UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-Q

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

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

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

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

Commission File Number: 0-28666

AMERICAN BIO MEDICA CORPORATION

(Exact name of registrant as specified in its charter)

New York		14-1702188
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
122 Smith Road, Kinderhook, New York		12106
(Address of principal executive offices)		(Zip Code)

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

518-758-8158

(Registrant's telephone number, including area code)

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

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

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

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

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

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

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

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

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

48,098,476 Common Shares as of ~~November~~June 1612, ~~2022~~2023

American Bio Medica Corporation

Index to Quarterly Report on Form 10-Q

For the quarter ended ~~September~~March 3031, ~~2022~~2023

PART I – FINANCIAL INFORMATION		PAGE
		PAGE
PART I – FINANCIAL INFORMATION
Item 1.	Condensed Financial Statements	3
	Condensed Balance Sheets as of September 30, 2022 (unaudited) and December 31, 2021	3
	Condensed Balance Sheets as of March 31, 2023 (unaudited) and December 31, 2022	3
	Condensed Unaudited Statements of Operations for the three and nine months ended September 30, 2022 and September 30, 2021	4-5
	Condensed Unaudited Statements of Operations for the three months ended March 31, 2023 and March 31, 2022	4
	Statements of Changes in Stockholders’ Deficit for the nine months ended September 30, 2022 and September 30, 2021	6
	Statements of Changes in Stockholders’ Deficit for the three months ended March 31, 2023 and March 31, 2022	5
	Condensed Unaudited Statements of Cash Flows for the nine months ended September 30, 2022 and September 30, 2021	7
	Condensed Unaudited Statements of Cash Flows for the three months ended March 31, 2023 and March 31, 2022	6
	Notes to Condensed Financial Statements (unaudited)	87
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2018
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	2823
Item 4.	Controls and Procedures	2823
PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	2924
Item 1A.	Risk Factors	2924
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3124
Item 3.	Defaults Upon Senior Securities	3124
Item 4.	Mine Safety Disclosures	3124
Item 5.	Other Information	3124
Item 6.	Exhibits	3225
Signatures		3326

Table of Contents

PART I - FINANCIAL INFORMATION

Item 1. Condensed Financial Statements

American Bio Medica Corporation
Condensed Balance Sheets
	September 30,			December 31,
	March 31,			December 31,
	2022			2021
	2023			2022
ASSETS	(Unaudited)
Current assets
Cash and cash equivalents	$	1068,000		$	~~115~~34,000
Accounts receivable, net of allowance for doubtful accounts of $2,000 at September 30, 2022 and $3,000 at December 31, 2021		39,000			323,000
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 $256,000 at September 30, 2022 and $278,000 at December 31, 2021		380,000			443,000
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			~~400~~202,000
Prepaid expenses and other current assets		24,000			24,000
Retention fund receivable-asset sale		300,000
Right of use asset – operating leases		15,000			35,000
Prepaid expenses and other current assets		0			72,000
Total current assets		~~670~~659,000			1769,~~340,~~000
Property, plant and equipment, net		~~479,000~~0			~~517~~466,000
Right of use asset – operating leases		~~7,000~~0			513,000
Other assets		~~21,000~~0			21,000
Total assets	$	1659,~~177,~~000		$	1,~~883~~269,000
LIABILITIES AND STOCKHOLDERS’ DEFICIT
LIABILITIES AND STOCKHOLDERS’ (DEFICIT)
Current liabilities
Accounts payable	$	~~950~~572,000		$	~~682~~760,000
Accrued expenses and other current liabilities		~~544~~338,000			~~467~~514,000
Right of use liability – operating leases		~~13,000~~0			354,000
Wages payable		9032,000			9794,000
Line of credit		0			178,000
Current portion of long-term debt		175,000			2,230,000
Current portion of long-term debt		1,595,000			1,365,000
Total current liabilities		1,117,000			3,602,000
Total current liabilities		3,192,000			2,824,000
Right of use liability – operating leases		0			6,000
Right of use liability – operating leases		7,000			3,000
Total liabilities		1,117,000			3,608,000
Total liabilities		3,199,000			2,827,000
COMMITMENTS AND CONTINGENCIES
Stockholders' deficit:
Preferred stock; par value $.01 per share; 5,000,000 shares authorized, none issued and outstanding at September 30, 2022 and December 31, 2021		0			0
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 September 30, 2022 and 47,598,476 issued and outstanding as of December 31, 2021		481,000			476,000
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,~~393~~403,000
Deficit		(2423,~~906~~342,000	)		(2325,~~813~~223,000	)
Total stockholders’ deficit		(2,022,000	)		(944,000	)
Total stockholders’ (deficit)		(458,000	)		(2,339,000	)
Total liabilities and stockholders’ deficit	$	1,177,000		$	1,883,000
Total liabilities and stockholders’ (deficit)	$	659,000		$	1,269,000
The accompanying notes are an integral part of the condensed financial statements.
The accompanying notes are an integral part of the condensed financial statements

Table of Contents

American Bio Medica Corporation
Condensed Statements of Operations
(Unaudited)
	For The Nine Months Ended
	For The Three Months Ended
	September 30,
	March 31,
	2022			2021
	2023			2022
Net sales	$	~~746~~164,000		$	1351,~~709,~~000
Cost of goods sold		~~799~~90,000			1323,~~284,~~000
Gross (loss) / profit		(53,000	)		425,000
Gross profit		74,000			28,000
Operating expenses:
Research and development		6328,000			6322,000
Selling and marketing		~~109~~20,000			~~233~~42,000
General and administrative		~~715~~238,000			1295,~~086,~~000
		887,000			1,382,000
		286,000			359,000
Operating loss	~~(,000)~~	(212,000	)		(~~957~~331,000	)
Other (expense) / income :
Other income/ (expense):
Interest expense		(153,000	)		(145,000	)
Loss on asset valuation		(921,000	)		0
Other income, net		2,000			50,000
Other income – asset sale		3,035,000			0
Income from forgiveness of PPP loan		0			335,000
Interest expense		(21,000	)		(48,000	)
Income from Employee Retention Credit		0			581,000
		2,093,000			(48,000	)
		(151,000	)		821,000
Net income / (loss) before tax		1,881,000			(379,000	)
Loss before income tax expense		(1,091,000	)		(136,000	)
Income tax expense		0			0
Income tax expense		(2,000	)		(2,000	)
Net income / (loss)	$	1,881,000		$	(379,000	)
Net loss	$	(1,093,000	)	$	(138,000	)
Basic and diluted income / (loss) per common share	$	0.04		$	(0.01	)
Basic and diluted loss per common share	$	(0.02	)	$	(0.00	)
Weighted average number of shares outstanding – basic & diluted		48,098,476			47,770,698
Weighted average number of shares outstanding – basic & diluted		47,990,417			39,281,286
The accompanying notes are an integral part of the condensed financial statements
The accompanying notes are an integral part of the condensed financial statements.

Table of Contents

American Bio Medica Corporation
Condensed Statements of Operations
Statements of Changes in Stockholders’ Deficit
(Unaudited)
	For The Three Months Ended
	Common Stock						Additional Paid-in
	September 30,
	Shares			Amount			Capital		Deficit			Total
	2022			2021
Balance – January 1, 2023		48,098,476		$	481,000		$	22,403,000	$	(25,223,000	)	$	(2,339,000	)
Net sales	$	209,000		$	614,000
Net income										1,881,000			1,881,000
Cost of goods sold		218,000			429,000
Balance – March 31, 2023		48,098,476		$	481,000		$	22,403,000	$	(23,342,000	)	$	(458,000	)
Gross (loss) / profit		(9,000	)		185,000
Balance January 1, 2022		47,598,476		$	476,000		$	22,393,000	$	(22,813,000	)	$	(944,000	)
Operating expenses:
Shares issued in connection with Landmark consulting agreement		500,000			5,000			10,000					15,000
Research and development		22,000			21,000
Net loss										(379,000	)		(379,000	)
Selling and marketing		26,000			79,000
Balance – March 31, 2022		48,098,476		$	481,000		$	22,403,000	$	(24,192,000	)	$	(1,308,000	)
General and administrative		205,000			289,000
		253,000			389,000
Operating loss		(262,000	)		(204,000	)
Other (expense) / income:
Interest expense		(53,000	)		(49,000	)
Income from forgiveness of PPP loan		0			335,000
Income from Employee Retention Credit		0			581,000
Other income, net		1,000			0
		(52,000	)		867,000
(Loss) / income before income tax expense		(314,000	)		663,000
Income tax expense		0			0
Net (loss) / income	$	(314,000	)	$	663,000
Basic and diluted (loss) / income per common share	$	(0.01	)	$	0.02
Weighted average number of shares outstanding – basic & diluted		48,098,476			44,020,650
The accompanying notes are an integral part of the condensed financial statements.

Table of Contents

American Bio Medica Corporation
Statements of Changes in Stockholders’ Deficit
Condensed Statements of Cash Flows
(Unaudited)
	Common Stock						Additional Paid-in		Accumulated
	For The Three Months Ended
	Shares			Amount			Capital		Deficit			Total
	March 31,
Balance – January 1, 2022		47,598,476		$	476,000		$	22,393,000	$	(22,813,000	)	$	(944,000	)
	2023			2022
Shares issued in connection with Landmark consulting agreement		500,000			5,000			10,000					15,000
Cash flows from operating activities:
Net loss										(1,093,000	)		(1,093,000	)
Net income / (loss)	$	1,881,000		$	(379,000	)
Balance – September 30, 2022		48,098,476		$	481,000		$	22,403,000	$	(24,906,000	)	$	(2,022,000	)
Adjustments to reconcile net income / (loss) to net cash used in operating activities:
Balance January 1, 2021		37,703,476		$	377,000		$	21,717,000	$	(23,350,000	)	$	(1,256,000	)
Depreciation and amortization		8,000			13,000
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
Asset Sale to Healgen		(2,114,000	)		0
Shares issued to Lincoln Park for purchases under the 2020 Lincoln Park Equity Line		5,800,000			58,000			449,000					507,000
Provision for bad debt		0			(1,000	)
Shares issued for Cherokee interest in lieu of cash		895,000			9,000			27,000					36,000
Consulting fee paid with restricted stock		0			15,000
Net loss										(138,000	)		(138,000	)
Changes in:
Balance – September 30, 2021		44,898,476		$	449,000		$	22,313,000	$	(23,488,000	)	$	(726,000	)
Accounts receivable		(7,000	)		186,000
The accompanying notes are an integral part of the condensed financial statements.
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

Table of Contents

American Bio Medica Corporation Condensed Statements of Cash Flows
(Unaudited)
	For The Nine Months Ended
	September 30,
	2022			2021
Cash flows from operating activities:
Net loss	$	(1,093,000	)	$	(138,000	)
Adjustments to reconcile net loss to net cash (used in) operating activities:
Depreciation and amortization		38,000			53,000
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		(22,000	)		44,000
Employee retention credit		0			(537,000	)
Shares issued for services		15,000			0
Interest paid with restricted stock		0			36,000
Forgiveness of PPP loan		0			(332,000	)
Forgiveness of PPP loan interest		0			(3,000	)
Changes in:
Accounts receivable		285,000			(121,000	)
Inventory		85,000			73,000
Employee retention credit refund		198,000			0
Prepaid expenses and other current assets		0			73,000
Right of use asset		18,000			26,000
Accounts payable		268,000			90,000
Accrued expenses and other current liabilities		77,000			(149,000	)
Right of use liability		(18,000	)		(27,000	)
Wages payable		(7,000	)		(24,000	)
Net cash used in operating activities		(157,000	)		(833,000	)
Cash flows from financing activities:
Proceeds from debt financing		280,000			0
Repayments of debt financing		(50,000	)		(25,000	)
Proceeds from Lincoln Park financing		0			632,000
Proceeds from line of credit		901,000			1,712,000
Repayments of line of credit		(1,079,000	)		(1,543,000	)
Net cash provided by financing activities		52,000			776,000
Net change in cash and cash equivalents		(105,000	)		(57,000	)
Cash and cash equivalents - beginning of period		115,000			98,000
Cash and cash equivalents - end of period	$	10,000		$	41,000
Supplemental disclosures of cash flow information
Non-Cash transactions
Interest paid with restricted stock	$	0		$	36,000
Forgiveness of PPP loan principal and interest	$	0		$	335,000
Cash paid during period for interest	$	143,000		$	142,000
Cash paid during period for taxes	$	2,000		$	2,000
The accompanying notes are an integral part of the condensed financial statements.

