal 2021, we continued to dominate our core markets; especially in the Government market where a tremendous amount of value is put on the lowest price.

We havedo expect to sell more Covid-19 testing products and positively impact our revenues in the year ending December 31, 2022, however we do not expect the sales to materially impact our business, our financial condition and/or results of operations.

Due to the Covid-19 pandemic, we are still not marketing our oral fluid drug tests (OralStat®) in the employment and insurance markets in the United States (under a limited exemption set forth by the FDA). We remain hopeful that we can effectively market our OralStat in the United States markets given its superior sensitivity and accuracy. Initially we may re-introduce the product in markets outside the United States via distribution relationships.

In the year ended December 31, 2019, we expanded our contract manufacturing operations with two (2) new customers. One ofUnfortunately, the Covid-19 pandemic halted sales to these new customers started generatingand resulted in no sales in Fiscal 2020. In Fiscal 2021, we started to ship orders to them again and our contract manufacturing sales increased in Fiscal 2021 when compared to Fiscal 2020.

In Fiscal 2021 and beyond, we are focusing our efforts on further penetration of our markets with both current and new products (drug testing, Covid-19 and other diagnostic tests). We are also looking for avenues to capitalize on our US manufacturing operations. In early 2021 we started exploring the three months ended March 31, 2019 whileretention of a marketing firm that would provide services related to public relations/social media to effectively communicate our manufacturing capabilities. There was an unforeseen delay on the other customer started generating salespart of the firm and presently discussions are halted.

Gross profit margin declined in Fiscal 2021 when compared to Fiscal 2020 primarily due to the fourth quarter ended December 31, 2019.

Operating expenses declined in Fiscal 2019 was negligible.

From August 2013 until June 2020, we maintained a 10% salary deferral program for our sole executive officer, throughout Fiscal 2019 and another member of senior management until his retirement in November 2019. The program consists of a 10% salary deferral for our Chief Executive Officer/Principal Financial Officer Melissa Waterhouse. The salary deferral program was initiated by Ms. Waterhouse and the othervoluntarily. Another member of senior management participated in the program voluntarily until his retirement. Asretirement in November 2019. After the member of December 31, 2019,senior management retired, we had totalagreed to make payments on the deferred compensation owed to these two individualsthis individual. In Fiscal 2021 and Fiscal 2020, we made payments of $20,000 and $57,000, respectively. The deferred compensation owed to this individual was paid in full in May 2021. Once the deferred compensation was paid in full to this individual, we began to make payments at the same rate to Ms. Waterhouse given the length of time the amount of $191,000. As cash flow from operations allows,had been owed and that the last payment (prior to May 2021) made to Ms. Waterhouse was in August 2017. In Fiscal 2021, we intendmade payments totaling $33,000 to repay portions of the deferred compensation.Ms. Waterhouse. We did not make any payments on deferred compensation to MelissaMs. Waterhouse in Fiscal 2019 or Fiscal 2018. After the member2020. As of senior management retired in November 2019,December 31, 2021, we agreed to make payments for thehad deferred compcompensation owed to this individual. In Fiscal 2019, weMs. Waterhouse in the amount of $74,000 and $5,000 in payroll taxes that are due as payments are made payments totaling $4,000 to this individual and no paymentsMs. Waterhouse; for a total of $79,000 in Fiscal 2018.

Our continued existence is dependent upon several factors, including our ability to: 1) raise revenue levels even though we have lost significant accounts and the drug testing market continues to be infiltrated by product manufactured outside of the United States as well as being impacted by the global health crisis caused by Covid-19, 2) further penetrate the markets (in and outside of the United States) for Covid-19 tests, 3) secure new contract manufacturing customers, 4) control operational costs to generate positive cash flows, 3)5) maintain our current credit facilities or refinance our current credit facilities if necessary, and 4)6) if needed, our ability to obtain working capital by selling additional shares of our common stock.

Our discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America, or “U.S. GAAP”. Part IV, Item 15, Note A to our financial statements describes the significant accounting policies and methods used in the preparation of our financial statements. The accounting policies that we believe are most critical to aid in fully understanding and evaluating the financial statements include the following:

Other income of $718,000 in Fiscal 2021 consisted of income related to the forgiveness of our PPP loan in the amount of $335,000, other income of $58,000; which is $50,000 related to certain non-refundable prepayments (customer deposits) that were forfeited when the customer did not remit the remaining amounts due on the order and $8,000 in income related to gains on certain liabilities, $619,000 in income from the Employee Retention Credit recognized in Fiscal 2021 (which is $44,000 in credits taken in Q3 2021, $38,000 in credit taken in Q4 2021 and $537,000 in refunds filed for credits in the first three quarters of 2021). This income was offset by interest expense associated with our credit facilities (our line of credit, our two loans with Cherokee Financial, LLC and a shareholder loan) and a charge related to the impairment of our patent asset.

