American Bio Medica (ABMC) 10-Q 15 Sep 20 2020 Q2 Quarterly report Financial data

Document And Entity Information

Document And Entity Information - shares	6 Months Ended
	Jun. 30, 2020	Sep. 15, 2020
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2020
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q2
Entity Registrant Name	AMERICAN BIO MEDICA CORP
Entity Central Index Key	0000896747
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Is Entity's Reporting Status Current?	No
Entity Emerging Growth Company	false
Entity Small Business	true
Entity Shell Company	false
Entity Interactive Data Current	Yes
Entity File Number	0-28666
Entity Incorporation State Country Code	NY
Entity Common Stock, Shares Outstanding		35,953,476

Condensed Balance Sheets

Condensed Balance Sheets - USD ($)	Jun. 30, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents	$ 225,000	$ 4,000
Accounts receivable, net of allowance for doubtful accounts of $34,000 at June 30, 2020 and at December 31, 2019	350,000	370,000
Inventory, net of allowance of $355,000 at June 30, 2020 and $291,000 at December 31, 2019	769,000	810,000
Prepaid expenses and other current assets	133,000	6,000
Right of use asset - operating leases	34,000	34,000
Total current assets	1,511,000	1,224,000
Property, plant and equipment, net	608,000	644,000
Patents, net	112,000	116,000
Right of use asset - operating leases	58,000	73,000
Other assets	21,000	21,000
Total assets	2,310,000	2,078,000
Current liabilities:
Accounts payable	627,000	652,000
Accrued expenses and other current liabilities	663,000	543,000
Right of use liability - operating leases	32,000	34,000
Wages payable	134,000	104,000
Line of credit	226,000	337,000
PPP Loan	332,000	0
Current portion of long-term debt, net of deferred finance costs	1,121,000	17,000
Total current liabilities	3,135,000	1,687,000
Long-term debt/other liabilities, net of current portion and deferred finance costs	0	1,108,000
Right of use liability - operating leases	58,000	73,000
Total liabilities	3,193,000	2,868,000
COMMITMENTS AND CONTINGENCIES
Stockholders' deficit:
Preferred stock; par value $.01 per share; 5,000,000 shares authorized, none issued and outstanding at June 30, 2020 and December 31, 2019	0	0
Common stock; par value $.01 per share; 50,000,000 shares authorized; 35,953,476 issued and outstanding at June 30, 2020 and 32,680,984 issued and outstanding as of December 31, 2019	359,000	327,000
Additional paid-in capital	21,658,000	21,437,000
Accumulated deficit	(22,900,000)	(22,554,000)
Total stockholders' deficit	(883,000)	(790,000)
Total liabilities and stockholders' deficit	$ 2,310,000	$ 2,078,000

Condensed Balance Sheets (Paren

Condensed Balance Sheets (Parenthetical) - USD ($)	Jun. 30, 2020	Dec. 31, 2019
Statement of Financial Position [Abstract]
Allowance for doubtful accounts receivable, current	$ 34,000	$ 34,000
Inventory valuation reserves	$ 355,000	$ 291,000
Preferred stock, par value	$ .01	$ 0.01
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ .01	$ 0.01
Common stock, shares authorized	50,000,000	50,000,000
Common stock, shares issued	35,953,476	32,680,984
Common stock, shares outstanding	35,953,476	32,680,984

Condensed Statements of Operati

Condensed Statements of Operations - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Income Statement [Abstract]
Net sales	$ 1,758,000	$ 958,000	$ 2,486,000	$ 1,880,000
Cost of goods sold	1,176,000	652,000	1,714,000	1,269,000
Gross profit	582,000	306,000	772,000	611,000
Operating expenses:
Research and development	19,000	20,000	52,000	39,000
Selling and marketing	230,000	107,000	319,000	219,000
General and administrative	317,000	334,000	656,000	682,000
Total operating expenses	566,000	461,000	1,027,000	940,000
Operating income / (loss)	16,000	(155,000)	(255,000)	(329,000)
Other (expense) / income:
Interest expense	(37,000)	(67,000)	(91,000)	(134,000)
Other income, net	0	168,000	0	169,000
Total other (expense) / income	(37,000)	101,000	(91,000)	35,000
Net loss before tax	(21,000)	(54,000)	(346,000)	(294,000)
Income tax expense	0	(2,000)	0	(2,000)
Net loss	$ (21,000)	$ (56,000)	$ (346,000)	$ (296,000)
Basic and diluted loss per common share	$ 0	$ 0	$ (0.01)	$ (0.01)
Weighted average number of shares outstanding - basic & diluted	35,905,948	32,521,675	34,937,236	32,445,244

Condensed Statements of Cash Fl

Condensed Statements of Cash Flows - USD ($)	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Cash flows from operating activities:
Net loss	$ (346,000)	$ (296,000)
Adjustments to reconcile net loss to net cash provided by / (used in) operating activities:
Depreciation and amortization	41,000	42,000
Amortization of debt issuance costs	37,000	55,000
Allowance for doubtful accounts	0	0
Provision for slow moving and obsolete inventory	72,000	42,000
Share-based payment expense	2,000	3,000
Director fee paid with restricted stock	30,000	5,000
Refinance fee paid with restricted stock	21,000	0
Changes in:
Accounts receivable	20,000	59,000
Inventory	(32,000)	153,000
Prepaid expenses and other current assets	(112,000)	28,000
Accounts payable	(25,000)	196,000
Accrued expenses and other current liabilities	103,000	(6,000)
Wages payable	31,000	(137,000)
Net cash (used in) / provided by operating activities	(158,000)	144,000
Cash flows from financing activities:
Proceeds from debt financing	332,000	48,000
Payments on debt financing	(6,000)	(81,000)
Proceeds from Private Placement	164,000	0
Proceeds from lines of credit	2,352,000	1,902,000
Payments on lines of credit	(2,463,000)	(2,027,000)
Net cash provided by / (used in) financing activities	379,000	(158,000)
Net change in cash and cash equivalents	221,000	(14,000)
Cash and cash equivalents - beginning of period	4,000	113,000
Cash and cash equivalents - end of period	225,000	99,000
Supplemental disclosures of cash flow information:
Debt issuance cost paid with restricted stock	0	14,000
Loans converted to stock	39,000	0
Director fee paid with restricted stock	30,000	5,000
Cash paid during period for interest	73,000	79,000
Cash paid during period for taxes	$ 0	$ 2,000

