<PAGE>   1
                    U. S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549
                                 FORM 10-QSB/A-2

 [x] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
     Act of 1934.
     For the quarterly period ended October 31, 1998.


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

     For the transition period from              to


                         Commission File Number: 0-28666


                         AMERICAN BIO MEDICA CORPORATION
        -----------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)


                New York                                14-1702188
       -------------------------------------------------------------------
       (State or other jurisdiction                  (I.R.S. Employer
       incorporation or organization)                Identification No.)


                   300 Fairview Avenue, Hudson, New York 12534
                   -------------------------------------------
                    (Address of principal executive offices)


                                  800-227-1243
                           ---------------------------
                           (Issuer's telephone number)



                                (Not Applicable)
              ----------------------------------------------------
              (Former name, former address and former fiscal year,
                          if changed since last report)


      Check whether the issuer

(1)  filed all reports required to be filed by Section 13 or 15(d) of the
     Exchange Act during the past 12 months (or for such shorter period that the
     registrant was required to file such reports), and

(2)  has been subject to such filing requirements for the past 90 days.

      Yes [X]    No [ ]

     State the number of shares outstanding of each of the issuer's classes of
common equity as of the latest practicable date:

     14,728,601 Common Shares as of December 10, 1998



     Transitional Small Business Disclosure Format Yes [ ] No [X]




<PAGE>   2


                                     PART I
                              FINANCIAL INFORMATION


Item 1. Financial Statements

     The condensed financial statements for the period ended October 31, 1998
included herein have been prepared by American Bio Medica Corporation, (the
"Company") without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission (the "Commission"). In the opinion of
management, the statements include all adjustments necessary to present fairly
the financial position of the Company as of October 31, 1998 and the results of
operations and cash flows for the six month periods ended October 31, 1997 and
1998.



                                       2
<PAGE>   3




                  AMERICAN BIO MEDICA CORPORATION
                           BALANCE SHEETS
             AS OF APRIL 30, 1998 AND OCTOBER 31, 1998


<TABLE>
<CAPTION>
                                                                                                    OCTOBER 31
                                                                                      APRIL 30         1998
                                                                                       1998         (UNAUDITED)
                                                                                   ------------    -------------
<S>                                                                                <C>             <C>
                             ASSETS

Current Assets
  Cash and cash equivalents                                                        $  3,239,000    $  1,597,000
  Accounts receivable - net of allowance                                                712,000       1,428,000
  Inventory                                                                             991,000       1,778,000
  Prepaid expenses                                                                       24,000         384,000

                                                                                   ------------    ------------
  Total  Current Assets                                                               4,966,000       5,187,000

Property, plant and equipment, net                                                      147,000         320,000
Due from officer                                                                        235,000         254,000
Other assets                                                                              8,000          20,000

                                                                                   ------------    ------------

Total Assets                                                                       $  5,356,000    $  5,781,000
                                                                                   ============    ============

              LIABILITIES AND STOCKHOLDER'S EQUITY

Current Liabilities
  Accounts payable                                                                 $    322,000    $  1,043,000
  Accrued expenses                                                                      164,000         291,000

                                                                                   ------------    ------------
 Total Current Liabilities                                                              486,000       1,334,000
                                                                                   ------------    ------------

Stockholders Equity:
 Preferred stock; par value $.01 per share; 5,000,000 shares authorized; 2,500
    and 2,298 shares Series D, 8% cumulative, convertible issued and Outstanding
    (face values $2,500,000 and $2,298,000)
     at April 30, 1998 and October 31, 1998 respectively                                      0               0
 Common stock; par value $.01 per share;
   30,000,000 shares authorized; 14,282,989 and 14,406,495
    Shares issued and outstanding at
     April 30, 1998 and October 31, 1998 respectively                                   143,000         144,000

