UNITED STATES
 
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 
FORM 10-Q
 
(Mark One)
 
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended September 30,December 31, 2012
 
OR
 
[ ] TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from _______ to _______
 
COMMISSION FILE NO. 0-17629
 
ADM TRONICS UNLIMITED, INC.
 (Exact name of registrant as specified in its charter)
 
Delaware22-1896032
Delaware  
(State or Other Jurisdiction  
(I.R.S. Employer
of Incorporation or organization)
22-1896032
(I.R.S. Employer
Identification Number)
 
224-S Pegasus Ave., Northvale, New Jersey 07647
(Address of Principal Executive Offices)
 
Registrant's Telephone Number, including area code: (201) 767-6040
 
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or 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 [ ]
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).     YES [X] NO [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer [ ]                                                                                                                                                Accelerated filer [ ]
Large accelerated filer [ ]Accelerated filer [ ]
Non-accelerated filer [ ] (Do not check if a smaller reporting company)Smaller reporting company [X]

Non-accelerated filer [ ] (Do not check if a smaller reporting company)                                                                 Smaller reporting company [X]
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
 
YES [ ] NO [X]
 
State the number of shares outstanding of each of the Issuer's classes of common equity, as of the latest practicable date:
 
56,939,537 shares of Common Stock, $.0005 par value, as of NovemberFebruary 19, 2012.2013.
 
 
1
 

ADM TRONICS UNLIMITED, INC., AND SUBSIDIARIES
 
INDEX
ADM TRONICS UNLIMITED, INC., AND SUBSIDIARIES
INDEX
  Page Number
Part I - Financial Information
   
Item 1.Condended Consolidated Financial Statements: 
   
 Condensed Consolidated Balance Sheet - September 30,December 31, 2012 (unaudited) and March 31, 20123
   
 
Condensed Consolidated Statements of Operations for the three and sixnine months ended September 30,December 31, 2012 and 2011 (unaudited)
4
   
 
Condensed Consolidated Statements of Cash Flow for the sixnine months ended September 30,December 31, 2012 and 2011 (unaudited)
5
   
 Notes to the Condensed Consolidated Financial Statements (unaudited)6
   
Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations11
   
Item 3.Quantitative and Qualitative Disclosures about Market Risk14
   
Item 4.Controls and Procedures15
   
Part II - Other Information
   
Item 1.Legal Proceedings15
   
Item 1A.Risk Factors15
   
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds15
   
Item 3.Defaults Upon Senior Securities15
   
Item 4.Other Information15
   
Item 5.Exhibits15

 
2
 

PART I. FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
ADM TRONICS UNLIMITED, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
 
September 30,
2012
(Unaudited)
   
March 31,
2012
  
December 31,
2012
(Unaudited)
  
March 31,
2012
 
 
ASSETS            
            
Current assets:            
Cash and cash equivalents $241,411  $299,156  $214,300  $299,156 
Accounts receivable, net of allowance for doubtful accounts of $500 and $329, respectively
  212,819   285,159   156,451   285,159 
Inventories  241,705   260,632   280,752   260,632 
Prepaid expenses and other current assets  18,235   26,157   14,114   26,157 
Restricted cash  231,782   231,455   231,782   231,455 
                
Total current assets  945,952   1,102,559   897,399   1,102,559 
                
Property and equipment, net of accumulated depreciation of $59,298 and $53,574, respectively
  18,018   23,742 
Property and equipment, net of accumulated depreciation of $61,264 and $53,574, respectively
  16,052   23,742 
                
Inventories - long-term portion  76,248   42,743   73,319   42,743 
Secured convertible note receivable  56,627   62,351   57,664   62,351 
Advances to related parties  22,480   22,480   22,480   22,480 
Intangible assets, net of accumulated amortization of $108,074 and $101,682, respectively
  60,074   66,466 
Intangible assets, net of accumulated amortization of $110,888 and $101,682, respectively
  57,260   66,466 
Other assets  16,109   16,109   16,109   16,109 
Total other assets  249,556   233,891   242,884   233,891 
                
Total assets $1,195,508  $1,336,450  $1,140,283  $1,336,450 
                
LIABILITIES AND STOCKHOLDERS' EQUITY                
                
Current liabilities:                
Note payable - bank $153,990  $160,000  $150,990  $160,000 
Accounts payable  149,005   148,832   213,070   148,832 
Customer deposit  -   21,023   -   21,023 
Accrued fees  215,305   197,120 
Accrued expenses and other current liabilities  159,930   188,815   401,620   385,935 
Total current liabilities  678,230   715,790   765,680   715,790 
                
Total liabilities  678,230   715,790   765,680   715,790 
                
Stockholders' equity:                
Preferred stock, $.01 par value; 5,000,000 shares authorized, no shares issued and outstanding
  -   -   -   - 
Common stock, $.0005 par value; 150,000,000 shares authorized, 56,939,537 shares issued and outstanding at September 30, 2012 and March 31, 2012
  28,470   28,470 
Common stock, $.0005 par value; 150,000,000 shares authorized, 56,939,537 shares issued and outstanding at December 31, 2012 and March 31, 2012
  28,470   28,470 
Additional paid-in capital  32,173,097   32,173,097   32,223,097   32,173,097 
Accumulated deficit  (31,684,289)  (31,580,907)  (31,876,964)  (31,580,907)
Total stockholders' equity  517,278   620,660   374,603   620,660 
                
Total liabilities and stockholders' equity $1,195,508  $1,336,450  $1,140,283  $1,336,450 
 
The accompanying notes are an integral part of these
condensed consolidated financial statements.
 
