Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Mar. 31, 2021 | May 20, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2021 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
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? | Yes | |
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 | 41,203,476 |
Condensed Balance Sheets
Condensed Balance Sheets - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 63,000 | $ 98,000 |
Accounts receivable, net of allowance for doubtful accounts of $5,000 at March 31, 2021 and $22,000 at December 31, 2020 | 337,000 | 407,000 |
Inventory, net of allowance of $300,000 at March 31, 2021 and $279,000 at December 31, 2020 | 507,000 | 536,000 |
Prepaid expenses and other current assets | 106,000 | 104,000 |
Right of use asset - operating leases | 35,000 | 35,000 |
Total current assets | 1,048,000 | 1,180,000 |
Property, plant and equipment, net | 560,000 | 576,000 |
Patents, net | 106,000 | 108,000 |
Right of use asset - operating leases | 32,000 | 41,000 |
Other assets | 21,000 | 21,000 |
Total assets | 1,767,000 | 1,926,000 |
Current liabilities: | ||
Accounts payable | 629,000 | 577,000 |
Accrued expenses and other current liabilities | 526,000 | 620,000 |
Right of use liability - operating leases | 34,000 | 33,000 |
Wages payable | 111,000 | 107,000 |
Line of credit | 245,000 | 277,000 |
PPP Loan | 332,000 | 332,000 |
Current portion of long-term debt, net of deferred finance costs | 1,290,000 | 75,000 |
Total current liabilities | 3,167,000 | 2,021,000 |
Long-term debt/other liabilities, net of current portion and deferred finance costs | 0 | 1,120,000 |
Right of use liability - operating leases | 31,000 | 41,000 |
Total liabilities | 3,198,000 | 3,182,000 |
COMMITMENTS AND CONTINGENCIES | ||
Stockholders' deficit: | ||
Preferred stock; par value $.01 per share; 5,000,000 shares authorized, none issued and outstanding at March 31, 2021 and December 31, 2020 | 0 | 0 |
Common stock; par value $.01 per share; 50,000,000 shares authorized; 39,803,476 issued and outstanding at March 31, 2021 and 37,703,476 issued and outstanding as of December 31, 2020 | 398,000 | 377,000 |
Additional paid-in capital | 22,077,000 | 21,717,000 |
Accumulated deficit | (23,906,000) | (23,350,000) |
Total stockholders' deficit | (1,431,000) | (1,256,000) |
Total liabilities and stockholders' deficit | $ 1,767,000 | $ 1,926,000 |
Condensed Balance Sheets (Paren
Condensed Balance Sheets (Parenthetical) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivable, current | $ 5,000 | $ 22,000 |
Inventory valuation reserves | $ 300,000 | $ 279,000 |
Preferred stock, par value | $ .01 | $ .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 | $ .01 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 39,803,476 | 37,703,476 |
Common stock, shares outstanding | 39,803,476 | 37,703,476 |
Condensed Statements of Operati
Condensed Statements of Operations - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Income Statement [Abstract] | ||
Net sales | $ 566,000 | $ 729,000 |
Cost of goods sold | 461,000 | 539,000 |
Gross profit | 105,000 | 190,000 |
Operating expenses: | ||
Research and development | 20,000 | 34,000 |
Selling and marketing | 83,000 | 88,000 |
General and administrative | 511,000 | 339,000 |
Total operating expenses | 614,000 | 461,000 |
Operating loss | (509,000) | (271,000) |
Other (expense) / income: | ||
Interest expense | (47,000) | (53,000) |
Other income, net | 0 | (1,000) |
Total other (expense) / income | (47,000) | (54,000) |
Net loss before tax | (556,000) | (325,000) |
Income tax expense | 0 | 0 |
Net loss | $ (556,000) | $ (325,000) |
Basic and diluted loss per common share | $ (0.01) | $ (0.01) |
Weighted average number of shares outstanding - basic & diluted | 38,859,032 | 33,968,523 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Cash flows from operating activities: | ||
Net loss | $ (556,000) | $ (325,000) |
Adjustments to reconcile net loss to net cash provided by / (used in) operating activities: | ||
Depreciation and amortization | 18,000 | 20,000 |
Amortization of debt issuance costs | 0 | 37,000 |
Penalty added to Cherokee loan balance | 120,000 | 0 |
Provision for bad debt | (17,000) | 0 |
Provision for slow moving and obsolete inventory | 21,000 | 21,000 |
Share-based payment expense | 0 | 1,000 |
Director fee paid with restricted stock | 0 | 5,000 |
Refinance fee paid with restricted stock | 0 | 21,000 |
Changes in: | ||
Accounts receivable | 87,000 | (26,000) |
Inventory | 8,000 | 66,000 |
Prepaid expenses and other current assets | 7,000 | (257,000) |
Accounts payable | 52,000 | 43,000 |
Accrued expenses and other current liabilities | (103,000) | 790,000 |
Wages payable | 4,000 | 35,000 |
Net cash used in operating activities | (359,000) | 431,000 |
Cash flows from investing activities: | ||
Patent application costs | 0 | 0 |
Net cash used in investing activities | 0 | 0 |
Cash flows from financing activities: | ||
Payments on debt financing | (25,000) | (3,000) |
Proceeds from Private Placement | 0 | 164,000 |
Proceeds from Licoln Park financing | 381,000 | 0 |
Proceeds from lines of credit | 595,000 | 1,155,000 |
Payments on lines of credit | (627,000) | (1,170,000) |
Net cash provided by / (used in) financing activities | 324,000 | 146,000 |
Net change in cash and cash equivalents | (35,000) | 577,000 |
Cash and cash equivalents - beginning of period | 98,000 | 4,000 |
Cash and cash equivalents - end of period | 63,000 | 581,000 |
Supplemental disclosures of cash flow information: | ||
Loans converted to stock | 0 | 35,000 |
Cash paid during period for interest | $ 41,000 | $ 36,000 |
Basis of Reporting
Basis of Reporting | 3 Months Ended |
Mar. 31, 2021 | |