Additional paid-in capital                                                           12,102,000      12,206,000
Subscriptions receivable                                                                 (9,000)         (9,000)
Unearned compensation                                                                   (24,000)        (24,000)
Accumulated deficit                                                                  (7,342,000)     (7,870,000)

                                                                                   ------------    ------------
  Total Stockholder's Equity                                                          4,870,000       4,447,000
                                                                                   ------------    ------------

Total Liabilities and Stockholders Equity                                          $  5,356,000    $  5,781,000
                                                                                   ============    ============

</TABLE>


                 See accompanying notes to financial statements



                                       3
<PAGE>   4



                         AMERICAN BIO MEDICA CORPORATION
                            STATEMENTS OF OPERATIONS
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                   FOR THE SIX MONTHS ENDED
                                                         OCTOBER 31,
                                                 -----------------------------
                                                  1997 (NOTE C)      1998
                                                 --------------  -------------
<S>                                              <C>             <C>
Revenues                                         $  1,025,000    $  3,081,000

Cost of sales                                         493,000       1,236,000
                                                 ------------    ------------

Gross profit                                          532,000       1,845,000
                                                 ------------    ------------

Operating expenses
  Selling, general and administrative expenses        996,000       1,984,000
  Non-cash compensation charges                       668,000               0
  Depreciation and amortization                        51,000          43,000
  Research & development                                    0         103,000
                                                 ------------    ------------

                                                    1,715,000       2,130,000
                                                 ------------    ------------

Income (loss) from operations                      (1,183,000)       (285,000)
                                                 ------------    ------------

Other income and expense
  Interest income                                      51,000          17,000


                                                 ------------    ------------

                                                       51,000          17,000
                                                 ------------    ------------

Net(loss)                                        $ (1,132,000)   $   (268,000)

Adjustments:
Preferred stock beneficial conversion feature                        (123,000)
Preferred stock dividend, including late fee                         (259,000)
                                                 ------------    ------------

Net loss attributable to common shareholders     $ (1,132,000)   $   (650,000)
                                                 ============    ============

Basic and diluted (loss)
   per common share (Note D)                     $      (0.08)   $      (0.05)

 Weighted average shares outstanding -
     basic and diluted                             13,718,265      14,346,669
                                                 ============    ============
</TABLE>



                 See accompanying notes to financial statements




                                       4
<PAGE>   5




                         AMERICAN BIO MEDICA CORPORATION
                            STATEMENTS OF OPERATIONS
                                   (UNAUDITED)



<TABLE>
<CAPTION>
                                                   FOR THE THREE MONTHS ENDED
                                                           OCTOBER 31,
                                                 ----------------------------
                                                 1997 (NOTE C)       1998
                                                 -------------   ------------
<S>                                              <C>             <C>
Revenues                                         $    359,000    $  1,773,000

Cost of sales                                         124,000         722,000
                                                 ------------    ------------

Gross profit                                          235,000       1,051,000
                                                 ------------    ------------

Operating expenses
  Selling, general and administrative expenses        548,000         953,000
  Non-cash compensation charges                        46,000
  Depreciation and amortization                        26,000          25,000
  Research & development                                               52,000
                                                 ------------    ------------

                                                      620,000       1,030,000
                                                 ------------    ------------

Income (loss) from operations                        (385,000)         21,000
                                                 ------------    ------------

Other income and expense
  Interest income (expense)                            29,000         (12,000)


                                                 ------------    ------------

                                                       29,000         (12,000)
                                                 ------------    ------------

Net income (loss)                                $   (356,000)   $      9,000

Adjustments:
Preferred stock dividend, including late fee                         (205,000)
                                                 ------------    ------------

Net loss attributable to common shareholders     $   (356,000)   $   (196,000)
                                                 ============    ============

Basic and diluted (loss)
   per common share (Note D)                     $      (0.03)   $      (0.01)

 Weighted average shares outstanding -
     basic and diluted                             13,718,265      14,346,669
                                                 ============    ============

