Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days ☒ Yes ☐ No

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

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

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

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

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

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

The accompanying unaudited interim condensed financial statements of American Bio Medica Corporation (the “Company”) have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Regulation S-X. Accordingly, these unaudited interim condensed financial statements do not include all information and footnotes required by U.S. GAAP for complete financial statement presentation. These unaudited interim condensed financial statements should be read in conjunction with audited financial statements and related notes contained in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2021.~~2022. In the opinion of management, the interim condensed financial statements include all normal, recurring adjustments which are considered necessary for a fair presentation of the financial position of the Company at ~~June 30, 2022,~~March 31, 2023, and the results of operations ~~for the three and six month periods ended June 30, 2022 and June 30, 2021~~ and cash flows for the ~~six~~three month periods ended ~~June 30,~~March 31, 2023 (the “First Quarter 2023”) and March 31, 2022 ~~and June 30, 2021.~~(the “First Quarter 2022”).

Operating results for the ~~six months ended June 30, 2022~~First Quarter 2023 are not ~~necessarily~~ indicative of results that ~~may~~will be ~~expected~~reported for the year ending December 31, ~~2022.~~2023 as the Company sold substantially all of its assets on February 28, 2023 to Healgen Scientific, LLC (“Healgen”). Amounts at December 31, ~~2021~~2022 are derived from audited financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2021.~~2022.

During the ~~six months ended June 30, 2022,~~First Quarter 2023, there were no significant changes to the Company’s critical accounting policies, which are included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2021.~~2022.

The preparation of these interim condensed financial statements requires the Company to make estimates and judgments that affect the reported amounts of ~~assets,~~ liabilities, ~~revenues and~~ expenses, and related disclosure of contingent ~~assets and~~ liabilities. On an on-going basis, the Company evaluates estimates, including those related to ~~product returns,~~ bad debts, ~~inventories,~~ income taxes, warranty obligations, contingencies and litigation. The Company bases estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying ~~values~~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.

These unaudited interim condensed financial statements have been prepared assuming that the Company will continue as a going concern and, accordingly, do not include any adjustments that might result from the outcome of this uncertainty. ~~Our~~The independent registered public accounting firm’s report on the financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2021,~~2022, contained an explanatory paragraph regarding the Company’s ability to continue as a going concern. As of the date of this report, the Company’s current cash balances ~~together with cash generated from future operations~~ and amounts ~~available under~~expected from its receivables (including the ~~Company’s credit facilities are~~Employee retention Credit receivable and the retention (escrow) proceeds from the asset sale) may not ~~currently~~be sufficient to fund ~~operations through August 2023.~~

~~Through the six months ended June 30, 2022,~~ the Company had a line of credit with Crestmark Bank. The maximum availability on the Company’s line of credit was $1,000,000. However, because the amount available under the line of credit is based upon the Company’s accounts receivable, the amounts actually available under the line of credit (historically) have been significantly less than the maximum availability. As of June 30, 2022, based on the Company’s availability calculation, there were no additional amounts available under the Company’s line of credit because the Company draws any balance available on a daily basis.through May 2024.

The Company’s credit facilities with Cherokee Financial, LLC (“Cherokee”) ~~matured/expired~~were paid in full with proceeds from the asset sale on February 15, 2022 with a final balloon payment due of $1,240,000. Throughout the three months ended June 30, 2022, the Company was in discussions with Cherokee related to the maturity and loan payoff, including, but not limited to, methods to pay off the two credit facilities, restructuring of the credit facilities and/or further extension of the facilities. On June 14, 2022, Cherokee agreed that they would defer the principal amounts due under the facilities until February 15, 2023 and that any applicable penalties would also be deferred as long as the Company remains current on the quarterly interest payments. Furthermore, any penalties will also be waived if the principal amounts are paid on or prior to February 15,28, 2023.

The Company’s total debt at June 30, 2022 with Cherokee is $1,240,000. The Company does not expect cash from operations within the next 12 months to be sufficient to pay the amounts due under these credit facilities so, the Company is currently looking at alternatives to pay off or refinance these facilities.

As discussed in more detail in “Cash Flow, Outlook/Risk”, if sales levels decline further, the Company will have further reduced availability on its line of credit due to decreased accounts receivable balances. If availability under the Company’s line of credit is not sufficient to satisfy our working capital and capital expenditure requirements, the Company will be required to obtain additional credit facilities or sell additional equity securities, or delay capital expenditures or reduce or terminate operations, which would have a material adverse effect on the business. There is no assurance that such financing will be available or that the Company will be able to complete financing on satisfactory terms, if at all or continue its operations.

ASU ~~2021-04, Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments~~2022-04, Liabilities – Supplier Finance Programs (Subtopic ~~470-50), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40),~~405-50): Disclosure of Supplier Finance Program Obligations, issued in ~~May 2021, addresses an issuer’s accounting for certain modifications~~September 2022, requires entities that use supplier finance programs in connection with the purchase of goods and services to disclose the key terms of the programs and information about obligations outstanding at the end of the reporting period, including a rollforward of those obligations. The guidance does not affect the recognition, measurement or ~~exchanges~~financial statement presentation of ~~freestanding equity-classified written call options. This amendment is~~supplier finance program obligations. ASU 2022-04 became effective ~~for all entities, for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted.~~on January 1, 2023. The Company adopted ASU ~~2021-04~~2022-04 on January 1, ~~2022~~2023 and the adoption did not have an impact on the Company’s financial condition or results of ~~operations.~~operations as the Company does not (and has not historically) utilized supplier finance programs in connection with the purchase of goods and services.

ASU ~~2021-10, Government Assistance~~2016-13, Financial Instruments—Credit Losses (Topic ~~832)~~326); Measurement of Credit Losses on Financial Instruments, ~~Disclosures by Business Entities About Government Assistance,~~ issued in ~~November 2021~~June 2016, requires ~~entities~~companies to ~~provide disclosures~~measure all expected credit losses for financial instruments held at the reporting date based on material government assistance transactions for annual reporting periods. The disclosures include information around the nature of the assistance, the related accounting policies used to account for government assistance, the effect of government assistance on the entity’s financial statements,historical experience, current conditions, and ~~any significant terms~~reasonable and ~~conditions of the agreements, including commitments and contingencies.~~supportable forecasts. The Company adopted ASU ~~2021-10~~2016-13 on January 1, ~~2022~~2023 and the adoption did not have ana material impact on ~~our~~the Company’s financial condition or results of ~~operations as ASU-2021-10 only impacts annual financial statement footnote disclosures.~~operations.

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

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

	June 30, 2022			December 31, 2021			March 31, 2023*		December 31, 2022

Raw Materials	$	456,000		$	462,000		$	0	$	444,000
Work In Process		90,000			109,000			0		110,000
Finished Goods		115,000			150,000			0		60,000
Allowance for slow moving and obsolete inventory		(260,000	)		(278,000	)		0		(235,000	)
	$	401,000		$	443,000		$	0	$	379,000

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

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

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

Basic net ~~loss~~income / (loss) per common share is calculated by dividing the net ~~loss~~income / (loss) by the weighted average number of outstanding common shares during the period. Diluted net income / (loss) per common share includes the weighted average dilutive effect of stock options and warrants. When the Company has a loss, option and warrants are not included as they would be anti-dilutive. In the three months ended March 31, 2023, although the Company had net income, there were no options in the money at March 31, 2023. Potential common shares outstanding as of ~~June 30, 2022~~March 31, 2023 and ~~2021:~~2022:

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

The Company’s Line of Credit and Debt consisted of the following as of ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021:~~2022:

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

On March 26, 2015, the Company entered into a LSA with Cherokee (the “Cherokee LSA”)~~. The debt with Cherokee is~~ in the amount of $1,200,000, which was collateralized by a first security interest in real estate and machinery and equipment. ~~Under the~~The Cherokee LSA ~~the Company was provided the sum~~reached maturity on February 15, 2020 with a balance of $1,200,000 in the form of a 5-year Note at a fixed annual interest rate of 8%; paid quarterly in arrears. In addition to the 8% interest, the Company is required to pay Cherokee a 1% annual fee for oversight and administration of the loan. This oversight fee is paid contemporaneously with the quarterly interest payments. The Company made$900,000 (after 4 principal reduction payments of $75,000 each were made over the course of the initial ~~term bringing the balance of the Cherokee LSA to $900,000.~~

term). In February 2020, the Cherokee LSA was extended for one year, or until February 15, 2021. No terms of the facility were changed under the February 2020 ~~extension; however, the Company was required to issue 2% of the $900,000 principal, or $18,000, in 257,143 restricted shares of the Company’s common stock to Cherokee on behalf of their investors.~~extension.

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

Under the terms of the February 2021 Extension, if the Company didn’t pay off the principal on or before February 15, 2022, Cherokee ~~may~~could charge an 8% delinquent fee on ~~whatever~~ the principal balance ~~was~~($1,000,000) on February 15, 2022. The Company was not able to pay off the facility on February 15, ~~2022.~~

~~Cantone Research, Inc. earned a 3% fee~~2022; however, on the extended principal of $900,000 (or $27,000) for their services related to securing the February 2021 Extension with Cherokee investors. This 3% service fee would be “rebated” when/if the Company prepays any, or a portion, of the Cherokee LSA. The fee paid to Cantone Research, Inc. was recorded as a bank fee and is included in general and administrative expenses in the six months ended June 30, 2021. The Company also paid Cherokee’s legal fees in the amount of $1,000.

On August 18, 2021, we issued 625,000 restricted shares of common stock to Cherokee in lieu of paying the $25,000 August 2021 interest payment in cash. The closing price of the Company’s common shares on the date of the payment in lieu of cash was $0.04.

On June 14, 2022 Cherokee agreed that they would defer the principal amounts due under the Cherokee LSA until February 15, 2023 and that any applicable penalties would also be deferred as long as the Company ~~remains~~remained current on the quarterly interest payments. ~~Furthermore, any penalties will also be waived if the principal amounts are paid on or prior to February 15, 2023.~~

InOn February 28, 2023, with proceeds from the ~~event of default, this includes, but is not limited to;~~Asset Sale to Healgen, the ~~Company’s inability~~Company paid all amounts due to ~~make any payments due~~Cherokee under the ~~Cherokee~~ LSA ~~(as amended) Cherokee has the right to increase the interest rate on the financing to 18%. The Company will continue to make interest payments~~for principal and administrative fees quarterly on the Cherokee LSA. The Company can pay off the Cherokee loan at any time with no penalty; except that a 1% administration fee would be required to be paid to Cherokee to close out all participations.interest.

The Company recognized ~~$50,000~~$13,000 in interest expense related to the Cherokee LSA in the ~~six months ended June 30, 2022~~First Quarter 2023 and ~~$48,000 in interest expense related to the Cherokee LSA in the six months ended June 30, 2021. The Company recognized~~ $25,000 in interest expense related to the Cherokee LSA in the ~~three months ended June 30, 2022and $25,000 in interest expense related to the Cherokee LSA in the three months ended June 30, 2021.~~

~~The Company had $8,000 in accrued interest expense at June 30,~~First Quarter 2022 ~~related to the Cherokee LSA.~~

As of ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, the balance of the Cherokee LSA was ~~$1,000,000.~~

~~On June 29, 2015 (the “Closing Date”), the Company entered into a Loan~~$0 and Security Agreement (“LSA”) with Crestmark related to a revolving line of credit (the “Crestmark LOC”). The Crestmark LOC is used for working capital and general corporate purposes. Upon completion of the initial 5 year term, the Crestmark LOC 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. The current maturity date of the Crestmark LOC is June 22, 2023.$1,000,000, respectively.