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, 2020. 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 March 31, 2021, and the results of operations and cash flows for the three month periods ended March 31, 2021 (the “First Quarter 2021”) and March 31, 2020 (the “First Quarter 2020”). Operating results for the First Quarter 2021 are not necessarily indicative of results that may be expected for the year ending December 31, 2021. Amounts at December 31, 2020 are derived from audited financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. During the First Quarter 2021, 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, 2020. 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, 2020, 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 May 2022. Through the First Quarter of 2021, the Company had a line of credit with Crestmark Bank. The maximum availability on the Company’s line of credit was $1,000,000 beginning June 22, 2020 when the facility was amended and extended. However, because the amount available under the line of credit is based upon the Company’s accounts receivable, the amounts actually available under our line of credit (historically) have been significantly less than the maximum availability. As of March 31, 2021, 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 2021, our credit facilities with Cherokee Financial, LLC were extended for another 12 months, or until February 15, 2022, which is less than 12 months from the date of this report. Our total debt at March 31, 2021 with Cherokee Financial, LLC is $1,240,000. We do not expect cash from operations within the next 12 months to be sufficient to pay the amounts due under these credit facilities, which is due in full on February 15, 2022. We are currently looking at alternatives to refinance these facilities. On December 9, 2020, we entered into a Purchase Agreement (the “Purchase Agreement”) and a Registration Rights Agreement (the “Registration Rights Agreement”) with Lincoln Park Capital Fund, LLC (“Lincoln Park”) under which Lincoln Park agreed to purchase from the Company, from time to time, up to $10,250,000 of our 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. Pursuant to the terms of the Registration Rights Agreement, we were required to file with the SEC, a registration statement on Form S-1 (the “Registration Statement”) to register for resale under the Securities Act of 1933, as amended (the “Securities Act”), the shares of common stock that we had already issued and sold to Lincoln Park (500,000 shares of common stock for a purchase price of $125,000 along with 1,250,000 shares of common stock issued to Lincoln Park’s for their irrevocable commitment to purchase common shares upon the terms of and subject to satisfaction of the conditions set forth in the Purchase Agreement), and shares of common stock we may in the future elect to issue and sell to Lincoln Park from time to time under the Purchase Agreement. As discussed in more detail in “Cash Flow, Outlook/Risk”, if sales levels decline further, 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 and the Lincoln Park Security Agreement are not sufficient to satisfy our working capital and capital expenditure requirements, we will be required to obtain additional credit facilities or sell additional equity securities, or delay capital expenditures, which could have a material adverse effect on 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 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) ASU 2020-06, “Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity”, Accounting Standards Issued; Not Yet Adopted There are not any new accounting standards issued but, not yet adopted in the First Quarter 2021. 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 | 3 Months Ended |
Mar. 31, 2021 | |
Inventory Disclosure [Abstract] | |
Inventory | Inventory is comprised of the following: March 31, 2021 December 31, 2020 Raw Materials $ 559,000 $ 534,000 Work In Process 103,000 127,000 Finished Goods 145,000 154,000 Allowance for slow moving and obsolete inventory (300,000 ) (279,000 ) $ 507,000 $ 536,000 |
Net Loss Per Common Share
Net Loss Per Common Share | 3 Months Ended |
Mar. 31, 2021 | |
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 March 31, 2021 and 2020: March 31, 2021 March 31, 2020 Warrants 0 0 Options 1,987,000 2,192,000 Total 1,987,000 2,192,000 The number of securities not included in the diluted net loss per share for the First Quarter 2021 and the First Quarter 2020 was 1,987,000 and 2,192,000, respectively, as their effect would have been anti-dilutive due to the net loss in the First Quarter 2021 and First Quarter 2020. |
Litigation_Legal Matters
Litigation/Legal Matters | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Litigation/Legal Matters | 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 | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Line of Credit and Debt | The Company’s Line of Credit and Debt consisted of the following as of March 31, 2021 and December 31, 2020: March 31, 2021 December 31, 2020 Loan and Security Agreement with Cherokee Financial, LLC $ 1,000,000 $ 900,000 Crestmark Line of Credit: 245,000 277,000 2019 Term Loan with Cherokee Financial, LLC: 240,000 220,000 April 2020 PPP Loan with Crestmark: 332,000 332,000 November 2020 Shareholder Note: 0 25,000 November 2020 Shareholder Note: 50,000 50,000 Total Debt $ 1,867,000 $ 1,804,000 Current portion $ 1,867,000 $ 684,000 Long-term portion, net of current portion $ 0 $ 1,120,000 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%; paid quarterly in arrears. In addition to the 8% interest, the Company is required to pay Cherokee a 1% annual fee for oversight and administration of the loan. This oversight fee is paid in cash and is paid contemporaneously with the quarterly interest payments. 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) were deducted from the balance on the Cherokee LSA and were amortized over the initial 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 term loan with Cherokee (See 2019 Term Loan with Cherokee within this Note E). 