SECURITIES AND EXCHANGE COMMISSION
                            Washington, D. C. 20549
                                  FORM 10-QSB

[x]   Quarterly report under Section 13 or 15(d) of the Securities Exchange Act
      of 1934.

      For the quarterly period ended June 30, 2004.


[_]   Transition report under 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 of                   (I.R.S. Employer
       incorporation or organization)                  Identification No.)


                   122 SMITH ROAD, KINDERHOOK, NEW YORK 12106
                  -------------------------------------------
                    (Address of principal executive offices)


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


      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:

      21,282,268 Common Shares as of August 10, 2004


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

                                       1
<PAGE>

                                     PART I
                             FINANCIAL INFORMATION
                        AMERICAN BIO MEDICA CORPORATION
                                 BALANCE SHEETS

                                                      JUNE 30,      DECEMBER 31,
                                                        2004            2003
                                                    (UNAUDITED)
                                                    ------------   ------------
                    ASSETS
Current assets:
    Cash and cash equivalents                       $  1,308,000   $    942,000
    Accounts receivable, net of allowance of
     $105,000 at June 30, 2004 and December
     31, 2003 respectively                             1,372,000      1,253,000
    Other receivables                                     11,000          8,000
    Inventory                                          3,015,000      3,049,000
    Prepaid expenses and other current assets            191,000         78,000
                                                    ------------   ------------

Total current assets                                   5,897,000      5,330,000

Property, plant and equipment, net                     1,608,000      1,441,000
Other assets                                               5,000          7,000
                                                    ------------   ------------

Total assets                                        $  7,510,000   $  6,778,000
                                                    ============   ============

     LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
     Accounts payable                               $    634,000   $    737,000
     Accrued liabilities                                 155,000        153,000
     Wages payable                                       199,000        375,000
     Line of credit                                       83,000
     Current portion of mortgages and notes
      payable                                             68,000         25,000
     Current portion of unearned grant                     8,000          8,000
                                                    ------------   ------------

Total current liabilities                              1,147,000      1,298,000

Long term portion of mortgages and notes
  payable                                                666,000        651,000
Long term portion of unearned grant                       67,000         67,000
                                                    ------------   ------------

Total liabilities                                      1,880,000      2,016,000
                                                    ------------   ------------

Stockholders' equity:
   Preferred stock; par value $.01 per share;
    5,000,000 shares authorized; none issued
    and outstanding
   Common stock; par value $.01 per share;
    50,000,000 shares authorized; 21,282,268
    and 20,664,151 shares issued and
    outstanding at June 30, 2004 and December
    31, 2003 respectively                                213,000        207,000
Additional paid-in capital                            18,763,000     17,959,000
Accumulated deficit                                  (13,346,000)   (13,404,000)
                                                    ------------   ------------

Total stockholders' equity                             5,630,000      4,762,000
                                                    ------------   ------------

Total liabilities and stockholders' equity          $  7,510,000   $  6,778,000
                                                    ============   ============


               See accompanying notes to financial statements

                                       2
<PAGE>

                        AMERICAN BIO MEDICA CORPORATION
                            STATEMENTS OF OPERATIONS
                                  (UNAUDITED)

                                                     FOR THE SIX MONTHS ENDED
                                                              JUNE 30,
                                                  -----------------------------
                                                      2004              2003
                                                  ------------     ------------

Net sales                                         $  6,264,000     $  5,828,000
Cost of goods sold                                   2,897,000        2,588,000
                                                  ------------     ------------
Gross profit                                         3,367,000        3,240,000
                                                  ------------     ------------

Operating expenses:
   Research and development                            273,000          339,000
   Selling and marketing                             1,353,000        1,314,000
   General and administrative                        1,408,000        1,321,000
   Employee severance costs                            240,000
                                                  ------------     ------------
                                                     3,274,000        2,974,000
                                                  ------------     ------------
Operating income                                        93,000          266,000
                                                  ------------     ------------

Other income (expense):
   Other income / (expense)                             (2,000)         198,000
   Interest income                                       4,000            2,000
   Interest expense                                    (27,000)         (49,000)
                                                  ------------     ------------
                                                       (25,000)         151,000
                                                  ------------     ------------
Income before provisions for income taxes               68,000          417,000
Provision for income taxes                              10,000                0
                                                  ------------     ------------
Net income                                        $     58,000     $    417,000
                                                  ============     ============

Basic and diluted income per common share         $       0.00     $       0.02
                                                  ============     ============