</TABLE>


                 See accompanying notes to financial statements



                                       5
<PAGE>   6




                         AMERICAN BIO MEDICA CORPORATION
                            STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                     FOR THE SIX MONTHS ENDED
                                                            OCTOBER 31,
                                                   ----------------------------
                                                   1997 (NOTE C)       1998
                                                   ------------   -------------
<S>                                                <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net  (loss)                                       $(1,132,000)   $  (268,000)
  Adjustments to reconcile net loss
   to net cash used in operating activities:
    Amortization and depreciation                       51,000         43,000
    Issuance of compensating stock/options             668,000
    Changes in:
     Accounts receivable                              (479,000)      (716,000)
     Inventory                                        (203,000)      (787,000)
     Prepaid expenses and other current assets         (24,000)      (360,000)
     Other assets                                       33,000        (12,000)
     Accounts payable and accrued expenses            (200,000)       588,000
                                                   -----------    -----------

      Net cash used in operating activities         (1,286,000)    (1,520,000)
                                                   -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES
  Purchase of property, plant and equipment            (73,000)      (217,000)
  Purchase of investments                              (24,000)
  Loans to officer                                                    (19,000)
                                                   -----------    -----------


Net cash used in investing activities                  (97,000)      (236,000)
                                                   -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from exercise of warrants and options       983,000        105,000
                                                   -----------    -----------

    Net cash provided by financing activities          983,000        105,000

                                                   -----------    -----------

NET DECREASE IN CASH AND CASH EQUIVALENTS             (400,000)    (1,642,000)

Cash and cash equivalents - beginning of period      1,763,000      3,239,000
                                                   -----------    -----------

CASH AND CASH EQUIVALENTS - END OF PERIOD          $ 1,363,000    $ 1,597,000
                                                   ===========    ===========

</TABLE>


                See accompanying notes to financial statements



                                        6
<PAGE>   7



Notes to Financial Statements
                                         October 31, 1998

Note A - Basis of Reporting

     The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q. Accordingly, they do not
include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, such statements include all adjustments (consisting of normal
recurring items and see Note D) which are considered necessary for a fair
presentation of the financial position of American Bio Medica Corporation (the
"Company") at October 31, 1998, and the results of its operations, and cash
flows for the six-month period then ended. The results of operations for the
six-month period ended October 31, 1998 are not necessarily indicative of the
operating results for the full year. It is suggested that these financial
statements be read in conjunction with the financial statements and related
disclosures for the year ended April 30, 1998 included in the Company's Form
10-KSB.


Note B - Net Income Per Share of Common Stock

     In 1997, the Financial Accounting Standards Board issued Statement No. 128,
"Earnings Per Share".  Statement No. 128 replaced the calculation of primary and
fully  diluted  earnings  per share with basic and diluted  earnings  per share.
Unlike primary earnings per share, basic earnings per share exclude any dilutive
effects of options, warrants, and convertible securities.  Dilutive earnings per
share is very similar to the  previously  reported  fully  diluted  earnings per
share. The Company adopted Statement No. 128 and has  retroactively  applied the
effects thereof for all periods  presented.  The impact on the per share amounts
previously reported was not significant.

     When preferred stock is convertible to common stock at a conversion rate
that is the lower of a rate fixed at issuance or a fixed discount from the
common stock market price at the time of conversion, the discounted amount is an
assured incremental yield, the "beneficial conversion feature", to the preferred
shareholders and should be accounted for as an embedded dividend to preferred
shareholders. As such, the loss per common share was adjusted for this feature.




                                       7
<PAGE>   8

Note C - Restatement of Prior Year Quarterly Statements of Operations

The Company is recording adjustments which effect prior interim accounting
periods of the fiscal year ended April 30, 1998 as indicated below.