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 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. On February 24, 2021, the Company completed a transaction related to another one-year Extension Agreement dated February 14, 2021 (the “Second Extension Agreement”) with Cherokee under which Cherokee extended the due date of the Cherokee LSA to February 15, 2022. Under the terms of the Second Extension Agreement, 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 extended Cherokee LSA was increased to a fixed rate of 10% (the prior fixed rate was 8%) plus a 1% annual oversight fee (that remained unchanged). Interest and the oversight fee are paid quarterly with the first payment being due on May 15, 2021. If the Company doesn’t pay off the principal on or before February 15, 2022, there will be an 8% delinquent fee charged. This delinquent fee will only apply to whatever the principal balance is on February 15, 2022. If the Company pays any portion (or all) of the principal back, the 8% fee will not be due on the prepaid amounts. The Company can prepay all of part of the facility back prior to February 15, 2022 with no penalty. Cantone Research, Inc. earned a 3% fee on the extended principal of $900,000 (or $27,000) for their services related to securing the extension with Cherokee investors. This 3% service fee will be “rebated” when/if the Company prepays any, or a portion, of the loan. As an example, if the Company makes a principal reduction payment of $100,000, only $97,000 in cash will need to be remitted to Cherokee to have the $100,000 taken off the principal balance. The fee paid to Cantone Research, Inc. was recorded as a bank fee and is included in general and administrative expenses. No common stock was issued in connection with the extensions. The Company also agreed to pay Cherokee’s legal fees in the amount of $1,000. 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%. The Company will continue to make interest payments and administrative fees quarterly on the Cherokee LSA. The Company can pay off the Cherokee loan at any time with no penalty; except that a 1% administration fee would be required to be paid to Cherokee to close out all participations. The Company recognized $23,000 in interest expense related to the Cherokee LSA in the First Quarter 2021. The Company recognized $35,000 in interest expense related to the Cherokee LSA in the First Quarter 2020 (of which $17,000 is debt issuance cost amortization recorded as interest expense. The Company had $17,000 in accrued interest expense at March 31, 2021 and $15,000 in accrued interest expense at March 31, 2020 related to the Cherokee LSA. As of March 31, 2021, the balance on the Cherokee LSA was $1,000,000 including the $100,000 penalty referenced above. As of December 31, 2020, 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. Upon completion of the initial 5 year term, the Crestmark LOC automatically renews for additional one (1) year terms unless notice of termination from the Company is received by Crestmark not less than sixty (60) days prior to the end of the renewal term. The Company has not provided Crestmark with a notice of non-renewal and therefore, the Crestmark LOC will automatically renew on June 22, 2021 for another one year term, or until June 22, 2022. The Company amended the Crestmark LOC on June 22, 2020 and, until this amendment, the maximum amount available under the Crestmark LOC was $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 was reduced to $0, (making the Crestmark LOC an accounts-receivable based line only). This means that as of June 30, 2020, there was no inventory sub-cap. Upon execution of the June 2020 amendment, the Maximum Amount was reduced to $1,000,000 and with the Inventory Sub-Cap Limit gone as of July 1, 2020; the Crestmark LOC became a receivables-based only line of credit. The Crestmark LOC has a minimum loan balance requirement of $500,000. At March 31, 2021, the Company did not meet the minimum loan balance requirement as our balance was $245,000. 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 of the LSA, which includes but is not limited to, failure of the Company to make any payment when due, Crestmark is permitted to charge an Extra Rate. The Extra Rate is the Company’s then current interest rate plus 12.75% per annum. Interest on the Crestmark LOC is at a variable rate based on the Prime Rate plus 3% with a floor of 5.25%. As of March 31, 2021 and 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 is 12.03%. The Company recognized $12,000 in interest expense in the First Quarter 2021 and $9,000 in interest expense in the First Quarter 2020 related to the Crestmark LOC. Given the nature of the administration of the Crestmark LOC, at March 31, 2021, 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 March 31, 2021, the balance on the Crestmark LOC was $245,000 and as of December 31, 2020, the balance on the Crestmark LOC was $277,000. 2019 TERM LOAN WITH CHEROKEE On February 25, 2019, the Company entered into an agreement dated (and effective) February 13, 2019 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. 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. 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 were 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. A final balloon payment was due on February 15, 2021; however the Company further extended the 2019 Cherokee Term Loan on February 24, 2021 to February 15, 2022. Under the terms of the 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. The annual interest rate under the 2019 Cherokee Term Loan remains fixed at 18% paid quarterly in arrears with the first interest payment being due on May 15, 2021. If the Company doesn’t pay off the principal on or before February 15, 2022, there will be an 8% delinquent fee charged. This delinquent fee will only apply to whatever the principal balance is on February 15, 2022. If the Company pays any portion (or all) of the principal back, the 8% fee will not be due on the prepaid amounts. The Company can prepay all of part of the facility back prior to February 15, 2022 with no penalty. 