Other expense of $93,000$173,000 in Fiscal 20192020 consisted of interest expense associated with our credit facilities (our line of credit, equipment loan with Crestmark Bank and our two loans with Cherokee Financial, LLC) nominally offset by $2,000 in other income from proceeds for an insurance claim related to our New Jersey facility (a claim that resulted from actions of a service vendor) and a gain on an accrual for a contingent liability. Other expense of $264,000 in Fiscal 2018 consisted of interest expense associated with our credit facilities, offset by other income related to gains on certain liabilities and a small amount of interest income.

Our cash requirements depend on numerous factors, including but not limited to manufacturing costs (such as raw materials, labor, 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. We expect to devote capital resources related to selling and marketing initiatives. We are examining other growth opportunities including strategic alliances.alliances and contract manufacturing. Given our current and historical cash position, such activities would need to be funded from the issuance of additional equity or additional credit borrowings, subject to market and other conditions.

Lincoln Park Equity Line

On December 9, 2020, we entered into a Purchase Agreement and a Registration Rights Agreement with Lincoln Park under which Lincoln Park agreed to purchase from the Company, from time to time, up to $10,250,000 of shares of our common stock, par value $0.01 per share, subject to certain limitations set forth in the Purchase Agreement, over a two year period. On December 29, 2020 we filed a Form S-1 Registration Statement (the “Registration Statement”). We amended the Registration Statement on January 7, 2021 and the SEC declared the Registration Statement effective on January 11, 2021. In Fiscal 2021, the Company sold 6,500,000 shares of common stock to Lincoln Park (including 500,000 shares required as an initial purchase under the Purchase Agreement) as Regular Purchases and received proceeds of $639,000.

Employee Retention Credit

As indicated in Note K to our Financial Statements, in August 2021, our payroll service provider processed and mailed a Form 941-X to claim an Employee Retention Credit (“ERC”) refund in the amount of $202,000 on qualified wages paid in the first quarter of Fiscal 2021. Due to a change in the Form 941-X, our payroll service provider did not process and mail our Form 941-X to claim an ERC refund in the amount of $198,000 on qualified wages paid in the second quarter of Fiscal 2021 until October 28, 2021. In the middle of the third quarter of Fiscal 2021, we began taking the ERC in our current payroll; which reduced our payroll by approximately $44,000 in the third quarter of 2021 and $38,000 in the fourth quarter of Fiscal 2021 (until the ERC program was ended early as part of the Infrastructure bill signed into law on November 15, 2021). Given this, we did not have to amend our Form 941 for runningthe third quarter of 2021; rather our business,Form 941 claiming a refund in the amount of $137,000 was filed electronically with the IRS on November 1, 2021 by our payroll service provider. On December 28, 2021, we received our refund for the third quarter of Fiscal 2021 in the amount of $137,000. Shortly before receiving our first refund, we spoke with the Internal Revenue Service (“IRS”) to obtain statuses of our filings. It was then that we were informed that they did not have record of receiving our Form 941-X for the first quarter of Fiscal 2021 (which was mailed by our service provider in August 2021). We re-sent the Form 941-X for the first quarter of Fiscal 2021 via overnight service on December 20, 201831, 2021 and the IRS received it on January 5, 2022. This lack of receipt will result in a delay in receiving our expected refund in the amount of $203,000. Based on our discussion with the IRS, we were expecting the refund payment for the second quarter of Fiscal 2020 sometime in February 2022; however, as of the date of this report, we have not received any further refund payments.