7 Table of Contents

Notes to condensed financial statements (unaudited)

~~September~~March 3031, ~~2022~~2023

Note A - Basis of Reporting

The accompanying unaudited interim condensed financial statements of American Bio Medica Corporation (the “Company”) have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Regulation S-X. Accordingly, these unaudited interim condensed financial statements do not include all information and footnotes required by U.S. GAAP for complete financial statement presentation. These unaudited interim condensed financial statements should be read in conjunction with audited financial statements and related notes contained in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~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 ~~September~~March 3031, ~~2022~~2023, and the results of operations and cash flows for the three ~~and nine~~ month periods ended ~~September~~March 3031, ~~2022~~2023 ~~and~~(the ~~September~~“First ~~30,~~Quarter ~~2021~~2023”) and ~~cash~~March ~~flows for the nine month periods ended September 30~~31, 2022 ~~and~~(the ~~September~~“First ~~30,~~Quarter ~~2021~~2022”).

Operating results for the ~~nine~~First ~~months~~Quarter ~~ended~~2023 ~~September 30, 2022~~ 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 ~~nine~~First ~~months~~Quarter ~~ended September 30~~2023, ~~2022,~~ 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~~and ~~with~~amounts ~~cash~~expected ~~generated~~ from ~~future~~its ~~operations~~receivables ~~and~~(including ~~amounts~~the ~~available~~Employee ~~under~~retention Credit receivable and the ~~Company’s~~retention ~~credit~~(escrow) ~~facilities~~proceeds ~~are~~from the asset sale) may not ~~currently~~be sufficient to fund ~~operations~~the Company through ~~November~~May ~~2023~~2024.

~~Throughout most of the nine months ended September 30, 2022, the Company had a line of credit with Crestmark Bank.~~ The ~~maximum availability on the~~ Company’s ~~line of~~ credit ~~was~~facilities ~~$1,000,000.~~with ~~However,~~Cherokee ~~because the amount available under the line of credit is based upon the Company’s accounts receivable~~Financial, ~~the~~LLC ~~amounts actually available under the line of credit~~ (~~historically~~“Cherokee”) ~~have~~were ~~been significantly less than the maximum availability. On September 29, 2022, we~~ paid ~~off~~in ~~the~~full ~~balance of our line of credit ($34,000)~~ with ~~the~~ proceeds ~~of a $40,000 loan~~ from anthe ~~unaffiliated~~asset ~~third~~sale ~~party.~~on ~~See~~February ~~Note~~28, ~~I – Subsequent Events~~2023.

The Company’s credit facilities with Cherokee Financial, LLC (“Cherokee”) matured/expired on February 15, 2022 with a final balloon payment due of $1,240,000. 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, 2023.

The Company’s total debt at September 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 evaluating alternatives to pay off or refinance these facilities.

8 Table of Contents

As discussed in more detail in “Cash Flow, Outlook/Risk”, if sales levels continue to decline further, the Company will continue to have inadequate cash flow and will not be able to satisfy its working capital and any capital expenditure requirements. The Company would then be required to obtain additional credit facilities, sell additional equity securities, or delay capital expenditures and/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.

Recently Adopted Accounting Standards

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

~~ASU~~7 ~~2021-10,~~Table Government Assistance (Topic 832), Disclosures by Business Entities About Government Assistance, issued in November 2021 requires entities to provide disclosures 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, and any significant terms and conditions of the agreements, including commitments and contingencies. The Company adopted ASU 2021-10 on January 1, 2022 and the adoption did not have an impact on our financial condition or results of operations as ASU-2021-10 only impacts annual financial statement footnote disclosures.Contents

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

Accounting Standards Issued; Not Yet Adopted

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

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

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

Note B – Inventory

Inventory is comprised of the following:

	September 30, 2022			December 31, 2021
	March 31, 2023*			December 31, 2022
Raw Materials	$	~~456,000~~0		$	~~462~~444,000
Work In Process		~~93,000~~0			~~109~~110,000
Finished Goods		~~87,000~~0			~~150~~60,000
Allowance for slow moving and obsolete inventory		~~(256,000~~0	)		(~~278~~235,000	)
	$	~~380,000~~0		$	~~443~~379,000

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

Note C – ~~Net~~Property, ~~Loss~~Plant ~~Per~~and ~~Common Share~~Equipment

~~Basic~~Property, ~~net~~plant ~~loss~~and ~~per~~equipment, ~~common share~~ is ~~calculated~~comprised ~~by dividing the net loss by the weighted average number~~ of ~~outstanding common shares during~~ the period. Diluted net income 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. Potential common shares outstanding as of September 30, 2022 and 2021following:

	September 30, 2022		September 30, 2021
	March 31, 2023*		December 31, 2022
Options		1,736,000		1,937,000
Land	$	0	$	102,000
Total		1,736,000		1,937,000
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

~~Note~~*On DFebruary –28, ~~Litigation/Legal~~2023, ~~Matters~~the Company sold substantially all of its assets to Healgen, including its property, plant and equipment.

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Note D – Accrued Expenses

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

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

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

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

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

Note F – Litigation/Legal Matters

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

~~Property~~Note ~~Taxes:~~G ~~The~~– Company is currently delinquent in its property and school taxes. The Company has been communicating with the county over the past several months to discuss options for payment of the delinquent taxes; including, but not limited to, entering into a payment plan offered by the county.Debt

~~Note~~The ECompany’s – Line of Credit and Debt consisted of the following as of March 31, 2023 and December 31, 2022:

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

	March 31, 2023		December 31, 2022
Loan and Security Agreement with Cherokee Financial, LLC: Secured note executed on February 15, 2015, at a fixed annual interest rate of 8% plus a 1% annual oversight fee, interest and oversight fee paid quarterly with principal due on February 15, 2020. Loan was extended for one year (until February 15, 2021) under the same terms and conditions as the original loan. The loan was further extended in February 2021 to February 15, 2022 with $100,000 added to the loan principal as a penalty and the annual interest rate increased to 10%. Loan was further extended in June 2022 (until February 15, 2023). Loan was paid in full on February 28, 2023.	$	0	$	1,000,000
2019 Term Loan with Cherokee Financial, LLC: Note at an annual fixed interest rate of 18% paid quarterly in arrears and a balloon payment due on February 15, 2020. Loan was extended in February 2020, until February 15, 2021 with a penalty of $20,000 added to the loan principal and, extended again in February 2021 to February 15, 2022 with another penalty of $20,000 added to the loan principal. Loan was extended in June 2022 (until February 15, 2023). Loan was paid in full on February 28, 2023.		0		240,000
November 2020 Shareholder Note: Term loan at 7% interest with the first interest only payment being made on February 4, 2021 and the final interest and $50,000 principal due on November 4, 2023.		50,000		50,000
December 2021 Shareholder Notes: Term loan with one non-affiliated shareholder at 7% interest until the loan is paid in full. Loan was amended to address additional amounts provided under the loan.		125,000		225,000
September 2022 Healgen Loan & Promissory Note: Term Loan with Healgen at a fixed rate of 1% per month compounded monthly. Loan was collateralized by first security interest in receivables, inventory, and all other assets with the exception of assets already encumbered. The Healgen loan was paid in full on February 28, 2023 (the closing of the Asset Sale to Healgen) and all interest was waived by Healgen.		0		715,000
Total Debt	$	175,000	$	2,230,000
Current portion	$	175,000	$	2,230,000

	September 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. Loan was collateralized by first security interest in receivables, inventory and all other assets. Line of credit was paid off on September 29, 2022 with the proceeds of a loan with an unaffiliated third party.		0		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 Note: Term loan with one non-affiliated shareholder at 7% interest until the loan is paid in full. Loan was amended to address additional amounts (totaling $240,000) provided under the loan.		265,000		75,000
September 2022 Loan & Promissory Note: Term loan with an unaffiliated third party at a fixed rate of 1% per month, compounded monthly. Loan is collateralized by first security interest in receivables, inventory and all other assets. Principal and accrued interest due on March 28, 2023.		40,000		0
Total Debt	$	1,595,000	$	1,543,000
Current portion	$	1,595,000	$	1,543,000

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10LOAN ~~Table~~AND ofSECURITY ~~Contents~~AGREEMENT (“LSA”) WITH CHEROKEE FINANCIAL, LLC (“CHEROKEE”)

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

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

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

~~Cantone~~Under ~~Research~~the terms of the February 2021 Extension, ~~Inc.~~if ~~earned~~the aCompany 3didn’t pay off the principal on or before February 15, 2022, Cherokee could charge an 8% delinquent fee on the ~~extended~~ principal ofbalance ($~~900~~1,000 ~~(or $27~~,000) ~~for~~on ~~their~~February ~~services~~15, ~~related~~2022. toThe ~~securing~~Company ~~the~~was ~~February~~not ~~2021~~able ~~Extension~~to ~~with~~pay ~~Cherokee~~off ~~investors.~~the ~~The~~facility ~~fee~~on ~~paid~~February to15, ~~Cantone~~2022; ~~Research~~however, ~~Inc.~~on ~~was~~June ~~recorded~~14, as2022 aCherokee ~~bank~~agreed ~~fee~~that ~~and~~they iswould ~~included~~defer inthe ~~general~~principal ~~and~~amounts ~~administrative~~due ~~expenses~~under in the ~~nine~~Cherokee ~~months~~LSA ~~ended~~until ~~September~~February 3015, ~~2021.~~2023 ~~The~~and ~~Company~~that any applicable penalties would also ~~paid~~be ~~Cherokee’s~~deferred ~~legal~~as ~~fees~~long inas the ~~amount~~Company ofremained ~~$1,000~~current on the quarterly interest payments.

On ~~August~~February 1828, ~~2021~~2023, wewith ~~issued~~proceeds ~~625,000~~from ~~restricted~~the ~~shares~~Asset ofSale ~~common stock~~ to ~~Cherokee in lieu of paying the $25~~Healgen,~~000~~ ~~August 2021 interest payment in cash. The closing price of~~ the Company’s ~~common~~paid ~~shares~~all onamounts ~~the~~due ~~date~~to ofCherokee under the ~~payment~~LSA infor ~~lieu~~principal ofand ~~cash was $0~~interest.~~04.~~

~~Under~~The ~~the terms of the February 2021 Extension, if the~~ Company ~~didn’t~~recognized ~~pay off the principal on or before February 15, 2022, Cherokee could charge an 8% delinquent fee on the principal balance (~~$113,000~~,000)~~ onin ~~February~~interest ~~15,~~expense ~~2022.~~related ~~The Company was not able~~ to ~~pay off~~ the ~~facility on February 15, 2022; however, on June 14, 2022~~ Cherokee ~~agreed~~LSA ~~that~~in ~~they would defer~~ the ~~principal~~First ~~amounts~~Quarter ~~due under the Cherokee LSA until February 15,~~ 2023 and ~~that~~$25,000 ~~any~~in ~~applicable~~interest ~~penalties~~expense ~~would~~related ~~also~~to ~~be deferred as long as~~ the ~~Company~~Cherokee ~~remained~~LSA ~~current~~in on the ~~quarterly~~First ~~interest~~Quarter ~~payments. Furthermore, any penalties will also be waived if the principal amounts are paid on or prior to February 15, 2023.~~2022

11As ~~Table~~of March 31, 2023 and December 31, 2022, the balance of ~~Contents~~the Cherokee LSA was $0 and $1,000,000, respectively.

~~The~~10 ~~debt~~Table ~~with~~of ~~Cherokee is collateralized by a first security interest in real estate and machinery and equipment.~~Contents

In the event of default, including the Company’s inability to make any payments due under the Cherokee LSA (as amended), Cherokee has the right to increase the interest rate on the financing to 18%. As of the date of this report, the Company is current in its interest and administrative fee payments and the Company will continue to make interest and administrative fee payment quarterly on the Cherokee LSA until its maturity in February 2023. 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.