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%. The Company recognized $10,000 in interest expense related to the 2019 Cherokee Term Loan in the First Quarter 2021 and $11,000 in interest expense in the First Quarter 2020 (of which $1,000 is debt issuance cost amortization recorded as interest expense). The Company had $7,000 in accrued interest expense at March 31, 2021 and $5,000 in accrued interest expense at March 31, 2020 related to the 2019 Cherokee Term Loan. The balance on the 2019 Cherokee Term Loan was $240,000 at March 31, 2021 and $220,000 at December 31, 2020. 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 in the amount of $332,000 under PPP guidelines after 24 weeks, or after October 2020. As of April 2021, the online application with Crestmark has been started and we are reconciling data with our payroll provider. The Company recognized $1,000 in interest expense related to the PPP Loan in the First Quarter 2021 and $0 in interest expense in the First Quarter 2020 (as the PPP Loan was not in place until April 2020). The Company had $3,000 in accrued interest expense at March 31, 2021 and $2,000 in accrued interest expense at December 31, 2020 related to the PPP Loan. This accrued interest is eligible for forgiveness under PPP loan guidelines. The balance on the PPP Loan was $332,000 at March 31, 2021 and at December 31, 2020. NOVEMBER 2020 LOAN WITH CHAIM DAVIS On November 6, 2020, the Company entered into a loan agreement with our (now former) Chairman of the Board Chaim Davis, under which Davis provided the Company the sum of $25,000 (the “November 2020 Loan”). There were no expenses or interest related to the November 2020 loan. The Company incurred $0 in interest expense in the First Quarter 2021 and $0 in the First Quarter 2020 (as the facility was not in place until November 2020). The balance on the November 2020 Term Loan was $25,000 at December 31, 2020, and $0 at December 31, 2019 (as the facility was not in place at December 31, 2019). The principal in the amount of $25,000 was paid on February 24, 2021 with proceeds from the Lincoln Park equity line. NOVEMBER 2020 TERM LOAN On November 4, 2020, the Company entered into a loan agreement with an individual in the amount of $50,000. There were no expenses related to the term loan and the interest rate is 7% (Prime + 3.75%). The first interest only payment was paid on February 4, 2021 and the final interest payment and 50,000 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. See Note H, Subsequent Event for more information on the extension. The company recognized and accrued less than $1,000 of interest expense related to the term loan in the First Quarter 2021 and $0 in interest expense in the First Quarter 2020 (as the loan was not in place until November 4, 2020). The balance on the 2020 Term Loan was $50,000 at March 31, 2021 and $50,000 at December 31, 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 First Quarter 2020. More specifically: 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 was 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 did not incur any interest expense in the First Quarter 2021 as the Equipment Loan was satisfied in full in the quarter ended September 30, 2020. The Company incurred minimal interest expense in the First Quarter 2020 related to the Equipment Loan. The balance on the Equipment Loan was $0 at March 31, 2021 and $0 at December 31, 2020. |
Stock Options and Warrants
Stock Options and Warrants | 3 Months Ended |
Mar. 31, 2021 | |
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 First Quarter 2021 and the First Quarter 2020, the Company issued 0 options to purchase shares of common stock. Stock option activity for the First Quarter 2021 and the First Quarter 2020 is summarized as follows (the figures contained within the tables below have been rounded to the nearest thousand): First Quarter 2021 First Quarter 2020 Weighted Average Exercise Price Aggregate Weighted Average Exercise Price Aggregate Intrinsic Value as of Shares Intrinsic Value as of Shares 31-Mar-20 31-Mar-21 Options outstanding at beginning of year 1,987,000 $ 0.13 2,252,000 $ 0.14 Granted 0 NA 0 NA Exercised 0 NA 0 NA Cancelled/expired 0 NA (60,000 ) $ 0.13 Options outstanding at end of quarter 1,987,000 $ 0.13 $ 107,000 2,192,000 $ 0.12 $ 2,000 Options exercisable at end of quarter 1,987,000 $ 0.13 2,112,000 $ 0.13 The Company recognized $0 in share based payment expense in the First Quarter 2021 and $1,000 in share based payment expense in the First Quarter 2020. At March 31, 2021, there was approximately $0 of unrecognized share based payment expense related to stock options. Warrants Warrant activity for the First Quarter 2021 and the First Quarter 2020 is summarized as follows: First Quarter 2021 First Quarter 2020 Shares Weighted Average Exercise Price Aggregate Intrinsic Value as of March 31, 2021 Shares Weighted Average Exercise Price Aggregate Intrinsic Value as of March 31, 2020 Warrants outstanding at beginning of year 0 NA 2,000,000 $ 0.18 Granted 0 0 Exercised 0 0 Cancelled/expired 0 NA (2,000,000 ) NA Warrants outstanding at end of quarter 0 NA None 0 NA None Warrants exercisable at end of quarter 0 NA 0 NA In the First Quarter 2021 and First Quarter 2020, the Company recognized $0 in debt issuance and deferred finance costs related to the issuance of the above warrants outstanding. As of March 31, 2021, there was $0 of total unrecognized expense. |
Changes in Stockholders' Defici
Changes in Stockholders' Deficit | 3 Months Ended |
Mar. 31, 2021 | |
Stockholders' deficit: | |