 
3
 
 
ADM TRONICS UNLIMITED, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTSTATEMENTS OF OPERATIONS
FOR THE THREE AND SIXNINE MONTHS ENDED
(Unaudited)
(Unaudited)
 
  
Three months ended
September 30,
  
Six months ended
September 30,
 
  2012  2011  2012  2011 
             
Net revenues $384,673  $472,689  $901,912  $891,751 
                 
Cost of sales  179,118   191,252   353,793   405,463 
                 
Gross Profit  205,555   281,437   548,119   486,288 
                 
Operating expenses:                
Research and development  9,143   8,697   18,274   18,001 
Selling, general and administrative  280,652   230,966   620,063   466,768 
Depreciation and amortization  4,713   10,693   12,116   21,460 
                 
Total operating expenses  294,508   250,356   650,453   506,229 
                 
Income (loss) from operations  (88,953)  31,081   (102,334)  (19,941)
                 
Other income (expense):                
Interest income  1,302   1,599   2,745   3,240 
Interest expense  (1,904)  (1,034)  (3,793)  (2,098)
Total other income (expense)  (602)  565   (1,048)  1,142 
                 
                 
Net income (loss) $(89,555) $31,646  $(103,382) $(18,799)
                 
Basic and diluted (loss) per common share: $(0.00) $0.00  $(0.00) $(0.00)
                 
Weighted average shares of common stock outstanding - basic and diluted  56,939,537   53,939,537   56,939,537   53,939,537 
  
Three months ended
December 31,
  
Nine months ended
December 31,
 
  2012  2011  2012  2011 
             
Net revenues $306,522  $452,943  $1,208,434  $1,344,694 
                 
Cost of sales  148,090   193,553   501,883   599,016 
                 
Gross Profit  158,432   259,390   706,551   745,678 
                 
Operating expenses:                
Research and development  6,999   8,630   25,273   26,630 
Selling, general and administrative  338,510   273,329   958,573   740,098 
Depreciation and amortization  4,780   11,185   16,896   32,645 
                 
Total operating expenses  350,289   293,144   1,000,742   799,373 
                 
Loss from operations  (191,857)  (33,754)  (294,191)  (53,695)
                 
Other income (expense):                
Interest income  1,038   1,484   3,783   4,724 
Interest expense  (1,856)  (1,336)  (5,649)  (3,434)
Total other income (expense)  (818)  148   (1,866)  1,290 
                 
                 
Net Loss $(192,675) $(33,606) $(296,057) $(52,405)
                 
Basic and diluted (loss) per common share: $(0.00) $(0.00) $(0.01) $(0.00)
                 
Weighted average shares of common stock outstanding - basic and diluted  56,939,537   53,939,537   56,939,537   53,939,537 
 
The accompanying notes are an integral part of these
consolidated financial statements.
 
 
4
 
 
ADM TRONICS UNLIMITED, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIXNINE MONTHS ENDED  SEPTEMBER 30,DECEMBER 31, 2012 AND 2011
(Unaudited)
 2012  2011  2012  2011 
Cash flows from operating activities:            
Net loss $(103,382) $(18,799) $(296,057) $(52,405)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
                
Depreciation and amortization  12,116   21,460   16,896   32,645 
Stock based compensation  50,000   - 
Interest receivable  (2,276)  (2,507)  (3,313)  (3,767)
Bad debt expense  171   -   171   - 
Increase (decrease) in cash flows as a result of changes in assets and liabilities balances:Increase (decrease) in cash flows as a result of changes in assets and liabilities balances:     Increase (decrease) in cash flows as a result of changes in assets and liabilities balances:     
Accounts receivable  72,169   (108,792)  128,537   (57,929)
Inventory  (14,578)  (58,382)  (50,696)  (131,833)
Prepaid expenses and other current assets  2,506   (37,010)  8,948   (39,212)
Accounts payable  5,589   16,073   67,333   21,593 
Accrued fees  18,185   - 
Customer deposit  (21,023)  150,816   (21,023)  108,751 
Accrued expenses and other current liabilities  (28,885)  63,459   15,685   112,921 
Net cash provided by (used) in operating activities  (59,408)  26,318 
Net cash used in operating activities  (83,519)  (9,236)
                
Cash flows from investing activities:                
Repayment from related party  -   2,936 
Payment for equipment costs  -   (2,296)
Collections from secured convertible note  8,000   -   8,000   - 
Payment for patents and trademark costs  -   (3,584)  -   (3,584)
Restricted cash  (327)  (543)  (327)  (720)
Net cash provided by (used in) investing activities  7,673   (4,127)  7,673   (3,664)
                
Cash flows from financing activities:                
Repayments on note payable - Bank  (6,010)  (6,000)  (9,010)  (9,000)
Repayments on note payable - Other  -   (7,250)  -   (13,900)
                
Net cash used in financing activities  (6,010)  (13,250)  (9,010)  (22,900)
                
Net increase (decrease) in cash  (57,745)  8,941 
Net decrease in cash  (84,856)  (35,800)
                
Cash and cash equivalents beginning of year  299,156   155,149 
Cash and cash equivalents beginning of period  299,156   155,149 
                
Cash and cash equivalents at end of year $241,411  $164,090 
Cash and cash equivalents at end of period $214,300  $119,349 
                
Cash paid for:                
Interest $2,115  $2,098  $2,115  $3,056 
Income taxes $-  $- 
                
Supplemental disclosures of non-cash investing and financing activities:Supplemental disclosures of non-cash investing and financing activities:     Supplemental disclosures of non-cash investing and financing activities:     
Accrued interest on note receivable $2,276  $2,507  $3,313  $3,767 
Increase in prepaid insurance and accounts payable $5,416  $8,466  $3,095  $8,466 
 
The accompanying notes are an integral part of these
condensed consolidated financial statements.
 
 
5
 
 
ADM TRONICS UNLIMITED, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30,DECEMBER 31, 2012
(Unaudited)
 
NOTE 1 - ORGANIZATIONAL MATTERS
 
ADM Tronics Unlimited, Inc. ("we", "us", the “Company" or "ADM"), was incorporated under the laws of the state of Delaware on November 24, 1969.  We are authorized under our Certificate of Incorporation to issue 150,000,000 common shares, with $.0005 par value, and 5,000,000 preferred shares with $.01 par value.
 
The accompanying condensed consolidated financial statements as of September 30,December 31, 2012 (unaudited) and March 31, 2012 and for the three and sixnine month periods ended September 30,December 31, 2012 and 2011 (unaudited) have been prepared by ADM pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) including Form 10-Q and Regulation S-X.  The information furnished herein reflects all adjustments (consisting of normal recurring accruals and adjustments) which are, in the opinion of management, necessary to fairly present the operating results for the respective periods.  Certain information and footnote disclosures normally present in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted pursuant to such rules and regulations. These financial statements and the information included under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations" should be read in conjunction with the audited financial statements and explanatory notes for the year ended March 31, 2012 as disclosed in our annual report on Form 10-K for that year as filed with the SEC, as it may be amended..  The results of the three and sixnine months ended September 30,December 31, 2012 (unaudited) are not necessarily indicative of the results to be expected for the pending full year ending March 31, 2013.
 
