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, 2006.


|_|   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:

      21,459,768 Common Shares as of August 10, 2006


      Transitional Small Business Disclosure Format: Yes |_| No |X|


                                       1
<PAGE>

                                     PART I
                              FINANCIAL INFORMATION
<TABLE>
<CAPTION>
                         American Bio Medica Corporation
                                 Balance Sheets
                                                                     June 30,     December 31,
                                                                      2006            2005
                                                                   (Unaudited)
                                                                  ------------    ------------
                               Assets
Current assets:
<S>                                                               <C>             <C>
      Cash and cash equivalents                                   $    591,000    $    446,000
      Accounts receivable, net of allowance of $105,000 at both
       June 30, 2006 and December 31, 2005                           1,811,000       1,370,000
      Inventory-net of reserve for slow moving and
        obsolete inventory of $250,000 at both June 30,
        2006 and December 31, 2005                                   3,706,000       4,444,000
      Prepaid and other current assets                                 238,000         109,000
                                                                  ------------    ------------

Total current assets                                                 6,346,000       6,369,000

Property, plant and equipment, net                                   1,376,000       1,562,000
Other assets                                                           107,000           7,000
                                                                  ------------    ------------

Total assets                                                      $  7,829,000    $  7,938,000
                                                                  ============    ============

                Liabilities and Stockholders' Equity

Current liabilities:
      Accounts payable                                            $    776,000    $  1,380,000
      Accrued liabilities                                              113,000         130,000
      Wages payable                                                    180,000         177,000
      Line of credit                                                   230,000
      Current portion of mortgages and notes payable                    23,000          36,000
      Current portion of unearned grant                                 10,000          10,000
                                                                  ------------    ------------

 Total current liabilities                                           1,332,000       1,733,000

  Long term portion of mortgages and notes payable                     582,000         592,000
  Long term portion of unearned grant                                   60,000          60,000
  Other long term liabilities                                          104,000
                                                                  ------------    ------------

 Total liabilities                                                   2,078,000       2,385,000
                                                                  ------------    ------------

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; 21,459,768 and
     21,359,768 shares issued and outstanding at
     June 30, 2006 and December 31, 2005, respectively
                                                                       215,000         214,000
Additional paid-in capital                                          18,859,000      18,853,000
Accumulated deficit                                                (13,323,000)    (13,514,000)
                                                                  ------------    ------------

Total stockholders' equity                                           5,751,000       5,553,000
                                                                  ------------    ------------

Total liabilities and stockholders' equity                        $  7,829,000    $  7,938,000
                                                                  ============    ============
</TABLE>

The accompanying notes are an integral part of the financial statements


                                       2
<PAGE>

                         American Bio Medica Corporation
                            Statements of Operations
                                   (Unaudited)

                                                   For The Six Months Ended
                                                          June 30,
                                                 ----------------------------
                                                     2006           2005
                                                 ------------    ------------

Net sales                                        $  7,093,000    $  6,736,000
Cost of goods sold                                  3,677,000       3,338,000
                                                 ------------    ------------
Gross profit                                        3,416,000       3,398,000
                                                 ------------    ------------

Operating expenses:
    Research and development                          311,000         332,000
    Selling and marketing                           1,630,000       1,681,000
    General and administrative                      1,327,000       1,146,000
                                                 ------------    ------------
                                                    3,268,000       3,159,000
                                                 ------------    ------------
Operating income                                      148,000         239,000
                                                 ------------    ------------

Other income (expense):
   Other income                                                        14,000
   Interest income                                      2,000           2,000
   Interest expense                                   (36,000)        (27,000)
                                                 ------------    ------------
                                                      (34,000)        (11,000)
                                                 ------------    ------------
Income before provision for income taxes              114,000         228,000
Income taxes                                            6,000           6,000
                                                 ------------    ------------
Net income                                       $    108,000    $    222,000
                                                 ============    ============

Basic income per common share                    $       0.01    $       0.01
                                                 ============    ============

Diluted income per common share                  $       0.00    $       0.01
                                                 ============    ============

 Weighted average shares outstanding                       --
    basic                                          21,338,635      21,284,768
 Dilutive effect of stock options and warrants        138,935          71,550
                                                 ------------    ------------
 Weighted average shares outstanding -
    diluted                                        21,477,570      21,356,318
                                                 ============    ============

The accompanying notes are an integral part of the financial statements


                                       3
<PAGE>

                         American Bio Medica Corporation
                            Statements of Operations
                                   (Unaudited)

                                                  For The Three Months Ended
                                                           June 30,
                                                 ----------------------------
                                                     2006            2005
                                                 ------------    ------------