Weighted average shares outstanding - basic         21,089,981       20,609,548
Dilutive effect of stock options and warrants        1,002,222          461,227
                                                  ------------     ------------
Weighted average shares outstanding - diluted       22,092,203       21,070,775
                                                  ============     ============


             See accompanying notes to financial statements

                                       3
<PAGE>

                        AMERICAN BIO MEDICA CORPORATION
                            STATEMENTS OF OPERATIONS
                                  (UNAUDITED)

                                                    FOR THE THREE MONTHS ENDED
                                                             JUNE 30,
                                                   ----------------------------
                                                       2004            2003
                                                   ------------    ------------

Net sales                                          $  3,192,000    $  3,172,000
Cost of goods sold                                    1,548,000       1,418,000
                                                   ------------    ------------

Gross profit                                          1,644,000       1,754,000
                                                   ------------    ------------

Operating expenses:
   Research and development                             144,000         133,000
   Selling and marketing                                725,000         694,000
   General and administrative                           720,000         660,000
                                                   ------------    ------------
                                                      1,589,000       1,487,000
                                                   ------------    ------------

Operating income                                         55,000         267,000
                                                   ------------    ------------

Other income (expense):
   Other income                                          (2,000)        186,000
   Interest income                                        2,000           2,000
   Interest expense                                     (14,000)        (31,000)
                                                   ------------    ------------
                                                        (14,000)        157,000
                                                   ------------    ------------
Income before provisions for income taxes                41,000         424,000
Provision for income taxes                               (8,000)              0
                                                   ------------    ------------
Net income                                         $     33,000    $    424,000
                                                   ============    ============

Basic and diluted income per common share          $       0.00    $       0.02
                                                   ============    ============


                                                   ============    ============

 Weighted average shares outstanding - basic         21,279,338      20,609,548
 Dilutive effect of stock options and warrants          377,381         250,652
                                                   ------------    ------------
 Weighted average shares outstanding - diluted       21,656,719      20,860,200
                                                   ============    ============


                 See accompanying notes to financial statements

                                       4
<PAGE>

                        AMERICAN BIO MEDICA CORPORATION
                            STATEMENTS OF CASH FLOWS
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                                FOR THE SIX MONTHS ENDED
                                                                          JUNE,
                                                               --------------------------
                                                                   2004          2003
                                                               -----------    -----------
<S>                                                            <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net income                                                    $    58,000    $   417,000
  Adjustments to reconcile net income to net cash used
   in operating activities:
     Depreciation                                                  115,000         90,000
     Non cash compensation expense                                 228,000
     Gain on sale of land                                                         (30,000)
     Changes in:
       Accounts receivable                                        (120,000)      (645,000)
       Inventory                                                    33,000        374,000
       Prepaid expenses and other current assets                  (113,000)       (42,000)
       Accounts payable                                           (103,000)      (186,000)
       Accrued liabilities                                           3,000        (11,000)
       Wages payable                                              (176,000)
                                                               -----------    -----------
         Net cash used in operating activities                     (75,000)       (33,000)
                                                               -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of property, plant and equipment                       (196,000)      (123,000)
  Sale of land                                                                    150,000
                                                               -----------    -----------
         Net cash provided by/(used in) investing activities      (196,000)        27,000
                                                               -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from exercise of warrants                               528,000
  Proceeds from exercise of options                                 53,000
  Proceeds from grant                                                              25,000
  Debt payments, net of borrowings                                 (27,000)       (74,000)
  Capital lease payments                                                           (7,000)
  Proceeds from line of credit                                     132,000         40,000
  Line of credit payments                                          (49,000)        (8,000)
                                                               -----------    -----------
         Net cash provided by/(used in) financing activities       637,000        (24,000)
                                                               -----------    -----------

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS               366,000        (30,000)
Cash and cash equivalents - beginning of period                    942,000        231,000
                                                               -----------    -----------

CASH AND CASH EQUIVALENTS - END OF PERIOD                      $ 1,308,000    $   201,000
                                                               ===========    ===========

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
  Cash paid during year for:
      Interest                                                 $    27,000    $    49,000
      Issuance of note payable for purchase of equipment            85,000
</TABLE>


                 See accompanying notes to financial statements

                                       5
<PAGE>

Notes to financial statements (unaudited)

                                 June 30, 2004

Note A - Basis of Reporting

      The  accompanying  unaudited  financial  statements  have been prepared in
accordance with accounting principles generally accepted in the United States of
America for interim  financial  information  and with the  instructions  to Form
10-QSB.  Accordingly,  they do not include all of the  information and footnotes
required by  accounting  principles  generally  accepted in the United States of
America for complete financial  statements.  In the opinion of management,  such
statements include all adjustments  (consisting only of normal recurring items),
which are considered necessary for a fair presentation of the financial position
of American Bio Medica  Corporation  (the "Company" or "ABMC") at June 30, 2004,
and the  results  of its  operations,  and  cash  flows  for the  six-month  and
three-month  periods ended June 30, 2004 and 2003. The results of operations for
the six-month and  three-month  periods ended June 30, 2004 are not  necessarily
indicative  of  the  operating  results  for  the  full  year.  These  financial
statements  should be read in conjunction with the Company's  audited  financial
statements and related disclosures for the year ended December 31, 2003 included
in the Company's Form 10-KSB.