Securities Purchase Agreement – October 2021

On October 18, 2021, we entered into a Securities Purchase Agreement (the “Purchase Agreement”“SPA”) with Chaim Davisa non-affiliated, accredited investor (the Chairman of our Board of Directors) and certain other accredited investors (altogether the “Investors”“Investor”), underpursuant to which we issued and sold to the InvestorsInvestor in a private placement (the “Private Placement”) 2,000,000 units (the “Units”). We closed on the Private Placement on December 24, 2018. Each Unit consisted, 2,500,000 shares of one (1) share of the Company’sour common stock, par value $0.01 per share (“Common Share”), at a price per UnitCommon Share of $0.10$0.04 (the “Purchase Price”) for netgross (and net) proceeds of $200,000$100,000 as there were no expenses related tocosts associated with the Private Placement.

Shareholder Loans – December 2021

On December 14, 2021, we entered into six month Loan Agreements with two non-affiliated investors resulting in gross (and net) proceeds of $75,000 as there were no costs associated with the loans. The loans bear interest of 7% per annum until principal and interest are both due in full, or until June 15, 2022. We did not utilize a placement agent forpaid one of the Private Placement. The net proceeds were used for working capitalinvestors their first interest payment (due on March 15, 2022); however, the other investor agreed to waive their first interest payment and general corporate purposes inhave the early partinterest paid at the end of Fiscal 2019. (See Note J – Subsequent Event for information related to an additional Private Placement completed in February 2020).

Going Concern

Our financial statements for Fiscal 2019 have been2021 were prepared assuming we will continue as a going concern, which assumes the realization of assets and the satisfaction of liabilities in the normal course of business. For Fiscal 2019, we had a net loss of $681,000 and net cash provided by operating activities of $58,000. While this is an improvement over a loss of $1,028,000 and net cash used in operating activities of $171,000 in Fiscal 2018; our cash position decreased by $109,000 in Fiscal 2019 and increased by $77,000 in Fiscal 2018. This increase in cash in Fiscal 2018 was in large part due to the private placement we closed in December 2018. We had a working capital deficit of $463,000 at December 31, 2019 compared to a working capital deficit of $212,000 at December 31, 2018. This increase in working capital deficit is primarily due to decreased sales.

Our loan and security agreement and 2019 Term Note with Cherokee for $900,000 and $200,000,$220,000, respectively, expired on February 15, 2020. As2021; however, on February 24, 2021, we completed a transaction with Cherokee related to (second) one-year Extension Agreements dated February 14, 2021 under which Cherokee extended the due date of the Cherokee LSA ($900,000) and the 2019 Term Loan with Cherokee ($220,000) again; the facilities were previously extended in February 2020). Under the terms of the (second) extensions, the $900,000 (secured) 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 in February 2021; a term that was included in the February 2020 extension. The annual interest rate on the (further) extended Cherokee LSA was increased to a fixed rate of 10% (the prior fixed rate was 8%) plus a 1% annual oversight fee (that remained unchanged). In addition, 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 in February 2021; a term that was included in the February 2020 extension. Our total debt at December 31, 2019, all2021 with Cherokee Financial, LLC was $1,240,000. We do not expect cash from operations within the next 12 months to be sufficient to pay the amounts due under these credit facilities, which was due in full on February 15, 2022. We were not able to these credit facilities when they were due and we are currently in discussions with Cherokee are included in our short-term debt givenrelated to possible payoff of the facilities expire in less than 12 months. (Seeloans (via a refinance) or to extend the due date of the loans. See Note JL – Subsequent EventEvents for information regardingrelated to the extensionstatus of our facility with Cherokee).

Throughout Fiscal 2021, we had a line of credit with Crestmark had aBank. The maximum availability on the line of $1,500,000;however,credit is $1,000,000. However, because the amount available under the line of credit is based upon our accounts receivable, the amounts actually available under our line of credit was much lower as it is based upon(historically) have been significantly less than the balance of our accounts receivable and a limited amount of inventory. Lowermaximum availability. When sales levels result in reduced availability on our line of credit, and starting in July 2018, the Inventory Sub-Cap Limit on the line of credit (which determines our availability from the inventory) is being reduced by $10,000 per month until the Inventory Sub-Cap Limit is $0 (making the line of credit an accounts-receivable based line only). This means that as of December 31, 2019, the Inventory Sub-Cap Limit is only $70,000 and that our availability related to inventory is significantly reduced. As of December 31, 2019, based on our availability calculation, there were no additional amounts available under our line of credit because we draw any balance available on a daily basis. If sales levels continue to decline, we will have reduced availability on our line of credit due to decreased accounts receivable balances. OurAs of December 31, 2021, based on our availability calculation, there were no additional amounts available under the line of credit because we draw any balance available on a daily basis. Upon completion of the initial 5 year term, the Crestmark line of credit automatically renews for additional one (1) year terms unless notice of termination from the Company is received by Crestmark not less than sixty (60) days prior to the end of the renewal term. We did not provide Crestmark with a notice of non-renewal and therefore, the Crestmark expiredline of credit automatically renewed on June 22, 2020. (See Note J – Subsequent Event2021 for information regarding the Crestmark LOC extension.