<TABLE>
<CAPTION>
                                                          Three Months Ended
                                                           October 31,1997
                                         -------------------------------------------
                                                            Adjustments
                                         --------------------------------------------------------------
                                As         Book       Compen-       Gross Profit                           As
                             Reported    Sales (1)   sation (2)     Percentage (3)             Other     Adjusted
                           ---------------------------------------------------------    -----------------------------
<S>                        <C>           <C>         <C>            <C>                 <C>              <C>
Revenues                         457,000  (97,000)                                      (4)    (1,000)        359,000

                                                                                        (5)   (58,000)
Cost Of Sales                    145,000  (15,000)                           58,000     (6)    (6,000)        124,000
                           -------------                                                                    ---------
Gross Profit                     312,000                                                                      235,000
                           -------------                                                                    ---------

                                                                                        (5)     58,000
                                                                                        (7)     53,000
                                                                                        (8)     18,000
Selling, General &                                                                      (9)     17,000
Administrative Expenses          425,000                    46,000                      (6)      3,000        620,000
                           -------------                                                                    ---------
Loss from operations            (113,000)                                                                    (385,000)
                           =============                                                                    =========

Net  Loss  per share               (0.01)                                                                       (0.03)
                           =============                                                                    =========


</TABLE>


<TABLE>
<CAPTION>
                                                           Six Months Ended
                                                           October 31,1997
                                         -------------------------------------------
                                                          Adjustments
                                         --------------------------------------------------------------
                                As         Book        Compen-       Gross Profit                           As
                             Reported    Sales (1)    sation (2)     Percentage (3)             Other     Adjusted
                           ---------------------------------------------------------    -----------------------------
<S>                        <C>           <C>         <C>             <C>                <C>              <C>
Revenues                       1,274,000 (176,000)                                            (73,000)     1,025,000
Cost Of Sales                    501,000  (27,000)                          175,000          (156,000)       493,000
                             -----------                                                                  ----------
Gross Profit                     773,000                                                                     532,000
                             -----------                                                                  ----------

Selling, General &
Administrative Expenses          839,000                   668,000                             208,000     1,715,000
                             ===========                                                                  ==========
Loss from operations             (66,000)                                                                 (1,183,000)
                             ===========                                                                  ==========

Net Income (Loss) per share         0.00                                                                       (0.09)
                             ===========                                                                  ==========
</TABLE>


The following explains the principal adjustments:

(1)  A revenue recognition adjustment to provide an allowance for book sales
     which are subject to customer acceptance and its related effect on cost of
     sales.

(2)  Adjustments to recognize non-cash employee and consulting compensation
     charges in the period earned. The expenses represent the issuance of equity
     instruments at fair value in accordance with employment agreements.(see
     note K [2] )



                                       8
<PAGE>   9

(3)  The gross profit percentages have been recalculated to correspond with
     inventory adjustments, drug test samples and the timing of revenue
     recognition.

(4)  Adjustment to reverse consignment sale of drug test kits and related cost
     of sales.

(5)  Reclassification of drug test samples from cost of sales to Selling
     Expense.

(6)  Other minor adjustments.

(7)  Write-off of investor relations supplies and expense.

(8)  Earned employee bonuses.

(9)  Allocation of bad debt accrual.


Note D - Registration Rights Agreement Penalty

Pursuant to the Registration Rights Agreement dated April 24, 1998 between CC
Investments, LDC and the Company entered into in connection with the issuance by
the Company of its Series D Preferred Shares, the Company incurred a late
registration penalty amounting to $160,000 in the three months ended October 31,
1998. This penalty, which has not been previously accrued, has been recorded as
a preferred stock dividend and resulted in the following adjustments:


<TABLE>
<CAPTION>

                                               FOR THE SIX MONTHS ENDED              FOR THE THREE MONTHS ENDED
                                                   OCTOBER 31, 1998                       OCTOBER 31, 1998
                                                   ----------------                       ----------------
                                           AS PREVIOUSLY            AS            AS PREVIOUSLY            AS
                                             REPORTED            ADJUSTED            REPORTED           ADJUSTED
                                             --------            --------            --------           --------
<S>                                     <C>                  <C>                <C>                 <C>
Net loss attributable to
   common shareholders                  $      (490,000)     $     (650,000)    $       (36,000)    $     (196,000)
Basis and diluted
   (loss) per common share              $         (0.03)     $        (0.05)    $         (0.00)    $        (0.01)
</TABLE>