Net sales                                        $  3,670,000    $  3,614,000
Cost of goods sold                                  1,897,000       1,858,000
                                                 ------------    ------------
Gross profit                                        1,773,000       1,756,000
                                                 ------------    ------------

Operating expenses:
    Research and development                          156,000         174,000
    Selling and marketing                             847,000         924,000
    General and administrative                        654,000         490,000
                                                 ------------    ------------
                                                    1,657,000       1,588,000
                                                 ------------    ------------
Operating income                                      116,000         168,000
                                                 ------------    ------------

Other income (expense):
   Interest income                                      1,000           1,000
   Interest expense                                   (20,000)        (16,000)
                                                 ------------    ------------
                                                      (19,000)        (15,000)
                                                 ------------    ------------
Income before provision for income taxes               97,000         153,000
Income taxes                                                           (5,000)
                                                 ------------    ------------
Net income                                       $     97,000    $    148,000
                                                 ============    ============

Basic income per common share                    $       0.00    $       0.01
                                                 ============    ============

Diluted income per common share                  $       0.00    $       0.01
                                                 ============    ============

 Weighted average shares outstanding                       --
    basic                                          21,317,735      21,284,768
 Dilutive effect of stock options and warrants        145,233           7,397
                                                 ------------    ------------
 Weighted average shares outstanding -
    diluted                                        21,462,968      21,292,165
                                                 ============    ============

The accompanying notes are an integral part of the financial statements


                                       4
<PAGE>

                         American Bio Medica Corporation
                            Statements of Cash Flows
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                          For The Six Months Ended
                                                                 June 30,
                                                           ----------------------
                                                              2006        2005
                                                           ---------    ---------
Cash flows from operating activities:
<S>                                                        <C>          <C>
 Net income                                                $ 108,000    $ 222,000
  Adjustments to reconcile net income to net
     cash used in operating activities:
     Depreciation                                            188,000      185,000
     Provision for doubtful accounts                          24,000       12,000
     Non cash compensation expense                             5,000
     Changes in:
       Accounts receivable                                  (464,000)    (498,000)
       Inventory                                             744,000      363,000
       Prepaid and other current assets                     (130,000)     (32,000)
       Accounts payable                                     (602,000)    (717,000)
       Accrued liabilities                                   (14,000)      13,000
       Unearned Grant                                                      (5,000)
       Wages payable                                           2,000       (8,000)
                                                           ---------    ---------
         Net cash used in operating activities              (139,000)    (465,000)
                                                           ---------    ---------

Cash flows from investing activities:
  Purchase of property, plant and equipment                  (12,000)     (99,000)
                                                           ---------    ---------
         Net cash used in investing activities               (12,000)     (99,000)
                                                           ---------    ---------

Cash flows from financing activities:
  Proceeds from exercise of warrants                                        3,000
  Proceeds from exercise of options                           85,000
  Debt payments                                              (19,000)     (38,000)
  Proceeds from line of credit                               230,000      176,000
  Line of credit payments
  Proceeds from grant                                                      25,000
                                                           ---------    ---------
         Net cash provided by financing activities           296,000      166,000
                                                           ---------    ---------

Net increase / (decrease) in cash and cash equivalents       145,000     (398,000)
Cash and cash equivalents - beginning of period              446,000      995,000
                                                           ---------    ---------

Cash and cash equivalents - end of period                  $ 591,000    $ 597,000
                                                           =========    =========

Supplemental disclosures of cash flow information
      Cash paid during period for interest                 $  36,000    $  27,000
      Issuance of note payable for purchase of equipment                $  85,000
</TABLE>

The accompanying notes are an integral part of the financial statements


                                       5
<PAGE>

Notes to financial statements (unaudited)

                                  June 30, 2006

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, which are considered necessary for a fair
presentation of the financial position of American Bio Medica Corporation (the
"Company" or "ABMC") at June 30, 2006, and the results of its operations, and
cash flows for the six-month and three-month periods ended June 30, 2006 and
2005. The results of operations for the six-month and three-month periods ended
June 30, 2006 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, 2005 included in the Company's Form 10-KSB.

      During the year ended December 31, 2005, the Company incurred a net loss
of $376,000 from net sales of $13,015,000, and had net cash used in operating
activities of $372,000. During the six months ended June 30, 2006, the Company
earned a net income of $108,000 from net sales of $7,093,000. The Company had
net cash outflows from operating activities of $139,000 for the first six months
of 2006 primarily as a result of increases in accounts receivable and prepaid
expenses, and reductions in accrued expenses and accounts payable offset by
reductions in inventory. The reduction in accounts payable stems from payments
for inventory purchases made in the first quarter of 2006. During the first half
of 2006, the Company continued to take steps to improve its financial prospects
including focusing on research and development and selling and marketing.