NATURE OF BUSINESS
 
We are a manufacturing and engineering concern whose principal lines of business are the production and sale of chemical products and the manufacture and sale of electronics. On July 17, 2009, we purchased the assets of Antistatic Industries of Delaware Inc., (“Antistatic”) a company involved in the research, development and manufacture of water-based and proprietary electrically conductive paints, coatings and other products and accessories which can be used by electronics, computer, pharmaceutical and chemical companies to prevent, reduce or eliminate static electricity.

Our chemical product line is principally comprised of water-based chemical products used in the food packaging and converting industries, and anti-static conductive paints, coatings and other products. These products are sold to customers located in the United States, Australia, Asia and Europe. Electronics equipment is manufactured in accordance with customer specifications on a contract basis. Our electronic device product line consists principally of proprietary devices used in diagnostics and therapeutics of humans and animals and, through our Action Industries, Unlimited, LLC subsidiary, electronic controllers for spas and hot tubs. These products are sold to customers located principally in the United States.  We are registered with the FDA as a contract manufacturing facility and we manufacture medical devices for customers in accordance with their designs and specifications.  We also provide research, development and engineering services to customers.  Our Sonotron Medical Systems, Inc. subsidiary is involved in medical electronic therapeutic technology and our Pegasus Laboratories, Inc. is involved in topical dermatological products.
 
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
 
CONSOLIDATION
 
The unaudited condensed consolidated financial statements include the accounts of ADM Tronics Unlimited, Inc. and its wholly owned subsidiaries, (ActionAction Industries Unlimited LLC (AIU), Sonotron Medical Systems, Inc. (SMS) and Pegasus Labaoratories)Laboratories, Inc. (PLI).  All significant intercompany balances and transactions have been eliminated in consolidation.
 
USE OF ESTIMATES
 
These unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States and, accordingly, require management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities.  Significant estimates made by management include expected economic life and value of our medical devices, reserves, deferred tax assets, valuation allowance, impairment of long lived assets, fair value of equity instruments issued to consultants for services and fair value of equity instruments issued to others, option and warrant expenses related to compensation to employees and directors, consultants and investment banks, allowance for doubtful accounts, and warranty reserves. Actual results could differ from those estimates.
 
6
 

FAIR VALUE OF FINANCIAL INSTRUMENTS

For certain of our financial instruments, including accounts receivable, inventories, accounts payable, accrued expenses and notes payable - other, the carrying amounts approximate fair value due to their relatively short maturities.

CASH AND EQUIVALENTS

Cash equivalents are comprised of certain highly liquid investments with maturities of three months or less when purchased. We maintain our cash in bank deposit accounts, which at times, may exceed federally insured limits. We have not experienced any losses to date as a result of this policy.

REVENUE RECOGNITION

CHEMICAL PRODUCTS:

Revenues are recognized when products are shipped to end users. Shipments to distributors are recognized as sales where no right of return exists.

ELECTRONICS:

We recognize revenue from the sale of our electronic products when they are shipped to the purchaser.  Shipping and handling charges and costs have been de minimis. We offer a limited 90 day warranty on our electronics products and a limited 5 year warranty on our electronic controllers for spas and hot tubs. Historically, the amount of warranty revenue included in the sales of our electronic products has been de minimis. We have no other post shipment obligations and sales returns have been de minimis. Based on prior experience, no amounts have been accrued for potential warranty costs and such costs were less than $500, for the three and sixnine months ended September 30,December 31, 2012 and 2011.

ENGINEERING SERVICES:

Pursuant to a Master Services Agreement with Ivivi Health Sciences, LLC (IHS), ADM provides engineering services, including quality control and quality assurance services along with regulatory compliance services, warehouse fulfillment services and network administration services including hardware and software services. Under the terms of the Agreement, the Company agrees to serve as the exclusive manufacturer of all current and future medical and non-medical electronic devices or products sold or rented by IHS.

RESEARCH AND DEVELOPMENT COSTS

Research and development costs consist of expenditures for the research and development of patents and technology which are not capitalizable. Our research and development costs consist mainly of labor costs in developing new products.

WARRANTY LIABILITIES

The Company’s provision for estimated future warranty costs is based upon historical relationship of warranty claims to sales. Based upon historical experience, the Company has concluded that no warranty liability is required as of the balance sheet dates. However, the Company periodically reviews the adequacy of its product warranties and will record an accrued warranty reserve if necessary.

RESTRICTED CASH

Restricted cash represents funds on deposit with a financial institution that secure the bank note payable.

NET LOSS PER SHARE

The Company computes basic loss per share by dividing the Company's net loss for the period by the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per share excludes potential common shares if the effect is anti-dilutive. Diluted loss per share is determined in the same manner as basic loss per share except that the number of shares is increased assuming exercise of dilutive stock options and warrants using the treasury stock method. As the Company had a net loss for all periods presented, the impact of the assumed exercise of the stock options is anti-dilutive and as such, these amounts have been excluded from the calculation of diluted loss per share. For the three and sixnine month periods ended September 30,December 31, 2012 and 2011, there were no common stock equivalent shares.

RECENT ACCOUNTING PRONOUNCEMENTS

Management does not believe that any other recently issued, but not yet effective accounting pronouncement, if adopted, would have a material effect on the accompanying unaudited condensed consolidated financial statements.

 
7
 
 
NOTE 3 - INVENTORY

Inventory at September 30,December 31, 2012 (unaudited) consisted of the following:
 
  Current  Long Term  Total 
Raw materials $196,480  $69,072  $265,552 
Finished Goods  45,225   7,176   52,401 
  $241,705  $76,248  $317,953 
  Current  Long Term  Total 
Raw materials $223,658  $68,408  $292,066 
Finished Goods  57,094   4,911   62,005 
  $280,752  $73,319  $354,071 
Inventory at March 31, 2012 consisted of the following:
 
  Current  Long Term  Total 
Raw materials $204,367  $38,555  $242,922 
Finished Goods  56,265   4,188   60,453 
  $260,632  $42,743  $303,375 
  Current  Long Term  Total 
Raw materials $204,367  $38,555  $242,922 
Finished Goods  56,265   4,188   60,453 
  $260,632  $42,743  $303,375 
 
The Company values its inventories at the first in, first out ("FIFO") method at the lower of cost or market.
 