Changes in Stockholders' Deficit | The following table summarizes the changes in stockholders’ deficit for the three month periods ending March 31, 2021 and March 31, 2020: Common Stock Shares Amount Additional Paid in Capital Accumulated Deficit Total Balance – January 1, 2021 37,703,476 $ 377,000 $ 21,717,000 $ (23,350,000 ) $ (1,256,000 ) Shares issued to Lincoln Park for balance of Initial Purchase under the 2020 Lincoln Park Equity Line 500,000 5,000 120,000 125,000 Shares issued to Lincoln Park for purchases under the 2020 Lincoln Pak Equity Line 1,600,000 16,000 240,000 256,000 Net loss (556,000 ) (556,000 ) Balance – March 31, 2021 39,803,476 $ 398,000 $ 22,077,000 $ (23,906,000 ) $ (1,431,000 ) Balance – January 1, 2020 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 1,000 1,000 Shares issued for board meeting attendance in lieu of cash 23,253 * 5,000 5,000 Net loss (325,000 ) (325,000 ) Balance – March 31, 2020 35,847,093 $ 358,000 $ 21,632,000 $ (22,879,000 ) $ (889,000 ) *indicates less than $1,000 LINCOLN PARK EQUITY LINE OF CREDIT – DECEMBER 2020 On December 9, 2020, the Company 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 our shares of common stock, par value $0.01 per share, subject to certain limitations set forth in the Purchase Agreement, during the term of the Purchase Agreement (two years). Pursuant to the terms of the Registration Rights Agreement, the Company was required to file with the U.S. Securities and Exchange Commission (the “SEC”) a registration statement on Form S-1 (the “Registration Statement”) to register for resale under the Securities Act of 1933, as amended (the “Securities Act”), the shares of common stock issued and sold as well as the shares of common stock that the Company may elect in the future to issue and sell to Lincoln Park from time to time under the Purchase Agreement. On December 9, 2020, the Company sold 500,000 shares of common stock to Lincoln Park in an initial purchase under the Purchase Agreement for a purchase price of $125,000. As consideration for Lincoln Park’s irrevocable commitment to purchase common shares upon the terms of and subject to satisfaction of the conditions set forth in the Purchase Agreement, on December 9, 2020, the Company also issued 1,250,000 shares of common stock to Lincoln Park as commitment shares. The commitment shares were valued at $138,000 and recorded as an addition to equity for the issuance of common stock and treated as a reduction to equity as a cost of capital to be raised under the Lincoln Park facility. While this commitment fee relates to the entire offering and the purchases of common shares that will occur over time, the Company has recorded the entire commitment fee as issuance costs in additional paid-in capital at the time the commitment fee was paid because the offering has been consummated, and there is no guaranteed future economic benefit from this payment. The Company did not have the right to commence any further sales to Lincoln Park under the Purchase Agreement until all of the conditions that are set forth in the Purchase Agreement had been satisfied, including, but not limited to, the Registration Statement being declared effective by the SEC (at which time all conditions are satisfied, the “Commencement”). On January 4, 2021, the Company was notified by the SEC that they would not review the Registration Statement on Form S-1 filed by the Company on December 29, 2020. The Company was subsequently instructed by the SEC (through counsel) to amend the originally filed Form S-1 to include certain information for the fiscal year ended December 31, 2020 in place of the information in the original filing that was for the fiscal year ended December 31, 2019. The Company filed a Form S-1/A on January 7, 2021 and requested (through counsel) that the SEC declare the Form S-1 effective on January 11, 2021. The SEC granted the Company’s request. On January 11, 2021, the Company sold the remaining 500,000 shares of common stock to Lincoln Park required as an initial purchase under the Purchase Agreement for a purchase price of $125,000. From and after the Commencement, under the Purchase Agreement, on any business day selected by the Company on which the closing sale price of its common stock exceeds $0.05, the Company may direct Lincoln Park to purchase up to 200,000 common shares on the applicable purchase date (a “Regular Purchase”), which maximum number of shares may be increased to certain higher amounts up to a maximum of 250,000 common shares, if the market price of the Company’s common stock at the time of the Regular Purchase equals or exceeds $0.20 and which maximum number of shares may be further increased to certain higher amounts up to a maximum of 500,000 common shares, if the market price of the Company’s common stock at the time of the Regular Purchase equals or exceeds $0.50 (such share and dollar amounts subject to proportionate adjustments for stock splits, recapitalizations and other similar transactions as set forth in the Purchase Agreement), provided that Lincoln Park’s purchase obligation under any single Regular Purchase may not exceed $500,000. The purchase price of the shares of common stock the Company may elect to sell to Lincoln Park under the Purchase Agreement in a Regular Purchase, if any, will be based on 95% of the lower of: (i) the lowest sale price on the purchase date for such Regular Purchase and (ii) the arithmetic average of the three lowest closing sale prices for the Company’s common shares during the 15 consecutive business days ending on the business day immediately preceding the purchase date for a Regular Purchase (in each case, to be appropriately adjusted for any reorganization, recapitalization, non-cash dividend, stock split or other similar transaction.) In addition to Regular Purchases, the Company may also direct Lincoln Park to purchase other amounts of the Company’s common shares in “accelerated purchases” and in “additional accelerated purchases” under the terms set forth in the Purchase Agreement. Lincoln Park cannot require the Company to sell any common stock to Lincoln Park, but Lincoln Park is obligated to make purchases as the Company directs, subject to certain conditions. There are no upper limits on the price per share