Basis of Reporting

Basis of Reporting	6 Months Ended
	Jun. 30, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
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, 2019. In the opinion of management, the interim condensed financial statements include all normal, recurring adjustments which are considered necessary for a fair presentation of the financial position of the Company at June 30, 2020, and the results of operations for the three and six month periods ended June 30, 2020 and June 30, 2019 and cash flows for the six month periods ended June 30, 2020 and June 30, 2019. Operating results for the six months ended June 30, 2020 are not necessarily indicative of results that may be expected for the year ending December 31, 2020. Amounts at December 31, 2019 are derived from audited financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. During the six months ended June 30, 2020, 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, 2019. 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 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. 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, 2019, contained an explanatory paragraph regarding the Company’s ability to continue as a going concern. As of the date of this report, the Company’s current cash balances, together with cash generated from future operations and amounts available under the Company’s credit facilities may not be sufficient to fund operations through September 2021. Through the six months ended June 30, 2020, the Company had a line of credit with Crestmark Bank. The maximum availability on the Company’s line of credit was $1,500,000 until the line of credit was amended and extended on June 22, 2020 when the maximum availability was reduced to $1,000,000. However, because the amount available under the line of credit is based upon the Company’s accounts receivable and inventory, the amounts actually available under our line of credit (historically) have been significantly less than the maximum availability. As of June 30, 2020, based on the Company’s availability calculation, there were no additional amounts available under the Company’s line of credit because the Company draws any balance available on a daily basis. In February 2020, our credit facilities with Cherokee Financial, LLC were extended for another 12 months, or until February 15, 2021 (which is less than 12 months from the date of this report). Our total debt at June 30, 2020 with Cherokee Financial, LLC is $1,120,000. We do not expect cash from operations within the next 12 months to be sufficient to pay the amounts due under these credit facilities, which is due in full on February 15, 2021. We are currently looking at alternatives to further extend or refinance these facilities. As discussed in more detail in “Cash Flow, Outlook/Risk”, if sales levels decline, the Company will have reduced availability on its line of credit due to decreased accounts receivable balances. If availability under the Company’s line of credit is not sufficient to satisfy its working capital and capital expenditure requirements, the Company will be required to obtain additional credit facilities or sell additional equity securities, or delay capital expenditures, which could 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. Recently Adopted Accounting Standards ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement” ASU 2019-08, Compensation – Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606)” Accounting Standards Issued; Not Yet Adopted ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes” ASU 2020-01, “Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)” 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. Reclassifications Certain items have been reclassified from the prior year to conform to the current year presentation.

Inventory

Inventory	6 Months Ended
	Jun. 30, 2020
Inventory Disclosure [Abstract]
Inventory	Inventory is comprised of the following: June 30, 2020 December 31, 2019 Raw Materials $ 679,000 $ 670,000 Work In Process 124,000 141,000 Finished Goods 321,000 290,000 Allowance for slow moving and obsolete inventory (355,000 ) (291,000 ) $ 769,000 $ 810,000

Net Loss Per Common Share

Net Loss Per Common Share	6 Months Ended
	Jun. 30, 2020
Earnings Per Share [Abstract]
Net Loss Per Common Share	Basic net loss per common share is calculated by dividing the net loss by the weighted average number of outstanding common shares during the period. Diluted net loss per common share includes the weighted average dilutive effect of stock options and warrants. Potential common shares outstanding as of June 30, 2020 and 2019: June 30, 2020 June 30, 2019 Warrants 0 2,000,000 Options 2,192,000 2,302,000 2,192,000 4,302,000 The number of securities not included in the diluted net loss per share for the three and six months ended June 30, 2020 and the three and six months ended June 30, 2019 was 2,192,000 and 4,302,000, respectively, as their effect would have been anti-dilutive due to the net loss in both of the three and six month periods.

Litigation_Legal Matters

Litigation/Legal Matters	6 Months Ended
	Jun. 30, 2020
Commitments and Contingencies Disclosure [Abstract]
Litigation/Legal Matters	ABMC v. Todd Bailey On August 5, 2019, we settled litigation with Todd Bailey; a former Vice President, Sales & Marketing and sales consultant of the Company until December 23, 2016; hereinafter referred to as “Bailey”). The litigation was filed by the Company in the Northern District of New York in February 2017. Our complaint sought damages related to profits and revenues that resulted from actions taken by Bailey related to our customers. The settlement also addressed a counter-claim filed by Bailey in October 2017 (filed originally in Minnesota but, transferred to the Norther District of New York in January 2019). Bailey was seeking deferred commissions in the amount of $164,000 that he alleged were owed to him by the Company. These amounts were originally deferred under a deferred compensation program initiated in 2013; a program in which Bailey was one of the participants. We believed the amount sought was not due to Bailey given the actions indicated in our litigation. Under the settlement, both parties elected to resolve the litigation and settle any and all claims made within the litigation. Neither party admitted to any of the allegations contained within the ABMC v. Baily litigation (including any allegations made by Bailey in his counterclaim). Both parties also agreed to dismiss all claims made against each other. From time to time, the Company may be named in legal proceedings in connection with matters that arose during the normal course of business. While the ultimate outcome of any such litigation 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 and cash flows of the Company.