NOTE 4 -– SECURED CONVERTIBLE NOTE RECEIVABLE

On June 4, 2009, the Company invested in Wellington which has rights to an electronic uroflowmetry diagnostic medical device technology.  The Company invested a total of $50,000, with $10,000 provided in cash, and $40,000 in services to Wellington.  Wellington Scientific, LLC ("Wellington"). Wellington, which has rights to an electronic uroflowmetry diagnostic medical device technology, issued a convertible note to the Company for a principal amount of $50,000 with an interest rate of 10% due at various dates through July 15, 2012.  The total of the note receivable and accrued interest at September 30,December 31, 2012 and March 31, 2012 was $56,627$57,664 and $62,351, respectively. At the option of the Company, the Note is convertible in whole or in part, into equity of Wellington.

The conversion price, and the resulting equity ownership percentage in Wellington, is determined by dividing the cash value of principal and accrued interest by $2,000,000.

In August 2012, the Company filed a civil suit in the Superior Court of New Jersey against defendants Wellington Scientific LLC (“Wellington”) and Peter F. Lordi, demanding payment of the convertible note receivable from Wellington in the amount of $50,000 (plus accrued interest). The Company is suing for breach of contract, fraud in the inducement, and other claims. Since this civil suit is in the early stages of litigation, its ultimate outcomesoutcome cannot be predicted with certainty at this time.

As of NovemberFebruary 19, 2012,2013, the loan has not yet been repaid.
 
 
8
 
 
NOTE 5 - INTANGIBLE ASSETS

Intangible assets are being amortized using the straight line method over periods ranging from 3-15 years with a weighted average remaining life of approximately 7.57.4 years.
 September 30, 2012  March 31, 2012  December 31, 2012  March 31, 2012 
 Cost  Weighted Average Amortization Period (years)  Accumulated Amortization  Net Carrying Amount  Cost  Weighted Average Amortization Period (years)  Accumulated Amortization  Net Carrying Amount  Cost 
 
 
 
 Weighted Average Amortization Period
(years)
 Accumulated Amortization  Net Carrying Amount  Cost 
 Weighted Average Amortization Period
(years)
 Accumulated Amortization  Net Carrying Amount 
Patents & Trademarks $82,702   15  $(63,464) $19,238  $82,702   15  $(62,464) $20,238  $82,702  15 $(63,916) $18,786  $82,702  15 $(62,464) $20,238 
Formulas  25,446   15   (5,443)  20,003   25,446   15   (4,595)  20,851   25,446  15  (6,020)  19,426   25,446  15  (4,595)  20,851 
Non-Compete Agreement  50,000   7   (29,167)  20,833   50,000   7   (25,595)  24,405   50,000  7  (30,952)  19,048   50,000  7  (25,595)  24,405 
Customer List  10,000   3   (10,000)  -   10,000   3   (9,028)  972   10,000  3  (10,000)  -   10,000  3  (9,028)  972 
 $168,148      $(108,074) $60,074  $168,148      $(101,682) $66,466  $168,148   $(110,888) $57,260  $168,148   $(101,682) $66,466 
 
Amortization expense was $6,392$9,206 and $14,366$21,548 for the sixnine months ended September 30,December 31, 2012 and 2011, respectively.
 
Estimated aggregate future amortization expense related to intangible assets is as follows:
 
2013  $5,501 
2014   10,828 
2015   10,779 
2016   6,068 
2017   3,092 
Thereafter   23,806 
   $60,074 
 2013  $2,512  
 2014   10,650  
 2015   10,601  
 2016   5,890  
 2017   2,914  
  Thereafter   24,693  
    $57,260  
 
NOTE 6 - CONCENTRATIONS
 
During the three month period ended September 30,December 31, 2012, three customers accounted for 40%41% of our revenue. As of September 30,December 31, 2012, three customers represented approximately 53%55% of our accounts receivable.

During the three month period ended September 30,December 31, 2011, three customers accounted for 65% of our revenue. As of December 31, 2011, two customers represented approximately 85% of our accounts receivable.

During the nine month period ended December 31, 2012, three customer accounted for 39% of our revenue. As of September 30, 2011, three customers represented approximately 77% of our accounts receivable.

During the sixnine month period ended September 30, 2012, one customer accounted for 19% of our revenue. During the six month period ended September 30,December 31, 2011, two customers accounted for 29%36% of our revenue.

The Company’s customer base is comprised of foreign and domestic entities with diverse demographics. Revenues from foreign customers represented $58,533$56,008 of net revenue or 15.2%18.3% for the three months ended September 30,December 31, 2012 and $95,614$151,622 of net revenue or 10.6%12.5% for the sixnine months ended September 30,December 31, 2012.

Revenues from foreign customers represented $45,804$30,741 of net revenue or 9.7%6.8% for the three months ended September 30,December 31, 2011 and $114,916$153,539 of net revenue or 12.9%11.4% of net revenue for the sixnine months ended September 30,December 31, 2011.

Accounts receivable from foreign entities as of September 30,December 31, 2012 and March 31, 2012 were $9,295$24,232 and $16,198, respectively.
 
 
9
 
 
NOTE 7 - SEGMENT INFORMATION
 
Information about segments is as follows:
 
 Chemical  Electronics  Total  Chemical  Electronics  Total 
Three months ended September 30, 2012         
Three months ended December 31, 2012         
Revenue from external customers $258,974  $125,699  $384,673  $266,061  $40,461  $306,522 
Segment operating income (loss) $34,879  $(123,832) $(88,953) $5,716  $(197,573) $(191,857)
                        
Three months ended September 30, 2011            
Three months ended December 31, 2011            
Revenue from external customers $252,232  $220,457  $472,689  $175,127  $277,816  $452,943 
Segment operating income (loss) $28,848  $2,233  $31,081  $24,381  $(58,135) $(33,754)
                        
Six months ended September 30, 2012            
Nine months ended December 31, 2012            
Revenue from external customers $548,938  $352,974  $901,912  $814,999  $393,435  $1,208,434 
Segment operating income (loss) $100,065  $(202,399) $(102,334) $105,780  $(399,971) $(294,191)
                        
Six months ended September 30, 2011            
Nine months ended December 31, 2011            
Revenue from external customers $545,236  $346,515  $891,751  $720,363  $624,331  $1,344,694 
Segment operating income (loss) $53,549  $(73,490) $(19,941) $77,930  $(131,625) $(53,695)
                        
Total assets at September 30, 2012 $777,374  $418,134  $1,195,508 
Total assets at December 31, 2012 $737,687  $402,596  $1,140,283 
                        
Total assets at March 31, 2012 $540,349  $796,101  $1,336,450  $540,349  $796,101  $1,336,450 

NOTE 8 - RELATED PARTY TRANSACTIONS

ADVANCES TO RELATED PARTIES

As of September 30,December 31, 2012 and March 31, 2012, ADM was owed $0 from advances made to an officer. No advances have been made since 2000. The previous balance, now paid in full, had an interest rate of 3% per year. Total accrued interest at September 30,December 31, 2012 and March 31, 2012 was $22,480 and $22,480, respectively.