The Crestmark LOC is secured by a first security interest in the Company’s inventory, receivables and security interest in all other assets of the Company (in accordance with permitted prior encumbrances). Although secured by the assets previously indicated, the Crestmark LOC is a receivables-based only line of credit and the maximum availability (“Maximum Amount”) under the Crestmark LOC is $1,000,000. The Crestmark LOC has a minimum loan balance requirement of $500,000. At June 30, 2022, the Company did not meet the minimum loan balance requirement as our balance was $52,000. Under the LSA, Crestmark has the right to calculate interest on the minimum balance requirement rather than the actual balance on the Crestmark LOC (and they are exercising that right).

In the event of a default of the LSA, which includes but is not limited to, failure of the Company to make any payment when due, Crestmark is permitted to charge an Extra Rate. The Extra Rate is the Company’s then current interest rate plus 12.75% per annum.

Interest on the Crestmark LOC is at a variable rate based on the Prime Rate plus 3% with a floor of 5.25%. As of June 30, 2022 the interest only rate on the Crestmark LOC was 7.75% and as of the date of this report, the interest only rate on the Crestmark LOC is 8.5%. As of the date of this report, with all fees considered (the interest rate + an Annual Loan Fee of $7,500 + a monthly maintenance fee of 0.30% of the actual average monthly balance from the prior month), the interest rate on the Crestmark LOC is 14.39%.

The Company incurred $22,000 in interest expense in the six months ended June 30, 2022 and $24,000 in interest expense related to the Crestmark LOC in the six months ended June 30, 2021. The Company incurred $12,000 in interest expense in the three months ended June 30, 2022 and $11,000 in interest expense in the three months ended June 30, 2021. Given the nature of the administration of the Crestmark LOC, at June 30, 2022, the Company had $0 in accrued interest expense related to the Crestmark LOC, and there is $0 in additional availability under the Crestmark LOC.

~~At June 30 2022, the balance on the Crestmark LOC was $47,000 and as of December 31, 2021, the balance on the Crestmark LOC was $178,000.~~

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

In February 2020, the 2019 Cherokee Term Loan was extended for one year, or until February 15, 2021. No terms of the facility were changed under the February 2020 extension. ~~For consideration of the Extension Agreement, the Company issued 1.5% of the $200,000 principal, or $3,000, in 42,857 restricted shares of the Company’s common stock to Cherokee.~~ The Company ~~also~~ incurred a penalty in the amount of $20,000 which was added to the principal balance of the 2019 Cherokee Term Loan; bringing the principal to $220,000.

In February 2021, the 2019 Cherokee Term Loan was further extended to February 15, 2022. Under the terms of this additional extension, the 2019 Cherokee Term Loan was increased to $240,000 to include a $20,000 penalty that was due as a result of the Company being unable to pay back the principal balance to Cherokee on February 15, 2021. In addition, if the Company didn’t pay off the principal on or before February 15, 2022, Cherokee ~~may~~could charge an 8% delinquent fee on ~~whatever~~ the principal balance ~~was~~($240,000) on February 15, 2022. The Company was not able to pay off the facility on February 15, ~~2022.~~

On2022; however, on June 14, 2022 Cherokee agreed that they would defer the principal amounts due under the 2019 Cherokee Term Loan until February 15, 2023 and that any applicable penalties would also be deferred as long as the Company ~~remains~~remained current on the quarterly interest payments. ~~Furthermore, any penalties will also be waived if the principal amounts are paid on or prior to February 15, 2023.~~

In the event of default, this includes, but is not limited to, the Company’s inability to make any payments due under the Agreement; Cherokee has the right to increase the interest rate on the 2019 Cherokee Term Loan to 20%.

The Company recognized ~~$22,000 in interest expense related to the 2019 Cherokee Term Loan in the six months ended June 30, 2022 and $21,000~~$4,000 in interest expense in the ~~six months ended June 30, 2021. The Company recognized $11,000 in interest expense related to the 2019 Cherokee Term Loan in the three months ended June 30, 2022~~First Quarter 2023 and $11,000 in interest expense in the ~~three months ended June 30, 2021.~~First Quarter 2022. The Company ~~had $4,000 in accrued~~paid all principal and interest ~~expense at June 30, 2022.~~

due to Cherokee on February 28, 2023 with proceeds from the Asset Sale to Healgen. The balance onof the 2019 Cherokee Term Loan was ~~$240,000~~$0 at ~~June 30, 2022~~March 31, 2023 and $240,000 at December 31, ~~2021.~~2022.

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

On November 4, 2021, the November 2020 Term Loan was extended again. Under this extension, the principal ~~is now~~was due on November 4, 2022. The last interest payment made to the shareholder was in November 2021 and was for the period of August 5, 2021 through November 4, 2021. The shareholder ~~has~~ agreed to defer the quarterly interest payments due on the extended facility. ~~Therefore, interest accruing~~The facility was further extended on ~~the November 2020 Term Loan from November 5, 2021 until~~ November 4, 2022, ~~(which will total $3,500) would be paid upon maturity of~~under the ~~loan along with the principal.~~same terms and conditions, for another 6 months, or until May 4, 2023.

The Company recognized ~~$2,000 of~~less than $1,000 in interest expense related to the November 2020 Term Loan in the ~~six months ended June 30, 2022~~First Quarter 2023 and $2,000 of interest expense in the six months ended June 30, 2021. The Company recognized $1,000 of interest expense related to the November 2020 Term Loan in the three months ended June 30, 2022 and less than $1,000 in interest expense in the ~~three months ended June 30, 2021.~~

~~The Company had less than $1,000 in accrued interest expense related to this loan as of June 30,~~First Quarter 2022.

The balance on the November 2020 Term Loan was $50,000 at ~~June 30, 2022~~March 31, 2023 and at December 31, ~~2021.~~2022. (See Note M – Subsequent Events for more information on the November 2020 Term Loan)

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

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

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

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

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

On June 13, 2022, the Company made a principal reduction payment to this shareholder in the amount of $25,000 from proceeds from the ERC refund received on June 2, 2022; bringing the principal amount owed on the loan to $175,000. ~~See Note I – Subsequent Events for more information~~

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

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

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

The Company incurred ~~$3,000~~$4,000 in interest expense related to these loans in the ~~six months ended June 30, 2022~~First Quarter 2023 and ~~$0 in interest expense in the six months ended June 30, 2021 (as the facilities were not in place until December 2021). The Company incurred $2,000~~$1,000 in interest expense related to these loans in the ~~three months ended June 30, 2022 and $0 in interest expense in the three months ended June 30, 2021 (as the facilities were not in place until December 2021).~~First Quarter 2022.

~~The Company had less than $6,000 in accrued interest expense at June 30, 2022.~~ The balance on these loans was ~~$175,000 at June 30, 2022~~$125,000 on March 31, 2023 and ~~$75,000~~$225,000 at December 31, ~~2021.~~2022. (See Note M – Subsequent Events for more information on the December 2021 Shareholder Loans)

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

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

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

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

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

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

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

In addition to the ~~current~~ debt indicated previously, previous debt facilities (paid in full via refinance or conversion into equity) had financial impact on the ~~three and/or six months ended June 30, 2021.~~First Quarter 2022. More specifically:

~~SBA PAYCHECK PROTECTION LOAN (PPP LOAN)~~LINE OF CREDIT WITH CRESTMARK BANK (“CRESTMARK”)

On ~~April 22, 2020,~~June 29, 2015, the Company entered into a ~~Promissory Note~~Loan and Security Agreement (“~~PPP Note”~~LSA”) ~~for $332,000~~ with Crestmark ~~Bank, pursuant~~related to a revolving line of credit (the “Crestmark LOC”). The Crestmark LOC was used for working capital and general corporate purposes. Upon completion of the initial 5 year term, the Crestmark LOC automatically renewed for additional one (1) year terms unless notice of termination from the Company was received by Crestmark not less than sixty (60) days prior to the ~~U.S. Small Business Administration (“SBA”) Paycheck Protection Program under Title I~~end of the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act passed by Congress and signed into law on March 27, 2020. The PPP Note was unsecured, with an interest rate of 1.00% per annum, with principal and interest payments deferred for the first six months, and maturity in two years.renewal term. On ~~June 15, 2021,~~September 29, 2022, the Company ~~applied for forgiveness of the PPP loan~~made a payment to Crestmark in the amount of ~~$332,000 under PPP guidelines. Our forgiveness application was reviewed by the SBA and on August 3, 2021, the SBA remitted payment to Crestmark Bank for~~$34,000 which paid off the balance ~~of the PPP Loan principal and all interest due~~ on the ~~PPP Loan.~~Crestmark LOC.

The Company ~~recognized $1,000~~incurred $0 in interest expense in the ~~six months ended June 30, 2021~~First Quarter 2023 and ~~less than $1,000~~$10,000 in interest expense in the ~~three months ended June 30, 2021.~~First Quarter 2022.

The employee retention credit (“ERC”), as originally enacted on March 27, 2020 by the CARES Act, iswas a refundable tax credit against certain employment taxes equal to 50% of the qualified wages an eligible employer pays to employees. On March 1, 2021, the IRS released Notice 2021-20 to provide guidance on the original ERC, as modified by the Relief Act. The Relief Act extended and enhanced the ERC for qualified wages paid after December 31, 2020 through June 30, 2021. Under the Relief Act, eligible employers may claim a refundable tax credit against certain employment taxes equal to 70% of the qualified wages an eligible employer pays to employees ~~after December 31, 2020 through June 30, 2021. Under the American Rescue Plan Act~~ and ~~previously under the Consolidated Appropriations Act, 2021, the ERC was extended and expanded allowing~~allowed claims through December 31, 2021 by eligible employers who retained employees during the Covid-19 pandemic. However, onin November 5, 2021, the ~~House of Representatives passed the Infrastructure Investment and Jobs Act (“Infrastructure Bill”) under which the~~ ERC ~~would terminate~~was terminated as of September ~~20,~~30, 2021 instead of December 31, ~~2021 and, President Biden signed the bill on November 15,~~ 2021.