      During the year ended  December 31, 2003, the Company earned net income of
$1,031,000 from net sales of $12,484,000, and had net cash provided by operating
activities of $684,000.  During the six months ended June 30, 2004 and 2003, the
Company had net sales of $6,264,000 and $5,828,000  respectively  and earned net
income of $58,000  and  $417,000  respectively.  Included  in 2003 net income is
$185,000  from the  release of an accrual  related to a 1998  royalty  agreement
terminated by mutual  agreement in the second  quarter of 2003.  Included in the
same  period  in 2003 is a gain on the  sale  of a  portion  of the  land at the
Company's  Kinderhook,  NY  facility  totaling  $30,000.  Net sales in the three
months  ended June 30,  2004 were  $3,192,000,  which  resulted in net income of
$33,000.  The Company had net cash outflows from operating activities of $75,000
for the six months  ended June 30, 2004  primarily as the result of increases in
accounts  receivables and prepaid  expenses and reductions in accounts and wages
payable.  The Company continued to take steps to improve its financial prospects
including  focusing on research and  development  and sales and  marketing.  The
Company continued  development of new products including the test components for
an  HIV  test,   completion  and  delivery  of  its  Rapid  Reader(TM)  and  the
introduction of a new OralStat(R)  oral fluids test designed and manufactured by
the Company.  Additionally,  the Company  added six new regional  sales or sales
support  professionals  in the first half of 2004.  Finally,  several changes in
personnel  including  the  separation of five  employees  were made in the first
quarter of 2004 along with other measures to enhance profit margins.

      The  Company's  continued  existence  is dependent  upon several  factors,
including  its  ability to raise  revenue  levels and reduce  costs to  generate
positive cash flows, and to sell additional shares of the Company's common stock
to fund operations, if necessary.

NEW ACCOUNTING STANDARDS

      None.

Note B - Net Income Per Common Share

      Basic net  income  or loss per share is  calculated  by  dividing  the net
income or loss by the  weighted  average  number of  outstanding  common  shares
during the period.  Diluted net income or loss per share  includes  the weighted
average dilutive effect of stock options and warrants.

                                       6
<PAGE>

      Potential common shares outstanding as of June 30, 2004 and 2003:

                                  JUNE 30, 2004    JUNE 30, 2003
                                  -------------    -------------

                WARRANTS            2,245,920       2,651,703
                OPTIONS             4,258,500       5,940,000

      For the three  months  and six months  ended  June 30,  2004 the number of
securities not included in the dilutive EPS,  because the effect would have been
anti-dilutive,  were 2,496,420 and 1,753,250 respectively.  For the three months
and six months ended June 30, 2003 the number of securities  not included in the
dilutive EPS, because the effect would have been  anti-dilutive,  were 5,433,920
and 3,298,420 respectively.

      The  following  pro forma  information  gives  effect to fair value of the
Company  options  on the date of grant  using the  Black-Scholes  option-pricing
model with the following assumptions: dividend yield of 0%, volatility of 80% to
81% for 2004 and 85% for 2003,  risk free  interest  rates ranging from 4.62% to
5.35% for 2004 and 4.35% to 4.97% for 2003, and an expected life of 10 years for
both 2004 and 2003. The pro-forma net income represents six months  amortization
of expense  associated  with the option  grants in the first quarter of 2004 and
three months  amortization  of expense  associated with the option grants in the
second quarter of 2004.