NOTE 9 -– NOTE PAYABLE, BANK

On August 21, 2008, the Company entered into a note payable with a commercial bank in the amount of $200,000.  This note bears interest at a rate of 2% above the interest rate for the Company’s savings account at this bank and is secured by cash on deposit with the institution, which is classified as restricted cash.  Amounts outstanding under the note are payable on demand, and interest is payable monthly.  The principal balance of the note at September 30,December 31, 2012 and March 31, 2012 was $153,090$150,990 and $160,000, respectively.

NOTE 10 -– NOTE PAYABLE – OTHER

On July 17, 2009 we purchased the assets of Antistatic Industries of Delaware, Inc. in exchange for cash and a note payable, bearing imputed interest rate of 3.5% per annum. The monthly interest and principal payments were $1,450 and as of September 30,December 31, 2012, the note has been fully paid.

NOTE 11 – CUSTOMER DEPOSIT

In July 2011 a customer made a cash deposit of $179,450 in conjunction with an order for 200 units of the Flo-Med device. For the periodnine months ended September 30,December 31, 2012, the balance of the deposit totaling $21,023 was recognized as revenue.
 
 
10
 

NOTE 12 -– STOCK OPTIONS

On December 20, 2012, 5,000,000 options were granted to Andre DiMino vesting immediately. The exercise price is $0.005 per share and the expiration date is December 20, 2017. The compensation cost recognized as of December 31, 2012 was $50,000.
A summary of the Company’s stock options activity is as follows:
  Shares  
Weighted Average
Exercise Price
 
       
       
Outstanding - April 1, 2012
  -  $- 
Granted  5,000,000   0.005 
Exercised  -   - 
         
Cancelled, Forfeited, or Expired  -   - 
         
Outstanding - December 31, 2012
  5,000,000  $0.005 
         
Exercisable - December 31, 2012  5,000,000  $0.005 
The following is a summary of stock options outstanding at December 31, 2012:
 
 
Exercise
Price
 
  
 
 
Number
Outstanding
 
  
 
Weighted
 Average
 Remaining
 Contractual
Life
(in Years)
 
  
 
 
Weighted
 Average
 Exercise
 Price
 
  
 
Number
Exercisable
 
 
              
$0.005   5,000,000   4.97  $0.005   5,000,000 

The fair value of the options were determined by using the Black Scholes method at the date of grant of the options based on the following assumptions ranges: (1) risk free interest rate of 0.77%  (2) dividend yield of 0%; (3) volatility factor of 430%; and (4) an expected life of the options of 2.5 years.

The weighted average fair value options granted was $0.005 per share during 2012.  There was $0 of total unrecognized compensation cost related to share-based compensation arrangements as of December 31, 2012.


NOTE 13 – COMMITMENTS

MASTER SERVICES AGREEMENT

On February 12, 2010, ADM agreed to provide certain services to Ivivi Health Sciences, LLC (IHS) pursuant to a Master Services Agreement, as described below:

• we provided IHS with engineering services, including quality control and quality assurance services along with regulatory compliance services warehouse fulfillment services and network administration services including hardware and software services;
• we were paid at the rate of $26,000 per month by IHS for these services; in June 2010, it was agreed that IHS would pay approximately $11,000 for June 2010 and approximately $5,000 per month thereafter for reduced services performed by ADM. In May 2011, IHS agreed to pay ADM approximately $16,800 per month for increased services, which decreased to approximately $6,000 in August 2012.  Pursuant to this agreement, revenues from engineering services to IHS for the sixnine months ended September 30,December 31, 2012 and 2011 were $82,338$124,530 and $117,671,$156,857, respectively.

For the three months ended September 30,December 31, 2012 and 2011, revenue was $30,304$19,439 and $65,210,$52,116, respectively.
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MANUFACTURING AGREEMENT

Under the terms of the February 12, 2010 manufacturing agreement with IHS, ADM has agreed to serve as the exclusive manufacturer of all current and future medical and nonmedical electronic and other electronic devices or products to be sold or rented by IHS. For each product that ADM manufactures, IHS pays ADM an amount equal to 120% of the sum of (i) the actual, invoiced cost for raw materials, parts, components or other physical items that are used in the manufacture of the product and actually purchased for such entity by ADM, if any, plus (ii) a labor charge based on ADM's standard hourly manufacturing labor rate, which ADM believes is more favorable than could be attained from unaffiliated third parties. Under the terms of the agreement, if ADM is unable to perform its obligations to IHS under the manufacturing agreement or is otherwise in breach of any provision of the manufacturing agreement, IHS has the right, without penalty, to engage third parties to manufacture some or all of its products. In addition, if IHS elects to utilize a third-party manufacturer to supplement the manufacturing being completed by ADM, IHS has the right to require ADM to accept delivery of its products from these third party manufacturers, finalize the manufacture of the products to the extent necessary and ensure that the design, testing, control, documentation and other quality assurance procedures during all aspects of the manufacturing process have been met.

Pursuant to the manufacturing agreement, sales of finished goods to IHS for the sixnine months ended September 30,December 31, 2012 and 2011 were $91,246$90,768 and $43,421,$108,613, respectively. Sales were $25,362$22,275 and $24,645$65,191 for the three months ended September 30,December 31, 2012 and 2011, respectively.

NOTE 14 – SUBSEQUENT EVENTS

On January 25, 2013 the Company entered into an agreement with a consultant to provide advice and consulting service regarding business strategies, strategic relationships, acquisitions and other areas mutually determined until December 31, 2014.  In consideration, the consultant purchased 3,000,000 shares of common stock at par value resulting in cash receipts of $1,500 to the Company.
 