The Company recognized $75,000 in interest expense related to the Cherokee LSA in the nine months ended September 30, 2022 and $73,000 in interest expense related to the Cherokee LSA in the nine months ended September 30, 2021. The Company recognized $25,000 in interest expense related to the Cherokee LSA in the three months ended September 30, 2022and $25,000 in interest expense related to the Cherokee LSA in the three months ended September 30, 2021.

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

As of September 30, 2022 and December 31, 2021, the balance of the Cherokee LSA was $1,000,000.

LINE OF CREDIT WITH CRESTMARK BANK (“CRESTMARK”)

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

The Crestmark LOC was 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 was a receivables-based only line of credit and the maximum availability (“Maximum Amount”) under the Crestmark LOC was $1,000,000. The Crestmark LOC had a minimum loan balance requirement of $500,000. Throughout the three and nine months ended September 30, 2022 (and until the Company paid off the Crestmark LOC on September 29, 2022), the Company did not meet the minimum loan balance requirement. Under the LSA, Crestmark had the right to calculate interest on the minimum balance requirement rather than the actual balance on the Crestmark LOC (and they were exercising that right).

Interest on the Crestmark LOC was at a variable rate based on the Prime Rate plus 3% with a floor of 5.25%. As of September 29, 2022 (the payoff date), the interest only rate on the Crestmark LOC was 9.25%. As of September 29, 2022 (the payoff date), 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 was 16.38%.

The Company incurred $35,000 in interest expense in the nine months ended September 30, 2022 and $38,000 in interest expense related to the Crestmark LOC in the nine months ended September 30, 2021. The Company incurred $13,000 in interest expense in the three months ended September 30, 2022 and $13,000 in interest expense in the three months ended September 30, 2021. The Crestmark LOC was paid off on September 29, 2022 so, the Company had $0 in accrued interest expense related to the Crestmark LOC at September 30, 2022.

At September 30 2022, the balance on the Crestmark LOC was $0 and as of December 31, 2021, the balance on the Crestmark LOC was $178,000.

2019 TERM LOAN WITH CHEROKEE

In February 2019, the Company entered into an agreement with Cherokee under which Cherokee provided the Company with a loan in the amount of $200,000 (the “2019 Cherokee Term Loan”). The annual interest rate under the 2019 Cherokee Term Loan 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 this extension, 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.

12In ~~Table~~February 2021, the 2019 Cherokee Term Loan was further extended to February 15, 2022. Under the terms of ~~Contents~~this additional extension, the 2019 Cherokee Term Loan was increased to $240,000 to include a $20,000 penalty that was due as a result of the Company being unable to pay back the principal balance to Cherokee on February 15, 2021. In addition, if the Company didn’t pay off the principal on or before February 15, 2022, Cherokee could charge an 8% delinquent fee on the principal balance ($240,000) on February 15, 2022. The Company was not able to pay off the facility on February 15, 2022; however, on June 14, 2022 Cherokee agreed that they would defer the principal amounts due under the 2019 Cherokee Term Loan until February 15, 2023 and that any applicable penalties would also be deferred as long as the Company remained current on the quarterly interest payments.

InThe ~~February~~Company ~~2021,~~recognized ~~the 2019 Cherokee Term Loan was further extended to February 15~~$4,000 ~~2022.~~in ~~Under~~interest ~~the~~expense ~~terms~~in ~~of this additional extension,~~ the ~~2019~~First ~~Cherokee~~Quarter ~~Term~~2023 ~~Loan~~and ~~was increased to~~ $~~240~~11,000 toin ~~include~~interest aexpense ~~$20,000~~in ~~penalty~~the ~~that~~First ~~was~~Quarter ~~due~~2022. asThe ~~a result of the~~ Company ~~being~~paid ~~unable~~all toprincipal ~~pay~~and ~~back~~interest ~~the~~due ~~principal balance~~ to Cherokee on February 1528, ~~2021.~~2023 Inwith ~~addition,~~proceeds iffrom the ~~Company~~Asset ~~didn’t~~Sale ~~pay~~to ~~off the principal on or before February 15, 2022, Cherokee may charge an 8% delinquent fee on the principal balance ($240,000) on February 15, 2022~~Healgen. The ~~Company~~balance ~~was~~of ~~not able to pay off~~ the ~~facility on February 15, 2022; however, on June 14, 2022 Cherokee agreed that they would defer the principal amounts due under the~~ 2019 Cherokee Term Loan ~~until~~was ~~February~~$0 15at March 31, 2023 and ~~that any applicable penalties would also be deferred as long as the Company remained current on the quarterly interest payments. Furthermore~~$240,000 ~~any~~at ~~penalties~~December ~~will also be waived if the principal amounts are paid on or prior to February 15~~31, ~~2023~~2022.

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

The Company recognized $32,000 in interest expense related to the 2019 Cherokee Term Loan in both the nine months ended September 30, 2022 and the nine months ended September 30, 2021. The Company recognized $11,000 in interest expense related to the 2019 Cherokee Term Loan in both the three months ended September 30, 2022 and the three months ended September 30, 2021. The Company had $4,000 in accrued interest expense at September 30, 2022.

The balance on the 2019 Cherokee Term Loan was $240,000 at September 30, 2022 and at December 31, 2021.

NOVEMBER 2020 TERM LOAN

On November 4, 2020, the Company entered into a loan agreement with an individual shareholder in the principal amount of $50,000. There were no expenses related to the term loan and the interest rate is 7%. The first interest only payment was ~~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 was due on November 4, 2022. The last interest payment made to the shareholder was in November 2021 and was for the period of August 5, 2021 through November 4, 2021. The shareholder agreed to defer the quarterly interest payments due on the extended facility. The facility was further extended on November 4, 2022, under the same terms and conditions, for another 6 months~~. Therefore~~, ~~interest~~or ~~accruing on the November 2020 Term Loan from November 5, 2021~~ until May 4, 2023 ~~would be paid upon maturity of the loan along with the principal~~. Provided no further funds are loaned under the facility and no payments are made on the loan, including a complete payoff, the interest due on May 4, 2023 would be $5,000. At September 30, 2022, the interest due on this loan is $3,000.

The Company recognized less than $31,000 ofin interest expense related to the November 2020 Term Loan in the ~~nine~~First ~~months~~Quarter ~~ended~~2023 ~~September 30, 2022~~ and $21,000 ofin interest expense in the ~~nine~~First ~~months~~Quarter ~~ended September 30, 2021~~2022. The ~~Company~~balance ~~recognized~~on ~~$1,000 of interest expense related to~~ the November 2020 Term Loan inwas ~~both~~$50,000 ~~the~~at ~~three~~March ~~months~~31, ~~ended~~2023 ~~September~~and 30December 31, 2022. ~~and~~(See inNote ~~the~~M ~~three~~– ~~months~~Subsequent ~~ended~~Events ~~September~~for ~~30,~~more ~~2021.~~information on the November 2020 Term Loan)

~~The~~DECEMBER ~~Company~~2021 ~~had~~SHAREHOLDER ~~$3,000 in accrued interest expense related to this loan as of September 30, 2022.~~LOANS

~~The~~On ~~balance~~December on14, 2021, the ~~November~~Company ~~2020~~entered ~~Term~~into Loan ~~was~~Agreements with two non-affiliated shareholders resulting in gross (and net) proceeds of $5075,000 atas ~~September~~there 30were no costs associated with the loans. Interest on the loans was 7% per annum until principal and interest were due in full, or until June 15, 2022. The first interest payments were due March 15, 2022 and atpayment ~~December~~of 31final interest and principal was due June 15, ~~2021~~2022.

DECEMBER 2021 SHAREHOLDER 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. Interest on the loans is 7% per annum until principal and interest were both 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 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.

13On ~~Table~~April 6, 2022, the Company amended the loan with the other non-affiliated shareholder. This amendment (No.1; hereinafter referred to in this paragraph as “Amendment No. 1”) increased the principal due to the shareholder by $25,000; bringing their total principal to $75,000. No other terms of ~~Contents~~the loan were changed under Amendment No. 1.

On11 ~~April~~Table 6, 2022, we 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.~~Contents

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 this loan.~~

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

The Company incurred $84,000 in interest expense related to these loans in the ~~nine~~First ~~months~~Quarter ~~ended~~2023 ~~September 30, 2022~~ and $~~0 in interest expense in the nine months ended September 30~~1, ~~2021 (as the facilities were not in place until December 2021). The Company incurred $3,~~000 in interest expense related to these loans in the ~~three~~First ~~months~~Quarter ~~ended September 30,~~ 2022 ~~and $0 in interest expense in the three months ended September 30, 2021 (as the facilities were not in place until December 2021)~~.

The ~~Company had $1,000 in accrued interest expense at September 30, 2022. The~~ balance on these loans was $~~265~~125,000 aton ~~September~~March 3031, ~~2022~~2023 and $75225,000 at December 31, ~~2021~~2022. (See Note IM – Subsequent ~~Event~~Events for more information ~~regarding~~on the ~~balance~~December of2021 ~~the~~Shareholder ~~loan.~~Loans)

SEPTEMBER 2022 HEALGEN LOAN & PROMISSORY NOTE

On September 28, 2022, the Company entered into a Loan and Promissory with anHealgen ~~unaffiliated~~Scientific ~~third~~Limited ~~party~~Liability Company (the “~~September~~Healgen ~~2022~~ 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 ~~its~~the Crestmark Line of Credit ~~(See~~and ~~Note~~the Ebalance –was ~~Line~~used offor ~~Credit~~working ~~and Debt)~~capital. The ~~September~~Healgen ~~2022~~ Loan iswas collateralized by a first security interest in the Company’s receivables, inventory, and all other assets with the exception of those assets already encumbered. ~~Principal~~The ~~and~~first ~~accrued~~payment ~~interest~~under isthe Healgen Loan was due on ~~March~~January 28, 2023 and was in the amount of $140,000.

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

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

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

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

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

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

OTHER DEBT INFORMATION

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

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

On ~~April~~June 2229, ~~2020~~2015, the Company entered into a ~~Promissory~~Loan ~~Note~~and Security Agreement (“~~PPP Note~~LSA”) ~~for $332,000~~ with Crestmark ~~Bank,~~related ~~pursuant~~ to ~~the~~a ~~U.S.~~revolving ~~Small~~line ~~Business~~of ~~Administration~~credit (the “~~SBA~~Crestmark LOC”). ~~Paycheck~~The ~~Protection~~Crestmark ~~Program~~LOC ~~under~~was ~~Title~~used Ifor ofworking ~~the~~capital ~~Coronavirus~~and ~~Aid,~~general ~~Relief,~~corporate ~~and~~purposes. ~~Economic~~Upon ~~Security~~completion ~~(“CARES”)~~of ~~Act~~the ~~passed~~initial by5 ~~Congress~~year ~~and~~term, ~~signed~~the ~~into~~Crestmark ~~law~~LOC onautomatically ~~March~~renewed ~~27,~~for ~~2020.~~additional ~~The~~one ~~PPP~~(1) ~~Note~~year ~~was~~terms ~~unsecured,~~unless ~~with~~notice anof ~~interest~~termination ~~rate~~from ofthe ~~1.00%~~Company ~~per~~was ~~annum,~~received ~~with~~by ~~principal~~Crestmark ~~and~~not ~~interest~~less ~~payments~~than ~~deferred~~sixty ~~for~~(60) ~~the~~days ~~first~~prior ~~six~~to ~~months,~~the ~~and~~end ~~maturity~~of inthe ~~two~~renewal ~~years~~term. On ~~June~~September 1529, ~~2021~~2022, the Company ~~applied~~made ~~for~~a ~~forgiveness~~payment ofto ~~the~~Crestmark ~~PPP loan~~ in the amount of $~~332~~34,000 ~~under~~which ~~PPP~~paid ~~guidelines.~~off ~~Our forgiveness application was reviewed by~~ the ~~SBA~~balance ~~and~~ on ~~August 3, 2021,~~ the ~~SBA remitted payment to~~ Crestmark ~~Bank for the balance of the PPP Loan principal and all interest due on the PPP Loan~~LOC.

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

NOTE H – Employee Retention Credit

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

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

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

Note I – Asset Sale to Healgen

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

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

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

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

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

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

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

NOTE J – Stock Options and Warrants

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

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

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

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The Company recognized $2,000 in interest expense in the nine months ended September 30, 2021 and $1,000 in interest expense in the three months ended September 30, 2021.