      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

      In December 2004, the FASB issued FAS No. 123 (revised 2004), "Share-Based
Payment", ("FAS No. 123(R)"), which amends FAS No. 123, Accounting for
Stock-Based Compensation, and supersedes APB Opinion No. 25, Accounting for
Stock Issued to Employees. FAS No. 123(R) requires compensation expense to be
recognized for all share-based payments made to employees based on the fair
value of the award at the date of grant, eliminating the intrinsic value
alternative allowed by FAS No. 123. Generally, the approach to determining fair
value under the original pronouncement has not changed. However, there are
revisions to the accounting guidelines established, such as accounting for
forfeitures, which will change our accounting for stock-based awards in the
future.

      FAS No. 123(R) must be adopted in the first interim or annual period
beginning after December 15, 2005. The statement allows companies to adopt its
provisions using either of the following transition alternatives:

      (i) The modified prospective method, which results in the recognition of
      compensation expense using FAS 123(R) for all share-based awards granted
      after the effective date and the recognition of compensation expense using
      FAS 123 for all previously granted share-based awards that remain unvested
      at the effective date; or


                                       6
<PAGE>

      (ii) The modified retrospective method, which results in applying the
      modified prospective method and restating prior periods by recognizing the
      financial statement impact of share-based payments in a manner consistent
      with the pro forma disclosure requirements of FAS No. 123. The modified
      retrospective method may be applied to all prior periods presented or
      previously reported interim periods of the year of adoption.

      ABMC adopted FAS No. 123(R) on January 1, 2006 using the modified
prospective method. Because we previously accounted for share-based payments to
our employees using the intrinsic value method, our results of operations have
not included the recognition of compensation expense for the issuance of stock
option awards. The Company accelerated the vesting of all outstanding stock
options to December 14, 2005. Options granted to two employees during the second
quarter of 2006 were accounted for in accordance with FAS No. 123(R).

      FAS No. 123(R) also requires the benefits of tax deductions in excess of
recognized compensation cost to be reported as a financing cash flow, rather
than as an operating cash flow as required under current literature. This
requirement may reduce our net operating cash inflows and increase our net
financing cash flows in periods after adoption. The impact that this change in
reporting will have on future periods cannot be determined at this time because
the benefit recognized is dependent upon attributes that vary for each option
exercise.

      In May 2005, the FASB issued FAS No. 154. "Accounting Changes and Error
Corrections" which replaced APB Opinion No. 20 and FASB Statement No. 3,
Reporting Accounting Changes in Interim Financial Statements, and changes the
requirements for the accounting for and reporting of a change in accounting
principle. This statement shall be effective for accounting changes and
corrections of errors made in fiscal years beginning after December 15, 2005.
FAS No. 154 requires retrospective application to prior periods' financial
statements of changes in accounting principle, unless it is impracticable to
determine either the period-specific effects or the cumulative effect of the
change. This Statement defines retrospective application as the application of a
different accounting principle to prior accounting periods as if that principle
had always been used or as the adjustment of previously issued financial
statements to reflect a change in the reporting entity. FAS No. 154 also
requires that a change in depreciation, amortization, or depletion method for
long-lived, non-financial assets be accounted for as a change in accounting
estimate effected by a change in accounting principle. The Company does not
believe that the adoption of FAS No. 154 will have a significant effect on its
financial statements.

      In February 2006 the FASB issued FAS No. 155 "Accounting for Certain
Hybrid Financial Instruments--an amendment of FASB Statements No. 133 and 140".
This Statement amends FASB Statements No. 133, Accounting for Derivative
Instruments and Hedging Activities, and No. 140, Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities.

This Statement:

      a.    Permits fair value remeasurement for any hybrid financial instrument
            that contains an embedded derivative that otherwise would require
            bifurcation

      b.    Clarifies which interest-only strips and principal-only strips are
            not subject to the requirements of Statement 133

      c.    Establishes a requirement to evaluate interests in securitized
            financial assets to identify interests that are freestanding
            derivatives or that are hybrid financial instruments that contain an
            embedded derivative requiring bifurcation

      d.    Clarifies that concentrations of credit risk in the form of
            subordination are not embedded derivatives

                                       7
<PAGE>

      e.    Amends Statement 140 to eliminate the prohibition on a qualifying
            special-purpose entity from holding a derivative financial
            instrument that pertains to a beneficial interest other than another
            derivative financial instrument.

      This Statement is effective for all financial instruments acquired or
issued after the beginning of an entity's first fiscal year that begins after
September 15, 2006. The Company does not believe that the adoption of FAS No.
155 will have a significant effect on its financial statements.