Note E - Litigation

In February 1994, Robert Friedenberg, as former owner of the two medical
technology companies, MDI and Gendex, acquired by the Company, in the name of
these corporations, filed for a declaratory judgement that a Share Exchange
Agreement had been rescinded. In order to make a claim for damages, the Company
filed a third-party claim against Dr. Friedenberg for breach of the Share
Exchange Agreement and fraud. In November 1995, after a trial, the court denied
Dr. Friedenberg's request for a declaration of rescission and allowed the
Company's third-party claim to proceed to trial. In September, 1996, Dr.
Friedenberg died.

         The Company's third-party claim was decided by a jury on May 5, 1997.
The verdict determined that Dr. Friedenberg breached the Share Exchange
Agreement, when he failed to deliver drug screening know how technology to the
Company. The jury also found in favor of the Company on two of the three fraud
claims against Friedenberg and awarded the Company approximately $321,000 in
damages. Friedenberg's estate, just prior to the jury trial, filed a
supplemental claim for the shares of the Company's stock which he would have
received under the Share Exchange Agreement. The trial judge took this
supplemental claim under advisement. The trial judge, on July 17, 1998, ruled
that the estate of Dr. Friedenberg is entitled to 5,907,154 common shares of the
Company. The Company has filed an appeal. Management of the Company in
consultation with counsel is of the opinion that the trial judge's award of the
shares to Dr. Friedenberg's estate will be reversed on appeal.

         Pending the resolution of the Company's appeal, the trial judge has
ordered that the shares be issued in the name of Dr. Friedenberg's wife and
placed in escrow or that the Company post a bond. The Company has applied for a
stay of this order. If the trial judge's order is not stayed, the issuance of
such shares or the posting of the required bond could have a significant
negative effect on the market price of the shares. Pending the resolution of the
Company's appeal of the trial judge's award of the shares to Dr. Friedenberg's
estate, the Company's ability to raise capital through the future sale of equity
securities may be materially impaired. If the trial judge's award of the shares
is not reversed on appeal, the issuance of such shares would have a significant
negative effect on the market price of the shares.

         In June 1995, the Company filed against Jacskon Morris, the lawyer who
was in charge of drafting and advising it on the Share Exchange Agreement. Mr.
Morris,



                                       9
<PAGE>   10

who had been recommended to the Company by Dr. Friedenberg, is alleged by the
Company to have breached his fiduciary duty to the Company by later advising Dr.
Friedenberg, individually, on how to rescind the Share Exchange Agreement. Mr.
Morris is also charged with negligence in drafting the Share Exchange Agreement.
The Company's lawsuit demands damages in the amount of $1,000,000. Mr. Morris
has counterclaimed as a party to the Share Exchange Agreement and seeks common
shares. No trial date has been set. The Company is vigorously contesting the
Morris Claim.






                                       10
<PAGE>   11

 Item 2. Management's Discussion and Analysis or Plan of Operation

         MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                          AND RESULTS OF OPERATIONS
               for the six months ended October 31, 1998 and 1997


     The following discussion of the Company's financial condition and results
of operations should be read in conjunction with the Financial Statements and
Notes thereto appearing elsewhere in this document.

     Statements in this "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and elsewhere in this document as well as
statements made in press releases and oral statements that may be made by the
Company or by officers, directors or employees of the Company acting on the
Company's behalf that are not statements of historical or current fact
constitute "forward looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward-looking statements
involve known and unknown risks, uncertainties and other unknown factors that
could cause the actual results of the Company to be materially different from
the historical results or from any future results expressed or implied by such
forward-looking statements. In addition to statements which explicitly describe
such risks and uncertainties, readers are urged to consider statements labeled
with the terms "believes", "belief", "expects", "intends", "anticipates" or
"plans" to be uncertain forward-looking. The forward looking statements
contained herein are also subject generally to other risks and uncertainties
that are described from time to time in the Company's reports and registration
statements filed with the Securities and Exchange Commission.