Line of Credit and Debt

Line of Credit and Debt	6 Months Ended
	Jun. 30, 2020
Debt Disclosure [Abstract]
Line of Credit and Debt	The Company’s Line of Credit and Debt consisted of the following as of June 30, 2020 and December 31, 2019: June 30, 2020 December 31, 2019 Loan and Security Agreement with Cherokee Financial, LLC: $ 900,000 $ 900,000 Crestmark Line of Credit: 226,000 337,000 Crestmark Equipment Term Loan : 1,000 7,000 2019 Term Loan with Cherokee Financial, LLC: 220,000 200,000 July 2019 Term Loan with Chaim Davis, et al: 0 10,000 December 2019 Convertible Note: 0 25,000 April 2020 PPP Loan with Crestmark: 332,000 0 $ 1,679,000 $ 1,479,000 Less debt discount & issuance costs (Cherokee Financial, LLC loans) 0 (17,000 ) Total debt, net $ 1,679,000 $ 1,462,000 Current portion $ 1,679,000 $ 354,000 Long-term portion, net of current portion $ 0 $ 1,125,000 LOAN AND SECURITY AGREEMENT WITH CHEROKEE FINANCIAL, LLC (“CHEROKEE”) On March 26, 2015, the Company entered into a LSA with Cherokee (the “Cherokee LSA”). The debt with Cherokee is collateralized by a first security interest in real estate and machinery and equipment. Under the Cherokee LSA, the Company was provided the sum of $1,200,000 in the form of a 5-year Note at a fixed annual interest rate of 8%. The Company received net proceeds of $80,000 after $1,015,000 of debt payments, and $105,000 in other expenses and fees. The expenses and fees (with the exception of the interest expense) are being deducted from the balance on the Cherokee LSA and are being amortized over the term of the debt (in accordance with ASU No. 2015-03). The Company was required to make annual principal reduction payments of $75,000 on each anniversary of the date of the closing; with the first principal reduction payment being made on February 15, 2016 and the last principal reduction payment being made on February 15, 2019; partially with proceeds received from a new, larger term loan with Cherokee (See 2019 Term Loan with Cherokee within this Note E). On February 24, 2020 (the “Closing Date”), the Company completed a transaction related to a one-year Extension Agreement dated February 14, 2020 (the “Extension Agreement”) with Cherokee under which Cherokee extended the due date of the Cherokee LSA (with a balance of $900,000) to February 15, 2021. No terms of the facility were changed under the Extension Agreement. For consideration of the Extension Agreement, the Company issued 2% of the $900,000 principal, or $18,000, in 257,143 restricted shares of the Company’s common stock to Cherokee on behalf of their investors. In the event of default, this includes, but is not limited to; 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%. If the amount due is not paid by the extended due date, Cherokee will automatically add a delinquent payment penalty of $100,000 to the outstanding principal. The Company will continue to make interest only payments quarterly on the Cherokee LSA. In addition to the 8% interest, the Company pays Cherokee a 1% annual fee for oversight and administration of the loan. This oversight fee is paid in cash and is paid contemporaneously with the quarterly interest payments. 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 $53,000 in interest expense related to the Cherokee LSA in the six months ended June 30, 2020 (of which $17,000 is debt issuance cost amortization recorded as interest expense), and $83,000 in interest expense related to the Cherokee LSA in the six months ended June 30, 2019 (of which $47,000 is debt issuance cost amortization recorded as interest expense). The Company recognized $18,000 in interest expense related to the Cherokee LSA in the three months ended June 30, 2020 (of which $0 is debt issuance cost amortization recorded as interest expense), and $42,000 in interest expense related to the Cherokee LSA in the three months ended June 30, 2019 (of which $23,000 is debt issuance cost amortization recorded as interest expense). The Company had $14,000 in accrued interest expense at June 30, 2020 related to the Cherokee LSA and $15,000 in accrued interest expense at June 30, 2019. As of June 30, 2020, the balance on the Cherokee LSA was $900,000. As of December 31, 2019, the balance on the Cherokee LSA was $900,000; however, the discounted balance was $884,000. 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 is used for working capital and general corporate purposes. The Company amended the Crestmark LOC on June 22, 2020 and as a result of this amendment, the Crestmark LOC expires on June 22, 2021. Until the amendment on June 22, 2020, the Crestmark LOC provided the Company with a revolving line of credit up to $1,500,000 (“Maximum Amount”). The Maximum Amount was subject to an Advance Formula comprised of: 1) 90% of Eligible Accounts Receivables (excluding, receivables remaining unpaid for more than 90 days from the date of invoice and sales made to entities outside of the United States), and 2) up to 40% of eligible inventory plus up to 10% of Eligible Generic Packaging Components not to exceed the lesser of $350,000, or 100% of Eligible Accounts Receivable. However, as a result of an amendment executed on June 25, 2018, the amount available under the inventory component of the line of credit was changed to 40% of eligible inventory plus up to 10% of Eligible Generic Packaging Components not to exceed the lesser of $250,000 (“Inventory Sub-Cap Limit”) or 100% of Eligible Accounts Receivable. In addition, the Inventory Sub-Cap Limit was reduced by $10,000 per month as of July 1, 2018 and thereafter on the first day of the month until the Inventory Sub-Cap Limit is reduced to $0, (making the Crestmark LOC an accounts-receivable based line only). This means that as of June 30, 2020, the