      In March 2006 the FASB issued FAS No. 156 "Accounting for Servicing of
Financial Assets--an amendment of FASB Statement No. 140". This Statement amends
FASB Statement No. 140, Accounting for Transfers and Servicing of Financial
Assets and Extinguishments of Liabilities, with respect to the accounting for
separately recognized servicing assets and servicing liabilities.

      This Statement is effective as of the beginning of the Company's first
fiscal year that begins after September 15, 2006. The Company does not have any
financial assets requiring servicing accordance with FAS No. 156 and does not
believe that the adoption of FAS No. 156 will have a significant effect on its
financial statements.

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.

      Potential common shares outstanding as of June 30, 2006 and 2005 are as
follows:

                  June 30,    June 30,
                   2006        2005
                 ---------   ---------
      Warrants   2,023,420   2,243,420
      Options    3,993,080   4,166,080

      For the three months and six months ended June 30, 2006 the number of
securities not included in the diluted EPS, because the effect would have been
anti-dilutive, were 4,474,500 each. For the three months and six months ended
June 30, 2005 the number of securities not included in the diluted EPS, because
the effect would have been anti-dilutive, were 5,783,000 and 5,284,500
respectively.

      ABMC adopted FAS 123(R) (see "New Accounting Standards" above) effective
January 1, 2006. FAS 123(R) requires compensation expense to be recognized for
all share-based payments made to employees based on the fair value of the award
at the date of grant, eliminating the intrinsic value alternative allowed by FAS
No. 123. The following pro forma information, presented for 2005, gives effect
to fair value of the options on the date of grant using the Black-Scholes
option-pricing model with the following assumptions: dividend yield of 0%,
volatility of 75% to 77%, risk free interest rates ranging from 4.26% to 4.91%,
and an expected life of 10 years. The pro-forma net income represents six months
amortization of expense associated with the option grants.


                                       8
<PAGE>


                                       Six months ended    Six months ended
                                           June 30,            June 30,
                                             2006                2005
                                        -------------      --------------

      Net Income/(loss):
            As reported                 $     108,000      $     222,000
            Pro forma                   $     108,000      $    (283,000)
      Basic income/(loss) per share
           As reported                  $         .01      $         .01
           Pro forma                    $         .01      $        (.01)
      Diluted income/(loss) per share
            As reported                 $         .00      $         .01
            Pro forma                   $         .00      $        (.01)

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 - Reclassifications

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

Note E - Line of Credit

      The Company has available a line of credit with First Niagara Financial
Group, Inc. ("FNFG") 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 FNFG prime rate and the Company is required to pay the principal down to $0
for a 30 consecutive day period in each 12 month period during which the line is
available.

      The Company obtained an additional line of credit from FNFG for $75,000
during the first quarter of 2006. The line of credit is to be used exclusively
for payments on a sublicense agreement entered into during the first quarter of
2006. The interest rate is .50% above the FNFG prime rate and principal may be
repaid at any time and borrowed again as needed. There is no requirement for
repayment of all principal annually on this line of credit. The Company intends
to repay the funds drawn down on this line within one year to allow borrowing of
additional amounts related to future payments due under the Sublicense
Agreement.

Note F -Sublicense Agreement

      On February 28, 2006, the Company entered into a non-exclusive Sublicense
Agreement (the "Agreement") related to certain patents to allow the Company to
expand its contract manufacturing operations. Under this Agreement, the Company
is committed to pay a non-refundable fee of $175,000 over the course of 2 years.
The Company would also be required to pay royalties for products the Company
manufactures that fall within the scope of these patents. The Company does not
currently manufacture any products that fall within the scope of these patents,
and therefore, no royalty payments are currently required.

Note G - Integrated Bio Technology Agreement

      On March 29, 2006, the Company entered into a royalty agreement with
Integrated Bio Technology Corporation ("IBC"). IBC is the owner of the RSV test
and previously purchased the tests from the Company, via a contract
manufacturing agreement, for resale to its distributor. At December 31, 2005 IBC
had outstanding amounts due to ABMC totaling approximately $119,000. To address
this outstanding balance, and to streamline the delivery of product to IBC's
distributor, the Company agreed to work directly with IBC's distributor to
receive orders, manufacture product and execute all invoicing and collection
directly from the distributor. Effective January 1, 2006, the Company will pay a
royalty equal to 20% of total sales to IBC. The Company will pay only 25% of
royalties earned during the first two years, with the remaining 75% applied to
amounts currently owed to ABMC by IBC. If the entire amount receivable from IBC
is not earned through royalties during the first two years of the term of the
royalty Agreement, all payments to IBC will cease until the full amount owed to
the Company is satisfied. During the first six months of 2006 ABMC manufactured
and sold approximately $413,000 of the RSV tests to IBC's distributor. The
royalties earned on these sales were approximately $83,000. During the six
months ended June 30, 2006 ABMC reduced the amounts owed from IBC by $62,000,
from $119,000 to $57,000 and made payments to IBC totaling approximately
$21,000.