The maximum qualified wages for each employee under the ~~current~~ ERC iswas $10,000 per quarter. Also, because the Company has 100 or fewer full-time employees, health plan expenses borne by the Company ~~can~~could also be included as qualified wages in addition to salary. To qualify for the ERC in 2021, an employer must have experienced at least a 20% reduction in gross receipts when compared to the same quarter in either 2020 or 2019. During the first quarter of 2021, the second quarter of 2021 and the third quarter of 2021, the Company qualified for the ERC when comparing its 2021 quarters with both 2020 and 2019 quarters. In August 2021, the Company’s payroll service provider processed and mailed a Form 941-X to claim a refund in the amount of $202,000 on qualified wages paid in the first quarter of 2021. Due to a change in the Form 941-X, the Company’s payroll service provider did not process and mail its Form 941-X to claim a refund in the amount of $198,000 on qualified wages paid in the second quarter of 2021 until October 28, 2021. In the middle of the third quarter of 2021, the Company began taking the ERC in its current payroll; which reduced payroll by approximately $44,000 in the third quarter of 2021. Given this, the Company did not have to amend its Form 941 for the third quarter of 2021; however the Form 941 claiming a refund in the amount of $137,000 was filed electronically with the IRS on November 1, 2021 by the Company’s payroll service provider. Upon passing of the Infrastructure Bill, the Company ceased taking the ERC in its current payroll.

On December 28, 2021, the Company received its refund for the third quarter of 2021 in the amount of $137,000. Shortly before receiving the first refund, the Company spoke with the Internal Revenue Service (“IRS”) to obtain statuses of our filings. The Company was informed that the IRS did not have record of receiving the Company’s Form 941-X for the first quarter of 2021 (which was mailed by the Company’s service provider in August 2021). The Company re-sent the Form 941-X for the first quarter of 2021 via overnight service on December 31, 2021 and the IRS received it on January 5, 2022. This lack of receipt ~~has~~ resulted in a delay in receiving the expected refund in the amount of $202,000.

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

Over the last several years, the Company has retained financial consultants to seek out alternative solutions; most recently in ~~late July/August~~early Fiscal 2022. The consultants were seeking solutions including but not limited to potential mergers, acquisitions, investment in the Company, and strategic relationships. Simultaneously, the Company’s ~~remaining expected refunds; totaling $202,000, is included on~~management was seeking alternative solutions and began discussions with Healgen. With the ~~Condensed Balance Sheets under~~ current ~~assets,~~financial condition of the Company, the Company was not able to find a suitable alternative apart from the Asset Sale to Healgen.

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

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

On December 19, 2022, the Company entered into an Asset Purchase Agreement (“APA”) with Healgen, pursuant to which the Company agreed, subject to ~~varying interpretations. Claims made under~~ the ~~CARES Act may also be subject~~approval of its shareholders, to ~~retroactive audit and review. There can be no assurance that regulatory authorities will not challenge~~sell substantially all of the Company’s ~~claim~~operating assets (excluding its cash, accounts receivables arising prior to the ~~ERC,~~closing date, and ~~it is not possible~~certain other assets). The Company submitted the Asset Sale to ~~determine the impact (if any) this would have upon the Company. Although~~Healgen to a shareholder vote via a preliminary Proxy Statement filed on December 22, 2022. On January 5, 2023, the Company ~~has recorded $202,000 under other long term liabilities~~filed an amendment to its Preliminary Proxy Statement and on ~~our Condensed Balance Sheets~~January 11, 2023, the Company filed its Definitive Proxy Statement with the SEC.

On February 15, 2023, the Company held the 2023 Special Meeting of Shareholders (the “Special Meeting”) at ~~June 30, 2022, even if~~ the Company’s ~~refund claim~~corporate offices in Kinderhook, New York, at which a quorum (27,863,899 shares of common stock of the 47,098,476 shares of common stock outstanding) was ~~challenged and ultimately denied,~~present in person or represented by proxy.

Approval of the Asset Sale to Healgen required the affirmative vote of the holders of a majority of the outstanding shares of the Company’s common stock (par value $0.01). 26,381,832, or 54.84% of the total outstanding shares of the Company, ~~would not actually have~~voted in favor of the Asset Sale to ~~remit $202,000~~Healgen. 1,476,077, or 3.06% of the total outstanding shares, voted against the Asset Sale to Healgen. 5,990, or 0.01% of the ~~IRS as that~~total shares outstanding, withheld voting on the Asset Sale to Healgen. Given the majority of total outstanding shares voted in favor of the Asset Sale to Healgen, the Asset Sale to Healgen was approved.

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

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

During the ~~three months ended June 30, 2022~~First Quarter 2023 and the ~~three months ended June 30, 2021,~~First Quarter 2022, the Company issued 0 options to purchase shares of common stock.

Stock ~~option0~~option activity for the ~~six months ended June 30, 2022~~First Quarter 2023 and the ~~six months ended June 30, 2021~~First Quarter 2022 is summarized as follows (the figures contained within the tables below have been rounded to the nearest thousand):

The Company recognized $0 in share based payment expense in the ~~six months ended June 30, 2022~~First Quarter 2023 and in the ~~six months ended June 30, 2021. The Company recognized $0 in share based payment expense in the three months ended June 30, 2022 and in the three months ended June 30, 2021.~~First Quarter 2022. At ~~June 30, 2022,~~March 31, 2023, there was $0 of unrecognized share based payment expense related to stock options.

~~There was no warrant activity in the three or six months ended June 30, 2022 and 2021.~~

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

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

The Breakup Fee would be invoked upon the generation of a specific transaction to ABMC which meets certain criteria agreed upon by both the Company and Landmark; which transaction is then rejected by the Company. The Company ~~will~~would also pay to Landmark a “Success Fee” for the consummation of a transaction closing during the term of the Agreement and for 12 months thereafter, between the Company and any party first introduced to the Company by Landmark, or with any party the Company has specifically requested ~~that Landmark~~Landmark’s assistance with the transaction.

Upon invocation of the Breakup Fee or payment of the Success Fee, the Company ~~will~~would also issue an additional 250,000 restricted shares of the Company’s common stock.

In the event that the Company ~~consummates~~consummated a transaction involving the provision of services to any party introduced to the Company by Landmark or with any party the Company has specifically requested Landmark’s assistance with, the Company ~~will~~would pay Landmark 10% of any revenues received from the transaction, unless this percentage is modified by both the Company and Landmark in writing. There is no material relationship between the Company and Landmark, other than with respect to the Agreement.

~~As of June 30, 2022 and as of~~Apart from the ~~date of this report,~~initial 500,000 restricted common shares, no additional ~~shares or warrants have been~~stock was issued ~~as the Breakup Fee has not been invoked nor has a Success Fee been required.~~to Landmark and no further amounts were paid to Landmark.

On December 9, 2020, the Company entered into a Purchase Agreement and a Registration Rights Agreement with Lincoln Park (together the “Agreements”) under which Lincoln Park agreed to purchase from the Company, from time to time, up to $10,250,000 of its shares of common stock, par value $0.01 per share, subject to certain limitations set forth in the Purchase Agreement, during the term of the Purchase Agreement (two years).

Pursuant to the terms of the Registration Rights Agreement, on December 29, 2020, the Company filed a registration statement on Form S-1 (the “Registration Statement”) with the U.S. Securities and Exchange Commission (the “SEC”) to register for resale under the Securities Act of 1933, as amended (the “Securities Act”), the shares of common stock issued and sold as well as the shares of common stock that the Company may elect in the future to issue and sell to Lincoln Park. The SEC declared the Form S-1, as amended, effective on January 11, 2021. On January 11, 2021, the Company sold the remaining 500,000 shares of common stock to Lincoln Park required as an initial purchase under the Purchase Agreement for a purchase price of $125,000.

Under the Purchase Agreement, on any business day selected by the Company on which the closing sale price of its common stock exceeds $0.05, the Company may direct Lincoln Park to purchase up to 200,000 common shares on the applicable purchase date (a “Regular Purchase”), which maximum number of shares may be increased to certain higher amounts up to a maximum of 250,000 or 500,000 common shares, if the market price of the Company’s common stock at the time of the Regular Purchase equals or exceeds amounts outlined in the Purchase Agreement. However, Lincoln Park’s purchase obligation under any single Regular Purchase may not exceed $500,000. The purchase price of the shares of common stock the Company may elect to sell to Lincoln Park under the Purchase Agreement in a Regular Purchase, if any, will be based on 95% of the lower of: (i) the lowest sale price on the purchase date for such Regular Purchase and (ii) the arithmetic average of the three lowest closing sale prices for the Company’s common shares during the 15 consecutive business days ending on the business day immediately preceding the purchase date for a Regular Purchase (in each case, to be appropriately adjusted for any reorganization, recapitalization, non-cash dividend, stock split or other similar transaction.)

Lincoln Park cannot require the Company to sell them any common stock, but is obligated to make purchases as the Company directs, subject to certain conditions outlined under the Purchase Agreement. There are no upper limits on the price per share that Lincoln Park must pay for the Company’s common shares that the Company may elect to sell to them pursuant to the Purchase Agreement. In all instances, the Company may not sell common shares to Lincoln Park under the Purchase Agreement to the extent that the sale of shares would result in Lincoln Park beneficially owning more than 9.99% of our common shares. There are no restrictions on future financings, rights of first refusal, participation rights, penalties or liquidated damages in the Purchase Agreement or Registration Rights Agreement, other than the Company’s agreement not to enter into any “variable rate” transactions (as defined in the Purchase Agreement) with any third party, subject to certain exceptions set forth in the Purchase Agreement, for the period set forth in the Purchase Agreement. Lincoln Park has covenanted not to cause or engage in any direct or indirect short selling or hedging of the Company’s common stock.

Actual sales of common stock to Lincoln Park, and the timing of the same, under the Purchase Agreement depend on a variety of factors to be determined by the Company from time to time. Proceeds the Company received from sales of common stock to Lincoln Park under the Purchase Agreement are used at the sole discretion of Company management and are used for general corporate purposes, capital expenditures and working capital.

The Company did not sell any shares of common stock to Lincoln Park in the three or six months ended June 30, 2022 as the closing price of the Company’s shares of common stock did not exceed $0.05. In fact, the last sale to Lincoln Park was in October 2021.

In the six months ended June 30, 2021, the Company sold 500,000 shares of common stock that represented the balance of the Initial Purchase and 4,400,000 shares of common stock to Lincoln Park as Regular Purchases. In the three months ended June 30, 2021, the Company sold a total of 2,100,000 shares of common stock to Lincoln Park (including the balance of the required initial purchase) as Regular Purchases and received proceeds of $381,000.

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

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

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted in response to the COVID-19 pandemic. The CARES Act, among other things, permits NOL carryovers and carrybacks to offset 100% of taxable income for taxable years beginning before 2021. With regards to the use of net losses incurred for 2018 and later, such net operating losses have no expiration, ~~date,~~ while ~~net operating loss carryforwards~~taxable income can only be ~~used to~~ offset up to 80% of taxable income. Net operating losses incurred prior to 2018 may be fully utilized to offset taxable ~~income, but expire in 20 years.~~income.