	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

~~NOTE~~The FCompany –recognized ~~Employee~~$0 ~~Retention~~in ~~Credit~~share based payment expense in the First Quarter 2023 and the First Quarter 2022. At March 31, 2023, there was $0 of unrecognized share based payment expense related to stock options.

~~The~~NOTE ~~employee~~K ~~retention~~– ~~credit~~Changes ~~(“ERC”),~~in asStockholders’ originally enacted on March 27, 2020 by the CARES Act, is 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 claims through December 31, 2021 by eligible employers who retained employees during the Covid-19 pandemic. However, on November 5, 2021, the House of Representatives passed the Infrastructure Investment and Jobs Act (“Infrastructure Bill”) under which the ERC would terminate as of September 20, 2021 instead of December 31, 2021 and, President Biden signed the bill on November 15, 2021.Deficit

The maximum qualified wages for each employee under the current ERC is $10,000 per quarter. Also, because the Company has 100 or fewer full-time employees, health plan expenses borne by the Company can 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. The Company has had a number of discussions with the IRS and has been given a number of time frames in which the refund for the first quarter of 2021 could be expected. However, the Company has not yet received the refund. Last contact with the IRS was in mid-September 2022 and the Company was informed at that time that the filing was still being processed with no adjustments. The Company’s remaining expected refunds; totaling $202,000, is included on the Condensed Balance Sheets under current assets, as well as on the Company’s Condensed Statements of Operations under other income.

Laws and regulations concerning government programs, including the Employee Retention Credit are complex and subject to varying interpretations. Claims made under the CARES Act may also be subject to retroactive audit and review. There can be no assurance that regulatory authorities will not challenge the Company’s claim to the ERC, and it is not possible to determine the impact (if any) this would have upon the Company.

NOTE G – Stock Options and Warrants

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 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.

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During the three months ended September 30, 2022 and the three months ended September 30, 2021, the Company issued 0 options to purchase shares of common stock.

Stock option activity for the nine months ended September 30, 2022 and the nine months ended September 30, 2021 is summarized as follows (the figures contained within the tables below have been rounded to the nearest thousand):

	Nine months ended September 30, 2022							Nine months ended September 30, 2021
	Shares			Weighted Average Exercise Price		Aggregate Intrinsic Value as of September 30, 2022		Shares			Weighted Average Exercise Price		Aggregate Intrinsic Value as of September 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		(201,000	)	$	0.18				(50,000	)	$	0.13
Options outstanding at end of quarter		1,736,000		$	0.12	$	0		1,937,000		$	0.13	$	0
Options exercisable at end of quarter		1,736,000		$	0.12				1,937,000		$	0.13

The Company recognized $0 in share based payment expense in the nine months ended September 30, 2022 and in the nine months ended September 30, 2021. The Company recognized $0 in share based payment expense in the three months ended September 30, 2022 and in the three months ended September 30, 2021. At September 30, 2022, there was $0 of unrecognized share based payment expense related to stock options.

Warrants

There was no warrant activity in the three or nine months ended September 30, 2022 or September 30, 2021.

NOTE H – Changes in Stockholders’ Deficit

LANDMARK CONSULTING AGREEMENT

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

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

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

~~Upon~~Apart ~~invocation~~from of the ~~Breakup~~initial ~~Fee~~500,000 orrestricted ~~payment~~common ~~of the Success Fee~~shares, ~~the~~no ~~Company~~additional ~~will~~stock ~~also~~was ~~issue~~issued anto ~~additional~~Landmark ~~250,000~~and ~~restricted~~no ~~shares~~further ofamounts ~~the~~were ~~Company’s~~paid ~~common~~to ~~stock~~Landmark.

Note L- Income Taxes

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

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

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

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

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

	March 31, 2023			December 31, 2022
					13,
Inventory allowance	$	0		$	61,000
Allowance for doubtful accounts		1,000			1,000
Stock based compensation		138,000			149,000
Deferred wages payable		30,000			21,000
Depreciation – Property, Plant & Equipment		0			(19,000	)
Research and development credits		26,000			24,000
Net operating loss carry-forward		2,482,000			2,972,000
Total gross deferred income tax assets		2,677,000			3,209,000
Less deferred income tax assets valuation allowance		(2,677,000	)		(3,209,000	)
Net deferred income tax assets	$	0			0

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

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

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

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

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

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InNote ~~the~~M ~~event~~– ~~that~~Subsequent the Company consummates 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 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.Events

AsERC ~~of September 30, 2022 and as of the date of this report, no additional shares or warrants have been issued as the Breakup Fee has not been invoked nor has a Success Fee been required.~~ Refund

~~LINCOLN~~The ~~PARK~~Company ~~EQUITY~~has ~~LINE~~been OFexpecting ~~CREDIT~~an –ERC ~~DECEMBER~~refund ~~2020~~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.

OnNovember ~~December 9,~~ 2020, ~~the~~Term 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). A Form S-1 Registration Statement was declared effective by the U.S. Securities and Exchange Commission (“SEC”) on January 11, 2021. Under the terms of the Lincoln Park facility, which have been previously disclosed in our periodic reports filed with the SEC, in the nine months ended September 30, 2021, the Company sold 500,000 shares of common stock that represented the balance of an initial purchase and 5,800,000 shares of common stock to Lincoln Park as Regular Purchases. The Company received proceeds of $632,000 from these purchases. The Company did not sell any shares of common stock to Lincoln Park in the nine months ended September 30, 2022 as the closing price of the Company’s shares of common stock did not exceed $0.05 (which is a requirement under the terms of the facility). In fact, the last sale to Lincoln Park was in October 2021.Loan

~~Note~~Upon Ireceipt –of ~~Subsequent~~the ~~Events~~payment from the IRS, the Company paid the principal balance due ($50,000) on this shareholder loan.

~~OCTOBER~~December ~~2022~~2021 ~~LOAN~~Shareholder ~~AND PROMISSORY NOTE~~Loan

OnUpon ~~October~~receipt 3,of ~~2022, we entered into a Loan and Promissory Note (~~the ~~“October~~payment ~~2022~~from ~~Loan) with~~ the ~~same~~IRS, ~~unaffiliated third party (~~the ~~“Holder”)~~Company ~~discussed~~made ina ~~the~~payment ~~September 2022 Loan and Promissory Note (found~~ in ~~Note E). The total principal under~~ the ~~October~~amount ~~2022~~of ~~Loan is~~ $~~400~~25,000 ~~and~~on ~~includes~~this ~~the~~shareholder ~~$40,000 that was extended under the September 2022 Loan; thereby cancelling the September 2022 Loan~~loan. ~~The~~As ~~October 2022 Loan is at a fixed rate~~ of 1%the ~~per~~date ~~month, compounded monthly. The October 2022 Loan is payable in three equal monthly installments~~ of ~~$140,132.50~~this ~~with the first payment being due on January 28~~report, ~~2023 and~~ the ~~final~~balance ~~payment being due~~ on ~~March 28, 2023 (~~the ~~maturity~~December ~~date~~2021 ofShareholder ~~the facility). The October 2022~~ Loan is ~~collateralized by a first security interest in the Company’s receivables~~$175, ~~inventory and all other assets~~000. If the Holder does not receive any payment when due, we would need to pay a late charge equaling 1% of the overdue amount. The principal may be paid prior to maturity without any premium or penalty. Our CEO Melissa Waterhouse (“Waterhouse”) also provided a Validity Guarantee in connection with the October 2022 Loan. Under the Validity Guarantee, Waterhouse provides representations and warranties with respect to the validity of our financials. Waterhouse did not receive any compensation in connection with providing the required Validity Guarantee.

~~DECEMBER~~Current ~~2021~~Salary ~~SHAREHOLDER~~owed ~~LOAN~~to Melissa Waterhouse

OnUpon ~~October~~receipt 4,of ~~2022~~the payment from the IRS, wethe ~~paid~~Company made a payment in the amount of $4032,000 to ~~the~~Melissa ~~shareholder~~Waterhouse to pay ~~off~~current asalary ~~short-term~~owed. ~~loan~~As ~~provided~~of to the ~~Company~~date onof ~~September~~this 28report, ~~2022.~~the ~~With~~amount ~~this~~due ~~payment,~~to ~~the~~Melissa ~~loan~~Waterhouse ~~balance~~for ~~under~~deferred ~~the~~compensation ~~December~~is ~~2021~~$92,000. ~~Shareholder~~Ms. ~~Loan~~Waterhouse is also owed $~~225~~12,000 for consulting services from March 2023 through May 2023.

EXTENSION OF THE NJ FACILITY LEASE

On October 27, 2022, we extended the lease of our NJ facility for an additional two months after the term of our current lease (which expires on December 31, 2022), or until February 28, 2023. In connection with the extension, we were required to pay $21,000 to our landlord which, is rent in advance for the months of November 2022 through February 2023 at a higher rate as consideration for the short-term extension.

NOVEMBER 2020 TERM LOAN

On November 4, 2022, the November 2020 Term Loan was further extended under the same terms and conditions for another 6 months, or until May 4, 2023.

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Note J – Income Taxes

The Company follows ASC 740 “Income Taxes” (“ASC 740”) which prescribes the asset and liability method whereby deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities, and are measured using the enacted laws and tax rates that will be in effect when the differences are expected to reverse. The measurement of 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 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.

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

	Quarter EndedSeptember 30, 2022			Quarter EndedSeptember 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		%)

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

	September 30, 2022			December 31, 2021
Inventory capitalization	$	0		$	8,000
Inventory allowance		66,000			72,000
Allowance for doubtful accounts		1,000			1,000
Accrued compensation		18,000			18,000
Stock based compensation		149,000			160,000
Deferred wages payable		19,000			21,000
Depreciation – Property, Plant & Equipment		(19,000	)		(24,000	)
Research and development credits		24,000			24,000
Net operating loss carry-forwards		2,916,000			2,631,000
Total deferred income tax assets, net		3,174,000			2,911,000
Less: valuation allowance		(3,174,000			(2,911,000	)
Net deferred income tax assets	$	0		$	0

The valuation allowance for deferred income tax assets was $3,174,000 as of September 30, 2022 and $2,911,000 as of December 31, 2021. The net change in the deferred income tax assets valuation allowance was $263,000 for the nine months ended September 30, 2022. The Company believes that it is more likely than not that the deferred tax assets will not be realized.

As of September 30, 2022, 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 September 30, 2022, the Company had Federal and state net operating loss carry-forwards for income tax purposes of approximately $11,214,000 and research and development credits of $24,000. The Company’s net operating loss carry-forwards began to expire in 2022 and continue to expire through 2037. Net operating losses incurred from 2018 to date have no expiration date. 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.

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

General

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

Overview~~/Plan of Operations~~

~~Sales~~Throughout ofthe ~~drug~~last ~~tests~~several ~~continue~~years, toour beproducts 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.

InOther ~~addition~~efforts to ~~the~~offset ~~marketing~~declines ofin ~~drug~~our ~~tests~~manufactured product sales involved selling various diagnostic product lines, weincluding ~~are~~but ~~continuing~~not limited to, ~~market~~ various Covid-19 rapid tests. ~~All~~In ofaddition to increased costs, materials used in the ~~Covid-19~~manufacture ~~tests~~of weour ~~are~~drug ~~offering~~test products are ~~being~~the ~~marketed~~same inmaterials ~~accordance~~used ~~with~~in the ~~March~~manufacture ~~2020~~of ~~Emergency~~lateral ~~Use~~flow ~~Authorization~~Covid-19 ~~(“EUA”)~~tests ~~policy~~as ~~set~~well ~~forth~~as bylateral ~~the~~flow ~~United~~tests ~~States~~for ~~Food~~Influenza and ~~Drug~~RSV, ~~Administration~~both ~~(FDA)~~of ~~and~~which surged in ~~accordance~~the ~~with~~latter ~~the~~part ~~individual~~of ~~EUAs~~Fiscal ~~issued~~2022. ~~for~~This ~~the~~increased ~~products.~~need Wefor ~~are~~the ~~currently~~same ~~offering~~materials ahas ~~number~~resulted ofin ~~different~~supply ~~rapid~~chain ~~antigen~~delays; ~~tests~~some ~~and~~of ~~rapid~~which ~~antibody~~negatively ~~tests~~impacted ~~that~~our ~~can~~customer berelationships. ~~used~~One inof ~~various~~those ~~different~~customers ~~settings,~~was ~~including~~our ~~home~~largest ~~use;~~customer ~~depending~~which onseverely ~~their~~negatively ~~specific~~impacted ~~EUA~~our ~~issuance~~sales.