                                              SIX MONTHS          SIX MONTHS
                                                ENDED               ENDED
                                               JUNE 30,            JUNE 30,
                                                 2004                2003
                                            ---------------------------------
     Net Income/(loss):
        As reported                          $   58,000          $  417,000
        Pro forma                            $  (272,000)        $  235,000
     Basic income/(loss) per share
        As reported                             $  .00             $  .02
        Pro forma                               $ (.01)            $  .01
     Diluted income/(loss) per share
        As reported                             $  .00             $  .02
        Pro forma                               $ (.01)            $  .01

      During  the first six  months of 2004  stockholders'  equity  changed as a
result of the  exercise  of  warrants  and  options  and  charges  for  non-cash
compensation.  Common  stock  changed by $6,000 and  additional  paid in capital
changed by $575,000  resulting  from the exercise of warrants and stock  options
during the first six months.  Further,  additional paid in capital  increased by
$229,000 as a result of $30,000 in non-cash expense for employee severance costs
and  $199,000 in non-cash  expense  related to  warrants  granted for  financial
advisory services.

Note C - Litigation

      The Company has been named in legal proceedings in connection with matters
that arose during the normal course of its  business,  and that in the Company's
opinion are not material.  While the ultimate result of any litigation cannot be
determined,  it is management's  opinion based upon  consultation  with counsel,
that it has adequately provided for losses that may be incurred related to these
claims.  If the Company is unsuccessful in defending any or all of these claims,
resulting  financial  losses  could  have an  adverse  effect  on the  financial
position, results of operations and cash flows of the Company.

Note D - Sale of Land

      On March 31, 2003 the Company sold  approximately  85 acres of land at its
Kinderhook headquarters for $150,000 recognizing a gain of $30,000.

                                       7
<PAGE>

Note E - Reclassifications

      Certain   items  have  been   reclassified   to  conform  to  the  current
presentation.

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 AND THREE MONTHS ENDED JUNE 30, 2004 AND 2003

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

      The  Private  Securities  Litigation  Reform  Act of 1995  provides a safe
harbor for forward-looking  statements. In order to comply with the terms of the
safe harbor, the Company notes that in addition to the description of historical
facts contained herein, this report contains certain forward-looking  statements
that involve risks and uncertainties as detailed herein and from time to time in
the Company's  other filings with the  Securities  and Exchange  Commission  and
elsewhere.  Such statements are based on management's  current  expectations and
are subject to a number of factors and  uncertainties,  which could cause actual
results  to  differ  materially  from  those  described  in the  forward-looking
statements.  These factors include, among others: (a) the Company's fluctuations
in  sales  and  operating  results;  (b)  risks  associated  with  international
operations;  (c)  regulatory,  competitive and  contractual  risks;  (d) product
development  risks;  and (e)  the  ability  to  achieve  strategic  initiatives,
including  but not limited to the  ability to achieve  sales  growth  across the
business  segments  through a combination of enhanced sales force, new products,
and customer service.

Critical accounting policies

      There  have  been  no  significant   changes  to  the  Company's  critical
accounting  policies,  which are included in the Company's  10KSB filing for the
year ended December 31, 2003, during the six months ended June 30, 2004.

      The Company  entered into  several  arrangements  with third  parties that
funded Research and  Development  activities in 2003. No new  arrangements  were
entered  into  during the first  half of 2004.  The 2003  arrangements  included
milestones  that had to be achieved  to receive  payment.  The Company  recorded
revenue based upon the lesser of costs incurred to date, or the milestone  value
(for the milestone  value to be used, the milestone  must be achieved).  In 2003
the  Company  recognized  sales  and cost of  sales  totaling  $60,000  from two
separate   arrangements   for  the   performance  of  Research  and  Development
activities.

Results of operations  for the six months ended June 30, 2004 as compared to the
six months ended June 30, 2003

      Net sales  were  $6,264,000  for the six  months  ended  June 30,  2004 as
compared to $5,828,000 for the six months ended June 30, 2003,  representing  an
increase  of  $436,000  or  7.5%.   Direct   sales,   telemarketing   sales  and
international  sales  continued  as the  primary  sources of sales  contributing
approximately  $5,314,000  or 84.8% of the net sales for the first six months of
2004  compared  to  $4,872,000  or 83.6% of the net sales for the same period in
2003.  During the six months  ended June 30,  2004,  the Company  continued  its
extensive  program to market and distribute its primary product lines, the Rapid
Drug  Screen(R),  its Rapid TEC(R) series and Rapid  One(R),  in addition to its
oral fluid based test,  the  OralStat.  The Company  also  introduced  and began
marketing its Rapid Reader. The Rapid Reader is a compact, portable device that,
when  connected  to any  computer,  captures a picture of the test results on an
ABMC drug screen using a high-resolution  camera. The Rapid Reader's proprietary
software analyzes this image and interprets the results. The information is then
sent to a data management  system,  which enables the user to interpret,  store,
transmit and print the drug test results. The Company continued its programs for
the development of diagnostic tests or test components using immunoassay lateral
flow  technology  to  diversify  its  product  line into the areas of  mycotoxin
detection, HIV and respiratory diseases.