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

~~Deferred income taxes reflect~~Significant components of the ~~temporary differences between the financial statement carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for~~Company’s deferred income tax ~~purposes, adjusted by the relevant tax rate. The components of deferred tax~~ assets ~~and liabilities~~ are as follows:

	June 30, 2022			December 31, 2021			March 31, 2023			December 31, 2022
											13,
Inventory capitalization	$	0		$	8,000
Inventory allowance		68,000			72,000		$	0		$	61,000
Allowance for doubtful accounts		1,000			1,000			1,000			1,000
Accrued compensation		16,000			18,000
Stock based compensation		152,000			160,000			138,000			149,000
Deferred wages payable		16,000			21,000			30,000			21,000
Depreciation – Property, Plant & Equipment		(20,000	)		(24,000	)		0			(19,000	)
Research and development credits		24,000			24,000			26,000			24,000
Net operating loss carry-forwards		2,834,000			2,631,000
Total deferred income tax assets, net		3,091,000			2,911,000
Less: valuation allowance		(3,091,000	)		(2,911,000	)
Net operating loss carry-forward								2,482,000			2,972,000
Total gross deferred income tax assets								2,677,000			3,209,000
Less deferred income tax assets valuation allowance								(2,677,000	)		(3,209,000	)
Net deferred income tax assets	$	0			0		$	0			0

The valuation allowance for net deferred income tax assets ~~was $3,091,000~~ as of ~~June 30, 2022~~March 31, 2023 and ~~$2,911,000 as of~~ December 31, ~~2021.~~2022 was $2,677,000 and $3,209,000, respectively. The net change in the ~~deferred income tax assets~~ valuation allowance was ~~$180,000 for the six months ended June 30,~~$532,000 at March 31, 2023 and $91,000 at March 31, 2022. The Company believes that it is more likely than not that the net deferred tax assets will not be realized.

As of ~~June 30, 2022,~~March 31, 2023, the prior ~~full~~ three years remain open for examination by the federal or state regulatory agencies for purposes of an audit for tax purposes.

At ~~June 30, 2022,~~March 31, 2023, the Company had Federal ~~and state~~ net operating loss carry-forwards for income tax purposes of approximately ~~$10,900,000~~$11,427,000 and research and development credits of ~~$24,000.~~$26,000. The Company’s net operating loss carry-forwards began to expire in 2022 and continue to expire through ~~2037.~~2038. Net operating losses incurred from 2018 to date have no ~~expiration date.~~expiration. In assessing the reliability of deferred income tax assets, management considers whether or not it is more likely than not that some portion or all deferred income tax assets ~~net,~~ will be realized. The ultimate realization of ~~net~~ deferred income tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the projected future taxable income and tax planning strategies in making this assessment.

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

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

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

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

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

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

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

The following discussion and analysis provides information, which we believe is relevant to an assessment and understanding of our financial condition and results of operations. The discussion should be read in conjunction with the Interim Condensed Financial Statements contained herein and the notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q. Certain statements contained in this Quarterly Report on Form 10-Q, including, without limitation, statements containing the words “believes”, “anticipates”, “estimates”, “expects”, “intends”, “projects”, and words of similar import, are forward-looking as that term is defined by the Private Securities Litigation Reform Act of 1995 (“1995 Act”), and in releases issued by the United State Securities and Exchange Commission (the “Commission”). These statements are being made pursuant to the provisions of the 1995 Act and with the intention of obtaining the benefits of the “Safe Harbor” provisions of the 1995 Act. We caution that any forward-looking statements made herein are not guarantees of future performance and that actual results may differ materially from those in such forward-looking statements as a result of various factors, including, but not limited to, any risks detailed herein, in our “Risk Factors” section of our Form 10-K for the year ended December 31, ~~2021,~~2022, in our most recent reports on Form 10-Q and Form 8-K and from time to time in our other filings with the Commission, and any amendments thereto. Any forward-looking statement speaks only as of the date on which such statement is made, and we are not undertaking any obligation to publicly update any forward-looking statements. Readers should not place undue reliance on these forward-looking statements.

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

~~In addition~~Other efforts to ~~the marketing of drug tests, we have continued~~offset declines in our manufactured product sales involved selling various diagnostic product lines, including but not limited to, ~~market~~ various Covid-19 rapid tests. All of the Covid-19 tests we are offering are being marketed in accordance with the March 2020 Emergency Use Authorization (“EUA”) policy set forth by the United States Food and Drug Administration (FDA) and in accordance with the individual EUAs issued for the products. We are currently offering a number of different rapid antigen tests and rapid antibody tests that can be used in various different settings, including home use; depending on their specific EUA issuance.

In addition to increased costs, ~~the~~ materials used in the manufacture of our drug test products are the same materials used in the manufacture of lateral flow Covid-19 tests as well as lateral flow tests for Influenza and ~~this~~RSV, both of which surged in the latter part of Fiscal 2022. This increased need for the same materials has resulted in supply chain delays; some of which ~~have~~ negatively impacted our customer relationships. One of those customers was our largest customer which severely negatively impacted our sales.

Gross margin has ~~been declining~~continually declined over the last several years due to the increased costs of manufacturing in the United States and the fact that overhead costs associated with both of our ~~facility in Kinderhook, NY cannot~~facilities could not be ~~decreased.~~decreased any further. As sales ~~continue~~continued to decline, ~~and~~ these costs cannot be adjusted downward, thereby creating greater manufacturing inefficiencies. Manufacturing inefficiencies ~~occur. The manufacturing inefficiencies are increasing~~continued to increase despite our efforts to mitigate them. ~~We are~~Efforts were also taking steps to obtain materials at the best available pricing. However, in many cases, we are purchasing at much lower volumes than the larger diagnostic companies and that results in higher per piece pricing. We are currently looking into possible production alternatives in attempts to address these fixed costs.

~~Operating expenses declined in the six months ended June 30, 2022 when compared to the six months ended June 30, 2021. We continuously make efforts~~made to control operational expenses to ensure they ~~are~~remained in line with sales, ~~including, but not limited to, consolidating job responsibilities in~~however, as a reporting public company; there is a certain ~~areas~~level of ~~the Company, securing more cost effective service providers and reduction of facility hours so they are more in line with production and administrative needs.~~expenses that much be maintained.

From August 2013 until June 2020 ~~and from April 2022 through the date of this report,~~ we maintained a salary deferral program for our sole executive officer, our Chief Executive Officer/Principal Financial Officer Melissa Waterhouse. The salary deferral program was initiated by Ms. Waterhouse voluntarily in both August 2013 and April 2022. Another member of senior management participated in the voluntary 2013 program until his retirement in November 2019. After the member of senior management retired, we agreed to make payments on the deferred compensation (i.e. deferred salary) owed to this individual. In the ~~six months ended June 30, 2021,~~First Quarter of 2022, we ~~made payments totaling $22,000 to this individual and his deferred compensation was paid in full in May 2021.~~

~~Once the deferred compensation was paid in full to this individual in May 2021, we began to~~did make payments ~~at the same rate~~ to Ms. Waterhouse ~~given the length of time the amount had been owed and that Ms. Waterhouse had not received any payments on her deferred compensation since August 2017. We made payments~~ totaling ~~$10,000 to Ms. Waterhouse in the six months ended June 30, 2022 and $5,000 in payments in the six months ended June 30, 2021.~~$10,000. We stopped making payments on Ms. Waterhouse’s deferred compensation in April 2022 when Ms. Waterhouse again voluntarily deferred her salary by 20%. This deferral remained in place through February 28, 2023.

As of ~~June 30, 2022,~~March 31, 2023, we had deferred compensation owed to Ms. Waterhouse in the amount of ~~$71,000~~$92,000 and ~~$6,000~~$7,000 in payroll taxes that are due as payments are made to Ms. Waterhouse; for a total of ~~$77,000~~$99,000 in deferred compensation owed to Ms. Waterhouse. In addition, as of ~~June 30, 2022,~~March 31, 2023, we ~~owe~~owed Ms. Waterhouse ~~$16,000~~$32,000 in current salary that was not paid. (See Note M – Subsequent Events for updated information on the currently salary owed to Ms. Waterhouse)

Beginning in April 2022, another member of senior management participated in the salary deferral program. As of ~~June 30, 2022,~~March 31, 2023, we had deferred compensation owed to this individual in the amount of ~~$4,000~~$14,000 and $1,000 in payroll taxes that are due as payments are made to this individual; for a total of ~~$5,000~~$15,000 in deferred compensation. This individual ceased participating in the salary deferral program on December 9, 2022 and received their full salary through February 28, 2023 (the closing date of the Asset Sale to Healgen).

~~Our continued existence is dependent upon several factors, including our ability to: 1) raise revenue levels even though~~Asset Sale to Healgen/Outlook

On February 28, 2023, we completed the ~~drug testing market continues~~Asset Sale to ~~be infiltrated by product manufactured outside~~Healgen and disposition of substantially all of the ~~United States as well as being impacted by supply chain issues 2) further penetrate~~Company’s assets. In connection with the ~~markets (in and outside~~closing of the ~~United States) for~~Asset Sale to Healgen, and in accordance with the ~~products we manufacture as well as products we offer via distribution, 3) secure new contract manufacturing customers, 4) control operational costs and manufacturing inefficiencies~~terms of the Asset Purchase Agreement, Healgen paid an aggregate purchase price of $3 million (“Purchase Price”). $300,000 of the Purchase Price is being held back in a retention fund to ~~generate positive cash flows, 5) maintain our current credit facilities or refinance our current credit facilities if necessary, and 6) if needed, obtain working capital~~cover potential indemnification claims during the six months following the close. Net proceeds in the amount of $247,000 were received by ~~selling additional shares of our common stock. Should~~ the Company ~~not be able to achieve positive cash flows from operations or raise additional funding, it~~after satisfaction of 1) a loan with the Healgen in the amount of $965,000, 2) the Cherokee LSA, (totaling $1,031,000 for principal and interest through February 27, 2023), 3) the 2019 Cherokee Term Loan (totaling $252,000 for principal and interest through February 27, 2023), 4) delinquent property related taxes in the amount of $193,000 and 5) $12,000 for current property related taxes.

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

Results of operations for the ~~six months ended June 30, 2022~~First Quarter 2023 compared to the ~~six months ended June 30, 2021~~First Quarter 2022

NET SALES:Net sales for ~~six months ended June 30, 2022~~the First Quarter 2023 decreased ~~by $559,000, or 51.1%,~~53.3% when compared to net sales in the ~~six months ended June 30, 2021;~~First Quarter 2022 primarily as a result in a decline in sales of drugs of abuse (“DOA”) ~~tests~~test that we ~~manufacture.~~manufacture and the fact that our last product sale was recorded on February 28, 2023. The decline in DOA sales stems almost entirely from decreased sales to our largest customer who has historically been a significant portion of our revenues. This customer ~~has~~had two segments of their business for which we ~~supply~~supplied products. They informed us in February 2022 that sales to one of those segments (which we supplied exclusively) would decrease as a result of their desire to have multiple vendors supplying the segment. They indicated this was to ensure uninterrupted supply as they had experienced periodic supply interruptions with us in 2021 (as a result of the supply chain issues we experienced in 2021 and ~~continue~~continued to experience into ~~2022; particularly with plastics and other materials that are used to manufacture our drug tests; materials that are also used in the manufacture of lateral flow Covid-19 tests)~~2022). They indicated that the other segment we supply would remain unchanged but, even in that particular segment; we saw a decline in sales when comparing the six months ended June 30, 2022 with the six months ended June 30, 2021. In addition to the decline in sales to this customer, international sales also declined; some of which is due to a backorder at June 30, 2022.