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
The following discussion of our operations and financial condition should be read in conjunction with the consolidated financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q.

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the "safe harbor" provisions under section 21E of the Securities and Exchange Act of 1934 and the Private Securities Litigation Act of 1995. We use forward-looking statements in our description of our plans and objectives for future operations and assumptions underlying these plans and objectives. Forward-looking terminology includes the words "may", "expects", "believes", "anticipates", "intends", "forecasts", "projects", or similar terms, variations of such terms or the negative of such terms. These forward-looking statements are based on management's current expectations and are subject to factors and uncertainties which could cause actual results to differ materially from those described in such forward-looking statements. We expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained in this Form 10-Q to reflect any change in our expectations or any changes in events, conditions or circumstances on which any forward-looking statement is based. Factors which could cause such results to differ materially from those described in the forward-looking statements include those set forth under "Item. 1 Description of Business – Risk Factors" and elsewhere in or incorporated by reference into our Annual Report on Form 10-K for the year ended March 31, 2012.

CRITICAL ACCOUNTING POLICIES

REVENUE RECOGNITION:

CHEMICALS:

Revenues are recognized when products are shipped to end users.  Shipments to distributors are recognized as sales where no right of return exists.

ELECTRONICS:

We recognize revenue from the sale of our electronic products when they are shipped to the purchaser.  Revenue from the sale of the electronics we manufacture is recognized upon shipment of product.  Shipping and handling charges and costs are de minimis. We offer a limited 90 day warranty on our electronics products and a limited 5 year warranty on our electronic controllers for spas and hot tubs. Historically, the amount of warranty revenue included in the sales of our electronic products have been de minimis. We have no other post shipment obligations and sales returns have been de minimis.
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WARRANTY LIABILITIES

We offer a limited 90 day warranty on our electronics products and a 5 year limited warranty on all of our electronic controllers for spas and hot tubs sold through Action.  This product lines’ past experience has resulted in de minimis costs associated with warranty issues.  Therefore, no warranty liabilities have yet been recorded.   Accordingly, management has not accrued any liability for future expenses as management has deemed such costs to be de minimus.
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USE OF ESTIMATES:

Our discussion and analysis of our financial condition and results of operations is based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the US. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to reserves, deferred tax assets and valuation allowance, impairment of long-lived assets, fair value of equity instruments issued to consultants for services and fair value of equity instruments issued to others. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions; however, we believe that our estimates, including those for the above described items, are reasonable.
 
BUSINESS OVERVIEW

ADM is a corporation that was organized under the laws of the State of Delaware on November 24, 1969. During the years ended March 31, 2012 and 2011, our operations were conducted through ADM itself and its subsidiaries, Pegasus Laboratories, Inc. (PLI) and Sonotron Medical Systems, IncInc. (SMS and  Action Industries Unlimited LLC (“AIU”). In addition, the Company owns a minority interest in Montvale Technologies Inc, (formerly known as Ivivi Technologies Inc.) (“ITI”), which until October 18, 2006 was operated as a subsidiary of the Company. ITI was deconsolidated as of October 18, 2006 upon the consummation of ITI’s initial public offering. Our investment in ITI from October 18, 2006 through March 31, 2008 was reported under the equity method of accounting. Since April 1, 2008 we reported our investment in ITI at fair value. As reported by ITI, on February 12, 2010 all of ITI’s assets were acquired by IHS, an unaffiliated entity controlled by ITI’s former Chairman of the Board. Concurrent with such asset sale, the Company entered into agreements with IHS for services related to engineering and regulatory matters, and the previous manufacturing agreement with ITI was assigned to IHS.

In 2009, we invested in Wellington Scientific, LLC (“Wellington”) which has rights to an electronic uroflowmetry diagnostic medical device technology. During the year ended March 31, 2012, we completed development of a new version of the device (Flo-Med device) for compliance with FDA and international standards and created the required documentation for distribution of this product in the US. In July, 2011 an order was received from a distributor for approximately $740,000 including a 25% cash deposit for the purchase of the Flo-Med device and related disposables. Production of the Flo-Med device and disposables continued during the period and the complete order was fulfilled during the quarter ended June 30, 2012.

We are a technology-based developer and manufacturer of diversified lines of products in the following four areas: (1) environmentally safe chemical products for industrial use, (2) electronic products for numerous industries, including therapeutic non-invasive electronic medical devices and electronic controllers for spas and hot tubs, (3) cosmetic and topical dermatological products and (4) Antistatic paint and coatings products. We have historically derived most of our revenues from the development, manufacture and sale of chemical products, and, to a lesser extent, from our electronics and topical dermatological products. Our Electronics segment includes our ActionAIU and SMS subsidiaries, and our Chemical segment includes our PLI subsidiary.
 
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED SEPTEMBER 30,DECEMBER 31, 2012 AS COMPARED TO SEPTEMBER 30,DECEMBER 31, 2011
 
REVENUES
 
Revenues were $384,673$306,522 for the three months ended September 30,December 31, 2012 as compared to $472,689$452,943 for the three months ended September 30,December 31, 2011, a decrease of $88,016,$146,421, or 19%32%.  The decrease resulted from a decrease in sales to customers in our electronics division in the amount of $94,758 and an increase in sales of $6,060 in our Antistatic division$226,978 coupled with an increase in sales in our chemical division in the amount of $682$90,934 and a decreasean increase in sales in our electronics subsidiary, Action, in the amount of $21,472. Sales$693 and a decrease in sales in our Sonotron division also decreased $12,581.of $11,070.
 
Gross profit was $205,555,$158.432, or 53%51.7%, for the three months ended September 30,December 31, 2012 and $281,437,$259,390, or 60%57.3% for the three months ended September 30,December 31, 2011.  Gross profit percentages increasedpercentage decreased in our chemical division 2% mainly due to the increase in31% though sales and gross profit increased $90,957 and $10,628 respectively. Gross profit percentages and in our Antistatic division gross profit percentage decreased 10%,20% due to an overall increase in cost of materials, while labor cost percentages increased marginally. Gross profit percentages decreased 6%62% in our electronics division due to a reduction of sales of our Flo-Med product in the quarter ended September 20, 2012 coupled with increases in material and labor costs of 10% as a percentage of sales.
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17%.
 
