<PAGE>

                                   FORM 10-KSB

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549


[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2002

[  ] TRANSITION REPORT UNDER SECTION 13 or 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

For the transition period ________________________ to _________________________

Commission File Number: 0-28666


                         American Bio Medica Corporation
                 ----------------------------------------------
                 (Name of Small Business Issuer in its charter)


           New York                                       14-1702188
-------------------------------                ---------------------------------
(State or other jurisdiction of                (IRS Employer Identification No.)
 incorporation or organization)


             122 Smith Road
      Kinderhook, New York 12106                              12106
----------------------------------------                   ----------
(Address of principal executive offices)                   (Zip Code)


Issuer's telephone number (800) 227-1243

Securities registered pursuant to Section 12(b) of the Exchange Act:  None

Securities registered pursuant to Section 12(g) of the Exchange Act:

                           Common Shares, $0.01 Par value

                           Common Share Purchase Warrants

                                Title of each class


         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.
[X] Yes [ ] No

         Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [X]

         State issuer's revenues for its most recent fiscal year: $10,312,000

<PAGE>

         The aggregate market value of 17,010,393 voting Common Shares held by
non-affiliates of the issuer was approximately $18,201,121 based on the average
bid and asked prices of the issuer's Common Shares, $.01 par value, as reported
on the NASDAQ SmallCap Market on March 25, 2003.

         As of March 21, 2003, the issuer had outstanding 20,609,548 Common
Shares, $.01 par value.

         The aggregate market value of 1,274,500 Common Share Purchase Warrants
held by non-affiliates of the issuer was approximately $802,935 based on the
average bid and asked price of the issuer's Common Share Purchase Warrants, as
reported on the NASDAQ SmallCap Market on March 25, 2003.

         As of March 25, 2003, the issuer had outstanding 1,274,500 Common Share
Purchase Warrants.

         Documents Incorporated by reference:

         (1)  The Proxy Statement for the Annual Meeting of Shareholders for the
              year ending December 31, 2002 in Part III of this Form 10-KSB
         (2)  Other documents incorporated by reference on this report are
              listed in the Exhibit Reference Table

         Transition Small Business Disclosure Format:  [  ] YES   [X] NO


<PAGE>

                         American Bio Medica Corporation

                      Index to Annual Report on Form 10-KSB
                   For the fiscal year ended December 31, 2002

<TABLE>
<CAPTION>
PART I.                                                                                 PAGE
                                                                                        ----
<S>       <C>      <C>                                                                  <C>
         Item 1.   Description of Business                                                 1
         Item 2.   Description of Property                                                16
         Item 3.   Legal Proceedings                                                      16
         Item 4.   Submission of Matters to a Vote of Security Holders                    17

PART II

         Item 5.   Market for Common Equity and Related Shareholder
                      Matters                                                             17
         Item 6.   Management's Discussion and Analysis or Plan of
                      Operations                                                          17
         Item 7.   Financial Statements                                                   25
         Item 8.   Changes In and Disagreements With Accountants on
                      Accounting and Financial Disclosure                                 25

PART III

         Item 9.   Directors, Executive Officers, Promoters and Control Persons;
                      Compliance with Section 16(a) of the Exchange Act                   26
         Item 10. Executive Compensation                                                  26
         Item 11. Security Ownership of Certain Beneficial Owners and
                      Management                                                          26
         Item 12. Certain Relationships and Related Transactions                          26
         Item 13. Exhibits and Reports on Form 8-K                                        26
         Item 14. Controls and Procedures                                                 26

Signatures                                                                                S-1

Certifications                                                                            C-1

</TABLE>



<PAGE>


         This Form 10-KSB may contain certain forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995. For this
purpose any statements contained in this Form 10-KSB that are not statements of
historical fact may be deemed to be forward-looking statements. Without limiting
the foregoing, words such as "may," "will," "expect," "believe," "anticipate,"
"estimate" or "continue" or comparable terminology is intended to identify
forward-looking statements. It is important to note that our actual results
could differ materially from those anticipated from the forward-looking
statements depending on various important factors. These important factors
include our history of losses and ability to continue as a going concern, the
uncertainty of acceptance of current and new products in our markets,
competition in our markets, our dependence on our distributors and the other
factors discussed in our "Risk Factors" found on page 10.