Partially offsetting these declines are increased contract manufacturing sales; primarily in sales of our private labeled RSV test and increased distribution sales; most of which is due to increased sales of the lower cost DOA tests we are selling. Sales of Rapid Antigen Covid-19 tests slightly increased when comparing the six months ended June 30, 2022 with the six months ended June 30, 2021; to $42,000 in the six months ended June 30, 2022 from $36,000 in the six months ended June 30, 2021. However, given the continued downward trend of pricing of these tests in the market and the fact that we are distributing these tests (which requires further markup); we believe that sales of Covid-19 tests will not have a significant impact on our sales going forward.

~~GROSS (LOSS) / PROFIT:~~For the first time in our operating history, we recorded a gross loss in the six months ended June 30, 2022 of $(45,000); this is compared to gross profit of $241,000 in the six months ended June 30, 2021. Gross profit began to dramatically decline in the first quarter of 2022 and further declined in the second quarter of 2022 due to even further reduced sales. This change to a gross (loss) from a gross profit is almost entirely due to decreased sales to our largest customer in one of their segments (previously discussed in net sales). The two segments we were supplying were comprised of one with low margin sales and one with higher margin sales. This allowed the Company to maintain an appropriate blended gross profit margin on the sales to the customer. The segment in which sales have decreased significantly is the segment in which products were sold at a higher profit margin and this has significantly reduced the blended gross profit margin on the account. At the same time, this decline in sales has resulted in greater inefficiencies in manufacturing. Manufacturing inefficiencies occur when production levels decrease but, not all costs can be reduced to be in line with production levels because they are fixed; these costs include but, are not limited to, depreciation, insurance, interest, taxes, utilities and other costs associated with running our two facilities.

~~We have taken steps~~GROSS PROFIT:Gross profit increased to ~~reduce manufacturing costs, including but not limited~~45.1% of net sales in the First Quarter 2023 from 8% of net sales in the First Quarter 2022. This increase in gross profit stems from the timing of the closing of the Asset Sale to ~~costs associated with labor, to mitigate these inefficiencies; however, the previously discussed fixed costs cannot easily be decreased. Given the price sensitivity in our markets~~Healgen and the ~~commoditized nature~~fact that the bulk of ~~drug testing products, customer pricing is challenging; however,~~the sales in the First Quarter 2023 were higher margin sales of the private labeled RSV product we ~~did implement a price increase~~supplied to ~~non-contractual customers in July 2021 however, the customer previously discussed has a contracted price in place that is not as easily increased.~~an unaffiliated third party.

OPERATING EXPENSES:Operating expenses decreased ~~36.3%~~ in the ~~six months ended June 30, 2022~~First Quarter 2023 compared to the ~~six months ended June 30, 2021. Expenses in~~First Quarter 2022. Selling and Marketing and General and Administrative expenses decreased ~~and~~while Research and Development expenses ~~remained relatively unchanged.~~increased. More specifically:

R&D expense ~~remained relatively unchanged (with a minimal decrease of 2.4%)~~increased 27.3%, when comparing the ~~six months ended June 30, 2022~~First Quarter 2023 with the ~~six months ended June 30, 2021. Salary expense was reduced slightly due to timing~~First Quarter 2022. FDA compliance costs (the cost of ~~pay periods. This slight decrease~~facility registrations and their timing) were the primary cause of the increase. The increase was partially offset by ~~an increase in utility costs in our New Jersey facility. All other expenses remained relatively consistent when comparing~~decreased salary expense since payroll ceased on February 28, 2023; closing of the ~~two six-month periods. In the six months ended June 30, 2022, our R&D department primarily focused their efforts on the enhancement of our current products and validations related~~Asset Sale to ~~drug testing product components.~~Healgen.

Selling and marketing expense in the ~~six months ended June 30, 2022~~First Quarter 2023 decreased ~~46.5%~~52.4% when compared to the ~~six months ended June 30, 2021.~~First Quarter 2022. Reductions in sales salary expense and benefits (due to the ~~termination~~closing of ~~personnel for performance reasons as well as an employee departure), reductions in~~the Asset Sale to Healgen on February 28, 2023) offset by increased costs associated with shipping ~~and promotional expense (due to the six months ended June 30, 2021 including fees paid to OTC Markets)~~ were the primary reason for the decline in expenses. ~~All other expenses remained relatively consistent when comparing the two six month periods.~~

In the six months ended June 30, 2022, we continued selling and marketing efforts related to the drug tests we manufacture and we promoted lower cost alternatives for onsite drug testing via distribution relationships. We also marketed and sold rapid Covid-19 tests via distribution relationships. These offerings did not result in increased selling and marketing expenses when comparing the six months ended June 30, 2022 with the six months ended June 30, 2021. Terminations of sales personnel have been due to poor performance. While we have taken efforts to increase the size of our sales team to further penetrate our markets; no new sales reps were hired in the six months ended June 30, 2022 due to lack of qualified candidates. We continue to look for contract manufacturing opportunities or situations in which we can leverage our U.S. based manufacturing operations.

G&A expense decreased ~~36.1%~~19.3% in the ~~six months ended June 30, 2022 when~~First Quarter 2023 compared to the First Quarter 2022. G&A salary expense in the six months ended June 30, 2021. The primary reason for the decline is that the six months ended June 30, 2022 did not include any fees associated with our loans with Cherokee while the six months ended June 30, 2022 includedand benefits (related to purchasing, warehouse, quality assurance and administrative personnel) decreased as a ~~total of $148,000 in fees incurred in connection with a penalty related to extension~~result of the ~~Cherokee loans in~~closing of the Asset Sale to Healgen on February ~~2021.~~

In addition, quality assurance salaries declined (due to retirement of an employee, departure of another employee as well as a reduced work week implemented early in April 2022), general and administrative salaries and benefits declined (due to fewer employees and28, 2023. Consulting fees also decreased when comparing the reduced work week implemented in April 2022), accounting fees declined (due to lower costs from our new accounting firm), and patent fees declined (due to less international patent maintenance fees paid), along with other smaller declines in other expenses.two periods. These declines were partially offset by increased ~~consulting~~costs associated with the Asset Sale to Healgen (legal fees, ~~(due to the execution of the Financial Advisory Agreement with Landmark Pegasus, Inc. in the six months ended June 30, 2022), increased transfer agent expense~~taxes, and ~~repairs and maintenance.~~insurance). There was no expense related to share based payments in either the ~~six months ended June 30, 2022~~First Quarter 2023 or the ~~six months ended June 30, 2021.~~First Quarter 2022.

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

Other expense ~~of $99,000~~ in the ~~six months ended June 30,~~First Quarter 2022 consisted of interest expense associated with our credit facilities (our (now former) line of credit with Crestmark Bank, our ~~two~~ loans with Cherokee Financial, LLC and shareholder loans) and interest income of $1,000 for interest received in connection with the ERC refund we received in June 2022. Other expense of $46,000 in the six months ended June 30, 2021 consisted of interest expense associated with our credit facilities (the same facilities indicated for the six months ended June 30, 2022) which was offset by other income of $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.

~~Results of operations for the three months ended June 30, 2022 compared to the three months ended June 30, 2021~~

~~NET SALES:~~Net sales for the three months ended June 30, 2022 decreased 65%, when compared to net sales in the three months ended June 30, 2021 primarily as a result in a decline in sales of DOA tests that we manufacture.

The decline in DOA sales stems almost entirely from decreased sales to our largest customer who has historically been a significant portion of our revenues. This customer has two segments of their business for which we supply products. They informed us in February 2022 that sales to one of those segments (which we supplied exclusively) would decrease as a result of their desire to have multiple vendors supplying the segment. They indicated this was to ensure uninterrupted supply as they had experienced periodic supply interruptions with us in 2021 (as a result of the supply chain issues we experienced in 2021 and continue to experience into 2022; particularly with plastics and other materials that are used to manufacture our drug tests; materials that are also used in the manufacture of lateral flow Covid-19 tests). They indicated that the other segment we supply would remain unchanged but, even in that particular segment; we saw a decline in sales when comparing the three months ended June 30, 2022 with the three months ended June 30, 2021. In addition to the decline in sales to this customer, international sales also declined; some of which is due to a backorder at June 30, 2022.

Partially offsetting these declines are increased contract manufacturing sales; primarily in sales of our private labeled RSV test and increased distribution sales; most of which is due to increased sales of the lower cost DOA tests we are selling. In the three months ended June 30, 2022, we did not have sales of Covid-19 tests and in the three months ended June 30, 2021 we only had $1,000 in Covid-19 test sales. Market pricing of Covid-19 tests has continued to decline over the last several months. Going forward, this will make it difficult for the Company to sell these tests given we are only distributing them (which requires further mark up to customers), therefore, we believe that sales of Covid-19 tests will not have a significant impact on our sales going forward.

For the first time in our operating history, we recorded a gross loss in the three months ended June 30, 2022 of $(73,000); this is compared to gross profit of $136,000 in the three months ended June 30, 2021. Gross profit began to dramatically decline in the first quarter of 2022 and further declined in the second quarter of 2022 due to even further reduced sales. This change to a gross (loss) from a gross profit is almost entirely due to decreased sales to our largest customer in one of their segments (previously discussed in net sales). The two segments we were supplying were comprised of one with low margin sales and one with higher margin sales. This allowed the Company to maintain an appropriate blended gross profit margin on the sales to the customer. The segment in which sales have decreased significantly is the segment in which products were sold at a higher profit margin and this has significantly reduced the blended gross profit margin on the account. At the same time, this decline in sales has resulted in greater inefficiencies in manufacturing. Manufacturing inefficiencies occur when production levels decrease but, not all costs can be reduced to be in line with production levels because they are fixed; these costs include but, are not limited to, depreciation, insurance, interest, taxes, utilities and other costs associated with running our two facilities.

We have taken steps to reduce manufacturing costs, including but not limited to, costs associated with labor, to mitigate these inefficiencies; however, the previously discussed fixed costs are not able to be decreased. Given the price sensitivity in our markets and the commoditized nature of drug testing products increasing, customer pricing is challenging; however, we did implement a price increase to non-contractual customers in July 2021 however, the customer previously discussed has a contracted price in place that is not as easily increased.

~~OPERATING EXPENSES:~~ ~~Operating expenses decreased 27.9% in the three months ended June 30, 2022 compared to the three months ended June 30, 2021. Expenses in all operating expense divisions decreased. More specifically:~~

R&D expense in the three months ended June 30, 2022 decreased 14.3% when compared to the three months ended June 30, 2021. Salary expense decreased due to timing of pay periods. This decrease was nominally offset by an increase in utility costs in our New Jersey facility. All other expenses remained relatively consistent when comparing the two three-month periods.

Selling and marketing expense in the three months ended June 30, 2022 decreased 43.1% when compared to the three months ended June 30, 2021. Reductions in sales salary expense and benefits (due to the termination of personnel for performance reasons as well as an employee departure) along with a reduction in promotional expense (due to the six months ended June 30, 2021 including fees paid to OTC Markets) were the primary reasons for the decline in expenses. These reductions were partially offset by increased costs associated with shipping.