If availability under our line of credit, iscash received from equity sales under the Lincoln Park Purchase Agreement and/or cash received as refunds under the ERC program are not sufficient to satisfy our working capital and capital expenditure requirements, we will be required to obtain additional credit facilities or sell additional equity securities, or delay capital expenditures which could have a material adverse effect on our business. There is no assurance that such financing will be available or that we will be able to complete financing on satisfactory terms, if at all.

As of December 31, 2021, we had the following debt/credit facilities:

(1) Facility was not repaid on February 15, 2022 and we are currently in discussions with Cherokee related to possible payoff of the facility (via a refinance) or to extend the due date of the facility.

Working Capital Deficit

At the end of Fiscal 2021, we were operating at a working capital deficit of $1,484,000. This compares to a working capital deficit of $841,000 at the end of Fiscal 2020. This increase in working capital deficit is primarily a result of our loans with Cherokee Financial, LLC being classified as long-term debt in Fiscal 2020 and short term debt in Fiscal 2021, partially offset by the forgiveness of the PPP loan in Fiscal 2021. We have historically satisfied working capital requirements through cash from operations, bank debt and private placements of our securities.

Dividends

We have never paid any dividends on our common shares and we anticipate that all future earnings, if any, will be retained for use in our business.

Cash Flow, Outlook/Risk

In MarchFiscal 2021, we had a net loss of $463,000 and net cash used in operating activities of $673,000.

Our cash position increased from $98,000 at December 31, 2020 to $115,000 at December 31, 2021. Cash at both December 31, 2020 and December 31, 2021 was positively impacted by proceeds received late in each year; the World Health Organization declared COVID-19 to beLincoln Park transaction in December 2020 (in the amount of $125,000) and an ERC refund in December 2021 (in the amount of $137,000).

In Fiscal 2020, along with the Lincoln Park proceeds previously discussed, we reserved cash by paying a pandemic. COVID-19 has spread throughoutrefinance fee and director attendance fees in shares of restricted stock and converted a loan into restricted shares of stock. We also completed a private placement of securities in February 2020. In Fiscal 2021, along with the globe, includingERC refund previously discussed, we reserved cash by paying interest in shares of restricted stock. We also received proceeds from 1) sales of common stock under our equity line of credit with Lincoln Park ($639,000), 2) a private placement of securities in October 2021 ($100,000) and 3) two shareholder loans in December 2021 (totaling $75,000). Our PPP loan was also forgiven in Fiscal 2021. However, in February 2021, we also incurred penalties in the Stateamount of New York where$120,000 from Cherokee Financial, LLC because we could not pay back our headquarters are located, andloans in the State of New Jersey where our strip manufacturing facility is located. In response to the outbreak, the Company has followed the guidelines of the U.S. Centers for Disease Control and Prevention (“CDC”) and applicable state government authorities to protect the health and safety of the Company’s employees, families, suppliers, customers and communities. While these existing measures and, COVID-19 generally, have not materially disrupted our business to date, any future actions necessitated by the COVID-19 pandemic may result in disruption to our business.

While the COVID-19Covid-19 pandemic continues to rapidly evolve,is seemingly winding down, we continue to assessbe impacted by it in the impactform of the COVID-19 pandemicmaterial delays, cost increases (in both manufacturing and other business costs), labor shortages and decreased sales orders from customers. We are unsure as to best mitigate risk andhow long we will continue the operations of our business.to be impacted negatively. The extent to which the outbreak impactspandemic may continue to impact our business, liquidity, results of operations and financial condition will depend on future developments, which are highlystill uncertain and cannot be predicted with confidence, including new information that may emerge concerning the severity of the COVID-19 pandemic and the actions to contain it or treat its impact, among others.predicted. If we, our customers or suppliers experience prolonged shutdowns or other(or in some cases continue to experience) business disruptions, our business, liquidity, results of operations and financial condition are likely to be materially adversely affected, and our ability to access the capital markets may be limited.