Year 2000 Issues

The Company has completed its assessment of Year 2000 compliance with respect to
its products that are currently being sold to customers and has concluded that
all significant products are compliant. With respect to third parties, the
Company is in the process of identifying and contacting its significant
suppliers and will shortly begin to contact its major customers to determine the
extent to which the Company may be vulnerable to such third parties' failure to
address their own year 2000 issues. As a result, the Company's assessment will
be substantially dependent on information provided by third parties. The Company
expects to materially complete this assessment process by the end of fiscal
1999. Based upon the Company's current estimates, additional out-of-pocket costs
associated with its Year 2000 compliance are expected to be immaterial. Such
costs do not include internal management time, which is not expected to be
material to the Company's results of operations or financial condition.


     Results of operations for the six months ended October 31, 1998 as compared
to the six months ended October 31, 1997 as amended.
--------------------------------------------------------------------------------

         The interim Statement of Operations for the six months ended October
31, 1998 and the fiscal 1998 second quarter have been adjusted. See Note C to
the Financial Statements. The results of operations for the six months ended
October 31, 1998 and the fiscal 1999 second quarter will be compared with the
adjusted results of operations for the fiscal 1998 second quarter.

         During the six months ended October 31, 1998, the Company continued its
extensive program to market and distribute its primary product, the Rapid Drug
Test kit. As a result, revenues from the sale of the test kits were $2,732,000
for the six months ended October 31, 1998 as compared to $937,000 for the six
months ended October 31, 1997 (as adjusted, see Note C to Notes to Financial
Statements), representing an increase of $1,795,000 or 191.6% over the preceding
year. Cost of goods sold for the six months ended October 31, 1998 was
$1,170,000 or 42.9% of drug test revenues as compared to $440,000 or 47.0% of
drug test revenues for the six months ended October 31, 1997. To further reduce
this cost, the Company has undertaken to improve its manufacturing processes and
expects further savings throughout the year.



                                       11
<PAGE>   12

         Revenues from book sales were $349,000 for the six months ended October
31, 1998 as compared to $88,000 for the six months ended October 31, 1997 (as
adjusted, see Note C to the Financial Statements) representing an increase of
$261,000 or 296.6%. It is anticipated that with continuing strong sales in the
drug test market, book sales as a percent of overall revenue will continue to
decline. Cost of goods sold for the six months ended October 31, 1998 was
$66,000 (19.0% of book sales) as compared to $54,000 (61.4% of book sales) for
the six months ended October 31, 1997.

         General and administrative costs for the six months ended October 31,
1998 were $1,984,000, an increase of 99.2% over expenses of $996,000 for the six
months ended October 31, 1997. These increased general and administrative costs
were undertaken to create the infrastructure necessary to meet the Company's
worldwide drug test marketing and production goals. As an outgrowth of
increasing drug test sales the Company expects general and administrative costs
to continue to increase but at a slower rate. As a percent of sales, this cost
decreased 32.8% during the current year and is expected to continue it's
decrease with anticipated sales growth.

         Depreciation and amortization was $43,000 and $51,000 for the six
months ended October 31, 1998 and 1997 respectively.

         Research and development expense amounted to $103,000 for the six
months ended October 31, 1998. This represents management's continued emphasis
on the development of both new products and improved methods to reduce the costs
of the drug testing delivery system.

         Net (loss) from operations amounted to $(268,000) for the six months
ended October 31, 1998 due to increases in selling, general and administrative
expenditures related to the expansion of the company's infrastructure.