G&A expense decreased 25.1% in the three months ended June 30, 2022 when compared to G&A expense in the three months ended June 30, 2021. Decreased costs associated with general and administrative salaries and benefits (due to fewer employees and the reduced work week implemented in April 2022), quality assurance salaries (due to retirement of an employee, departure of another employee as well as a reduced work week implemented early in April 2022), and investor relations were partially offset by increased utility costs. There was no expense related to share based payments in either the three months ended June 30, 2022 or the three months ended June 30, 2021.

~~Other expense of $51,000 in the three months ended June 30, 2022 consisted of interest expense associated with our credit facilities (our line of credit, our two~~ loans with Cherokee Financial, LLC and shareholder loans) and interest income of $1,000 for interest received in connection with the ERC refund we received in June 2022. Other income of $1,000 in the three months ended June 30, 2021 consisted of other income of $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 which was almost entirely offset by interest expense associated with our credit facilities (our line of credit, our two ~~loans with Cherokee Financial, LLC and a shareholder loan.~~shareholders).

~~Our~~Until the closing of the Asset Sale to Healgen on February 28, 2023, our cash requirements depend on numerous factors, including but not limited to manufacturing costs (such as labor and overhead costs, raw materials, equipment, etc.), selling and marketing initiatives, product development activities, regulatory costs, legal costs, and effective management of inventory levels and production levels in response to sales history and ~~forecasts. We are examining growth opportunities including strategic alliances and contract manufacturing. Given~~forecasts (if available). Since the closing of the Asset Sale to Healgen, our ~~current and historical~~ cash ~~position, such activities would~~requirements depend on the costs we will need to ~~be funded from~~incur to maintain our status as a fully reporting public entity and the ~~issuance~~time it will take to either bring another business into the public shell or dissolve the Company and distribute any remaining assets to the shareholders; along with management of amounts due to vendors and receipt of additional ~~equity or additional credit borrowings, subject to market~~customer receivables and ~~other conditions.~~receipt of the retention fund.

The following transactions materially impacted our liquidity and cash flow in the ~~six months ended June 30, 2022~~First Quarter 2023 and/or the ~~six months ended June 30, 2021~~First Quarter 2022 or are expected to have an impact on our cash flow in the year ending December 31, ~~2022:~~2023:

~~As discussed in Note F~~Asset Sale to our financial statements, we have been expecting to receive two ERC refunds totaling $400,000. On June 2, 2022, we received a refund for the second quarter of 2021 in the amount of $199,000. This amount represents the $198,000 claimed as a refund and $1,000 in interest.Healgen

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

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

On ~~December 9, 2020,~~September 28, 2022, we entered into a ~~Purchase Agreement~~Loan Promissory Note with Healgen (the “Healgen Loan”) and ~~a Registration Rights Agreement~~received gross/net proceeds of $400,000. We utilized $34,000 of the loan proceeds to pay off the Crestmark Line of Credit. On November 15, 2022, we amended the Healgen Loan to address an additional $300,000 in principal received under the Healgen Loan; bringing the total principal due under the Healgen Loan to $700,000. The Healgen Loan was further amended on December 19, 2022 to address an additional $15,000 in principal received under the Healgen Loan; bringing the total principal due under the Healgen Loan to $715,000. (See Note E – Line of Credit and Debt)

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

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

On February 28, 2023, with proceeds from the ~~Company, from time~~Asset Sale 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~~Healgen, we made a payment 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~~amount of $965,000 to Healgen for all principal due under the ~~Registration Statement on January 7, 2021 and~~Healgen Loan. Healgen waived all interest due under the ~~SEC declared the Registration Statement effective on January 11, 2021. In the six months ended June 30, 2022,~~Healgen Loan.

As discussed in Note F, as of March 31, 2023 we were ~~not able~~still awaiting the refund for the first quarter of 2021; expected to ~~sell any shares~~be $202,000. (See Note M – Subsequent Events for updated information on the ERC refund)

Over the course of ~~common stock to Lincoln Park due~~the First Quarter 2022, via expense reports, Ms. Waterhouse extended various amounts to the ~~market price of our common shares (i.e. they are~~Company for expenses including, but not ~~closing at or above $0.05 per share~~limited to, amounts for manufacturing materials, services, patent maintenance fees, office supplies, and ~~have not closed at that price since the latter part~~equipment. Upon closing of the ~~year ended December 31, 2021). In~~Asset Sale to Healgen, we made a payment to Ms. Waterhouse in the ~~six months ended June 30, 2022, the Company sold 4,900,000 shares~~amount of ~~common stock~~$43,000 to ~~Lincoln Park (including 500,000 shares required as an initial purchase under the Purchase Agreement) as Regular Purchases and received proceeds of $564,000.~~pay all amounts due in connection with these loans.

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

Our financial statements for the ~~six months ended June 30, 2022~~First Quarter 2023 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. Our current cash balances, together with ~~cash generated~~amounts from ~~future operations,~~accounts receivable, ERC refunds and ~~amounts available under our credit facilities will~~the receipt of the retention fund associated with the Asset Sale to Healgen, may not be sufficient to fund operations through ~~August 2023.~~May 2024. At ~~June 30, 2022,~~March 31, 2023, we have Stockholders’ Deficit of ~~$(1,708,000)~~$(458,000). Should the Company not be able to increase sales to generate positive cash flows or obtain additional financing in the form of additional loans or sale of equity, it will be required to reduce or terminate operations.

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

~~We do not expect cash from operations within~~Throughout most of the next 12 months to be sufficient to pay the amounts due under these credit facilities, which are due in full on February 15, 2023. Given this, we will be required to refinance the facilities either via a new debt facility or raising capital through some other means. 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 or that we would be able to raise capital via other means.

~~Throughout the six months~~year ended ~~June 30,~~December 31, 2022, we had a line of credit with Crestmark Bank. ~~The maximum availability~~On September 29, 2022, using proceeds from the Healgen Loan, we made a payment to Crestmark Bank in the amount of $34,000 which paid off the balance on the ~~line~~Crestmark LOC. The payoff of ~~credit is $1,000,000. However, because~~ the ~~amount available under the line~~Crestmark Line of credit is based upon our accounts receivable, the amounts actually available under our line of credit (historically) have been significantly less than the maximum availability. When sales levels decline, we have reduced availability on our line of credit due to decreased accounts receivable balances. As of June 30, 2022, 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. The Crestmark line of credit automatically renewed on June 22, 2022 for another one year term, or until June 22, 2023.

If availability under our line of credit (from sales) 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 seek 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.Credit resulted in lower interest costs.

As of ~~June 30, 2022,~~March 31, 2023, we had the following debt/credit facilities:

Facility

Debtor

Balance as of

June 30,

2022

Due Date

Debtor

Balance as of

March 31, 2023

Due Date

Loan and Security Agreement

Cherokee Financial, LLC

1,000,000

February 15, 2023

Revolving Line of Credit

Crestmark Bank

47,000

June 22, 2023

Term Loan

Cherokee Financial, LLC

240,000

February 15, 2023

Term Loan

Individual

50,000

November 4, 2022

Individual

50,000

May 4, 2023⁽¹⁾

Term Loan

Individual

175,000

⁽¹⁾

Individual

125,000

NA⁽²⁾

Total Debt

1,512,000

175,000

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

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

At ~~June 30, 2022,~~March 31, 2023, we were operating at a working capital deficit of ~~$2,220,000.~~$458,000. This compares to a working capital deficit of ~~$1,484,000~~$2,833,000 at December 31, ~~2021.~~2022. The ~~increase~~improvement in the working capital deficit is primarily due to ~~decline~~the payment of debt with the proceeds from the Asset Sale to Healgen and the retention fund receivable in ~~cash balances and accounts receivable (due~~connection with the Asset Sale to ~~decreased sales) along with increased debt facilities that are short-term facilities.~~Healgen. We ~~have~~ historically satisfied working capital requirements through cash from operations, bank debt and equity financings.

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

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

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

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

InOver the ~~six months ended June 30, 2022,~~last several years, we ~~had a net loss of $779,000~~have been able to access loans from shareholders and ~~net cash used in operating activities of $82,000.~~

~~Our cash position decreased~~raise funds via private equity financings. As time went on and the financial results continued to $2,000 at June 30, 2022 from $115,000 at December 31, 2021 and $30,000 at June 30, 2021. Cash at December 31, 2021 was positively impacted by an ERC refund in December 2021 (in the amount of $137,000). We did receive an ERC refund in the amount of $198,000 in early June 2022; however, the cash was used rather quickly to make debt payments, Cherokee interest payments and other outstanding amounts due. In the year ending December 31, 2022, we are expecting one more ERC refund in the amount of $202,000

~~In February 2022 we~~deteriorate, these options were informed by our largest customer that sales to one of their segments (which we supplied exclusively) would decrease as a result of their desire to have multiple vendors supplying the segment. This decrease in sales to the one segment of their businessno longer available. Ms. Waterhouse also ~~negatively impacts gross profit as this segment is the more profitable segment from a margin perspective. This has resulted in less profit~~extended loans to the Company ~~which is negatively impacting cash flows. While the Covid-19 pandemic is seemingly winding down, we continue to be impacted by it in the form of material delays~~ and ~~cost increases (in both manufacturing and other business costs).~~deferred her salary.

~~The extent~~Given the above, on December 19, 2022, we agreed, subject to ~~which~~ the ~~pandemic and the commoditized nature~~approval of our ~~markets will continue~~shareholders, to impact our business, liquidity, results of operations and financial condition will depend on future developments, which are still uncertain and cannot be predicted. Current levels of sales declines are impacting our business, liquidity, results of operations and financial condition and our ability to access the capital markets may also be limited. Prior to the fourth quarter of the year ended December 31, 2021, we were able to utilize the Lincoln Park Equity Line; however, the downturnsell substantially all of our ~~common stock starting in~~operating assets to Healgen (excluding cash, accounts receivables and certain other assets). We closed on the ~~third quarter of 2021 has prevented any further sales~~Asset Sale to ~~be initiated.~~

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. Given the current state of our business and the current stock price, it is unlikely we will be able to facilitate purchases under our Purchase Agreement with Lincoln Park in the near future. If we are unable to meet our credit facility obligations 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 remain in line with sales levels and make every effort to control manufacturing costs, although as previously discussed herein; certain overhead costs are fixed and cannot be reduced to be in line with sales levels. We have consolidated job responsibilities in multiple areas of the Company and this has enabled us to implement personnel reductions. We are also promoting new products and service offerings to diversify our revenue stream.

~~If we are forced to refinance our debt~~Healgen on less favorable terms, our results of operations and financial condition would be further 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 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 including reducing or terminating operations.February 28, 2023.

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

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

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.

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

~~The following~~There have been no material changes to our risk factors set forth in Part I, Item 1A, in our Annual Report on Form 10-K for the year ended December 31, 2021 are being revised in connection with the results of the three and six months ended June 30, 2022 and recent developments related to our debt obligations. Any risk factors not appearing within this section remain unchanged from the disclosure in the Annual Report on Form 10-K for the year ended December 31, 2021.