We are highly dependent upon certain customers to generate our revenues. During the three month period ended September 30,December 31, 2012, three customers accounted for 40%41% of our revenue. During the three month period ended September 30,December 31, 2011, twothree customers accounted for 39%65% of our revenue.  TheThe complete loss of or significant reduction in business from, or a material adverse change in the financial condition of any of our customers could cause a material and adverse change in our revenues and operating results.   
 
OPERATING PROFIT / LOSS

Loss from operations for the three months ended September 30,December 31, 2012 was $88,953$191,857 compared to a profitloss from operations for the three months ended September 30,December 31, 2011 of $31,081.$33,754. Selling, general and administrative expenses increased by $49,686,$65,181, or 22%24%, from $230,966$273,329 to $280,652. We had increased accounting costs$338,510 mainly due to a stock payment of $50,000 to Andre DiMino, our President and Chief Executive Officer and an increase of $63, 801 in the amount of $18,846, increased health insurance costs in the amount of $8,280 and increasedregulatory engineering and regulatory expense in the amount of $48,656.costs. Cost of sales decreased by $12,134,$45,463, or 6%23% from $191,252$193,553 to $179,118,$148,090, due to a decrease in direct material purchases of $33,475$49,645 offset by an increase in labor costs of $18,123.$7,744.

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NET LOSS AND NET LOSS PER SHARE
 
Net loss for the three months ended September 30,December 31, 2012 was $89,555,$192,674, or $0.00 per share, compared to a net incomeloss for the three months ended September 30,December 31, 2011 of $31,646,$33,606, or $0.00 per share. Interest income decreased $297$446 to $1,302$1,038 in the three months ended September 30,December 31, 2012, from $1,599$1,484 in the three months ended September 30,December 31, 2011, due to decreased funds invested in a money market account, offset by an increase in accrued interest receivable on a convertible note issued to Wellington.
 
RESULTS OF OPERATIONS FOR THE SIXNINE MONTHS ENDED SEPTEMBER 30,DECEMBER 31, 2012 AS COMPARED TO SEPTEMBER 30,DECEMBER 31, 2011
 
REVENUES
 
Revenues were $901,912$1,208,434 for the sixnine months ended September 30,December 31, 2012 as compared to $891,751$1,344,694 for the threenine months ended September 30,December 31, 2011, an increasea decrease of $10,161$136,260 or 1%10%.  The increasedecrease resulted from aan increase in sales to customers in our electronics division in the amountantistatic and chemical divisions of $6,459$22,438 and an increase in sales of $22,491 in our Antistatic division$72,198 respectively offset by ana decrease in sales in our chemicalelectronics division of $125,699 and a decreases in the amountour Action and Sonotron subsidiaries of $18,789.$59,422 and $45,775, respectively
 
Gross profit was $548,119,$706,551, or 61%58%, for the sixnine months ended September 30,December 31, 2012 and $486,288,$745,678, or 55% for the sixnine months ended September 30,December 31, 2011.  Gross profit percentages increaseddecreased in our chemical division 8% mainly due to the increase in sales and gross profit percentagesantistatic divisions 1% and in our Antistatic division gross4% respectively. Gross profit percentage increased 3%, due to an overall increase in cost of materials, while labor cost percentages increased marginally. Gross profit percentages increased 6% in our electronics division due the sale of our Flo-Med product during the period ended September 20,December 31, 2012.
 
We are highly dependent upon certain customers to generate our revenues. During the sixnine month period ended September 30,December 31, 2012, onethree customers accounted for 19%39% of our revenue. During the sixnine month period ended September 30,December 31, 2011, two customers accounted for 29%36% of our revenue.  TheThe complete loss of or significant reduction in business from, or a material adverse change in the financial condition of any of our customers could cause a material and adverse change in our revenues and operating resultsresults.   
 
OPERATING LOSS

Loss from operations for the sixnine months ended September 30,December 31, 2012 was $102,334$294,192 compared to a loss from operations for the sixnine months ended September 30,December 31, 2011 of $19,941.$53,695. Selling, general and administrative expenses increased by $153,295,$218,475 or 33%30%, from $466,768$740,098 to $620,063. We had increased insurance$958,573 mainly due to compensation expense of $50,000 for stock options granted to Andre DiMino, our President and Chief Executive Officer, an increase of $145,186 in regulatory engineering costs and an increase in the amountroyalties of $14,287, increased commission and royalty costs of $44,980 and increased advertising expense in the amount of $11,781.$23,240. Cost of sales decreased by $51,670,$97,133 or 13%16% from $405,463$599,016 to $353,793,$501,883, due to a decrease in direct material purchases of $72,566$121,259 offset by an increase in labor costs of $14,669.$21,110.

NET LOSS AND NET LOSS PER SHARE
 
Net loss for the sixnine months ended September 30,December 31, 2012 was $103,382,$296,057, or $0.00$(0.01) per share, compared to a net loss for the sixnine months ended September 30,December 31, 2011 of $18,799,$52,405, or $0.00$(0.00) per share. Interest income decreased $495$941 to $2,745$3,783 in the sixnine months ended September 30,December 31, 2012, from $3,240$4,724 in the sixnine months ended September 30,December 31, 2011, due to decreased funds invested in a money market account, offset by an increase in accrued interest receivable on a convertible note issued to Wellington.
 
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LIQUIDITY AND CAPITAL RESOURCES

At September 30,December 31, 2012, we had cash and cash equivalents of $241,411$214,300 as compared to $299,156 at March 31, 2012. The $57,745$84,856 decrease was primarily the result of cash used in operations during the threenine month period in the amount of $59,408,$83,519, cash provided by investing activities of $7,673 and cash used in financing activities in the amount of $6,010.$9,010. Our cash will continue to be used for increased marketing costs, and the related administrative expenses, in order to attempt to increase our revenue.  We expect to have enough cash to fund operations for the next twelve months. Our note payable of $153,090$150,990 at September 30,December 31, 2012, is secured and collateralized by restricted cash of $231,782. This note bears an interest rate of 2% above the rate of the savings account. The interest rate at September 30,December 31, 2012 was 2.20% and is payable upon demand.