                                       8
<PAGE>

      Cost of goods sold for the six months  ended June 30, 2004 was  $2,897,000
or 46.2% of net sales as  compared to  $2,588,000  or 44.4% of net sales for the
six  months  ended  June  30,  2003.  The  increase  in  cost of  goods  sold is
commensurate with the increase in sales. Gross margin  percentages  decreased in
the first  six  months  of 2004  primarily  due to the  complexity  of  assembly
procedures  related to new products.  Management  expects  margins to improve as
enhancements to the assembly  procedures are implemented.  Net sales and cost of
sales for the first six months of 2003 included  $60,000  billed to entities for
which the Company performed R&D services, which did not recur in 2004.

      Operating  expenses  increased  10.1% to $3,274,000 in first six months of
2004 as compared to  $2,974,000  in the same  period in 2003.  This  increase of
$300,000 is  attributable  to  increases  in sales and  marketing  expenses  and
general  and  administrative  expenses  offset by  reductions  in  research  and
development.

      Included  in  operating  expenses in the first half of 2004 are charges of
$465,000 of which  $240,000 is related to employee  severance  costs incurred in
response to the changing  needs of the business in January 2004, and $225,000 of
professional  fees,  that are not  expected to recur,  related to the  Company's
investigation into allegations identified in an anonymous letter received by its
independent  accountants.  As part  of this  response,  an  independent  counsel
performed an internal investigation.  The employee severance costs included cash
payments  totaling  $210,000  and  non-cash  charges of  $30,000  related to the
retention   of  options.   Professional   fees  are   included  in  general  and
administrative expenses and pertain to incremental legal and accounting fees.

Research and development

      Research and  development  ("R&D")  expenses for the six months ended June
30, 2004 were $273,000 or 4.4% of net sales  compared to $339,000 or 5.8% of net
sales for the same period in 2003.  The decrease in expense is primarily  due to
the redeployment of personnel to  manufacturing  from R&D in 2004 in response to
increased sales.  Management's  strategy is to: focus on new product development
to meet the  changing  needs of the point of  collection  drug of abuse  testing
market and to penetrate new segments of the market;  develop test components for
an HIV test currently under development for an unrelated party; seek and respond
to Original Equipment Manufacturing ("OEM") development requests to leverage the
Company's current  technology;  and develop new uses of immunoassay lateral flow
technology  including  respiratory  disease  and  mycotoxin  detection,  remains
unchanged.

Selling and marketing expense

      Selling and marketing  expense was $1,353,000 or 21.6% of net sales in the
first six months of 2004,  an increase of $39,000,  from  $1,314,000 or 22.5% of
net sales in the same six months in 2003.  This increase is primarily due to the
addition of six field sales  professionals  during 2004, offset by the departure
of two others. Increases in salaries and benefits, travel, entertainment,  trade
shows and equipment  resulting  from the  additional  field sales force has been
offset by savings in commissions  resulting  from  revisions to the  commissions
programs.

General and administrative expense

      General and  administrative  (G&A) expense was $87,000 higher in the first
six months of 2004 than the same  period in 2003.  Total G&A expense for the six
months  ended June 30,  2004 was  $1,408,000  or 22.5% of net sales  compared to
$1,321,000  or 22.7% of net sales in the first six  months of 2003.  Savings  in
personnel costs were offset by increases in patent and license expense, $225,000
in professional  fees incurred in connection  with the Company's  response to an
anonymous letter received by the Company's independent  accountants,  additional
quality  assurance costs resulting from additional  personnel hired during 2003,
and non-cash  service fees totaling  $199,000,  stemming from a contract entered
into in the fourth  quarter of 2003 with Brean Murray & Co.,  Inc. This contract

                                       9
<PAGE>

provided for the  performance of financial  advisory  services by Brean Murray &
Co., Inc in exchange for warrants to purchase 300,000 shares of common stock and
a monthly cash payment.  A copy of this agreement was filed as an Exhibit to the
Company's  10-KSB for the year ending December 31, 2003. In June, at the request
of the Company,  Brean  Murray & Co.,  Inc.  agreed to surrender  150,000 of the
aforementioned  warrants and require no monthly cash payment in conjunction with
the  agreement.  The Company  released Brean Murray & Co., Inc. from any further
financial advisory services obligations (a copy of this agreement is filed as an
Exhibit to this 10-QSB).