that Lincoln Park must pay for the Company’s common shares that the Company may elect to sell to Lincoln Park pursuant to the Purchase Agreement. In all instances, the Company may not sell common shares to Lincoln Park under the Purchase Agreement to the extent that the sale of shares would result in Lincoln Park beneficially owning more than 9.99% of our common shares. There are no restrictions on future financings, rights of first refusal, participation rights, penalties or liquidated damages in the Purchase Agreement or Registration Rights Agreement, other than the Company’s agreement not to enter into any “variable rate” transactions (as defined in the Purchase Agreement) with any third party, subject to certain exceptions set forth in the Purchase Agreement, for the period set forth in the Purchase Agreement. Lincoln Park has covenanted not to cause or engage in any direct or indirect short selling or hedging of the Company’s common stock. Actual sales of common stock, if any, to Lincoln Park under the Purchase Agreement will depend on a variety of factors to be determined by the Company from time to time, including, among others, market conditions, the trading price of the Company’s common stock and determinations by the Company as to the appropriate sources of funding for the Company and its operations. The net proceeds to the Company from sales of common stock to Lincoln Park under the Purchase Agreement, if any, will depend on the frequency and prices at which the Company sells common stock to Lincoln Park under the Purchase Agreement. Any proceeds that the Company receives from sales of common stock to Lincoln Park under the Purchase Agreement will be used at the sole discretion of Company management and will be used for general corporate purposes, capital expenditures and working capital. The Purchase Agreement and the Registration Rights Agreement contain customary representations, warranties, conditions and indemnification obligations of the parties. During any “event of default” under the Purchase Agreement, Lincoln Park does not have the right to terminate the Purchase Agreement; however, the Company may not initiate any Regular Purchase or any other purchase of common shares by Lincoln Park, until such event of default is cured. The Company has the right to terminate the Purchase Agreement at any time, at no cost or penalty. In addition, in the event of bankruptcy proceedings by or against the Company, the Purchase Agreement will automatically terminate. The representations, warranties and covenants contained in such agreements were made only for purposes of such agreements and as of specific dates, were solely for the benefit of the parties to such agreements, and may be subject to limitations agreed upon by the contracting parties. In the First Quarter 2021, the Company sold a total of 2,100,000 shares of common stock to Lincoln Park (including the balance of the required initial purchase) as Regular Purchases and received proceeds of $381,000. PRIVATE PLACEMENT – FEBRUARY 2020 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. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | November 2020 Shareholder Note On May 4, 2021, we entered into a six-month Extension Agreement (the “Extension”) with the shareholder. Under the Extension, the principal in the amount of $50,000 is now due on November 4, 2021. The interest rate and all other terms of the note remain unchanged under the Extension. The interest payment due to the shareholder on May 4, 2021 was paid as required with the next interest payment being due on August 4, 2021. |
Basis of Reporting (Policies)
Basis of Reporting (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
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, 2020. 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 March 31, 2021, and the results of operations and cash flows for the three month periods ended March 31, 2021 (the “First Quarter 2021”) and March 31, 2020 (the “First Quarter 2020”). Operating results for the First Quarter 2021 are not necessarily indicative of results that may be expected for the year ending December 31, 2021. Amounts at December 31, 2020 are derived from audited financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. During the First Quarter 2021, 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, 2020. 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, 2020, 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 May 2022. Through the First Quarter of 2021, the Company had a line of credit with Crestmark Bank. The maximum availability on the Company’s line of credit was $1,000,000 beginning June 22, 2020 when the facility was amended and extended. However, because the amount available under the line of credit is based upon the Company’s accounts receivable, the amounts actually available under our line of credit (historically) have been significantly less than the maximum availability. As of March 31, 2021, 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 2021, our credit facilities with Cherokee Financial, LLC were extended for another 12 months, or until February 15, 2022, which is less than 12 months from the date of this report. Our total debt at March 31, 2021 with Cherokee Financial, LLC is $1,240,000. We do not expect cash from operations within the next 12 months to be sufficient to pay the amounts due under these credit facilities, which is due in full on February 15, 2022. We are currently looking at alternatives to refinance these facilities. On December 9, 2020, we entered into a Purchase Agreement (the “Purchase Agreement”) and a Registration Rights Agreement (the “Registration Rights Agreement”) with Lincoln Park Capital Fund, LLC (“Lincoln Park”) under which Lincoln Park agreed to purchase from the Company, from time to time, up to $10,250,000 of our 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. Pursuant to the terms of the Registration Rights Agreement, we were