Inventory Sub-Cap Limit is only $10,000. Upon execution of the amendment, the Maximum Amount was reduced to $1,000,000 and with the Inventory Sub-Cap Limit gone effective July 1, 2020; the Crestmark LOC is a receivables-based only line of credit. The Crestmark LOC has a minimum loan balance requirement of $500,000. At June 30, 2020, the Company did not meet the minimum loan balance requirement as our balance was $226,000. Under the LSA, Crestmark has the right to calculate interest on the minimum balance requirement rather than the actual balance on the Crestmark LOC (and they are exercising that right). The Crestmark LOC is secured by a first security interest in the Company’s inventory, and receivables and security interest in all other assets of the Company (in accordance with permitted prior encumbrances). Prior to the amendment on June 22, 2020, the Crestmark LOC contained a minimum Tangible Net Worth (“TNW”) covenant (previously defined in other periodic reports). With the exception of the quarter ended June 30, 2019, the Company did not historically comply with the TNW covenant and Crestmark previously provided a number of waivers (for which the Company was charged $5,000 each). The TNW covenant was removed effective with the quarter ended June 30, 2020. In the event of a default under the LSA, which includes but is not limited to, failure of the Company to make any payment when due, Crestmark is permitted to charge an Extra Rate. The Extra Rate is the Company’s then current interest rate plus 12.75% per annum. Interest on the Crestmark LOC is at a variable rate based on the Prime Rate plus 3% with a floor of 5.25%. As of the date of this report, the interest only rate on the Crestmark LOC is 6.25%. As of the date of this report, with all fees considered (the interest rate + an Annual Loan Fee of $7,500 + a monthly maintenance fee of 0.30% of the actual average monthly balance from the prior month), the interest rate on the Crestmark LOC was 12.65%. The Company recognized $17,000 in interest expense related to the Crestmark LOC in the six months ended June 30, 2020 and $25,000 in interest expense related to the Crestmark LOC in the six months ended June 30, 2019. The Company recognized $9,000 in interest expense in the three months ended June 30, 2020 and $12,000 in interest expense in the three months ended June 30, 2019. Given the nature of the administration of the Crestmark LOC, at June 30, 2020, the Company had $0 in accrued interest expense related to the Crestmark LOC, and there is $0 in additional availability under the Crestmark LOC. At June 30, 2020, the balance on the Crestmark LOC was $226,000 and as of December 31, 2019, the balance on the Crestmark LOC was $337,000. EQUIPMENT LOAN WITH CRESTMARK On May 1, 2017, the Company entered into term loan with Crestmark in the amount of $38,000 related to the purchase of manufacturing equipment. The equipment loan is collateralized by a first security interest in a specific piece of manufacturing equipment. The Company executed an amendment to its LSA and Promissory Note with Crestmark. The amendments addressed the inclusion of the term loan into the LSA and an extension of the Crestmark LOC. No terms of the Crestmark LOC were changed in the amendment. The interest rate on the term loan is the WSJ Prime Rate plus 3%; or 6.25% as of the date of this report. The Company incurred minimal interest expense in the six months ended June 30, 2020 related to the Equipment Loan and less than $1,000 in interest expense in the six months ended June 30, 2019. The Company incurred minimal interest expense in the three months ended June 30, 2020 and less than $1,000 in interest expense in the three months ended June 30, 2019. The balance on the Equipment Loan is $1,000 at June 30, 2020 and $7,000 at December 31, 2019. 2019 TERM LOAN WITH CHEROKEE On February 25, 2019 (the “Closing Date”), the Company entered into an agreement dated (and effective) February 13, 2019 (the “Agreement”) with Cherokee under which Cherokee provided the Company with a loan in the amount of $200,000 (the “2019 Cherokee Term Loan”). Gross proceeds of the 2019 Cherokee Term Loan were $200,000; $150,000 of which was used to satisfy the 2018 Cherokee Term Loan, $48,000 (which was used to pay a portion of the $75,000 principal reduction payment; with the remaining $27,000 being paid with cash on hand) and $2,000 which was used to pay Cherokee’s legal fees in connection with the financing. In connection with the 2019 Cherokee Term Loan, the Company issued 200,000 restricted shares of common stock to Cherokee in the three months ended March 31, 2019. The annual interest rate under the 2019 Cherokee Term Loan is 18% (fixed) paid quarterly in arrears with the first interest payment being made on May 15, 2019 and the latest interest payment being made in May 2020. The loan was required to be paid in full on February 15, 2020. On February 24, 2020, the Company completed a transaction related to a one-year Extension Agreement dated February 14, 2020 (the “Extension Agreement”) with Cherokee under which Cherokee extended the due date of the 2019 Term Loan to February 15, 2021. No terms of the facility was changed under the Extension Agreement. For consideration of the Extension Agreement, the Company issued 1.5% of the $200,000 principal, or $3,000, in 42,857 restricted shares of the Company’s common stock to Cherokee. The Company also incurred a penalty in the amount of $20,000 which was added to the principal balance of the Cherokee Term Loan. In the event of default, this includes, but is not limited to, the Company’s inability to make any payments due under the Agreement, Cherokee has the right to increase the interest rate on the financing to 20% and Cherokee