Results of  operations  for the three  months ended June 30, 2004 as compared to
the three months ended June 30, 2003

      Net sales were  $3,192,000  for the three  months  ended June 30,  2004 as
compared to $3,172,000 for the three months ended June 30, 2003, representing an
increase of $20,000 or 0.6%. Direct sales, telemarketing sales and international
sales combined to contribute  approximately $2,763,000 or 86.6% of the net sales
for the quarter  compared to $2,693,000 or 84.9% in the second  quarter of 2003.
During the three months ended June 30, 2004, the Company continued its extensive
program to market and  distribute  its  primary  product  lines,  the Rapid Drug
Screen and Rapid One, in addition  to its oral fluid based test,  the  OralStat,
and its recently developed Rapid TEC series.

      The  Company  continued  its  development  of  diagnostic  tests  or  test
components  using  immunoassay  lateral flow technology to diversify its product
line  into  the  areas of  mycotoxin  detection,  and  respiratory  disease.  In
addition,  components for an HIV test are being manufactured for an unaffiliated
third party,  new drugs of abuse tests or test platforms are being  developed to
respond to the changing  needs in the  marketplace  and to penetrate  new market
segments,  and the Company is currently  seeking and responding to inquiries for
OEM  opportunities  to leverage its technology.  Management  believes that sales
from its urine  based  drug test kits and the  OralStat  saliva  based test will
continue  to grow as a result of this focus on the core  business  and new sales
will increase from new product development.

      Cost of goods sold for the three months ended June 30, 2004 was $1,548,000
or 48.5% of net sales as  compared to  $1,418,000  or 44.7% of net sales for the
three  months  ended  June 30,  2003.  The  increase  in cost of  goods  sold is
commensurate  with the  increase  in  sales.  The  decrease  in gross  margin is
associated with more complex procedures for assembling new products.  Management
expects  margins to improve  as  enhancements  to the  assembly  procedures  are
implemented.

      Operating  expenses  increased  $102,000,  or 6.9%,  to  $1,589,000 in the
second  quarter of 2004 as  compared to  $1,487,000  in the same period in 2003.
This increase is attributable to increased research and development expenditures
with the addition of a scientist and two  technicians,  increased  sales expense
resulting from the addition of new field sales professionals,  and net increases
in general and  administrative  expenses including $160,000 in professional fees
incurred  in  connection  with the  Company's  response to an  anonymous  letter
received by its independent accountants.

      Management believes that the amount of research and development, sales and
marketing  and  general  and  administrative  costs may  increase as the Company
continues its focus on long term growth and creates the necessary infrastructure
to:  achieve its worldwide  drug test  marketing  and sales goals,  continue its
penetration  of the direct sales market,  and leverage new product  initiatives.
However,  management has implemented programs to control the rate of increase of
these costs to be more  consistent  with the  expected  sales growth rate of the
Company.

Research and development

      Research and development  ("R&D") expenses for the three months ended June
30, 2004 were $144,000 or 4.5% of net sales  compared to $133,000 or 4.2% of net
sales for the three  months  ended June 30,  2003.  The  increase  in expense is
primarily  due to several new  positions  added to the R&D group during 2003 and
2004.  Additional  resources were added as part of management's  initiatives to:
focus on new  product  development  to meet the  changing  needs of the point of

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<PAGE>

collection drug of abuse testing market, develop test components for an HIV test
for an  unaffiliated  third party,  and develop new uses of immunoassay  lateral
flow technology. Management expects increases in R&D expenses as it explores new
markets and uses for its immunoassay technology.

Selling and marketing expense

      Selling and  marketing  expense was  $725,000 or 22.7% of net sales in the
second  quarter of 2004,  an increase of $31,000,  from $694,000 or 21.9% of net
sales in the same  three  months in 2003.  This  increase  is  primarily  due to
increases in salaries,  benefits,  travel and equipment  costs  associated  with
additions to the field sales force during 2004. These increases have been offset
by  savings  in  commissions  resulting  from  changes  to the  commission  plan
structure and softer than expected sales in the second quarter of 2004.

General and administrative expense

      General  and  administrative  expense  increased  by $60,000 in the second
quarter of 2004  compared to the same  period in 2003.  Total G&A expense in the
second  quarter of 2004 was $720,000 or 22.6% of net sales  compared to $660,000
or 20.8% of net sales in the three months ended June 30, 2003. Incremental legal
and  accounting  fees of $160,000  resulting  from the Company's  response to an
anonymous   letter  received  by  its   independent   accountants  and  non-cash
compensation  of  $129,000  relating  to an  agreement  for  financial  advisory
services were offset by savings in salaries and wages, travel, entertainment and
telephone expense resulting from a reorganization in January 2004.