required to file with the SEC, a registration statement on Form S-1 (the “Registration Statement”) to register for resale under the Securities Act of 1933, as amended (the “Securities Act”), the shares of common stock that we had already issued and sold to Lincoln Park (500,000 shares of common stock for a purchase price of $125,000 along with 1,250,000 shares of common stock issued to Lincoln Park’s for their irrevocable commitment to purchase common shares upon the terms of and subject to satisfaction of the conditions set forth in the Purchase Agreement), and shares of common stock we may in the future elect to issue and sell to Lincoln Park from time to time under the Purchase Agreement. As discussed in more detail in “Cash Flow, Outlook/Risk”, if sales levels decline further, 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 and the Lincoln Park Security Agreement are not sufficient to satisfy our working capital and capital expenditure requirements, we will be required to obtain additional credit facilities or sell additional equity securities, or delay capital expenditures, which could have a material adverse effect on 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. |
Accounting Standards | 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) ASU 2020-06, “Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity”, Accounting Standards Issued; Not Yet Adopted There are not any new accounting standards issued but, not yet adopted in the First Quarter 2021. 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) | 3 Months Ended |
Mar. 31, 2021 | |
Inventory Disclosure [Abstract] | |
Inventory | March 31, 2021 December 31, 2020 Raw Materials $ 559,000 $ 534,000 Work In Process 103,000 127,000 Finished Goods 145,000 154,000 Allowance for slow moving and obsolete inventory (300,000 ) (279,000 ) $ 507,000 $ 536,000 |
Net Loss Per Common Share (Tabl
Net Loss Per Common Share (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
Potentially dilutive shares | March 31, 2021 March 31, 2020 Warrants 0 0 Options 1,987,000 2,192,000 Total 1,987,000 2,192,000 |
Line of Credit and Debt (Tables
Line of Credit and Debt (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Line of credit and debt | March 31, 2021 December 31, 2020 Loan and Security Agreement with Cherokee Financial, LLC $ 1,000,000 $ 900,000 Crestmark Line of Credit: 245,000 277,000 2019 Term Loan with Cherokee Financial, LLC: 240,000 220,000 April 2020 PPP Loan with Crestmark: 332,000 332,000 November 2020 Shareholder Note: 0 25,000 November 2020 Shareholder Note: 50,000 50,000 Total Debt $ 1,867,000 $ 1,804,000 Current portion $ 1,867,000 $ 684,000 Long-term portion, net of current portion $ 0 $ 1,120,000 |
Stock Options and Warrants (Tab
Stock Options and Warrants (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Stock Options | |
Stock option/warrant activity | First Quarter 2021 First Quarter 2020 Weighted Average Exercise Price Aggregate Weighted Average Exercise Price Aggregate Intrinsic Value as of Shares Intrinsic Value as of Shares 31-Mar-20 31-Mar-21 Options outstanding at beginning of year 1,987,000 $ 0.13 2,252,000 $ 0.14 Granted 0 NA 0 NA Exercised 0 NA 0 NA Cancelled/expired 0 NA (60,000 ) $ 0.13 Options outstanding at end of quarter 1,987,000 $ 0.13 $ 107,000 2,192,000 $ 0.12 $ 2,000 Options exercisable at end of quarter 1,987,000 $ 0.13 2,112,000 $ 0.13 |
Warrants | |
Stock option/warrant activity | First Quarter 2021 First Quarter 2020 Shares Weighted Average Exercise Price Aggregate Intrinsic Value as of March 31, 2021 Shares Weighted Average Exercise Price Aggregate Intrinsic Value as of March 31, 2020 Warrants outstanding at beginning of year 0 NA 2,000,000 $ 0.18 Granted 0 0 Exercised 0 0 Cancelled/expired 0 NA (2,000,000 ) NA Warrants outstanding at end of quarter 0 NA None 0 NA None Warrants exercisable at end of quarter 0 NA 0 NA |
Changes in Stockholders' Defi_2
Changes in Stockholders' Deficit (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Stockholders' deficit: | |
Statement of Stockholders' Deficit | Common Stock Shares Amount Additional Paid in Capital Accumulated Deficit Total Balance – January 1, 2021 37,703,476 $ 377,000 $ 21,717,000 $ (23,350,000 ) $ (1,256,000 ) Shares issued to Lincoln Park for balance of Initial Purchase under the 2020 Lincoln Park Equity Line 500,000 5,000 120,000 125,000 Shares issued to Lincoln Park for purchases under the 2020 Lincoln Pak Equity Line 1,600,000 16,000 240,000 256,000 Net loss (556,000 ) (556,000 ) Balance – March 31, 2021 39,803,476 $ 398,000 $ 22,077,000 $ (23,906,000 ) $ (1,431,000 ) Balance – January 1, 2020 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 1,000 1,000 Shares issued for board meeting attendance in lieu of cash 23,253 * 5,000 5,000 Net loss (325,000 ) (325,000 ) Balance – March 31, 2020 35,847,093 $ 358,000 $ 21,632,000 $ (22,879,000 ) $ (889,000 ) *indicates less than $1,000 |
Inventory (Details)
Inventory (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 559,000 | $ 534,000 |
Work in process | 103,000 | 127,000 |
Finished goods | 145,000 | 154,000 |
Allowance for slow moving and obsolete inventory | (300,000) | (279,000) |
Inventory, net | $ 507,000 | $ 536,000 |
Net Loss Per Common Share (Deta
Net Loss Per Common Share (Details) - shares | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Weighted average number diluted shares outstanding adjustment | 1,987,000 | 2,192,000 |
Warrants | ||
Weighted average number diluted shares outstanding adjustment | 0 | 0 |
Stock Options | ||
Weighted average number diluted shares outstanding adjustment | 1,987,000 | 2,192,000 |
Net Loss Per Common Share (De_2
Net Loss Per Common Share (Details Narrative) - shares | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Earnings Per Share [Abstract] | ||
Antidilutive securities excluded from computation of earnings per share, amount | 1,987,000 | 2,192,000 |
Line of Credit and Debt (Detail