will automatically add a delinquent payment penalty of $20,000 to the outstanding principal. The Company recognized $21,000 in interest expense related to the 2019 Cherokee Term Loan in the six months ended June 30, 2020 (of which $1,000 is debt issuance cost amortization recorded as interest expense) and $22,000 in interest expense (of which $7,000 was debt issuance costs recorded as interest expense) in the six months ended June 30, 2019. The Company recognized $10,000 in interest expense related to the 2019 Cherokee Term Loan in the three months ended June 30, 2020 (of which $0 is debt issuance cost amortization recorded as interest expense) and $13,000 in interest expense in the three months ended June 30, 2019, (of which $4,000 was debt issuance cost amortization recorded as interest expense). The Company had $14,000 in accrued interest expense related to the 2019 Cherokee Term Loan at June 30, 2020. The balance on the 2019 Term Loan is $220,000 at June 30, 2020 (including the $20,000 penalty referenced above). SBA PAYCHECK PROTECTION LOAN (PPP LOAN) On April 22, 2020, we entered into a Promissory Note (“PPP Note”) for $332,000 with Crestmark Bank, pursuant to the U.S. Small Business Administration Paycheck Protection Program under Title I of the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act passed by Congress and signed into law on March 27, 2020. The PPP Note is unsecured, bears interest at 1.00% per annum, with principal and interest payments deferred for the first six months, and matures in two years. The principal is payable in equal monthly installments, with interest, beginning on the first business day after the end of the deferment period. The PPP Note may be forgiven subject to the terms of the Paycheck Protection Program. Additionally, certain acts of the Company, including but not limited to: (i) the failure to pay any taxes when due, (ii) becoming the subject of a proceeding under any bankruptcy or insolvency law, (iii) making an assignment for the benefit of creditors, or (iv) reorganizing, merging, consolidating or otherwise changing ownership or business structure without PPP Lender’s prior written consent, are considered events of default which grant Lender the right to seek immediate payment of all amounts owing under the PPP Note. The Company intends to apply for forgiveness of loan under PPP guidelines after 24 weeks, or in October 2020. OTHER DEBT INFORMATION In addition to the debt indicated previously, previous debt facilities (paid in full via refinance or conversion into equity) had financial impact on the six months ended June 30, 2019. More specifically: 2018 TERM LOAN WITH CHEROKEE On March 2, 2018, the Company entered into a one-year Loan Agreement made as of February 15, 2018 (the “Closing Date”) with Cherokee under which Cherokee provided the Company with $150,000 (the “2018 Cherokee Term Loan”). The proceeds from the 2018 Cherokee Term Loan were used by the Company to pay a $75,000 principal reduction payment to Cherokee that was due on February 15, 2018 and $1,000 in legal fees incurred by Cherokee. Net proceeds (to be used for working capital and general business purposes) were $74,000. The annual interest rate for the 2018 Cherokee Term Loan was 12% to be paid quarterly in arrears with the first interest payment being made on May 15, 2018. In connection with the 2018 Cherokee Term Loan, the Company issued 150,000 restricted shares of common stock to Cherokee on March 8, 2018. The 2018 Cherokee Term Loan was required to be paid in full on February 15, 2019 and was paid in full via refinance into the 2019 Term Loan with Cherokee. The Company recognized $3,000 in interest expense related to the 2018 Cherokee Term Loan in the three and six months ended June 30, 2019 (of which $2,000 was debt issuance costs recorded as interest expense). As of June 30, 2020 and December 31, 2019, the balance on the 2018 Cherokee Term Loan was $0 as the Company paid the facility in full with proceeds from the 2019 Term Loan with Cherokee. JULY 2019 TERM LOAN WITH CHAIM DAVIS, ET AL On July 31, 2019, the Company entered into loan agreements with two (2) individuals, under which each individual provided the Company the sum of $7,000 (for a total of $14,000) to be used in connection with certain fees and/or expenses related legal matters of the Company (the “July 2019 Term Loan”). One of the individuals was our Chairman of the Board Chaim Davis. There were no expenses related to the July 2019 Term Loan. The first payment of principal and interest was due on September 1, 2019 and the last payment of principal and interest is due on October 1, 2020. The annual interest rate of the July 2019 Term Loan is fixed at 7.5% (which represented the WSJ Prime Rate +2.0%). All amounts loaned under the July 2019 Term Loan were converted into equity as part of a private placement closed in February 2020. Any interest that was incurred under the facility in 2019 and up to the conversion in February 2020 was forgiven by the holders. The balance on the July 2019 Term Loan was $0 at June 30, 2020 and $10,000 at December 31, 2019. DECEMBER 2019 CONVERTIBLE NOTE On December 31, 2019, the Company entered into a Convertible Note with one individual in the amount of $25,000 (“2019 Convertible Note”). Under the terms of the 2019 Convertible Note, the principal amount would convert into equity within 120 days of the origination of the note or upon the close of a contemplated private placement in early 2020, whichever was sooner. The 2019 Convertible Note did not bear any interest and was ultimately converted into equity as part of a private placement closed in February 2020. The balance on the 2019 Convertible Note was $0 at June 30, 2020 and $25,000 at December 31, 2019.