In18 ~~addition~~Table ~~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 and this has resulted in supply chain delays; some of which have negatively impacted our customer relationships.Contents

WeGross ~~are~~margin ~~still~~has ~~not~~continually ~~marketing~~declined ~~our~~over ~~oral~~the ~~fluid~~last ~~drug~~several ~~test~~years ~~(OralStat®)~~due into the ~~employment~~increased ~~and~~costs ~~insurance~~of ~~markets~~manufacturing in the United States ~~(under~~and athe ~~limited~~fact ~~exemption~~that ~~set~~overhead ~~forth~~costs byassociated ~~the~~with ~~FDA)~~both of our facilities could not be decreased any further. WeAs ~~remain~~sales ~~hopeful~~continued ~~that~~to wedecline, ~~can~~these ~~effectively~~costs ~~market~~cannot ~~our~~be ~~OralStat~~adjusted indownward, ~~the~~thereby ~~United~~creating ~~States~~greater ~~markets~~manufacturing ~~given~~inefficiencies. ~~its~~Manufacturing ~~superior~~inefficiencies ~~sensitivity~~continued ~~and~~to ~~accuracy~~increase despite our efforts to mitigate them. ~~Initially~~Efforts wewere ~~may~~also ~~re-introduce~~made ~~the~~to ~~product~~control operational expenses to ensure they remained in ~~markets~~line ~~outside~~with ~~the~~sales, ~~United~~however, ~~States~~as ~~via~~a ~~distribution~~reporting ~~relationships~~public company; there is a certain level of expenses that much be maintained.

InFrom ~~2019~~August 2013 until June 2020 we ~~expanded~~maintained ~~our~~a ~~contract~~salary ~~manufacturing~~deferral ~~operations~~program ~~with~~for ~~two~~our ~~new~~sole ~~customers.~~executive ~~Unfortunately~~officer, ~~the~~our ~~Covid-19~~Chief ~~pandemic~~Executive ~~halted~~Officer/Principal ~~sales~~Financial toOfficer ~~these~~Melissa ~~customers~~Waterhouse. ~~throughout~~The ~~2020~~salary ~~and~~deferral ~~into~~program ~~2021~~was ~~but,~~initiated by Ms. Waterhouse voluntarily in both August 2013 and April 2022. In the ~~year~~First ~~ended~~Quarter ~~December~~of 312022, ~~2021,~~ we ~~started~~did tomake ~~ship~~payments ~~orders~~ to ~~them~~Ms. ~~again~~Waterhouse astotaling ~~their~~$10,000. ~~business~~We ~~started~~stopped tomaking ~~return~~payments toon ~~normal~~Ms. WeWaterhouse’s ~~are~~deferred ~~hopeful~~compensation ~~that~~in ~~sales~~April to2022 ~~these~~when ~~customers~~Ms. ~~will~~Waterhouse ~~improve~~again asvoluntarily wedeferred ~~get~~her ~~further~~salary ~~outside~~by of20%. ~~the~~This ~~pandemic~~deferral remained in place through February 28, 2023.

20As ~~Table~~of March 31, 2023, we had deferred compensation owed to Ms. Waterhouse in the amount of ~~Contents~~$92,000 and $7,000 in payroll taxes that are due as payments are made to Ms. Waterhouse; for a total of $99,000 in deferred compensation owed to Ms. Waterhouse. In addition, as of March 31, 2023, we owed Ms. Waterhouse $32,000 in current salary that was not paid. (See Note M – Subsequent Events for updated information on the currently salary owed to Ms. Waterhouse)

InBeginning ~~our~~in ~~current~~April ~~fiscal~~2022, ~~year~~another ~~and~~member ~~beyond~~of senior management participated in the salary deferral program. As of March 31, 2023, we ~~are~~had ~~focusing~~deferred ~~our~~compensation ~~efforts~~owed onto ~~further~~this ~~penetration~~individual in the amount of ~~our~~$14,000 ~~markets~~and ~~with~~$1,000 ~~our~~in ~~current~~payroll ~~products~~taxes that weare ~~manufacture~~due ~~and~~as ~~distribute~~payments are made to this individual; for a total of $15,000 in deferred compensation. This individual ceased participating in the salary deferral program on December 9, 2022 and wereceived ~~are~~their ~~continually~~full ~~looking~~salary ~~into~~through ~~other~~February ~~products~~28, to2023 ~~offer~~(the ~~via~~closing ~~distribution~~date ~~relationships~~of the Asset Sale to Healgen).

~~Although~~Asset ~~the~~Sale ~~cost of manufacturing drug tests in the United States is proving~~ to be nearly cost prohibitive, we do believe there are opportunities to capitalize on our US-based lateral flow manufacturing capabilities; specifically for small to mid-size diagnostic firms that require high quality manufacturing; especially given the current challenges with getting imports into the United States.Healgen/Outlook

~~Gross~~On ~~margin~~February ~~has~~28, ~~been~~2023, ~~declining~~we ~~due~~completed the Asset Sale to ~~the~~Healgen ~~increased~~and ~~costs~~disposition of ~~manufacturing~~substantially inall of the ~~United~~Company’s ~~States~~assets. ~~and~~In connection with the ~~fact~~closing ~~that~~of ~~overhead~~the ~~costs~~Asset ~~associated~~Sale to Healgen, and in accordance with ~~both~~the terms of ~~our~~the ~~facilities~~Asset ~~cannot~~Purchase beAgreement, ~~decreased~~Healgen ~~any~~paid ~~further.~~an Asaggregate ~~sales~~purchase ~~continue~~price toof ~~decline~~$3 million (“Purchase Price”). $300,000 ~~and~~of ~~these~~the ~~costs~~Purchase ~~cannot~~Price beis ~~adjusted~~being ~~downward,~~held ~~greater~~back ~~manufacturing~~in ~~inefficiencies~~a ~~occur.~~retention ~~The~~fund ~~manufacturing~~to ~~inefficiencies~~cover ~~are~~potential ~~increasing~~indemnification ~~despite~~claims ~~our~~during ~~efforts~~the tosix ~~mitigate~~months ~~them~~following the close. WeNet ~~are~~proceeds ~~also~~in ~~taking~~the ~~steps~~amount toof ~~obtain~~$247,000 ~~materials~~were atreceived by the ~~best~~Company ~~available~~after ~~pricing.~~satisfaction ~~However,~~of 1) a loan with the Healgen in ~~many~~the ~~cases~~amount of $965,000, we2) ~~are~~the ~~purchasing~~Cherokee atLSA, ~~much~~(totaling ~~lower~~$1,031,000 ~~volumes~~for ~~than~~principal and interest through February 27, 2023), 3) the ~~larger~~2019 ~~diagnostic~~Cherokee ~~companies~~Term ~~and~~Loan ~~that~~(totaling ~~results~~$252,000 infor ~~higher~~principal ~~per~~and ~~piece~~interest ~~pricing.~~through WeFebruary ~~are~~27, ~~currently~~2023), ~~looking~~4) ~~into~~delinquent ~~possible~~property ~~production~~related ~~alternatives~~taxes in ~~attempts~~the toamount ~~address~~of ~~these~~$193,000 ~~fixed~~and ~~costs~~5) $12,000 for current property related taxes.

~~Operating~~The ~~expenses~~Board ~~declined~~believes inour ~~the~~status ~~nine~~as ~~months~~a ~~ended~~fully ~~September~~reporting ~~30,~~public ~~2022~~company ~~when~~is ~~compared~~an asset which may be sufficiently attractive to ~~the~~induce ~~nine~~others ~~months~~to ~~ended~~enter ~~September~~into ~~30,~~business ~~2021~~combinations. WeThe ~~continuously~~Board ~~make~~is ~~efforts~~exploring tostrategic ~~control~~transactions ~~operational~~which ~~expenses~~may toresult ~~ensure~~in ~~they~~entering ~~are~~into ina new line ~~with~~of ~~sales~~business ~~including,~~(subject ~~but~~to ~~not~~specific ~~limited~~competitive limitations under the Asset Sale to, ~~consolidating~~Healgen). ~~job~~The ~~responsibilities~~Board inbelieves ~~certain~~strategic ~~areas~~acquisitions ofusing the Company’s publicly traded stock as transaction consideration could enhance shareholder value. Nonetheless, ~~securing~~the ~~more~~Board ~~cost~~may ~~effective~~later ~~service~~determine ~~providers~~to dissolve the Company and ~~reduction~~distribute ofany ~~facility~~remaining ~~hours~~assets soto ~~they~~the ~~are~~Company’s ~~more~~shareholders inif ~~line~~the ~~with~~Company ~~production~~is ~~and~~unable ~~administrative~~to ~~needs~~make any strategic acquisitions or enter into any strategic transactions.

~~From~~Results ~~August 2013 until June 2020 and from April 2022 through the date~~ of ~~this~~operations ~~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~~First ~~2013~~Quarter ~~program~~2023 ~~until~~compared ~~his retirement in November 2019. After the member of senior management retired, we had~~ to ~~make payments on~~ the ~~deferred~~First ~~compensation~~Quarter (i.e. deferred salary) owed to this individual. In the nine months ended September 30, 2021, we made payments totaling $22,000 to this individual and his deferred compensation was paid in full in May 2021.2022

~~Once~~NET SALES:Net sales for the ~~deferred~~First ~~compensation~~Quarter ~~was~~2023 ~~paid~~decreased in53.3% ~~full~~when compared to ~~this~~net ~~individual~~sales in ~~May~~the ~~2021,~~First weQuarter ~~began~~2022 toprimarily ~~make~~as ~~payments~~a atresult ~~the~~in ~~same~~a ~~rate~~decline toin ~~Ms.~~sales ~~Waterhouse~~of ~~given~~drugs ~~the length~~ of ~~time~~abuse ~~the~~(“DOA”) ~~amount~~test ~~had~~that ~~been~~we ~~owed~~manufacture and ~~that~~the ~~Ms.~~fact ~~Waterhouse~~that ~~had~~our ~~not~~last ~~received~~product ~~any~~sale ~~payments~~was recorded on ~~her~~February ~~deferred~~28, ~~compensation since August 2017~~2023. WeThe ~~made~~decline ~~payments~~in ~~totaling~~DOA ~~$10,000~~sales tostems ~~Ms.~~almost ~~Waterhouse~~entirely infrom ~~the~~decreased ~~nine~~sales ~~months~~to ~~ended~~our ~~September~~largest ~~30,~~customer ~~2022~~who ~~and~~has ~~$20,000~~historically inbeen ~~payments~~a insignificant ~~the~~portion ~~nine~~of ~~months~~our ~~ended September 30, 2021~~revenues. WeThis ~~stopped~~customer ~~making~~had ~~payments~~two onsegments ~~Ms.~~of ~~Waterhouse’s~~their ~~deferred~~business ~~compensation~~for inwhich ~~April~~we ~~2022~~supplied ~~when Ms~~products. ~~Waterhouse~~They ~~again~~informed ~~voluntarily~~us ~~deferred~~in ~~her~~February ~~salary~~2022 bythat ~~20%.~~sales Asto one of ~~September~~those ~~30,~~segments ~~2022,~~(which we ~~had~~supplied ~~deferred~~exclusively) ~~compensation~~would ~~owed~~decrease toas ~~Ms.~~a ~~Waterhouse~~result ~~in the amount~~ of ~~$79,000~~their ~~and~~desire ~~$6,000~~to inhave ~~payroll~~multiple ~~taxes~~vendors ~~that~~supplying ~~are~~the ~~due~~segment. asThey ~~payments~~indicated ~~are~~this ~~made~~was to ~~Ms.~~ensure ~~Waterhouse;~~uninterrupted ~~for~~supply aas ~~total~~they ofhad ~~$85,000~~experienced inperiodic ~~deferred~~supply ~~compensation~~interruptions ~~owed~~with tous ~~Ms.~~in ~~Waterhouse.~~2021 In(as ~~addition,~~a asresult of ~~September~~the ~~30,~~supply ~~2022,~~chain issues we ~~owe~~experienced ~~Ms. Waterhouse $30,000~~ in ~~current~~2021 ~~salary~~and ~~that~~continued ~~was~~to ~~not~~experience ~~paid~~into 2022).