LIQUIDITY AND CAPITAL RESOURCES AS OF JUNE 30, 2004

      The Company's  cash  requirements  depend on numerous  factors,  including
product  development  activities,  ability to penetrate the direct sales market,
market  acceptance  of its new products,  and effective  management of inventory
levels in response to sales forecasts. The Company expects to devote substantial
capital  resources to continue  its product  development,  expand  manufacturing
capacity,  and support its direct sales efforts.  The Company will examine other
growth  opportunities  including strategic alliances and expects such activities
will be funded from existing cash and cash  equivalents,  issuance of additional
equity or debt securities or additional  borrowings  subject to market and other
conditions.  The Company  believes  that its  current  cash  balances,  and cash
generated from future  operations  will be sufficient to fund operations for the
next twelve months. 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  obtain  additional  credit
facilities.  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.

      Management believes that the amount of research and development, sales and
marketing  and  general  and  administrative  costs may  increase as the Company
continues  its  investment  in  long  term  growth  and  creates  the  necessary
infrastructure  to:  achieve its worldwide  drug test marketing and sales goals,
continue  its  penetration  of the direct  sales  market,  support  research and
development projects and leverage new product initiatives.  However,  management
has  implemented  programs  to control the rate of increase of these costs to be
consistent with the expected sales growth rate of the Company.

      The Company has working capital of $4,750,000 at June 30, 2004 as compared
to  working  capital of  $4,032,000  at  December  31,  2003.  The  Company  has
historically satisfied its net working capital requirements,  if needed, through
cash  generated by proceeds from private  placements of equity  securities  with
institutional  investors. The Company has never paid any dividends on its common
shares and anticipates  that all future  earnings,  if any, will be retained for
use in the  Company's  business  and it does  not  anticipate  paying  any  cash
dividends.

      Net cash used in operating activities was $75,000 for the six months ended
June 30, 2004  compared to net cash used in operating  activities of $33,000 for
the six months  ended June 30, 2003.  The net cash used in operating  activities

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<PAGE>

during  the  first  six  months  of 2004  resulted  primarily  from  net  income
associated with increased net sales and non-cash  expenses,  offset by increases
in accounts receivable and prepaid expenses and reductions in accounts and wages
payable. Prepaid expenses historically increase in the first half of the year as
a  result  of  several  large  insurance  premiums  paid  for  annual  coverage.
Reductions in accounts payable are as a result of increased cash flow.

      Net cash used in  investing  activities  was  $196,000  for the six months
ended June 30, 2004  compared to net cash  provided by investing  activities  of
$27,000 for the same period in 2003.  The net cash used in investing  activities
in 2004 was  exclusively  for investment in property,  plant & equipment and was
comprised of Rapid Reader devices and software, computer replacement and upgrade
costs, a mold for a new product,  and the purchase and  installation of enhanced
sales tracking and forecasting software. In the first half of 2003 cash provided
by investing activities was comprised of proceeds from the sale of approximately
85  acres of land at the  Company's  headquarters  in  Kinderhook,  NY  totaling
$150,000, offset by $123,000 for the purchase of property, plant and equipment.

      Net cash provided by financing  activities was $637,000 for the six months
ended June 30,  2004,  primarily  consisting  of proceeds  from the  exercise of
warrants  totaling  $528,000,  proceeds  from the  exercise of options  totaling
$53,000,  and borrowings on a line of credit totaling  $132,000 for the purchase
of  inventory  components.  The line of credit is held by Hudson  River Bank and
Trust  Company  ("HRBT") and has a maximum  available  line of $350,000,  not to
exceed 70% of accounts  receivable  less than 60 days. The interest rate is .25%
above the HRBT prime rate and the Company is required to pay the principal  down
to $0 for a 30 consecutive day period in each 12 months during which the line is
available.  Net cash used in financing activities in the first half of 2003 were
comprised of borrowings on a line of credit totaling $40,000 and proceeds from a
grant of  $25,000  offset  by  payments  on  long-term  debt and  capital  lease
payments.

      At June 30, 2004, the Company had cash and cash equivalents of $1,308,000.

      The Company's primary  short-term capital and working capital needs relate
to  continued  support of its  research and  development  programs,  opening new
distribution  opportunities,  focusing sales efforts on segments of the drugs of
abuse  testing  market  that  will  yield  high  volume  sales,  increasing  its
manufacturing and production  capabilities,  and establishing adequate inventory
levels to support expected sales.