Stock Options and Warrants

Stock Options and Warrants	6 Months Ended
	Jun. 30, 2020
Stockholders' Equity Note [Abstract]
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. During the three months ended June 30, 2020, the Company issued 0 options to purchase shares of common stock. During the three months ended June 30, 2019, the Company issued options to purchase 20,000 shares of stock to each of its non-employee board members as an annual stock option grant (for a total of 80,000 options) under the 2001 Plan. Stock option activity for the six months ended June 30, 2020 and the six months ended June 30, 2019 is summarized as follows (the figures contained within the tables below have been rounded to the nearest thousand): Six months ended June 30, 2020 Six months ended June 30, 2019 Shares Weighted Average Exercise Price Aggregate Intrinsic Value as of June 30, 2020 Shares Weighted Average Exercise Price Aggregate Intrinsic Value as of June 30, 2019 Options outstanding at beginning of year 2,252,000 $ 0.14 2,222,000 $ 0.13 Granted 0 NA 80,000 $ 0.07 Exercised 0 NA 0 NA Cancelled/expired (60,000 ) $ 0.13 0 NA Options outstanding at end of year 2,192,000 $ 0.12 $ 177,000 2,302,000 $ 0.13 $ 1,000 Options exercisable at end of year 2,192,000 $ 0.12 2,142,000 $ 0.13 The Company recognized $2,000 in share based payment expense in the six months ended June 30, 2020 and $4,000 in share based payment expense in the six months ended June 30, 2019. The Company recognized $1,000 in share based payment expense in the three months ended June 30, 2020 and $1,000 in share based payment expense in the three months ended June 30, 2019. At June 30, 2020, there was $0 of total unrecognized share based payment expense related to stock options. Warrants Warrant activity for the six months ended June 30, 2020 and the six months ended June 30, 2019 is summarized as follows: Six months ended June 30, 2020 Six months ended June 30, 2019 Shares Weighted Average Exercise Price Aggregate Intrinsic Value as of June 30, 2020 Shares Weighted Average Exercise Price Aggregate Intrinsic Value as of June 30, 2019 Warrants outstanding at beginning of year 2,000,000 $ 0.18 2,000,000 $ 0.18 Granted 0 NA 0 NA Exercised 0 NA 0 NA Cancelled/expired (2,000,000 ) $ 0.18 0 NA Warrants outstanding at end of year 0 NA None 2,000,000 $ 0.18 None Warrants exercisable at end of year 0 NA 2,000,000 $ 0.18 In the six months ended June 30, 2020 and June 30, 2019, the Company recognized $0 in debt issuance and deferred finance costs related to the issuance of the above warrants outstanding. In the three months ended June 30, 2020 and June 30, 2019, the Company recognized $0 in debt issuance and deferred finance costs related to the issuance of the above warrants. As of June 30, 2020, there was $0 of total unrecognized expense.

Changes in Stockholders' Defici

Changes in Stockholders' Deficit	6 Months Ended
	Jun. 30, 2020
Stockholders' deficit:
Changes in Stockholders' Deficit	The following table summarizes the changes in stockholders’ deficit for the six month periods ending June 30, 2020 and June 30, 2019: Common Stock Shares Amount Additional Paid in Capital Accumulated Deficit Total Balance – December 31, 2019 32,680,984 $ 327,000 $ 21,437,000 (22,554,000 ) $ (790,000 ) Shares issued in connection with private placement* 2,842,856 28,000 171,000 199,000 Shares issued to Cherokee in connection with loan 300,000 3,000 18,000 21,000 Share based payment expense 2,000 2,000 Shares issued for board meeting attendance in lieu of cash 129,636 1,000 30,000 31,000 Net loss (346,000 ) (346,000 ) Balance – June 30, 2020 35,953,476 $ 359,000 $ 21,658,000 $ (22,900,000 ) $ (883,000 ) Balance – December 31, 2018 32,279,368 $ 323,000 $ 21,404,000 $ (21,873,000 ) $ (146,000 ) Shares issued to Cherokee in connection with loan 200,000 2,000 12,000 14,000 Shares issued for board meeting attendance in lieu of cash 66,408 5,000 5,000 Share based payment expense 4,000 4,000 Net loss (296,000 ) (296,000 ) Balance-June 30, 2019 32,545,776 $ 325,000 $ 21,425,000 $ (22,169,000 ) $ (419,000 ) PRIVATE PLACEMENT On February 20, 2020, we entered into a Securities Purchase Agreement (the “Purchase Agreement”) with Chaim Davis (the Chairman of our Board of Directors) and certain other accredited investors (the “Investors”), pursuant to which we agreed to issue and sell to the Investors in a private placement (the “Private Placement”), 2,842,857 Units (the “Units”). Each Unit consists of one (1) share of our common stock, par value $0.01 per share (“Common Share”), at a price per Unit of $0.07 (the “Purchase Price”) for aggregate gross proceeds of approximately $199,000. We received net proceeds of $199,000 from the Private Placement as expenses related to the Private Placement were minimal. We did not utilize a placement agent for the Private Placement. We used the net proceeds for working capital and general corporate purposes. The July 2019 Term Loan with Chaim Davis, Et Al and the December 2019 Convertible Note (See Note E); totaling $39,000, were both converted into equity as part of a private placement closed in February 2020. Any interest that was incurred under the July 2019 Term Loan with Chaim Davis, Et in 2019 and up to the conversion in February 2020 was forgiven by the holders and the December 2019 Convertible Note did not bear any interest. We do not intend to register the Units issued under the Private Placement; rather the Units issued will be subject to the holding period requirements and other conditions of Rule 144. The Purchase Agreement contains customary representations, warranties and covenants made solely for the benefit of the parties to the Purchase Agreement. Although our Chairman of the Board was an investor in the Private Placement, the pricing of the Units was determined by the non-affiliate investors.