~~Beginning~~19 inTable ~~April 2022, another member~~ of senior management participated in the salary deferral program. As of September 30, 2022, we had deferred compensation owed to this individual in the amount of $9,000 and $1,000 in payroll taxes that are due as payments are made to this individual; for a total of $10,000 in deferred compensation.Contents

~~Our~~GROSS ~~continued~~PROFIT:Gross ~~existence~~profit isincreased ~~dependent upon several factors, including our ability~~ to: 45.1)% ~~raise~~of ~~revenue~~net ~~levels~~sales ~~even~~in ~~though~~ the ~~drug~~First ~~testing~~Quarter ~~market~~2023 ~~continues~~from to8% beof ~~infiltrated~~net bysales ~~product~~in ~~manufactured outside of~~ the ~~United~~First ~~States~~Quarter as2022. ~~well~~This asincrease ~~being~~in ~~impacted~~gross byprofit ~~supply~~stems ~~chain~~from ~~issues~~the ~~and~~timing ~~increased costs~~ of ~~material and labor 2) further penetrate~~ the ~~markets~~closing ~~(in and outside~~ of the ~~United~~Asset ~~States)~~Sale ~~for 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~~ to ~~generate~~Healgen ~~positive cash flows, 5) maintain our current credit facilities or refinance our current credit facilities if necessary,~~ and 6)the iffact ~~needed,~~that ~~obtain~~the ~~working~~bulk ~~capital by selling additional shares~~ of ~~our~~the ~~common~~sales ~~stock.~~in ~~Should~~ the ~~Company~~First ~~not~~Quarter be2023 ~~able~~were tohigher ~~continue~~margin tosales ~~achieve~~of ~~positive~~the ~~cash~~private ~~flows~~labeled ~~from~~RSV ~~operations~~product orwe ~~raise~~supplied ~~additional funding, it may be required~~ to ~~further~~an ~~reduce~~unaffiliated orthird ~~terminate operations~~party.

21OPERATING ~~Table~~EXPENSES: ofOperating ~~Contents~~expenses decreased in the First Quarter 2023 compared to the First Quarter 2022. Selling and Marketing and General and Administrative expenses decreased while Research and Development expenses increased. More specifically:

Results of operations for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021

NET SALES: Net sales for nine months ended September 30, 2022 decreased by 56.3%, when compared to net sales in the nine months ended September 30, 2021; primarily as a result in a decline in sales of drugs of abuse (“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 nine months ended September 30, 2022 with the nine months ended September 30, 2021. In addition to the decline in sales to this customer, international sales also declined; the majority of which is due to lower sales to one of our distributors along with a backorder at September 30, 2022.

Contract manufacturing sales also declined when comparing the two nine-month periods; primarily due to decreased sales of the malaria product we manufacture. This decrease was partially offset by increased sales of the RSV test we manufacture and private label to an unaffiliated third party, the private label Rapid TOX® product we manufacture and contract assembly work we performed on a limited basis in the nine months ended September 30, 2022.

Distribution sales increased in the nine months ended September 30, 2022 when compared to the nine months ended September 30, 2021. This increase stems from increased sales of the lower cost DOA tests that we sell via distribution which was primarily offset by decreased sales of rapid Covid-19 tests we have been distributing. We still believe that given the continued downward trend of pricing of Covid-19 tests and the fact that we are distributing these tests (which requires further markup); sales of Covid-19 tests will not have a significant impact on our sales going forward.

GROSS (LOSS) / PROFIT: Once again we recorded a gross (loss) in the nine months ended September 30, 2022 of $(53,000); this is compared to gross profit of $425,000 in the nine months ended September 30, 2021. Gross profit began to dramatically decline in the first quarter of 2022 and further declined in the second and third 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 cannot easily be decreased. Given the price sensitivity in our markets and the commoditized nature of drug testing products, 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 decreased 35.8% in the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021. Expenses in Selling and Marketing and General and Administrative expenses decreased and Research and Development expenses remained unchanged. More specifically:

22 Table of Contents

Research and development (“R&D”)

R&D expense ~~was~~increased ~~unchanged~~27.3%, when comparing the ~~nine~~First ~~months~~Quarter ~~ended~~2023 ~~September 30, 2022~~ with the ~~nine~~First ~~months~~Quarter ~~ended September 30, 2021~~2022. ~~Although~~FDA ~~salary~~compliance ~~expense~~costs ~~decreased slightly due to~~ (the ~~timing~~cost of ~~pay~~facility ~~periods,~~registrations ~~other expenses did increase slightly. More specifically, expenses related to utilities~~ and ~~FDA~~their ~~compliance~~timing) ~~increased~~were ~~slightly.~~the ~~All~~primary ~~other~~cause ~~expenses~~of ~~remained relatively consistent when comparing~~ the ~~two nine-month periods~~increase. InThe ~~the~~increase ~~nine~~was ~~months~~partially ~~ended~~offset ~~September~~by ~~30,~~decreased ~~2022,~~salary ~~our~~expense ~~R&D~~since ~~department~~payroll ~~continued~~ceased toon ~~focus~~February ~~their~~28, ~~efforts~~2023; onclosing ~~the enhancement~~ of ~~our~~the ~~current~~Asset ~~products~~Sale ~~and validations related~~ to ~~drug testing product components~~Healgen.

Selling and marketing

Selling and marketing expense in the ~~nine~~First ~~months~~Quarter ~~ended~~2023 ~~September 30, 2022~~ decreased 5352.24% when compared to the ~~nine~~First ~~months~~Quarter ~~ended September 30, 2021~~2022. Reductions in sales salary expense and benefits (due to the ~~termination~~closing of ~~personnel~~the ~~for~~Asset ~~performance~~Sale ~~reasons~~to asHealgen ~~well~~on asFebruary ~~an employee departure)~~28, ~~commissions (due to decreased sales~~2023), ~~auto~~offset ~~expense,~~by ~~reductions~~increased in costs associated with shipping ~~and promotional expense (due to the nine months ended September 30, 2021 including fees paid to OTC Markets)~~ were the primary ~~reasons~~reason for the decline in expenses. ~~All other expenses remained relatively consistent when comparing the two nine-month periods.~~

In the nine months ended September 30, 2022, we continued selling and marketing efforts related to the drug tests we manufacture and 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 nine months ended September 30, 2022 with the nine months ended September 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 nine months ended September 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.

General and administrative (“G&A”)

G&A expense decreased 3419.23% in the ~~nine~~First ~~months~~Quarter ~~ended~~2023 ~~September~~compared ~~30,~~to ~~2022~~the ~~when~~First ~~compared~~Quarter to2022. G&A salary expense inand ~~the~~benefits ~~nine~~(related ~~months~~to ~~ended~~purchasing, ~~September 30~~warehouse, ~~2021.~~quality Aassurance ~~primary~~and ~~reason~~administrative ~~for~~personnel) ~~the~~decreased ~~decline~~as isa ~~that~~result of the ~~nine~~closing ~~months~~of ~~ended~~the ~~September~~Asset ~~30,~~Sale ~~2022~~to ~~did~~Healgen ~~not~~on ~~include~~February ~~any~~28, 2023. Consulting fees ~~associated~~also ~~with~~decreased ~~our~~when ~~loans~~comparing ~~with~~the ~~Cherokee~~two ~~while~~periods. ~~the~~These ~~nine~~declines ~~months~~were ~~ended~~partially ~~September~~offset ~~30,~~by ~~2021~~increased ~~included~~costs aassociated ~~total~~with ofthe ~~$148,000~~Asset inSale to Healgen (legal fees, ~~incurred~~taxes, inand ~~connection~~insurance). ~~with~~There awas ~~penalty~~no expense related to ~~extension~~share ofbased payments in either the ~~Cherokee~~First ~~loans~~Quarter in2023 ~~February~~or ~~2021~~the First Quarter 2022.

InOther ~~addition,~~income ~~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 and the reduced work week implemented in April 2022), accounting fees declined (due to lower costs from our new accounting firm), expenses associated with intellectual property declined (due to less international patent maintenance fees paid and less legal fees incurred), and payroll service fees declined (due to change in vendor) along with other smaller declines in other expenses. These declines were partially offset by increased consulting fees (due to the execution of the Financial Advisory Agreement with Landmark Pegasus, Inc. in the nine months ended September 30, 2022), increased utility expenses and repairs and maintenance expense~~. There was no expense related to share based payments in either the nine months ended September 30, 2022 or the nine months ended September 30, 2021.~~):

~~OTHER~~Other ~~INCOME~~income ~~AND~~in ~~EXPENSE:~~the ~~Other~~First ~~expense~~Quarter 2023 consisted of other income of $~~151~~3,035,000 in(which is the ~~nine~~$3,000,000 ~~months~~purchase ~~ended~~price ~~September~~paid 30for the Company’s assets and $35,000 ~~2022~~in ~~consisted~~amounts ofreimbursed ~~interest~~by ~~expense~~Healgen ~~associated~~in connection with ~~our~~the ~~credit~~Asset ~~facilities~~Sale; ~~(our~~pro-rated ~~line~~real ofestate ~~credit,~~taxes ~~our~~and ~~two~~payment ~~loans~~of ~~with~~50% ~~Cherokee~~of ~~Financial,~~the ~~LLC~~payout ~~and~~related ~~shareholder~~to ~~loans)~~employee ~~and~~vacation ~~interest~~expense). This income ofwas ~~$2,000~~offset ~~(most~~by ofa ~~which~~loss ison ~~interest~~the ~~received~~sale inof ~~connection~~assets ~~with~~($921,000) ~~the~~and ~~ERC~~interest ~~refund~~expense weassociated ~~received~~with inour ~~June 2022)~~debt.

Other ~~income~~expense ~~of $821,000~~ in the ~~nine~~First ~~months~~Quarter ~~ended~~2022 ~~September 30, 2021~~ consisted of income related to the forgiveness of our PPP loan in the amount of $335,000, 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, $581,000 in income from the Employee Retention Credit recognized in the nine months ended September 30, 2021 (which is $44,000 in credits taken in Q3 2021 and $537,000 in refunds filed for credits in the first three quarters of 2021). This income was offset by interest expense associated with our credit facilities (our (now former) line of credit with Crestmark Bank, our ~~two~~ loans with Cherokee Financial, LLC and aour ~~shareholder~~loans ~~loan~~with two shareholders).

23Liquidity ~~Table~~and Capital Resources as of ~~Contents~~March 31, 2023

~~Results~~Until ofthe ~~operations~~closing ~~for~~of the ~~three~~Asset ~~months~~Sale ~~ended~~to ~~September~~Healgen 30on February 28, ~~2022~~2023, ~~compared~~our cash requirements depend on numerous factors, including but not limited to manufacturing costs (such as labor and overhead costs, raw materials, equipment, etc.), selling and marketing initiatives, product development activities, regulatory costs, legal costs, and effective management of inventory levels and production levels in response to sales history and forecasts (if available). Since the ~~three~~closing ~~months~~of ~~ended~~the ~~September~~Asset 30Sale to Healgen, ~~2021~~our cash requirements depend on the costs we will need to incur to maintain our status as a fully reporting public entity and the time it will take to either bring another business into the public shell or dissolve the Company and distribute any remaining assets to the shareholders; along with management of amounts due to vendors and receipt of additional customer receivables and receipt of the retention fund.