~~We have a history of incurring net losses. As of December 31, 2021, we have a stockholders’ deficit and for the three and six months ended June 30, 2022, we have a gross loss.~~

Since our inception and throughout most of our history, we have incurred net losses, including but not limited to, a net loss of $463,000 incurred in Fiscal 2021. As of December 31, 2021, we also reported negative stockholders’ equity of $944,000. For the three and six months ended June 30, 2022 and for the first time in our operating history, we have gross losses of $73,000 and $45,000, respectively. We incur substantial expenditures for sales and marketing, general and administrative and research and development purposes. Our ability to achieve profitability in the future will primarily depend on our ability to increase sales of our products. Stockholders’ equity improvement will also be dependent on our ability to increase sales which will increase the value of our assets and decrease our liabilities. Future profitability is also dependent on our ability to reduce manufacturing costs. However, some manufacturing costs are fixed and cannot be reduced. There can be no assurance that we will be able to increase our revenues at a rate that equals or exceeds expenditures which will enable us to manufacture products in sufficient quantities to absorb the expenditures, including but not limited to fixed overhead expenditures. Our failure to increase sales while controlling sales and marketing, general and administrative, and research and development costs (relative to sales) would result in additional losses and/or the reduction or termination of operations.

Our inability to comply with our debt obligations could result in our creditors declaring all amounts owed to them due and payable with immediate effect, or result in the collection of collateral by the creditor, both of which would have an adverse material impact on our business and our ability to continue operations.

We have a credit facility with Crestmark Bank consisting of a revolving line of credit (the “Crestmark LOC”). The Crestmark LOC is secured by a first security interest in all of our receivables and inventory and security interest in all other assets of the Company (in accordance with permitted prior encumbrances), (together the “Collateral”).

In addition to the Crestmark LOC, we have a loan and security agreement with Cherokee Financial, LLC. (“Cherokee”) which is secured by a first security interest in our real estate and machinery and equipment. We also have an unsecured term loan with Cherokee. We also have a number of smaller loans with individuals.

In addition to general economic, financial, competitive, regulatory, business and other factors beyond our control, our ability to make payments to our creditors will depend primarily upon our future operating performance; which has been negatively impacted by the loss of material contracts, the increased price competition in our core markets for drug testing and the continued negative impact of the Covid-19 pandemic on some of our drug testing markets.

A failure to repay any of our debt obligations could result in an event of default, which, if not cured or waived, could result in the Company being required to pay much higher costs associated with the indebtedness and/or enable our creditors to declare all amounts owed to them due and payable with immediate effect. In fact, in February 2021, with the extension of the loans until February 2022, Cherokee imposed penalties in the amount of $120,000 in response to our inability to pay back our facilities along with increasing the interest rate on our larger facility from 8% to 10%. In February 2022, we did not repay the Cherokee loans.

On June 14, 2022, Cherokee agreed that they would defer the principal amounts due under the Cherokee LSA and the 2019 Term Loan with Cherokee until February 15, 2023 and that any applicable penalties would also be deferred as long as we remain current on the quarterly interest payments. Furthermore, any penalties will also be waived if the principal amounts are paid on or prior to February 15, 2023.

If we are forced to refinance our debt on less favorable terms, our results of operations and financial condition would be further adversely affected by increased costs and rates. 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, or that future borrowings or equity financing would be available for the payment of any indebtedness we may have. In addition, in an event of default, our creditors could begin proceedings to collect the collateral securing the debt. This would have a material adverse effect on our ability to continue operations.

~~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 will not be sufficient to fund operations through August 2023. 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. Should additional financing not be available, we may be required to reduce or terminate operations.

~~One of our customers accounted for more than 50% of our total net sales in Fiscal 2021.~~

One of our customers accounted for 57.5% and 35.2% of our net sales in Fiscal 2021 and Fiscal 2020, respectively. We currently have a contract in place with this long-standing customer that does not expire in the near future. However, in February 2022, the customer informed us that sales to one of their business segments (which we supplied exclusively) would decrease as a result of their desire to have multiple vendors supplying the segment. They indicated this was to ensure uninterrupted supply. They indicated that the other segment we supply would remain unchanged but, even in that particular segment; however, even in that segment, we are seeing declines in sales when comparing sales so far in 2022 to sales during the same period in 2022. There can be no assurance that this customer will stop ordering products from us completely, or that any of our current customers will continue to place orders, or that orders by existing customers will continue at current or historical levels.

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

In accordance with the requirements of the Exchange Act, the registrant has caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

☒	Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
	For the quarterly period ended March 31, 2023
	~~For the quarterly period ended~~ ~~June 30, 2022~~

122 Smith Road, Kinderhook, New York		12106
(Address of principal executive offices)		(Zip Code)

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	ABMC	OTC Markets Pink

		PAGE
PART I – FINANCIAL INFORMATION			~~PAGE~~

Item 1.	Condensed Financial Statements		3
	Condensed Balance Sheets as of ~~June 30, 2022~~March 31, 2023 (unaudited) and December 31, ~~2021~~2022		3
	Condensed Unaudited Statements of Operations for the three ~~and six~~ months ended ~~June 30,~~March 31, 2023 and March 31, 2022 ~~and June 30, 2021~~	4
	4Statements of Changes in Stockholders’ Deficit for the three months ended March 31, 2023 and March 31, 2022	5
	Condensed Unaudited Statements of Cash Flows for the ~~six~~three months ended ~~June 30,~~March 31, 2023 and March 31, 2022 ~~and June 30, 2021~~		7
	~~Statements of Changes in Stockholder’s Deficit for the six months ended June 30, 2022 and June 30, 2021~~		6
	Notes to Condensed Financial Statements (unaudited)		8	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		19	18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		25	23
Item 4.	Controls and Procedures		25	23

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings		26	24
Item 1A.	Risk Factors		26	24
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		27	24
Item 3.	Defaults Upon Senior Securities		27	24
Item 4.	Mine Safety Disclosures		27	24
Item 5.	Other Information		27	24
Item 6.	Exhibits		28	25

Signatures		29	26

American Bio Medica Corporation
Condensed Balance Sheets

	June 30,			December 31,
	2022			2021
ASSETS	(Unaudited)
Current assets
Cash and cash equivalents	$	2,000		$	115,000
Accounts receivable, net of allowance for doubtful accounts of $2,000 at June 30, 2022 and $3,000 at December 31, 2021		83,000			323,000
Inventory, net of allowance of $260,000 at June 30, 2022 and at December 31, 2021		401,000			443,000
Employee retention credit receivable		202,000			400,000
Prepaid expenses and other current assets		33,000			24,000
Right of use asset – operating leases		21,000			35,000
Total current assets		742,000			1,340,000
Property, plant and equipment, net		491,000			517,000
Right of use asset – operating leases		2,000			5,000
Other assets		21,000			21,000
Total assets	$	1,256,000		$	1,883,000

LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities
Accounts payable	$	885,000		$	682,000
Accrued expenses and other current liabilities		467,000			467,000
Right of use liability – operating leases		18,000			35,000
Wages payable		80,000			97,000
Line of credit		47,000			178,000
Current portion of long-term debt		1,465,000			1,365,000
Total current liabilities		2,962,000			2,824,000
Right of use liability – operating leases		2,000			3,000
Total liabilities		2,964,000			2,827,000
COMMITMENTS AND CONTINGENCIES
Stockholders' deficit:
Preferred stock; par value $0.01 per share; 5,000,000 shares authorized, none issued and outstanding at June 30, 2022 and December 31, 2021		0			0
Common stock; par value $0.01 per share; 75,000,000 shares authorized; 48,098,476 issued and outstanding at June 30, 2022 and 47,598,476 issued and outstanding as of December 31, 2021		481,000			476,000
Additional paid-in capital		22,403,000			23,393,000
Deficit		(24,592,000	)		(23,813,000	)
Total stockholders’ deficit		(1,708,000	)		(944,000	)
Total liabilities and stockholders’ deficit	$	1,256,000		$	1,883,000

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

	For the transition period from ~~__________~~ to ~~__________~~

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated ~~Filer~~filer	☐	Smaller reporting company	☒
		Emerging growth company	☐

American Bio Medica Corporation
Condensed Balance Sheets
	March 31,			December 31,
	2023			2022
ASSETS	(Unaudited)
Current assets
Cash and cash equivalents	$	68,000		$	34,000
Accounts receivable, net of allowance for doubtful accounts of $2,000 at March 31, 2023 and at December 31, 2022		89,000			82,000
Inventory, net of allowance of $0 at March 31, 2023 and $235,000 at December 31, 2022		0			379,000
Employee retention credit receivable		202,000			202,000
Retention fund receivable-asset sale		300,000
Prepaid expenses and other current assets		0			72,000
Total current assets		659,000			769,000
Property, plant and equipment, net		0			466,000
Right of use asset – operating leases		0			13,000
Other assets		0			21,000
Total assets	$	659,000		$	1,269,000

LIABILITIES AND STOCKHOLDERS’ (DEFICIT)
Current liabilities
Accounts payable	$	572,000		$	760,000
Accrued expenses and other current liabilities		338,000			514,000
Right of use liability – operating leases		0			4,000
Wages payable		32,000			94,000
Current portion of long-term debt		175,000			2,230,000
Total current liabilities		1,117,000			3,602,000
Right of use liability – operating leases		0			6,000
Total liabilities		1,117,000			3,608,000
COMMITMENTS AND CONTINGENCIES
Stockholders' deficit:
Preferred stock; par value $.01 per share; 5,000,000 shares authorized, none issued and outstanding at March 31, 2023 and December 31, 2022		0			0
Common stock; par value $.01 per share; 75,000,000 shares authorized; 48,098,476 issued and outstanding at March 31, 2023 and at December 31, 2022		481,000			481,000
Additional paid-in capital		22,403,000			22,403,000
Deficit		(23,342,000	)		(25,223,000	)
Total stockholders’ (deficit)		(458,000	)		(2,339,000	)
Total liabilities and stockholders’ (deficit)	$	659,000		$	1,269,000

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

American Bio Medica Corporation
Condensed Statements of Operations
(Unaudited)
	For The Six Months Ended
	June 30,
	2022				2021

Net sales	$	536,000			$	1,095,000

Cost of goods sold		581,000				854,000

Gross (loss) / profit		(45,000	)			241,000

Operating expenses:
Research and development		40,000				41,000
Selling and marketing		83,000				155,000
General and administrative		510,000				798,000
Total		633,000				994,000

Operating loss		(678,000	)			(753,000	)

Other (expense) / income :
Interest expense		(100,000	)			(96,000	)
Other income, net		1,000				50,000
Total2		(99,000	)			(46,000	)

Loss before income tax expense		(777,000	)			(799,000	)

Income tax expense		(2,000	)			(2,000	)

Net loss	$	(779,000	)		$	(801,000	)

Basic and diluted loss per common share	$	(0.02	)	��	$	(0.02	)

Weighted average number of shares outstanding – basic & diluted		47,935,493				39,910,658

American Bio Medica Corporation
Statements of Changes in Stockholders’ Deficit
(Unaudited)