Basis of Reporting (Policies)

Basis of Reporting (Policies)	6 Months Ended
	Jun. 30, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Accounting Standards	Recently Adopted Accounting Standards ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement” ASU 2019-08, Compensation – Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606)” Accounting Standards Issued; Not Yet Adopted ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes” ASU 2020-01, “Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)” 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.
Reclassifications	Certain items have been reclassified from the prior year to conform to the current year presentation.

Inventory (Tables)

Inventory (Tables)	6 Months Ended
	Jun. 30, 2020
Inventory Disclosure [Abstract]
Inventory	June 30, 2020 December 31, 2019 Raw Materials $ 679,000 $ 670,000 Work In Process 124,000 141,000 Finished Goods 321,000 290,000 Allowance for slow moving and obsolete inventory (355,000 ) (291,000 ) $ 769,000 $ 810,000

Net Loss Per Common Share (Tabl

Net Loss Per Common Share (Tables)	6 Months Ended
	Jun. 30, 2020
Earnings Per Share [Abstract]
Potentially dilutive shares	June 30, 2020 June 30, 2019 Warrants 0 2,000,000 Options 2,192,000 2,302,000 2,192,000 4,302,000

Line of Credit and Debt (Tables

Line of Credit and Debt (Tables)	6 Months Ended
	Jun. 30, 2020
Debt Disclosure [Abstract]
Line of credit and debt	June 30, 2020 December 31, 2019 Loan and Security Agreement with Cherokee Financial, LLC: $ 900,000 $ 900,000 Crestmark Line of Credit: 226,000 337,000 Crestmark Equipment Term Loan : 1,000 7,000 2019 Term Loan with Cherokee Financial, LLC: 220,000 200,000 July 2019 Term Loan with Chaim Davis, et al: 0 10,000 December 2019 Convertible Note: 0 25,000 April 2020 PPP Loan with Crestmark: 332,000 0 $ 1,679,000 $ 1,479,000 Less debt discount & issuance costs (Cherokee Financial, LLC loans) 0 (17,000 ) Total debt, net $ 1,679,000 $ 1,462,000 Current portion $ 1,679,000 $ 354,000 Long-term portion, net of current portion $ 0 $ 1,125,000

Stock Options and Warrants (Tab

Stock Options and Warrants (Tables)	6 Months Ended
	Jun. 30, 2020
Stock Options
Stock option/warrant activity	Six months ended June 30, 2020 Six months ended June 30, 2019 Shares Weighted Average Exercise Price Aggregate Intrinsic Value as of June 30, 2020 Shares Weighted Average Exercise Price Aggregate Intrinsic Value as of June 30, 2019 Options outstanding at beginning of year 2,252,000 $ 0.14 2,222,000 $ 0.13 Granted 0 NA 80,000 $ 0.07 Exercised 0 NA 0 NA Cancelled/expired (60,000 ) $ 0.13 0 NA Options outstanding at end of year 2,192,000 $ 0.12 $ 177,000 2,302,000 $ 0.13 $ 1,000 Options exercisable at end of year 2,192,000 $ 0.12 2,142,000 $ 0.13
Warrants
Stock option/warrant activity	Six months ended June 30, 2020 Six months ended June 30, 2019 Shares Weighted Average Exercise Price Aggregate Intrinsic Value as of June 30, 2020 Shares Weighted Average Exercise Price Aggregate Intrinsic Value as of June 30, 2019 Warrants outstanding at beginning of year 2,000,000 $ 0.18 2,000,000 $ 0.18 Granted 0 NA 0 NA Exercised 0 NA 0 NA Cancelled/expired (2,000,000 ) $ 0.18 0 NA Warrants outstanding at end of year 0 NA None 2,000,000 $ 0.18 None Warrants exercisable at end of year 0 NA 2,000,000 $ 0.18

Changes in Stockholders' Defi_2

Changes in Stockholders' Deficit (Tables)	6 Months Ended
	Jun. 30, 2020
Stockholders' deficit:
Statement of Stockholders' Deficit	Common Stock Shares Amount Additional Paid in Capital Accumulated Deficit Total Balance – December 31, 2019 32,680,984 $ 327,000 $ 21,437,000 (22,554,000 ) $ (790,000 ) Shares issued in connection with private placement* 2,842,856 28,000 171,000 199,000 Shares issued to Cherokee in connection with loan 300,000 3,000 18,000 21,000 Share based payment expense 2,000 2,000 Shares issued for board meeting attendance in lieu of cash 129,636 1,000 30,000 31,000 Net loss (346,000 ) (346,000 ) Balance – June 30, 2020 35,953,476 $ 359,000 $ 21,658,000 $ (22,900,000 ) $ (883,000 ) Balance – December 31, 2018 32,279,368 $ 323,000 $ 21,404,000 $ (21,873,000 ) $ (146,000 ) Shares issued to Cherokee in connection with loan 200,000 2,000 12,000 14,000 Shares issued for board meeting attendance in lieu of cash 66,408 5,000 5,000 Share based payment expense 4,000 4,000 Net loss (296,000 ) (296,000 ) Balance-June 30, 2019 32,545,776 $ 325,000 $ 21,425,000 $ (22,169,000 ) $ (419,000 )

Inventory (Details)

Inventory (Details) - USD ($)	Jun. 30, 2020	Dec. 31, 2019
Inventory Disclosure [Abstract]
Raw materials	$ 679,000	$ 670,000
Work in process	124,000	141,000
Finished goods	321,000	290,000
Allowance for slow moving and obsolete inventory	(355,000)	(291,000)
Inventory, net	$ 769,000	$ 810,000