~~NET~~The ~~SALES:~~following ~~Net~~transactions ~~sales~~materially ~~for~~impacted ~~the~~our ~~three~~liquidity ~~months~~and ~~ended~~cash ~~September~~flow ~~30,~~in ~~2022~~the ~~decreased~~First ~~66%,~~Quarter ~~when~~2023 ~~compared~~and/or tothe ~~net~~First ~~sales~~Quarter in2022 ~~the~~or ~~three~~are ~~months~~expected ~~ended~~to ~~September~~have ~~30,~~an ~~2021~~impact ~~primarily~~on asour acash ~~result~~flow in athe ~~decline~~year inending ~~sales~~December of31, ~~DOA tests that we manufacture.~~2023:

~~The~~Asset ~~decline~~Sale ~~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 September 30, 2022 with the three months ended September 30, 2021. In addition to the decline in sales to this customer, international sales also declined; most of which is due to a backorder at September 30, 2022.Healgen

~~Contract~~20 ~~manufacturing~~Table ~~sales also decreased when comparing the three-month periods. This decrease stems from decreased sales~~ of the malaria product we manufacture; partially offset by increased sales of the private label Rapid TOX® product we manufacture and contract assembly work we performed on a limited basis in the three months ended September 30, 2022.Contents

~~Distribution~~On ~~sales~~December ~~also~~19, ~~decreased~~2022, ~~when~~we ~~comparing~~entered ~~the~~into ~~three~~an ~~months~~Asset ~~ended~~Purchase ~~September~~Agreement 30(“APA”) with Healgen, ~~2022~~pursuant to which the ~~three~~Company ~~months~~agreed, ~~ended~~subject ~~September~~to ~~30,~~the ~~2021.~~approval ~~This~~of ~~decrease~~its ~~stems~~shareholders, ~~primarily~~to ~~from~~sell ~~lower~~substantially ~~sales~~all of ~~rapid~~our ~~Covid-19~~operating ~~tests~~assets we(excluding ~~have~~cash, ~~been~~accounts ~~distributing;~~receivables ~~partially~~arising ~~offset~~prior byto ~~increased~~the ~~sales~~closing ofdate, ~~the~~and ~~lower~~certain ~~cost~~other ~~DOA~~assets). ~~tests~~On ~~were~~February ~~are~~15, ~~distributing.~~2023, Inwe held the ~~three~~2023 ~~months~~Special ~~ended~~Meeting ~~September~~of 30Shareholders (the “Special Meeting”) at our corporate offices in Kinderhook, ~~2022~~New York, weat ~~did~~which ~~not~~a ~~have~~quorum ~~sales~~(27,863,899 shares of ~~Covid-19~~common ~~tests.~~stock ~~Market~~of ~~pricing~~the 47,098,476 shares of ~~Covid-19~~common ~~tests~~stock ~~has~~outstanding) ~~continued~~was topresent ~~decline~~in ~~and~~person ~~demand~~or ~~has~~represented ~~decreased~~by ~~somewhat~~proxy. ~~Going~~Approval ~~forward,~~of ~~this~~the ~~will~~Asset ~~make~~Sale itto ~~difficult~~Healgen ~~for~~required the ~~Company~~affirmative tovote ~~sell~~of ~~these~~the ~~tests~~holders ~~given~~of wea ~~are~~majority ~~only~~of ~~distributing~~the ~~them~~outstanding ~~(which~~shares ~~requires~~of ~~further~~the ~~mark~~Company’s upcommon tostock ~~customers~~(par value $0.01), ~~therefore~~and 26,381,832, weor ~~still~~54.84% ~~believe~~of ~~that~~the ~~sales~~total ofoutstanding ~~Covid-19~~shares ~~tests~~of ~~will~~the ~~not~~Company, ~~have~~voted ain ~~significant~~favor ~~impact~~of onthe ~~our~~Asset ~~sales~~Sale ~~going~~to ~~forward~~Healgen.

~~GROSS~~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 (~~LOSS~~“Purchase Price”). /$300,000 ~~PROFIT:~~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.

~~Once~~Healgen ~~again~~Loan wePromissory recorded a gross (loss) in the three months ended September 30, 2022 of $(9,000) ; this is compared to gross profit of $185,000 in the three months ended September 30, 2021. Gross profit began to dramatically decline in the first quarter of 2022 and further declined in the second and third 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.Note

~~There~~On ~~was~~September ~~some~~28, ~~improvement~~2022, inwe ~~the~~entered ~~gross~~into ~~loss~~a ~~between~~Loan ~~the~~Promissory ~~second~~Note ~~and~~with ~~third~~Healgen ~~quarter~~(the of“Healgen ~~2022~~Loan”) ~~(from~~and areceived gross/net ~~loss~~proceeds of $~~(45~~400,000). inWe ~~the~~utilized ~~three~~$34,000 ~~months~~of ~~ended~~the ~~June~~loan ~~30,~~proceeds ~~2022~~ to apay ~~gross~~off ~~loss~~the ofCrestmark ~~$(9,000)~~Line inof ~~the~~Credit. ~~three~~On ~~months~~November ~~ended September 30~~15, 2022), as we ~~continue~~amended tothe ~~take~~Healgen ~~steps~~Loan to ~~reduce~~address ~~manufacturing~~an ~~costs.~~additional ~~These manufacturing costs include~~$300,000 ~~but~~in ~~are~~principal ~~not~~received ~~limited~~under ~~to,~~the ~~costs~~Healgen ~~associated~~Loan; ~~with~~bringing ~~labor.~~the ~~However,~~total ~~fixed~~principal ~~costs~~due ~~cannot~~under ~~easily be decreased. Given~~ the ~~price~~Healgen ~~sensitivity~~Loan into ~~our~~$700,000. ~~markets~~The ~~and~~Healgen ~~the~~Loan ~~commoditized~~was ~~nature~~further ofamended ~~drug~~on ~~testing~~December ~~products~~19, ~~customer~~2022 ~~pricing~~to isaddress ~~also~~an ~~challenging;~~additional ~~however~~$15,000 wein ~~did~~principal ~~implement~~received aunder ~~price~~the ~~increase~~Healgen toLoan; ~~non-contractual~~bringing ~~customers~~the intotal ~~July~~principal ~~2021~~due ~~however,~~under the ~~customer~~Healgen ~~previously~~Loan ~~discussed~~to ~~has~~$715,000. a(See ~~contracted~~Note ~~price~~E in– ~~place~~Line ~~that~~of isCredit ~~not~~and ~~as easily increased.~~Debt)

24The ~~Table~~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 ~~Contents~~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.

~~OPERATING~~The ~~EXPENSES:~~Healgen ~~Operating~~Loan ~~expenses~~was ~~decreased~~amended ~~35%~~again inon February 9, 2023 to increase the ~~three~~principal ~~months~~due ~~ended~~under ~~September~~the 30loan to $965,000. ~~2022~~Under ~~compared~~this tofourth amendment, the ~~three~~amount ~~months~~of ~~ended~~the ~~September~~first 30payment (due February 15, ~~2021.~~2023) ~~Selling~~was ~~and~~changed ~~Marketing~~to ~~and~~$337,000 ~~General~~with ~~and~~payments ~~Administrative~~of ~~expenses~~the ~~decreased~~same ~~while~~amount ~~R&D~~due ~~Expense~~on ~~nominally~~March ~~increased~~15, 2023 and April 15, 2023. ~~More~~No ~~specifically:~~other terms of the Healgen Loan were changed.

~~Research~~On ~~and~~February ~~development~~28, ~~(“R&D”)~~2023, with proceeds from the Asset Sale to Healgen, we made a payment in the amount of $965,000 to Healgen for all principal due under the Healgen Loan. Healgen waived all interest due under the Healgen Loan.

~~R&D~~ERC expense in the three months ended September 30, 2022 increased 4.8% when compared to the three months ended September 30, 2021. The actual increase was $1,000 and this was due to higher salary expense which, was due to timing of pay periods. All other expenses remained relatively consistent when comparing the two three-month periods.Refund

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

~~Selling~~Loans ~~and~~from ~~marketing~~CEO ~~expense~~Melissa in the three months ended September 30, 2022 decreased 67.1% when compared to the three months ended September 30, 2021. Reductions in sales salary expense and benefits (due to the termination of personnel for performance reasons as well as an employee departure), auto expense, and costs associated with shipping are the primary reasons for the decline. Other expenses remained relatively unchanged.Waterhouse

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

~~G&A~~In ~~expense decreased 29.1% in the three months ended September 30~~addition, ~~2022~~at ~~when~~March ~~compared to G&A expense in the three months ended September 30~~31, ~~2021. Decreased costs associated with general and administrative salaries and benefits (due to fewer employees and the reduced work week implemented in April 2022)~~2023, ~~quality~~we ~~assurance~~owed ~~salaries~~Ms. ~~(due~~Waterhouse ~~to retirement of an employee~~$32,000 ~~departure of another employee as well as a reduced work week implemented early~~ in ~~April~~current ~~2022),~~salary ~~and intellectual property~~ (~~due~~which tois ~~less~~13 ~~international~~weeks ~~patent~~of ~~maintenance~~her ~~fees~~non-deferred ~~paid and less legal fees incurred~~salary) ~~were partially offset by increased costs associated with increased legal fees~~. ~~There~~(see ~~was~~Note noM ~~expense~~– ~~related~~Subsequent toEvents ~~share~~for ~~based~~updated ~~payments~~information inon ~~either~~ the ~~three~~Waterhouse ~~months ended September 30, 2022 or the three months ended September 30, 2021.~~loans)

OTHER INCOME AND EXPENSE:

Other expense of $52,000 in the three months ended September 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. Other income of $867,000 in the three months ended September 30, 2021 consisted of income related to the forgiveness of our PPP loan in the amount of $335,000 and $581,000 in income from the Employee Retention Credit recognized in the three months ended September 30, 2021 (which is $44,000 in credits taken in Q3 2021 and $537,000 in refunds filed for credits in the first three quarters of 2021). This income was offset by interest expense associated with our credit facilities (our line of credit, our two loans with Cherokee Financial, LLC and a shareholder loan).

Liquidity and Capital Resources as of September 30, 2022

Our cash requirements depend on numerous factors, including but not limited to manufacturing costs (such as labor and overhead costs, raw materials, equipment, etc.), selling and marketing initiatives, product development activities, regulatory costs, legal costs, and effective management of inventory levels and production levels in response to sales history and forecasts (if available). We are examining growth opportunities including strategic alliances and contract manufacturing. Given our current and historical cash position, such activities would need to be funded from the issuance of additional equity or additional credit borrowings, subject to market and other conditions.

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

Employee Retention Credit (“ERC”)

As discussed in Note F to our financial statements, on June 2, 2022, we received a refund for the second quarter of 2021 in the amount of $199,000. This amount represented the $198,000 claimed as a refund and $1,000 in interest. We are still expecting to receive one more ERC refund in the amount of $202,000.

25 Table of Contents

Shareholder Loans

We currently have two shareholder loan facilities; the November 2020 Shareholder Loan and the December 2021 Shareholder Loan (See Note E – Line of Credit and Debt). In the nine months ended September 30, 2022, we received proceeds totaling $240,000 under the December 2021 Shareholder Loan and we made payments totaling $50,000 on the December 2021 Shareholder Loan.

September 2022 Loan and Promissory Note

On September 28, 2022, we entered into a Loan and Promissory with an unaffiliated third party (the “September 2022 Loan”) and received gross/net proceeds of $40,000. We utilized $34,000 of the loan proceeds to pay off the Crestmark Line of Credit (See Note E – Line of Credit and Debt).

Lincoln Park Equity Line

On December 9, 2020, we entered into a Purchase Agreement and a Registration Rights Agreement with Lincoln Park under which Lincoln Park agreed to purchase from the Company, from time to time, up to $10,250,000 of shares of our common stock, par value $0.01 per share, subject to certain limitations set forth in the Purchase Agreement, over a two year period. In the nine months ended September 30, 2022, we were not able to sell any shares of common stock to Lincoln Park due to the market price of our common shares (i.e. they are not closing at or above $0.05 per share and have not closed at that price since the latter part of the year ended December 31, 2021). In the nine months ended September 30, 2021, the Company sold 6,300,000 shares of common stock to Lincoln Park (including 500,000 shares required as an initial purchase under the Purchase Agreement) as Regular Purchases and received proceeds of $632,000.

Going Concern

Our financial statements for the ~~nine~~First ~~months~~Quarter ~~ended~~2023 ~~September 30, 2022~~ 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~~amounts ~~generated~~ from ~~future~~accounts ~~operations~~receivable, ERC ~~refund,~~refunds and ~~recent~~the ~~loans~~receipt ~~from~~of ~~shareholders~~the ~~and~~retention ~~other~~fund ~~third~~associated ~~parties~~with ~~will~~the Asset Sale to Healgen, may not be sufficient to fund operations through ~~November~~May ~~2023~~2024. At ~~September~~March 3031, ~~2022~~2023, we have Stockholders’ Deficit of $(2458,~~022,~~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.