Line of Credit and Debt (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Long-term debt, gross | $ 1,867,000 | $ 1,804,000 |
Total debt, net | 1,867,000 | 1,804,000 |
Current portion | 1,867,000 | 684,000 |
Long-term portion, net of current portion | 0 | 1,120,000 |
Loan and Security Agreement with Cherokee Financial, LLC | ||
Long-term debt, gross | 1,000,000 | 900,000 |
Crestmark Line of Credit | ||
Long-term debt, gross | 245,000 | 277,000 |
2019 Term Loan with Cherokee Financial, LLC | ||
Long-term debt, gross | 240,000 | 220,000 |
April 2020 PPP Loan with Crestmark | ||
Long-term debt, gross | 332,000 | 332,000 |
November 2020 Shareholder Note | ||
Long-term debt, gross | 0 | 25,000 |
November 2020 Shareholder Note | ||
Long-term debt, gross | $ 50,000 | $ 50,000 |
Line of Credit (Details Narrati
Line of Credit (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Loan and Security Agreement with Cherokee Financial, LLC | ||
Interest expense | $ 23,000 | $ 35,000 |
Accrued interest | 17,000 | 15,000 |
Crestmark Line of Credit | ||
Interest expense | 12,000 | 9,000 |
Accrued interest | 0 | 0 |
Cherokee Loan and Security Agreement | ||
Interest expense | 10,000 | 11,000 |
Accrued interest | 7,000 | 5,000 |
April 2020 PPP Loan with Crestmark | ||
Interest expense | 1,000 | 0 |
Accrued interest | 3,000 | 2,000 |
November 2020 Shareholder Note | ||
Interest expense | 0 | 0 |
Accrued interest | 0 | 0 |
November 2020 Shareholder Note | ||
Interest expense | 1,000 | 0 |
Accrued interest | $ 0 | $ 0 |
Stock Options and Warrants (Det
Stock Options and Warrants (Details) - Stock Options - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Shares, beginning balance | 1,987,000 | 2,252,000 |
Shares, granted | 0 | 0 |
Shares, exercised | 0 | 0 |
Shares, cancelled/expired | 0 | (60,000) |
Shares, ending balance | 1,987,000 | 2,192,000 |
Shares, exercisable | 1,987,000 | 2,112,000 |
Weighted average exercise price, beginning balance | $ .13 | $ .14 |
Weighted average exercise price, granted | .00 | .00 |
Weighted average exercise price, exercised | .00 | .00 |
Weighted average exercise price, cancelled/expired | .00 | .13 |
Weighted average exercise price, ending balance | .13 | .12 |
Weighted average exercise price, exercisable | $ .13 | $ .13 |
Aggregate intrinsic value, outstanding | $ 107,000 | $ 2,000 |
Stock Options and Warrants (D_2
Stock Options and Warrants (Details 1) - Warrants - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Shares, beginning balance | 0 | 2,000,000 |
Shares, granted | 0 | 0 |
Shares, exercised | 0 | 0 |
Shares, cancelled/expired | 0 | (2,000,000) |
Shares, ending balance | 0 | 0 |
Shares, exercisable | 0 | 0 |
Weighted average exercise price, beginning balance | $ .00 | $ .18 |
Weighted average exercise price, granted | .00 | .00 |
Weighted average exercise price, exercised | .00 | .00 |
Weighted average exercise price, cancelled/expired | .00 | .00 |
Weighted average exercise price, ending balance | .00 | .00 |
Weighted average exercise price, exercisable | $ .00 | $ .00 |
Aggregate intrinsic value, outstanding | $ 0 | $ 0 |
Stock Options and Warrants (D_3
Stock Options and Warrants (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Stockholders' Equity Note [Abstract] | ||
Share based payment expense | $ 0 | $ 1,000 |
Unrecognized share based payment expense related to stock options | 0 | |
Debt issuance and deferred finance costs | 0 | $ 0 |
Unrecognized share based payment expense related to warrants | $ 0 |
Changes in Stockholders' Defi_3
Changes in Stockholders' Deficit (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Common Stock | ||
Beginning balance, shares | 37,703,476 | 32,680,984 |
Beginning balance, amount | $ 377,000 | $ 327,000 |
Shares issued to Lincoln Park for balance of Initial Purchase under the 2020 Licoln Park Equity Line, shares | 500,000 | |
Shares issued to Lincoln Park for balance of Initial Purchase under the 2020 Licoln Park Equity Line, amount | $ 5,000 | |
Shares issued to Licoln Park for purchases under the 2020 Licoln Park Equity Line, shares | 1,600,000 | |
Shares issued to Licoln Park for purchases under the 2020 Licoln Park Equity Line, amount | $ 16,000 | |
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 | |
Shares issued to Cherokee in connection with loan, amount | $ 3,000 | |
Shares issued for board meeting attendance in lieu of cash, shares | 23,253 | |
Shares issued for board meeting attendance in lieu of cash, amount | $ 0 | |
Ending balance, shares | 39,803,476 | 35,847,093 |
Ending balance, amount | $ 398,000 | $ 358,000 |
Additional Paid in Capital | ||
Beginning balance, amount | 21,717,000 | 21,437,000 |
Shares issued to Lincoln Park for balance of Initial Purchase under the 2020 Licoln Park Equity Line, amount | 120,000 | |
Shares issued to Licoln Park for purchases under the 2020 Licoln Park Equity Line, amount | 240,000 | |
Shares issued in connection with private placement, amount | 171,000 | |
Shares issued to Cherokee in connection with loan, amount | 18,000 | |
Shares issued for board meeting attendance in lieu of cash, amount | 5,000 | |
Share based payment expense | 1,000 | |
Ending balance, amount | 22,077,000 | 21,632,000 |
Accumulated Deficit | ||
Beginning balance, amount | (23,350,000) | (22,554,000) |
Net loss | (556,000) | (325,000) |
Ending balance, amount | (23,906,000) | (22,879,000) |
Beginning balance, amount | (1,256,000) | (790,000) |
Shares issued to Lincoln Park for balance of Initial Purchase under the 2020 Licoln Park Equity Line, amount | 125,000 | |
Shares issued to Licoln Park for purchases under the 2020 Licoln Park Equity Line, amount | 256,000 | |
Shares issued in connection with private placement, amount | 199,000 | |
Shares issued to Cherokee in connection with loan, amount | 21,000 | |
Shares issued for board meeting attendance in lieu of cash, amount | 5,000 | |
Share based payment expense | 0 | 1,000 |
Net loss | (556,000) | (325,000) |
Ending balance, amount | $ (1,431,000) | $ (889,000) |