DISCLOSURE CONTROLS AND PROCEDURES

      As of the  end  of the  period  covered  by  this  report,  the  Company's
President and CFO reviewed the  Company's  disclosure  controls and  procedures.
Based on this  evaluation,  the Company,  including  the President and CFO, have
concluded that the Company's  disclosure controls and procedures are adequate to
ensure the clarity and material  completeness of the Company's disclosure in its
periodic  reports  required to be filed with the SEC.  Additionally,  based upon
this most recent  evaluation,  we have  concluded that there were no significant
changes in internal  controls or other factors that could  significantly  affect
the internal controls of the company subsequent to the date of evaluation.

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<PAGE>

                                    PART II
                               OTHER INFORMATION

Item 1. Legal Proceedings:

      See "Note C - Litigation" in the Notes to Financial Statements included in
      this report for a description  of pending legal  proceedings  in which the
      Company is a party.

Item 2. Changes in Securities

      None.

Item 3. Defaults upon Senior Securities

      None.

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

      The following  matters were voted upon at the Company's  Annual Meeting of
      Shareholders  (the  "Meeting")  held at the Marriott Hotel in Albany,  New
      York on June 18, 2003.


                       PROPOSAL 1 - ELECTION OF DIRECTORS



TOTAL SHARES VOTED: 19,761,654           OUTSTANDING SHARES: 21,282,268
PERCENT OF SHARES VOTED: 92.3

      PROPOSAL NO. 1 - ELECTION OF DIRECTORS

      Director                For            Pct.      Withheld     Pct.
      --------                ---            ---       --------     ----

      Edmund Jaskiewicz       19,470,069    98.5        291,585      1.5
      Stan Cipkowski          19,348,517    97.9        413,137      2.1
      Richard P. Koskey       19,534,644    98.9        227,010      1.1
      Daniel W. Kollin        19,535,644    98.9        226,010      1.1
      Anthony Costantino      19,536,114    98.9        225,510      1.1

      All five nominees for election to the Board of Directors were elected.

      PROPOSAL #2 - OTHER MATTERS

      (NONE)

                  For               19,323,768    Pct     97.8
                  Against              220,350    Pct      1.1
                  Abstain              217,536    Pct      1.1

Item 5. Other Information

            On June 15, 2004,  the  Company's  Board of  Directors  approved the
      payment of a monthly  retainer in the amount of $8,000  effective  July 1,
      2004 to Edmund M. Jaskiewicz,  the Company's President and a member of the
      Board of  Directors,  in exchange for his services as patent and trademark
      counsel to the Company and for his services as President.  Mr.  Jaskiewicz
      had  previously  billed  the  Company  monthly  for  such  services.   Mr.
      Jaskiewicz's efforts on behalf of the Company have increased over the past

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<PAGE>

      months and the Company expects such efforts to continue in the short-term.
      In the  fiscal  year  ended  December  31,  2003,  the  Company  paid  Mr.
      Jaskiewicz  an aggregate of $63,000 in fees for his services as patent and
      trademark  counsel.  As of June 30, 2004, this retainer agreement with the
      company is an oral  agreement  with no specific  duration  or  termination
      date.

Item 6. Exhibits and Reports on Form 8-K

      (a) Exhibits

             99.1    Certification of the Chairman of the Board and Chief
                     Executive Officer pursuant to 18 U.S.C. Section 1350, as
                     adopted pursuant to Section 906 of the Sarbanes-Oxley Act
                     of 2002.

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

            10.19.1  Letter of Agreement dated June 21, 2004 by and between the
                     Company and Brean Murray & Co., Inc. related to amendments
                     made to the December 2, 2003 Financial Advisory Agreement
                     and the surrender by Brean Murray & Co., Inc of 150,000
                     warrants to purchase common stock.

      (b) Reports on Form 8-K

            On April 15, 2004,  the Company filed a Form 8-K related to the late
      filing of its 10-KSB for the fiscal  year  ending  December  31, 2003 as a
      result of an internal independent  investigation  initiated by the Company
      in  response  to  an  anonymous   letter   received  by  its   independent
      accountants.

            On June  14,  2004,  the  Company  filed a Form 8-K  related  to the
      resignation of Donal V. Carroll from the Company's Board of Directors.

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<PAGE>

SIGNATURES

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



                                          AMERICAN BIO MEDICA CORPORATION
                                          (Registrant)

                                          By: /s/ Keith E. Palmer
                                          --------------------------------------
                                          EVP of Finance, Chief Financial
                                          Officer and Treasurer (Principal
                                          Accounting Officer and duly
                                          authorized Officer)


Dated: August 10, 2004

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