                                       9
<PAGE>

Note H - Stock Option Grants

      In June 2006, the Company's Board of Directors granted a stock option to
purchase 72,000 shares of the Company's common stock to the Company's Chief
Financial Officer, and an option to purchase 3,000 shares of the Company's
common stock to an employee in the Company's R&D division. Both option grants
have exercise prices of $1.05 (the closing price of the Company's common shares
on the date of grant) and vest 100% on the one-year anniversary of the date of
the grant. In accordance with FAS 123(R) (see "New Accounting Standards"), the
Company will recognize $63,347 in non-cash compensation expense related to these
grants over the next twelve months. Included in the three months and six months
ended June 30, 2006 is $5,279 of this non-cash compensation expense.

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 THREE AND SIX MONTHS ENDED JUNE 30, 2006 AND 2005

      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
business; (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

      During the six months ended June 30, 2006, except for the adoption of FAS
123(R), there were no significant changes to the Company's critical accounting
policies, which are included in the Company's Annual Report on Form 10-KSB for
the year ended December 31, 2005.


                                       10
<PAGE>

Results of operations for the six months ended June 30, 2006 as compared to the
six months ended June 30, 2005

      Net sales were $7,093,000 for the six months ended June 30, 2006 as
compared to $6,736,000 for the six months ended June 30, 2005, an increase of
$357,000 or 5.3%. Increases in sales of Rapid Drug Screen(R) (RDS(R)) InCup(R),
Oralstat(R) oral fluid test, Rapid TOX(TM) (the cassette product introduced by
the Company in late 2005), and contract manufacturing were offset by a decrease
in RDS sales during the first six months of 2006 compared to the same period a
year ago. The Company anticipates continued growth in sales of the Rapid TOX
product as it gains market acceptance and continued growth in its contract
manufacturing operations as the Company is currently working with several new
entities on contract manufacturing projects.

      During the six months ended June 30, 2006, the Company continued its
extensive program to market and distribute their urine and oral fluid based
point of collection tests for drug of abuse. The Company also continued
marketing its Rapid Reader(TM), the first all inclusive drug screen
interpretation and data management system cleared by the Food and Drug
Administration ("FDA").

      In the first half of 2006, the Company filed three 510(k) marketing
applications with the FDA. One related to a drug screen for Buprenorphine, one
for the Company's Rapid TOX cassette product and one related to a new detection
level for the Company's drug screen for cocaine. In May 2006, the Company
received 510(k) clearance from the FDA for its Rapid TOX product and in June
2006, the Company received 510(k) clearance from the FDA for the new detection
level for the Company's drug screen for cocaine. As of the date of this report,
the Company is still awaiting a response from the FDA concerning clearance of
the Company's drug screen for Buprenorphine.

      The Company continued its contract manufacturing operations for
unaffiliated third parties during the first half of 2006. Development continued
on the production of a point of collection test for HIV for one of the Company's
contract manufacturing customers, which is currently being evaluated by the FDA.
The Company is also evaluating several other requests for contract manufacturing
including incorporation of the Company's drugs of abuse tests into another test
manufactured by an unrelated third party that is used in hospitals, emergency
rooms and clinics, and development of variations of the Company's current oral
fluid product to meet specific market demands in Europe.

      Cost of goods sold for the six months ended June 30, 2006 was $3,677,000
or 51.8% of net sales as compared to $3,338,000 or 49.6% of net sales for the
six months ended June 30, 2005. The increase in cost of goods sold is due to
increases in the cost of labor in manufacturing, stemming from the greater
diversity and complexity of new products. While the cost of labor and overhead
rose in 2006 compared to a year ago, cost of materials has remained relatively
consistent and the Company continued its efforts to control the costs to produce
its products. Increased price pressure in the marketplace has limited the
Company's ability to recover cost increases while maintaining market share. The
Company continues to evaluate all aspects of its manufacturing and assembly
processes to identify any areas of cost savings to improve gross margins.