	Common Stock				Additional Paid-in
	Shares		Amount		Capital		Deficit			Total
Balance – January 1, 2023		48,098,476	$	481,000	$	22,403,000	$	(25,223,000	)	$	(2,339,000	)
Net income								1,881,000			1,881,000
Balance – March 31, 2023		48,098,476	$	481,000	$	22,403,000	$	(23,342,000	)	$	(458,000	)

Balance January 1, 2022		47,598,476	$	476,000	$	22,393,000	$	(22,813,000	)	$	(944,000	)
Shares issued in connection with Landmark consulting agreement		500,000		5,000		10,000					15,000
Net loss								(379,000	)		(379,000	)
Balance – March 31, 2022		48,098,476	$	481,000	$	22,403,000	$	(24,192,000	)	$	(1,308,000	)

	Common Stock				Additional Paid-in		Accumulated
	Shares		Amount		Capital		Deficit			Total
Balance – January 1, 2022		47,598,476	$	476,000	$	22,393,000	$	(22,813,000	)	$	(944,000	)
Shares issued in connection with Landmark consulting agreement		500,000		5,000		10,000					15,000
Net loss								(779,000	)		(779,000	)
Balance – June 30, 2022		48,098,476	$	481,000	$	22,403,000	$	(24,592,000	)	$	(1,708,000	)

Balance January 1, 2021		37,703,476	$	377,000	$	21,717,000	$	(23,350,000	)	$	(1,256,000	)
Shares issued to Lincoln Park for balance of Initial Purchase under the 2020 Lincoln Park Equity Line		500,000		5,000		120,000					125,000
Shares issued to Lincoln Park for purchases under the 2020 Lincoln Park Equity Line		4,400,000		44,000		395,000					439,000
Net loss								(801,000	)		(801,000	)
Balance – June 30, 2021		42,603,476	$	426,000	$	22,232,000	$	24,151,000		$	(1,493,000	)

American Bio Medica Corporation
Condensed Statements of Cash Flows
(Unaudited)
	For The Three Months Ended
	March 31,
	2023			2022
Cash flows from operating activities:
Net income / (loss)	$	1,881,000		$	(379,000	)
Adjustments to reconcile net income / (loss) to net cash used in operating activities:
Depreciation and amortization		8,000			13,000
Asset Sale to Healgen		(2,114,000	)		0
Provision for bad debt		0			(1,000	)
Consulting fee paid with restricted stock		0			15,000
Changes in:
Accounts receivable		(7,000	)		186,000
Inventory		0			24,000
Prepaid expenses and other current assets		83,000			(11,000	)
Right of use asset		0			9,000
Accounts payable		24,000			161,000
Accrued expenses and other current liabilities		(176,000	)		(17,000	)
Right of use liability		0			(9,000	)
Wages payable		(62,000	)		(4,000	)
Net cash used in operating activities		(363,000	)		(13,000	)
Cash Flows from investing activities
Business Sale, net proceeds		247,000			0
Net cash provided by investing activities		247,000			0
Cash flows from financing activities:
Payments on debt financing		(100,000	)		0
Proceeds from debt financing		250,000			0
Proceeds from lines of credit		0			462,000
Payments on lines of credit		0			(547,000	)
Net cash provided by / (used in) financing activities		150,000			(85,000	)
Net change in cash and cash equivalents		34,000			(98,000	)
Cash and cash equivalents - beginning of period		34,000			115,000
Cash and cash equivalents - end of period	$	68,000		$	17,000
Supplemental disclosures of cash flow information
Non-Cash transactions:
Consulting fee paid with restricted stock	$	0		$	15,000
Cash paid for interest	$	41,000		$	46,000

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

American Bio Medica Corporation Condensed Statements of Cash Flows
(Unaudited)

	For The Six Months Ended
	June 30,
	2022			2021
Cash flows from operating activities:
Net loss	$	(779,000	)	$	(801,000	)
Adjustments to reconcile net loss to net cash (used in) operating activities:
Depreciation and amortization		26,000			36,000
Penalty added to Cherokee loan balance		0			120,000
(Recovery) of bad debts		(1,000	)		(17,000	)
(Reduction of) provision for slow moving and obsolete inventory		(18,000	)		42,000
Shares issued for services		15,000			0
Changes in:
Accounts receivable		240,000			37,000
Inventory		60,000			19,000
Employee retention credit refund		198,000			0
Prepaid expenses and other current assets		(9,000	)		97,000
Right of use asset		18,000
Accounts payable		203,000			16,000
Accrued expenses and other current liabilities		0			(150,000	)
Right of use liability		(18,000	)
Wages payable		(17,000	)		(15,000	)
Net cash (used in) operating activities		(82,000	)		(616,000	)

Cash flows from financing activities:
Proceeds from debt financing		150,000			0
Repayments of debt financing		(50,000	)		(25,000	)
Proceeds from Lincoln Park financing		0			564,000
Proceeds from line of credit		673,000			1,143,000
Repayments of line of credit		(804,000	)		(1,134,000	)
Net cash (used in) / provided by financing activities		(31,000	)		548,000

Net change in cash and cash equivalents		(113,000	)		(68,000	)
Cash and cash equivalents - beginning of period		115,000			98,000

Cash and cash equivalents - end of period	$	2,000		$	30,000

Supplemental disclosures of cash flow information
Cash paid during period for interest	$	94,000		$	90,000
Cash paid during period for taxes	$	2,000		$	2,000

	March 31, 2023*		December 31, 2022

Land	$	0	$	102,000
Buildings and improvements		0		1,352,000
Manufacturing and warehouse equipment		0		2,110,000
Office equipment (incl. furniture and fixtures)		0		412,000
		0		3,976,000
Less accumulated depreciation		0		(3,510,000	)
	$	0	$	466,000

	March 31, 2023		December 31, 2022
Accounting fees	$	16,000	$	87,000
Interest payable		20,000		39,000
Accounts receivable credit balances		0		1,000
Sales tax payable		188,000		188,000
Deferred compensation		114,000		109,000
Other current liabilities		0		90,000
	$	338,000	$	514,000

	March 31, 2023		March 31, 2022
Options		1,690,000		1,937,000
Total		1,690,000		1,937,000

	June 30, 2022		December 31, 2021
Loan and Security Agreement with Cherokee Financial, LLC: 5 year note executed on February 15, 2015, at a fixed annual interest rate of 8% plus a 1% annual oversight fee, interest and oversight fee paid quarterly with principal due on February 15, 2020. Loan was extended for one year (until February 15, 2021) under the same terms and conditions as the original loan. The loan was further extended in February 2021 to February 15, 2022 with $100,000 added to the loan principal as a penalty and the annual interest rate increased to 10%. Loan was further extended in June 2022 (until February 15, 2023). Loan is collateralized by a first security interest in building, land and machinery & equipment.	$	1,000,000	$	1,000,000
Crestmark Line of Credit: Line of credit maturing on June 22, 2023 with interest payable at a variable rate based on WSJ Prime plus 3% with a floor or 5.25%; loan fee of 0.5% annually & monthly maintenance fee of 0.3% on actual loan balance from prior month. Early termination fee of 2% if terminated prior to natural expiration. Loan is collateralized by first security interest in receivables, inventory and all other assets. The all-in interest rate as of the date of this report is 14.39%.		47,000		178,000
2019 Term Loan with Cherokee Financial, LLC: Note at an annual fixed interest rate of 18% paid quarterly in arrears and a balloon payment due on February 15, 2020. Loan was extended in February 2020, until February 15, 2021 with a penalty of $20,000 added to the loan principal and, extended again in February 2021 to February 15, 2022 with another penalty of $20,000 added to the loan principal. Loan was extended in June 2022 (until February 15, 2023).		240,000		240,000
November 2020 Shareholder Note: Term loan at 7% interest with the first interest only payment being made on February 4, 2021 and the final interest and $50,000 principal due on November 4, 2022.		50,000		50,000
December 2021 Shareholder Notes: Two term loans with two non-affiliated shareholders at 7% interest until June 15, 2022. One term loan in the amount of $25,000 was paid in full on June 13, 2022. The Company made a payment of $25,000 on the other loan and the other loan was extended and amended to address additional amounts (totaling $150,000) provided under the loan.		175,000		75,000
Total Debt	$	1,512,000	$	1,543,000
Current portion	$	1,512,000	$	1,543,000

	Six months ended June 30, 2022							Six months ended June 30, 2021
	Shares			Weighted Average Exercise Price		Aggregate Intrinsic Value as of June 30, 2022		Shares		Weighted Average Exercise Price		Aggregate Intrinsic Value as of June 30, 2021
Options outstanding at beginning of year		1,937,000		$	0.13				1,987,000	$	0.13
Granted		0			NA				0		NA
Exercised		0			NA				0		NA
Cancelled/expired		(150,000	)	$	0.18				0		NA
Options outstanding at end of quarter		1,787,000		$	0.12	$	0		1,987,000	$	0.13	$	25,000
Options exercisable at end of quarter		1,787,000		$	0.12				1,987,000	$	0.13

	First Quarter 2023						First Quarter 2022
	Shares		Weighted Average Exercise Price		Aggregate Intrinsic Value as of March 31, 2023		Shares		Weighted Average Exercise Price		Aggregate Intrinsic Value as of March 31, 2022
Options outstanding at beginning of year		1,736,000	$	0.12				1,937,000	$	0.13
Granted		0	NA					0	NA
Exercised		0	NA					0	NA
Cancelled/expired		46,000	$	0.26				0	NA
Options outstanding at end of quarter		1,690,000	$	0.12	$	0		1,937,000	$	0.13	$	0
Options exercisable at end of quarter		1,690,000	$	0.12				1,937,000	$	0.13

	Quarter Ended June 30, 2022			Quarter Ended June 30, 2021
Tax expense at federal statutory rate	(21		%)	(21		%)
State tax expense, net of federal tax effect		0	%		0	%
Increase in valuation allowance		21	%		21	%
Effective income tax rate		(0	%)		(0	%)

	Quarter Ended March 31, 2023			Quarter Ended March 31, 2022
Tax expense at federal statutory rate	(21%)			(21%)
State tax expense, net of federal tax effect		0	%		0	%
Increase in valuation allowance		21	%		21	%
Effective income tax rate	(0%)			(0%)

31.1/31.2		Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer/Chief Financial Officer

32.1/32.2		Certification of the Chief Executive Officer/Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101		The following materials from our Quarterly Report on Form 10-Q for the quarter ended ~~June 30, 2022,~~March 31, 2023, formatted in XBRL (Extensible Business Reporting Language): (i) Condensed Balance ~~Sheet,~~Sheets, (ii) Condensed Statements of Income (iii) Statements of Change in Stockholders’ Equity, (iv) Condensed Statements of Cash Flows, ~~(iv) Statements of Changes in Stockholders’ Deficit~~ and (v) Notes to Condensed Financial Statements.

	AMERICAN BIO MEDICA CORPORATION
	(Registrant)

	By:	/s/ Melissa A. Waterhouse
		Melissa A. Waterhouse
		Chief Executive Officer (Principal Executive Officer)
		Principal Financial Officer
		Principal Accounting Officer

Dated: ~~August 15, 2022~~ June 12, 2023