Future Sources of Liquidity:

We expect our primary source of cash during fiscal 2013 to be net cash provided by operating activities. We expect that growth in profitable revenues and continued focus on new customers will enable us to continue to generate cash flows from operating activities.
If we do not generate sufficient cash from operations, face unanticipated cash needs or do not otherwise have sufficient cash, we may need to consider the sale of certain intellectual property which does not support the Company’s operations. In addition, we have the ability to reduce certain expenses depending on the level of business operation.
14

Based on current expectations, we believe that our existing cash of $241,411$214,300 as of September 30,December 31, 2012 and our net cash provided by operating activities and other potential sources of cash will be sufficient to meet our cash requirements. Our ability to meet these requirements will depend on our ability to generate cash in the future, which is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control.
 
OPERATING ACTIVITIES
 
Net cash used by operating activities was $59,408$83,519 for the sixnine months ended September 30,December 31, 2012, as compared to net cash providedused by operating activities of $26,318$9,236 for the sixnine months ended September 30,December 31, 2011.  The use of cash during the sixnine months ended September 30,December 31, 2012 was primarily due to net loss of $103,382$296,057 and an decreaseincrease in operating liabilities of $26,134,$61,995, and an decrease in net operating assets of $60,097.             $86,789.             

Net cash providedused by operating activities was $26,318$9,236 for the sixnine months ended September 30,December 31, 2011. The increasereduction of $364,935 of cash used during the sixnine months ended September 30,December 31, 2011 was primarily due to net loss reduction of $18,799,$331,619, an increase in accounts receivable of $108,792$57,929 and an increase in prepaid expenses of $37,010$39,212 offset with an increase in accrued expenses of $63,459$112,921 and a deposit payable from a customer in the amount of $179,450.
$108,751.

INVESTING ACTIVITIES

For the sixnine months ended September 30,December 31, 2012, net cash provided by investing activities was $7,673 mainly due to the collection against our secured convertible note. 
 
Net cash used in investing activities was $4,127$3,664 for the sixnine months ended September 30,December 31, 2011, mainly as a result of the purchase ofpayments for patents and trademarks and equipment during the period.
 
FINANCING ACTIVITIES

For the sixnine months ended September 30,December 31, 2012, net cash used for financing activities was $6,010,$9,010, which was used for repayment on a note from a commercial bank to facilitate our acquisition of Action.AIU.

For the sixnine months ended September 30,December 31, 2011, net cash used for financing activities was $13,250,$22,900, of which $6,000$9,000 was used for repayment on a note from a commercial bank to facilitate our acquisition of ActionAIU and $7,250$13,900 was used for repayment of notes payable – other.

OFF BALANCE SHEET ARRANGEMENTS’
We have no off-balance sheet arrangements that have had or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.resources.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Concentration of Credit Risk
 
Financial instruments that potentially subject us to significant concentrations of credit risk consist primarily of cash and cash equivalents, accounts receivable and our investment in ITI. We have no control over the market value of our investment in ITI.
 
14
We maintain cash and cash equivalents with FDIC insured financial institutions.
 
Our sales are materially dependent on a small group of customers, as noted in Note 6 of our financial statements. We monitor our credit risk associated with our receivables on a routine basis. We also maintain credit controls for evaluating and granting customer credit.

ITEM 4. CONTROLS AND PROCEDURES
 
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

We maintain disclosureThe Company's management, including the Company's principal executive officer and principal financial officer, have evaluated the effectiveness of the Company's "disclosure controls and procedures, (as" as such term is defined in RulesRu1e 13a-15(e) and 15d - 15(e)promulgated under the Securities Exchange Act of 1934, as amended, (the "Exchange Act")). Based upon their evaluation, the principal executive officer and principal financial officer concluded that, are designed to ensureas of the end of the period covered by this report, the Company's disclosure controls and procedures were effective for the purpose of ensuring that the information required to be disclosed in ourthe reports that the Company files or submits under the Exchange Act reportswith the Securities and Exchange Commission (the "SEC") (1) is recorded, processed, summarized and reported within the time periods specified in the SEC’sSEC's rules and forms, and that such information(2) is accumulated and communicated to the Company's management, including the Chief Executive Officerits principal executive and Chief Financial Officer,principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management necessarily applies its judgmentDuring the quarterly period ended December 31,2012, there were no changes in assessing the costs and benefits of suchCompany's internal control over financial reporting which materially affected, or are reasonably likely to materially affect, the Company's internal controls and procedures, which, by their nature, can provide only reasonable assurance regarding management's control objectives.over financial reporting.
 
As of the end of the period covered by this Quarterly Report on Form 10-Q, we carried out an evaluation, with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures pursuant to Exchange Act Rule 13a-15.  Based on that evaluation as of September 30, 2012, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were effective, as of the date of their evaluation, to ensure that the information required to be disclosed by us in the reports that we file or submit, under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms.
15
 
CHANGES IN INTERNAL CONTROLS OVER FINANCIAL REPORTING
 
There were no changes in our internal control over financial reporting that occurred during our last fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
 
PART II. OTHER INFORMATION
 
ITEM 1. LEGAL PROCEEDINGS.
 
None
In August 2012, the Company filed a civil suit in the Superior Court of New Jersey against defendants Wellington Scientific LLC (“Wellington”) and Peter F. Lordi, demanding payment of the convertible note receivable from Wellington in the amount of $50,000 (plus accrued interest). The Company is suing for breach of contract, fraud in the inducement, and other claims. Since this civil suit is in the early stages of litigation, its ultimate outcome cannot be predicted with certainty at this time.
 
ITEM 1A. RISK FACTORS
 
There have been no material changes to the risk factors contained in our Annual Report on Form 10-K for the year ended March 31, 2012.
 
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
 
None
 
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
 
None
 
ITEM 4. OTHER INFORMATION
 
None
 
ITEM 5. EXHIBITS.
 
(a) Exhibit No.
 
31.1 Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
 
31.2 Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
 
32.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
101.INS XBRL Instance Document
 
101.SCH XBRL Taxonomy Extension Schema Document
 
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document
 
101.DEF XBRL Taxonomy Extension Definition Linkbase Document
 
101.LAB XBRL Taxonomy Extension Label Linkbase Document
 
101.PRE XBRL Taxonomy Extension Presentation Linkbase Document
 

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SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
ADM TRONICS UNLIMITED, INC.
 (Registrant)
 
 
By:/s/ Andre' DiMino 
  Andre' DiMino, Chief Executive 
  Officer and Chief Financial Officer 
Dated: Northvale, New Jersey
November 19, 2012

Dated: Northvale, New Jersey
 February 19, 2013
 
 

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