      Operating expenses increased 3.5% to $3,268,000 in the first six months of
2006, compared to $3,159,000 in the same period in 2005. An increase of $181,000
in general and administrative expense was offset by decreases of $21,000 and
$51,000 in research and development and selling and marketing expense
respectively. Driving the increase in general and administrative expense were
investor relations expense and royalty expense as well as increases in general
and administrative salaries and wages. Operating expenses decreased from 46.9%
of net sales in the first six months of 2005 to 46.1% for the same period in
2006.

Research and development

      Research and development expenses for the six months ended June 30, 2006
were $311,000, or 4.4%, of net sales compared to $332,000, or 4.9%, of net sales
for the six months ended June 30, 2005. The decrease in expense is primarily due
to decreases in research and development salaries and wages and supplies
resulting from the departure of an R&D manager in late 2005, as well as
decreases in spending on supplies, offset by an increase in FDA compliance
costs. Management continues its overall strategy to: focus on new product
development to meet the changing needs of the point of collection drug of abuse
testing market; develop test components for an HIV test currently under
development for a third party and being evaluated by the FDA; and develop new
uses of immunoassay lateral flow technology.

                                       11
<PAGE>

Selling and marketing expense

      Selling and marketing expense was $1,630,000, or 23.0%, of net sales in
the first six months of 2006. This represents a decrease of $51,000, from
$1,681,000 or 25.0% of net sales in the same six months in 2005. This decrease
is primarily attributable to reductions in commissions expense stemming from a
restructuring of the commission plan in 2006, savings in travel and travel
related expenses and decreases in expenses for trade shows, offset by increases
in consulting fees, outside service fees and postage. The increase in postage
expense represents postage in excess of amounts received from customers for
shipping and handling and was previously reported as general and administrative
expense in 2005. During 2006, the Company implemented new internal reporting of
this expense in more detail enabling them to attribute these shipping and
handling excesses to the appropriate sales division rather than charging them to
general and administrative expense. This reclassification allows the Company to
evaluate the impact of these charges on the business and more specifically on
each of the sales divisions. This reporting was not available in 2005. The
Company's sales strategy continues to be a focus on direct sales as well as an
inside direct sales group of seven.

General and administrative expense

      General and administrative (G&A) expense was $181,000 higher in the first
six months of 2006 than the same period in 2005. Total G&A expense for the six
months ended June 30, 2006 was $1,327,000, or 18.7%, of net sales compared to
$1,146,000, or 17.0%, of net sales in the first six months of 2005. Expenses
totaling $179,000 for investor relations and royalty expense were primarily
responsible for the increase. The investor relations expense relates to a
contract signed in 2005 with an investor relations firm. The contract with this
firm is for one year and it expires in September 2006. Royalty expense relates
to the agreement entered into with IBC (see note G) and the sublicense agreement
entered into during the first quarter of this year (see note F). Also affecting
G&A expense in the first six months of 2006 were increases in salaries and wages
and outside service fees in the Company's quality assurance department.
Offsetting these increases were savings in insurance costs resulting from
changes in insurance carriers during the fourth quarter of 2005 and first
quarter of 2006. In addition, a reclassification of postage expense as a selling
and marketing expense, described above, resulted in a decrease in warehouse
costs. In addition the Company reduced spending in taxes, utilities, accounting
fees and insurance in the first half of 2006.

Results of operations for the three months ended June 30, 2006 as compared to
the three months ended June 30, 2005

      Net sales were $3,670,000 for the three months ended June 30, 2006 as
compared to $3,614,000 for the three months ended June 30, 2005, representing an
increase of $56,000, or 1.6%. Direct sales accounted for 70.6%, or $2,592,000,
of sales for the second quarter compared to $2,678,000, or 74.1%, a year ago.
Telemarketing, international and other sales contributed $1,078,000, or 29.4%,
of the net sales for the second quarter of 2006, compared to $936,000, or 25.9%,
of the net sales for the same period in 2005. Also contributing to the increase
in sales were contract manufacturing sales of $112,000 during the second quarter
of 2006, compared to $74,000 during the same period in 2005.

      During the three months ended June 30, 2006, the Company continued its
extensive program to market and distribute their urine and oral fluid based
point of collection tests for drug of abuse. The Company also continued
marketing its Rapid Reader(TM), the first all inclusive drug screen
interpretation and data management system cleared by the Food and Drug
Administration ("FDA").

                                       12
<PAGE>

      In May 2006, the Company received 510(k) clearance from the FDA for its
Rapid TOX product and in June 2006, the Company received 510(k) clearance from
the FDA for the new detection level for the Company's drug screen for cocaine.
Both of these applications were filed in the first quarter of 2006 along with an
application filed for the Company's drug screen for Buprenorphine. As of the
date of this report, the Company is still awaiting a response from the FDA
concerning clearance of the Company's drug screen for Buprenorphine.