Net Loss Per Common Share (Deta

Net Loss Per Common Share (Details) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Weighted average number diluted shares outstanding adjustment	2,192,000	4,302,000	2,192,000	4,302,000
Warrants
Weighted average number diluted shares outstanding adjustment			0	2,000,000
Stock Options
Weighted average number diluted shares outstanding adjustment			2,192,000	2,302,000

Net Loss Per Common Share (De_2

Net Loss Per Common Share (Details Narrative) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Earnings Per Share [Abstract]
Antidilutive securities excluded from computation of earnings per share, amount	2,192,000	4,302,000	2,192,000	4,302,000

Line of Credit and Debt (Detail

Line of Credit and Debt (Details) - USD ($)	Jun. 30, 2020	Dec. 31, 2019
Long-term debt, gross	$ 1,679,000	$ 1,479,000
Less debt discount & issuance costs (Cherokee Financial, LLC Loan)	0	(17,000)
Total debt, net	1,679,000	1,462,000
Current portion	1,679,000	354,000
Long-term portion, net of current portion	0	1,125,000
Loan and Security Agreement with Cherokee Financial, LLC
Long-term debt, gross	900,000	900,000
Crestmark Line of Credit
Long-term debt, gross	226,000	337,000
Crestmark Equipment Term Loan
Long-term debt, gross	1,000	7,000
2019 Term Loan with Cherokee Financial, LLC
Long-term debt, gross	220,000	200,000
July 2019 Term Loan with Chaim Davis, et al
Long-term debt, gross	0	10,000
December 2019 Convertible Note
Long-term debt, gross	0	25,000
April 2020 PPP Loan with Crestmark
Long-term debt, gross	$ 332,000	$ 0

Stock Options and Warrants (Det

Stock Options and Warrants (Details) - Stock Options - USD ($)	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Shares, beginning balance	2,252,000	2,222,000
Shares, granted	0	80,000
Shares, exercised	0	0
Shares, cancelled/expired	(60,000)	0
Shares, ending balance	2,192,000	2,302,000
Shares, exercisable	2,192,000	2,142,000
Weighted average exercise price, beginning balance	$ .14	$ .13
Weighted average exercise price, granted	.00	.07
Weighted average exercise price, exercised	.00	.00
Weighted average exercise price, cancelled/expired	.13	.00
Weighted average exercise price, ending balance	.12	.13
Weighted average exercise price, exercisable	$ .12	$ .13
Aggregate intrinsic value, outstanding	$ 177,000	$ 1,000

Stock Options and Warrants (D_2

Stock Options and Warrants (Details 1) - Warrants - USD ($)	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Shares, beginning balance	2,000,000	2,000,000
Shares, granted	0	0
Shares, exercised	0	0
Shares, cancelled/expired	(2,000,000)	0
Shares, ending balance	0	2,000,000
Shares, exercisable	0	2,000,000
Weighted average exercise price, beginning balance	$ 0.18	$ .18
Weighted average exercise price, granted	0	.00
Weighted average exercise price, exercised	0	.00
Weighted average exercise price, cancelled/expired	.18	.00
Weighted average exercise price, ending balance	.00	.18
Weighted average exercise price, exercisable	$ .00	$ .18
Aggregate intrinsic value, outstanding	$ 0	$ 0

Stock Options and Warrants (D_3

Stock Options and Warrants (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Stockholders' Equity Note [Abstract]
Share based payment expense	$ 1,000	$ 1,000	$ 2,000	$ 4,000
Unrecognized share based payment expense related to stock options	0		0
Debt issuance and deferred finance costs	0	$ 0	0	$ 0
Unrecognized share based payment expense related to warrants	$ 0		$ 0

Changes in Stockholders' Defi_3

Changes in Stockholders' Deficit (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Common Stock
Beginning balance, shares			32,680,984	32,279,368
Beginning balance, amount			$ 327,000	$ 323,000
Shares issued in connection with private placement, shares			2,842,856
Shares issued in connection with private placement, amount			$ 28,000
Shares issued to Cherokee in connection with loan, shares			300,000	200,000
Shares issued to Cherokee in connection with loan, amount			$ 3,000	$ 2,000
Shares issued for board meeting attendance in lieu of cash, shares			129,636	66,408
Shares issued for board meeting attendance in lieu of cash, amount			$ 1,000
Net loss
Ending balance, shares	35,953,476	32,545,776	35,953,476	32,545,776
Ending balance, amount	$ 359,000	$ 325,000	$ 359,000	$ 325,000
Additional Paid in Capital
Beginning balance, amount			21,437,000	21,404,000
Shares issued in connection with private placement, amount			171,000
Shares issued to Cherokee in connection with loan, amount			18,000	12,000
Shares issued for board meeting attendance in lieu of cash, amount			30,000	5,000
Share based payment expense			2,000	4,000
Net loss
Ending balance, amount	21,658,000	21,425,000	21,658,000	21,425,000
Accumulated Deficit
Beginning balance, amount			(22,554,000)	(21,873,000)
Net loss			(346,000)	(296,000)
Ending balance, amount	(22,900,000)	(22,169,000)	(22,900,000)	(22,169,000)
Beginning balance, amount			(790,000)	(146,000)
Shares issued in connection with private placement, amount			199,000
Shares issued to Cherokee in connection with loan, amount			21,000	14,000
Shares issued for board meeting attendance in lieu of cash, amount			31,000	5,000
Share based payment expense	1,000	1,000	2,000	4,000
Net loss	(21,000)	(56,000)	(346,000)	(296,000)
Ending balance, amount	$ (883,000)	$ (419,000)	$ (883,000)	$ (419,000)