We have been able to utilize the following debt/credit facilities:

In December 2021, we received one of $200,000. We expect to issue additional restricted sharesour ERC refunds (in the amount of common stock$137,000) from the IRS. In Fiscal 2022, we are expecting two more refunds; one in the amount of $203,000 and the other in the amount of $197,000; for attendance at meetingsa total of the Board of Directors if a director (or directors) choose(s) payment in shares in lieu of cash as their form of payment. (See Note J - Subsequent Event for information related to the private placement completed in February 2020).

Our ability to repay our current debt and other liabilities may also be affected by general economic, financial, competitive, regulatory, legal, business and other factors beyond our control, including those discussed herein. If we are unable to meet our credit facility obligations and we wouldare unable to facilitate purchases under our Purchase Agreement with Lincoln Park, we will be required to raise money through new equity and/or debt financing(s) and, there is no assurance that we would be able to find new financing, or that any new financing would be at favorable terms.

We will continue to take steps to ensure that operating expenses and conditions of the Crestmark LOCmanufacturing costs remain unchanged under the extension periodin line with the exception of the following, 1) the maximum availability under the Crestmark LOC was reduced from $1,500,000 to $1,000,000, 2) availability under the Crestmark LOC is based on receivables only (under the same terms), 3) the requirement for field auditssales levels. We have consolidated job responsibilities in certain areas of the Company was removed, and 4) the Tangible Net Worth (TNW) covenant was removed.

If we are forced to refinance our debt on less favorable terms, our results of operations and financial condition could be adversely affected by increased costs and rates. There is also no assurance that we could obtain alternative debt facilities. We may also be forced to pursue one or more alternative strategies, such as restructuring, selling assets, reducing or delaying capital expenditures or seeking additional equity capital. There can be no assurances that any of these strategies could be implemented on satisfactory terms, if at all.

If events and circumstances occur such that 1) we do not meet our current operating plans to increase sales, 2) we are unable to raise sufficient additional equity or debt financing, 3), we are unable to effect sales under the Lincoln Park Equity Line, 4) we are unable to utilize equity as a form of payment in lieu of cash or 4)5) our credit facilities are insufficient or not available, we may be required to further reduce expenses or take other steps which could have a material adverse effect on our future performance.

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

Our Financial Statements are set forth beginning on page F-1.

None.

Management has reviewed the effectiveness of our “disclosure controls and procedures” (as defined in the Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this report and have concluded that the 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.

Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is designed 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. Our internal control over financial reporting includes those policies and procedures that:

(i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorization of Management; and

(iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

Because of inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to risk that controls may become inadequate because of changes in conditions, or the degree of compliance may deteriorate.

Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2018.2020. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organization of the Treadway Commission (COSO) in Internal Control-Integrated Framework. Based on that assessment, Management has concluded that our internal control over financial reporting was effective as of December 31, 2018.

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.

This annual report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by our independent registered public accounting firm pursuant to rules of the SEC that exempt smaller reporting companies from this requirement.

The information required by this item is contained in our definitive Proxy Statement with respect to our Annual Meeting of Shareholders for Fiscal 2019,2021, under the captions “Discussion“Information about the Board of Proposal Recommended by Board”, “Directors that are not Nominees”Directors” “Executive Officer”, “Additional Executive Officers and Senior Management”, “Section 16(a) Beneficial Ownership Reporting Compliance”, “Code of Ethics”, “Nominating Committee”, “Audit Committee” and “Audit Committee Financial Expert” and is incorporated herein by reference.

The information required by this item is contained in our definitive Proxy Statement with respect to our Annual Meeting of Shareholders for Fiscal 2019,2021, under the captions “Executive Compensation”, “Compensation of Directors”, “Compensation Committee Interlocks and Insider Participation”, and “Compensation Committee Report”, and is incorporated herein by reference.

The information required by this item is contained in our definitive Proxy Statement with respect to the Annual Meeting of Shareholders for Fiscal 2019,2021, under the captions “Certain Relationships and Related Transactions” and “Independent Directors”, and is incorporated herein by reference.

The information required by this item is contained in our definitive Proxy Statement with respect to the Annual Meeting of Shareholders for Fiscal 2019,2021, under the caption “Independent Public Accountants”, and is incorporated herein by reference.

(11) Filed as the exhibit number listed to the Company’s Current Report on Form 8-K filed on December 10, 2020.

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned thereunto duly authorized.