Table of Contents

Debt

Our loan and security agreement and 2019 Term Note with Cherokee for $1,000,000 and $240,000, respectively, expired on February 15, 2022. On June 14, 2022, Cherokee agreed that they would defer the principal amounts due under the Cherokee LSA until February 15, 2023 and that any applicable penalties would also be deferred as long as ~~the~~we ~~Company~~remained ~~remains~~ current on the quarterly interest payments. ~~Furthermore,~~We ~~any~~used ~~penalties~~proceeds ~~will~~from ~~also~~the beAsset ~~waived~~Sale ifto ~~the~~Healgen ~~principal~~to ~~amounts~~pay ~~are~~off ~~paid~~the onCherokee orfacilities ~~prior~~on to February 1528, 2023.

WeThroughout domost ~~not~~of ~~expect cash from operations within~~ the ~~next~~year 12ended ~~months~~December to31, be2022, ~~sufficient~~we tohad ~~pay~~a ~~the~~line ~~amounts~~of ~~due under these~~ credit ~~facilities,~~with ~~which~~Crestmark ~~are~~Bank. ~~due~~On inSeptember ~~full on February 15~~29, ~~2023. Given this~~2022, weusing ~~will~~proceeds befrom ~~required to refinance~~ the ~~facilities~~Healgen ~~either~~Loan, ~~via~~we made a ~~new~~payment ~~debt~~to ~~facility~~Crestmark orBank ~~raising~~in ~~capital~~the ~~through~~amount ~~some~~of ~~other~~$34,000 ~~means.~~which ~~There~~paid isoff nothe ~~assurance~~balance ~~that such financing will be available or that we will be able to complete financing~~ on ~~satisfactory~~the ~~terms,~~Crestmark ifLOC. atThe ~~all~~payoff orof ~~that~~the weCrestmark ~~would~~Line beof ~~able~~Credit toresulted ~~raise~~in ~~capital~~lower ~~via~~interest ~~other means~~costs.

~~Throughout~~As ~~most~~ of ~~the~~March ~~nine months ended September 30~~31, ~~2022~~2023, we had ~~a line of credit with Crestmark Bank. The maximum availability on~~ the ~~line~~following of debt/credit was $1,000,000. However, because the amount available under the line of credit was 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 declined, we had reduced availability on our line of credit due to decreased accounts receivable balances. On September 29, 2022 we made a payment to Crestmark Bank in the amount of $34,000 which paid off the balance on the Crestmark LOC. The payoff of the Crestmark Line of Credit will result lower interest costs. Through the nine months ended September 30, 2022, we recognized $35,000 in interest expense related to the Crestmark Line of Credit and in the nine months ended September 30, 2021, we recognized $38,000 in interest expense.facilities:

26 Table of Contents

Facility	Debtor	Balance as of March 31, 2023		Due Date
Term Loan	Individual		50,000	May 4, 2023⁽¹⁾
Term Loan	Individual		125,000	NA⁽²⁾
Total Debt		$	175,000

If(1) ~~cash~~See ~~generated~~Note ~~from~~M ~~operations,~~– ~~cash~~Subsequent ~~received~~Events ~~from~~for aupdated ~~refund~~information ~~under~~on ~~the~~this ~~ERC program and~~ loan proceeds are not sufficient to satisfy our working capital and capital expenditure requirements, we will be required to seek additional credit facilities, sell additional equity securities, or delay capital expenditures which could have a material adverse effect on our businessbalance. ~~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 alternative strategies will be available.~~

As of September 30, 2022, we had the following debt/credit facilities:

Facility	Debtor	Balance as of September 30, 2022		Due Date
Loan and Security Agreement	Cherokee Financial, LLC	$	1,000,000	February 15, 2023
Term Loan	Cherokee Financial, LLC		240,000	February 15, 2023
Term Loan	Individual		50,000	May 4, 2023(1)
Term Loan	Individual		265,000	NA(2)
Term Loan	Unaffiliated Third Party		40,000	January 28, 2023
Total Debt		$	1,595,000

(1) The loan agreement was amended on November 4, 2022 to change the maturity date to May 4, 2023.

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

Working Capital Deficit

At ~~September~~March 3031, ~~2022~~2023, we were operating at a working capital deficit of $2458,~~522,~~000. This compares to a working capital deficit of $12,~~484~~833,000 at December 31, ~~2021~~2022. The ~~increase~~improvement in the working capital deficit is primarily due to the ~~decline~~payment ~~in cash balances and accounts receivable (both~~ of ~~which~~debt ~~are due to decreased sales) along~~ with athe ~~decline~~proceeds infrom the ~~ERC~~Asset ~~tax~~Sale ~~receivable~~to ~~(due~~Healgen toand the ~~receipt~~retention offund ~~one~~receivable ofin ~~the~~connection ~~refunds~~with in the ~~nine~~Asset ~~months~~Sale ~~ended~~to ~~September 30, 2022)~~Healgen. We ~~have~~ historically satisfied working capital requirements through cash from operations, bank debt and equity financings.

Dividends

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

Cash Flow, Outlook/Risk

In the ~~nine~~First ~~months~~Quarter ~~ended September 30~~2023, ~~2022,~~ we had a net ~~loss~~income of $1,~~093~~881,000 and net cash used in operating activities of $~~157~~363,000. Our cash position increased to $68,000 at March 31, 2023 from $34,000 at December 31, 2022.

~~Our~~Over ~~cash~~the ~~position~~last ~~decreased~~several toyears ~~$10,000~~and atthrough ~~September~~February 3028, ~~2022~~2023 ~~from~~(the ~~$115,000~~closing atdate ~~December~~of ~~31,~~the ~~2021~~Asset ~~and~~Sale ~~$41,000~~to ~~at September 30~~Healgen), ~~2021.~~we ~~Cash~~decreased atcash ~~December~~requirements ~~31,~~by ~~2021~~implementing ~~was~~cost ~~positively~~cutting ~~impacted~~initiatives. byThis anincluded ~~ERC~~expense ~~refund~~reductions in ~~December~~selling ~~2021~~and marketing (inwhich ~~the~~included ~~amount~~reduced and deferred salaries of ~~$137,000).~~a Wenumber ~~did~~of ~~receive~~employees) anand ~~ERC~~no ~~refund~~additional contributions in ~~the~~research ~~amount~~and ofdevelopment ~~$198,000~~to indevelop ~~early~~new ~~June 2022~~products. InSuch ~~the~~reductions, ~~year~~although ~~ending~~necessary ~~December~~to ~~31,~~maintain ~~2022~~operations, wewere ~~are~~not ~~expecting~~compatible ~~one~~with ~~more~~growing ~~ERC~~or ~~refund~~even maintaining our business both in the ~~amount~~short ofand ~~$202~~the long term. Our cash position has deteriorated,~~000~~ and continued to deteriorate, due to gross losses, fixed labor and overhead costs and payments required under our debt facilities.

InWe ~~February~~believed ~~2022~~the welosses ~~were informed by our largest customer that sales to one of their segments (which~~ we ~~supplied~~reported ~~exclusively)~~over ~~would~~the ~~decrease~~last asseveral ayears ~~result~~and ofmost ~~their~~recently ~~desire~~the tosignificant ~~have~~loss ~~multiple~~reported ~~vendors~~for ~~supplying~~in the ~~segment.~~year ~~This~~ended ~~decrease~~December in31, ~~sales~~2022 towould ~~the~~continue ~~one~~as ~~segment~~(i) ofour ~~their~~primary business ~~also~~(onsite ~~negatively~~drugs ~~impacts~~of ~~gross~~abuse ~~profit~~tests) ashas ~~this~~become ~~segment~~a iscommoditized ~~the~~market ~~more~~and ~~profitable~~we ~~segment~~cannot ~~from~~compete awith ~~margin~~the ~~perspective.~~low ~~This~~pricing ~~has~~offered ~~resulted~~by inour ~~less~~competitors ~~profit~~who tomanufacture ~~the~~outside ~~Company~~of ~~which~~the isU.S. ~~negatively~~and ~~impacting~~(ii) ~~cash~~we ~~flows.~~have Wenot ~~also~~been ~~continue~~able to beobtain ~~impacted~~new bybusiness ~~material~~to ~~delays~~replace ~~and~~the ~~cost~~significant ~~increases~~loss ~~(in~~of ~~both~~business ~~manufacturing~~from ~~and~~our ~~other~~largest ~~business costs)~~customer.

~~The~~22 ~~extent~~Table ~~to which the commoditized nature~~ of our markets will continue 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 downturn of our common stock starting in the third quarter of 2021 has prevented any further sales to be initiated. Contents

27Over ~~Table~~the oflast ~~Contents~~several years, we have been able to access loans from shareholders and raise funds via private equity financings. As time went on and the financial results continued to deteriorate, these options were no longer available. Ms. Waterhouse also extended loans to the Company and deferred her salary.

~~Our~~Given ~~ability~~the ~~to repay our current debt and other liabilities may also be affected by general economic~~above, ~~financial,~~on ~~competitive,~~December ~~regulatory~~19, ~~legal~~2022, ~~business~~we ~~and other factors beyond our control~~agreed, ~~including~~subject ~~those~~to ~~discussed herein. Given~~ the ~~current~~approval ~~state~~ of our ~~business and the current stock price~~shareholders, ~~it is unlikely we will be able~~ to ~~facilitate~~sell ~~purchases~~substantially ~~under~~all ~~our~~of ~~Purchase Agreement with Lincoln Park in the near future before it expires in December 2022. If we are unable to meet~~ our ~~credit~~operating ~~facility~~assets ~~obligations we will be required~~ to ~~raise~~Healgen ~~money~~(excluding ~~through~~cash, ~~new~~accounts ~~equity~~receivables and~~/or~~ ~~debt~~certain ~~financing(s~~other assets). ~~and,~~We ~~there~~closed ison nothe ~~assurance~~Asset ~~that~~Sale ~~we would be able~~ to ~~find~~Healgen ~~new~~on ~~financing~~February 28, ~~or that any new financing would be at favorable terms~~2023.

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 alternative products and service offerings to diversify our revenue stream.

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. 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 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.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

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

Item 4. Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures

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

(b) Changes in Internal Control Over Financial Reporting

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

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PART II – OTHER INFORMATION

Item 1. Legal Proceedings

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

Item 1A. Risk Factors

~~The~~There ~~following~~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 nine months ended September 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.~~

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Risks Related to our Financial Condition

We have a history of incurring net losses. As of December 31, 2021, we have a stockholders’ deficit and for the three and nine months ended September 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 nine months ended September 30, 2022 we have gross losses of $9,000 and $53,000, 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 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 and the increased price competition in our core markets for drug testing.

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 November 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.

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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 2021. 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.

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

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

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

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Item 6. Exhibits

31.1/31.2	~~Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer/Chief Financial Officer~~	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~~	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 September 30, 2022, formatted in XBRL (Extensible Business Reporting Language): (i) Condensed Balance Sheet, (ii) Condensed Statements of Income (iii) Condensed Statements of Cash Flows, (iv) Statements of Changes in Stockholders’ Deficit and (v) Notes to Condensed Financial Statements.	The following materials from our Quarterly Report on Form 10-Q for the quarter ended March 31, 2023, formatted in XBRL (Extensible Business Reporting Language): (i) Condensed Balance Sheets, (ii) Condensed Statements of Income (iii) Statements of Change in Stockholders’ Equity, (iv) Condensed Statements of Cash Flows, and (v) Notes to Condensed Financial Statements.

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SIGNATURES

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

AMERICAN BIO MEDICA CORPORATION(Registrant) By: /s/ Melissa A. Waterhouse Melissa A. WaterhouseChief Executive Officer (Principal Executive Officer)Principal Financial OfficerPrincipal Accounting Officer

	AMERICAN BIO MEDICA CORPORATION (Registrant)

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

Dated: June 12, 2023

~~Dated: November 16, 2022~~26

Filing Compare · AMERICAN BIO MEDICA CORP