Results of operations for the three months ended October 31, 1998 as compared to
the three months ended October 31, 1997 as amended.
--------------------------------------------------------------------------------

         Revenues from the sale of the test kits were $1,567,000 for the three
months ended October 31, 1998 as compared to $301,000 for the three months ended
October 31, 1997 (as adjusted, see Note C to Notes to Financial Statements),
representing an increase of $1,266,000 or 420.6% over the preceding year. Cost
of goods sold for the three months ended October 31, 1998 amounted to $683,000
or 43.6% of drug test revenues as compared to $94,000 or 31.2% of drug test
revenues for the three months ended October 31, 1997.

         Revenues from book sales were $206,000 for the three months ended
October 31, 1998 as compared to $58,000 for the three months ended October 31,
1997 representing an increase of $148,000 or 255.2%. Cost of goods sold for the
three months ended October 31, 1998 amounted to $39,000 (18.9% of book sales) as
compared to $30,000 (51.7% of book sales) for the three months ended October 31,
1997.

         General and administrative costs for the three months ended October 31,
1998 Amounted to $953,000, an increase of 73.9% over expenses of $548,000 for
the three months ended October 31, 1997. As a percent of sales, this cost
decreased 98.8% during the current year and is expected to continue it's
decrease with anticipated sales growth.

         Depreciation and amortization was $25,000 and $26,000 for the three
months ended October 31, 1998 and 1997 respectively.

         Research and development expense amounted to $52,000 for the three
months ended October 31, 1998, continuing management's emphasis on the
development of both new products and improved methods of production.

         Net income from operations amounted to $9,000 for the three months
ended October 31, 1998 as compared to a net (loss) of $(356,000) for the three
months ended October 31, 1997.

     Liquidity and capital resources as of the end of the six months ended
October 31, 1998.
--------------------------------------------------------------------------------



                                       12
<PAGE>   13

         The Company's cash and cash equivalents amounted to $1,597,000 for the
six months ended October 31, 1998 representing a decrease of $1,642,000 or 50.7%
over $3,239,000 for the year ended April 30, 1998. Working capital decreased
$627,000 or 14.0% over $4,480,000 recorded for the year ended April 30, 1998.

         The decrease in working capital resulted from a decrease in cash,
accounts payable and accrued expenses offset by increases in accounts
receivable, inventories, and prepaid expenses.

         As a result of strong six month sales of drug test kits, accounts
receivable increased $716,000 or 100.6% to $1,428,000 for the six months ended
October 31, 1998 compared to $712,000 for the year ended April 30, 1998.


         Due to increased sales and to obtain favorable prices on bulk
purchases, inventories rose 79.4% to $1,778,000 for the six months ended October
31, 1998 or $787,000 above $991,000 reported as of the six months ended October
31,1997.

         Prepaid expenses primarily for future trade shows and conferences rose
$360,000 to $384,000 for the six months ended October 31, 1998.

         Accounts payable and accrued expenses increased $688,000 for the six
months ended October 31, 1998 due primarily to increased inventory requirements.

         The Company's primary short-term needs are to increase its
manufacturing capabilities, increase inventory levels and continue to support
its research and development programs. The Company currently plans to expend
approximately $2.0 million for the expansion and development of its
manufacturing facilities in addition to its marketing and general administrative
programs.

         The Company expects its capital requirements to increase over the next
several years as it expands its research and development efforts, new product
development, sales and administration infrastructure, manufacturing capabilities
and facilities. The Company's future liquidity and capital funding requirements
will depend on numerous factors, including the extent to which the Company's
products under development are successfully developed and gain market
acceptance, the timing of regulatory actions regarding the Company's potential
products, the costs and timing of expansion of sales, marketing and
manufacturing activities, facilities expansion needs, procurement and
enforcement of patents important to the Company's business, results of clinical
investigations and competition.