      The Company continued its contract manufacturing operations for
unaffiliated third parties during the second quarter of 2006. Development
continued on the production of a point of collection test for HIV for one of the
Company's contract manufacturing customers, which is currently being evaluated
by the FDA. The Company is also evaluating several other requests for contract
manufacturing including incorporation of the Company's drugs of abuse tests into
another test manufactured by an unrelated third party that is used in hospitals,
emergency rooms and clinics, and development of variations of the Company's
current oral fluid product to meet specific market demands in Europe.

      Cost of goods sold for the three months ended June 30, 2006 was
$1,897,000, or 51.7%, of net sales as compared to $1,858,000, or 51.4%, of net
sales for the three months ended June 30, 2005. The increase in cost of goods
sold is due to increases in the cost of labor in manufacturing, stemming from
the greater diversity and complexity of new products, and the disposal of some
obsolete Oralstat inventory components during the second quarter. While the cost
of labor and overhead rose in 2006 compared to a year ago, materials have
remained relatively consistent and the Company continued its efforts to control
the costs to produce its products. Increased price pressure in the marketplace
has limited the Company's ability to recover cost increases while maintaining
market share. The Company continues to evaluate all aspects of its manufacturing
and assembly processes to identify any areas of cost savings to improve gross
margins.

      Operating expenses increased $69,000, or 4.3%, to $1,657,000 in the second
quarter of 2006, compared to $1,588,000 in the same period in 2005. This is
attributable to increases in G&A expense of $164,000, offset by savings in R&D
expenses of $18,000 and selling and marketing expenditures of $77,000.

Research and development

      Research and development ("R&D") expenses for the three months ended June
30, 2006 were $156,000, or 4.3%, of net sales compared to $174,000, or 4.8%, of
net sales for the three months ended June 30, 2005. The decrease in expense is
primarily due to a decrease in research and development salaries and wage
expense resulting from the departure of an R&D manager in late 2005, as well as
decreases in spending on supplies. The primary focus of the R&D group in the
second quarter of 2006 was refining modifications to the Company's products,
including OralStat, and preparing these modifications for production and sale.
Management continues its overall strategy to: focus on new product development
to meet the changing needs of the point of collection drug of abuse testing
market; develop test components for an HIV test currently under development for
a third party and being evaluated by the FDA; and develop new uses of
immunoassay lateral flow technology.

Selling and marketing expense

      Selling and marketing expense was $847,000, or 23.1%, of net sales in the
second quarter of 2006, a decrease of $77,000, from $924,000, or 25.6%, of net
sales in the same three months in 2005. This decrease is primarily attributable
to the reductions in commissions expense resulting from a restructuring of the
commission plan in 2006, as well as decreases in travel and travel related
spending and systems costs. These decreases were offset by increases in postage
expense resulting from a change to internal reporting that the Company
implemented in 2006. The new reporting of this expense is done in more detail
enabling them to attribute these shipping and handling excesses to the
appropriate sales division rather than charging them to general and
administrative expense. This reclassification allows the Company to evaluate the
impact of these charges on the business and more specifically on each of the
sales divisions. The primary focus of spending in selling and marketing is to
increase coverage through direct sales in the marketplace coordinated with
telemarketing efforts through an in-house sales group.

                                       13
<PAGE>

General and administrative expense

      General and administrative expense increased by $164,000 in the second
quarter of 2006 compared to the same period in 2005. Total G&A expense in the
second quarter of 2006 was $654,000, or 17.8%, of net sales compared to
$490,000, or 13.6%, of net sales in the three months ended June 30, 2005.
Primarily responsible for the increase in G&A expense in the second quarter is
investor relations expense related to contracting with an investor relations
firm during 2005, and royalty and sublicense fees related to agreements executed
in the first quarter of 2006 (see notes F and G). Increases in bad debts
resulting from two account write offs totaling $12,000, directors fees and
expenses, outside service fees, accounting fees and general and administrative
salaries and wages were offset by savings insurance and a reclassification of
postage expenses, described above.

LIQUIDITY AND CAPITAL RESOURCES AS OF JUNE 30, 2006

      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 research and development, selling 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 $5,014,000 at June 30, 2006 compared to
working capital of $4,636,000 at December 31, 2005. 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 $139,000 for the six months
ended June 30, 2006 compared to net cash used in operating activities of
$465,000 for the six months ended June 30, 2005. Operating cash flow improved
for the six months ended June 30, 2006 primarily because of increases in
accounts receivable and prepaid expense, offset by reductions in inventory,
accounts payable and accrued expenses. Reductions in accounts payable pertain to
purchases of inventory materials in the first quarter of 2006, paid for in the
second quarter of 2006.

                                       14
<PAGE>

      Net cash used in investing activities was $12,000 for the six months ended
June 30, 2006 compared to net cash used in investing activities of $99,000 for
the six months ended June 30, 2005. The net cash used in both years was for
investment in property plant and equipment. The cash used in 2005 was
specifically for costs associated with the completion of the Company's HIV room
and equipment purchases in the Company's New Jersey facility and additional
equipment purchases for new hires. Cash used in 2006 was for equipment
purchases.

      Net cash provided by financing activities was $296,000 for the six months
ended June 30, 2006 consisting of proceeds from the Company's lines of credit
and $85,000 from the exercise of 100,000 options by an employee. Net cash
provided in the first six months of 2005 was $166,000 resulting from the
exercise of warrants, proceeds from the Company's line of credit and proceeds of
$25,000 from a Columbia County Economic Development Grant offset by payments on
mortgage and notes payable.

      The Company has available two lines of credit with First Niagara Financial
Group, Inc. ("FNFG"). The first line has a maximum available line of $350,000,
not to exceed 70% of accounts receivable less than 60 days for general operating
use. The interest rate is .25% above the FNFG prime rate and the Company is
required to pay the principal down to $0 for a 30 consecutive day period in each
12-month period during which the line is available. The amount outstanding on
this line of credit was $174,000 at June 30, 2006 and $176,000 at June 30, 2005.
The second line of credit was obtained during the first quarter of 2006 for the
limited purpose of paying amounts associated with a sublicense agreement
executed during the first quarter. This line is for a maximum of $75,000 with an
interest rate of .50% above the FNFG prime rate and the Company is not required
to pay the principal down to $0 during each twelve-month period. The amount
outstanding on this line of credit at June 30, 2006 was $56,000.

      At June 30, 2006, the Company had cash and cash equivalents of $591,000.

      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, establishing adequate inventory
levels to support expected sales and instituting controls necessary to comply
with financial disclosure controls as necessitated by new regulatory
requirements.

ITEM 3. CONTROLS AND PROCEDURES

      As of the end of the period covered by this report, American Bio Medica
Corporation carried out an evaluation, under the supervision and with the
participation of the Chief Financial Officer and the Chief Executive Officer, to
evaluate the effectiveness of the disclosure controls and procedures (as defined
in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended
("Exchange Act")). Based on that evaluation, the Chief Financial Officer and the
Chief Executive Officer have concluded that American Bio Medica Corporation's
disclosure controls and procedures as of the date of this report are effective
for recording, processing, summarizing, and reporting information that is
required to be disclosed in their reports under the Exchange Act, as amended,
within the time periods specified in the Securities and Exchange Commission's
rules and forms. Additionally, based upon this most recent evaluation, we have
concluded that there were no significant changes in internal controls or other
factors that have materially affected or are likely to materially affect the
Company's internal control over financial reporting during the period covered by
this report.


                                       15
<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 Holiday Inn, in East Greenbush, New
York on June 13, 2006.


                       PROPOSAL 1 - ELECTION OF DIRECTORS


Total shares in attendance: 19,800,354            Outstanding shares: 21,359,768


         Proposal No. 1 - Election of Directors   Votes Cast: 19,800,354

         Director            For            Pct.    Withheld    Pct.
         ----------          ---            ----    --------    ----
         Anthony Costantino  19,578,976     98.9    221,808     1.1
         Carl Florio         19,647,279     99.2    153,505     0.8
         Edmund Jaskiewicz   19,638,076     99.2    162,708     0.8
         Daniel W. Kollin    17,855,037     90.2  1,945,747     9.8
         Stan Cipkowski      19,614,476     99.1    186,308     0.9
         Richard Koskey      19,674,286     99.4    126,498     0.6


      All six nominees for election to the Board of Directors were elected for
      staggered terms commencing with the ensuing year and until the years noted
      below or until their successors shall be elected and duly qualified.

      o Anthony G. Costantino, Ph.D. (2007)       o Carl Florio (2007)
      o Edmund M. Jaskiewicz (2008)               o Daniel W. Kollin (2008)
      o Stan Cipkowski (2009)                     o Richard P. Koskey (2009)


                                       16
<PAGE>

      Proposal No. 2 - Classification of Board terms    Votes Cast: 7,128,163

      For:                       6,564,986     92.1%
      Against:                     404,682      5.7%
      Abstain:                     158,495      2.2%
      Broker Non-Votes:         12,672,621


Item 5. Other Information

      None.

Item 6. Exhibits

      31.1  Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer

      31.2  Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer

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

      32.2  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.


                                       17
<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, 2006



                                       18