         The Company believes that its available cash and cash from operations
will be sufficient to satisfy its funding needs for at least the next 12 months.
Thereafter, if cash generated from operations is insufficient to satisfy the
Company's working capital and capital expenditure requirements, the Company may
be required to sell additional equity or debt securities or obtain additional
credit facilities. There can be no assurance that such financing, if required,
will be available on satisfactory terms, if at all.





                                       13
<PAGE>   14


                                      PART II
                                 OTHER INFORMATION

Item 1. Legal Proceedings.

In February 1994, Robert Friedenberg, as former owner of the two medical
technology companies, MDI and Gendex, acquired by the Company, in the name of
these corporations, filed for a declaratory judgement that a Share Exchange
Agreement had been rescinded. In order to make a claim for damages, the Company
filed a third-party claim against Dr. Friedenberg for breach of the Share
Exchange Agreement and fraud. In November 1995, after a trial, the court denied
Dr. Friedenberg's request for a declaration of rescission and allowed the
Company's third-party claim to proceed to trial. In September, 1996, Dr.
Friedenberg died.

         The Company's third-party claim was decided by a jury on May 5, 1997.
The verdict determined that Dr. Friedenberg breached the Share Exchange
Agreement, when he failed to deliver drug screening know how technology to the
Company. The jury also found in favor of the Company on two of the three fraud
claims against Friedenberg and awarded the Company approximately $321,000 in
damages. Friedenberg's estate, just prior to the jury trial, filed a
supplemental claim for the shares of the Company's stock which he would have
received under the Share Exchange Agreement. The trial judge took this
supplemental claim under advisement. The trial judge, on July 17, 1998, ruled
that the estate of Dr. Friedenberg is entitled to 5,907,154 common shares of the
Company. The Company has filed an appeal. Management of the Company in
consultation with counsel is of the opinion that the trial judge's award of the
shares to Dr. Friedenberg's estate will be reversed on appeal.

         Pending the resolution of the Company's appeal, the trial judge has
ordered that the shares be issued in the name of Dr. Friedenberg's wife and
placed in escrow or that the Company post a bond. The Company has applied for a
stay of this order. If the trial judge's order is not stayed, the issuance of
such shares or the posting of the required bond could have a significant
negative effect on the market price of the shares. Pending the resolution of the
Company's appeal of the trial judge's award of the shares to Dr. Friedenberg's
estate, the Company's ability to raise capital through the future sale of equity
securities may be materially impaired. If the trial judge's award of the shares
is not reversed on appeal, the issuance of such shares would have a significant
negative effect on the market price of the shares.

         In June 1995, the Company filed against Jacskon Morris, the lawyer who
was in charge of drafting and advising it on the Share Exchange Agreement. Mr.
Morris, who had been recommended to the Company by Dr. Friedenberg, is alleged
by the Company to have breached his fiduciary duty to the Company by later
advising Dr. Friedenberg, individually, on how to rescind the Share Exchange
Agreement. Mr. Morris is also charged with negligence in drafting the Share
Exchange Agreement. The Company's lawsuit demands damages in the amount of
$1,000,000. Mr. Morris has counterclaimed as a party to the Share Exchange
Agreement and seeks common shares. No trial date has been set. The Company is
vigorously contesting the Morris Claim.


Item 2. Changes in Securities

     None.

Item 3. Defaults upon Senior Securities

     None.

Item 4. Submission of Matters to a Vote of Security-Holders

      None.






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<PAGE>   15


                                   SIGNATURES



     In accordance with the requirements of the Securities Exchange Act of 1934,
the registrant has caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.




                                    AMERICAN BIO MEDICA CORPORATION
                                        (Registrant)

                                     By: /s/Stan Cipkowski
                                         ---------------------------------------
                                         Stan Cipkowski,
                                         President and Principal
                                         Executive Officer


                                     By: /s/John F. Murray
                                         ---------------------------------------
                                         John F. Murray,
                                         Treasurer and Principal
                                         Financial Officer







Dated: June 4, 1999





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