PART I
------

         ITEM 1.  DESCRIPTION OF BUSINESS

Business Development
--------------------

         Our Company was incorporated on April 2, 1986 under the laws of the
State of New York under the name American Micro Media, Inc. On September 9,
1992, we filed an amendment to our Articles of Incorporation to change our name
to American Bio Medica Corporation. Our principal business office is located at
122 Smith Road, Kinderhook, New York, 12106. We also have a research &
development (R&D) and production facility located at 603 Heron Drive, Unit #3,
Logan Township, New Jersey, 08085.

         In November 2001, we purchased our facility located in Kinderhook, New
York from Avoba, Inc. for $950,000. Included in the purchase were the facility,
its contents and 107 acres of land surrounding the facility.

Our Business
------------

         We develop, manufacture and market immunoassay diagnostic test kits,
primarily for the immediate, onsite screening for drugs of abuse. Our drugs of
abuse screening products offer health care, law enforcement, government,
industrial safety and educational professionals, self-contained, one-step
screening devices capable of identifying illicit drug use within minutes. In
addition to our manufacture and distribution of our drugs of abuse screening
products, in late 2001 we also began performing contract strip manufacturing for
other point of care diagnostic companies. While we do not currently derive a
significant portion of our revenues from contract manufacturing, we do expect
that contract manufacturing will become a more substantial portion of our
revenues in the future. Our long-term objective is to provide an extensive
product portfolio to the expanding $6 billion immunoassay market.

    Our Products

         Rapid Drug Screen(R): We manufacture the Rapid Drug Screen, or RDS(TM),
our primary product line. The Rapid Drug Screen is a patented, rapid, onsite,
test kit that detects the presence or absence of drugs of abuse in a urine
specimen. We market the RDS as easy to-use, cost-effective and highly reliable.
Controlled tests conducted by an independent laboratory, American Medical
Laboratories, compared the Rapid Drug Screen with results produced by EMIT II
and Gas Chromatography/Mass Spectrometry (GC/MS), an enzyme immunoassay
laboratory test and the laboratory gold standard, and found greater than 99%
correlation of results. We produce several versions (panels) of the Rapid Drug
Screen. Each panel screens for a specified number of drugs (up to 10 classes of
drugs) simultaneously. We can also custom produce panels for the screening of
any quantity or combination of the following classes of drugs: cocaine, THC
(marijuana), opiates, amphetamine, PCP, benzodiazepines, methamphetamines,
barbiturates, tricyclic antidepressants, methadone, MDMA (Ecstasy) and
Oxycodone.


                                       1
<PAGE>

         To use our Rapid Drug Screen product, an individual slides a panel into
a self-contained, disposable, urine-filled cup and within minutes accurate
results are shown on the panel. A single line in the test window indicates a
positive reading, and a double line indicates a negative reading for the
presence of drugs. We believe that this ease of use is a competitive advantage
over lab products, as well as products that need to add reagents, manipulate the
test or utilize trained professionals to understand results.

         One of the problems that may occur in onsite drug testing is that of
fraud or evasion practiced by the person being tested. The most prevalent method
of avoiding adverse test results is the substitution, by the person being
tested, of a hidden "clean" urine sample, which he or she brings to the test. As
a consequence, each of our urine drug screens contains a temperature sensor,
which helps prevent the substitution of another urine sample. A substituted
sample would normally be of a lower temperature than a sample produced from the
body on the spot. In addition, both our urine and saliva-based drug screens (See
"OralStat" on page 3) contain a control line, designed to assure the test
administrator that the test is working properly and that the reagents are
present and not destroyed by any outside agent. Should the control line not
appear, the administrator is instructed to void the test and re-test the
individual by obtaining another sample. A positive result is normally confirmed
by laboratory testing.

         Our Rapid Drug Screen is currently marketed in the following standard
configurations: two different 2-panel tests, three different 3-panel tests, two
different 4-panel tests, four different 5-panel tests, one 8-panel test and one
9-panel test. We can also produce, on special order, or if a market demands,
tests that can screen for any quantity (from two - ten) or configuration of
classes of drugs. These standard configurations are:

         o    Two panel tests, designed for the criminal justice and education
              markets that screen for cocaine and THC or methamphetamines and
              THC.

         o    Three panel tests, designed for various non-clinical markets, that
              screen for THC, cocaine and opiates; THC, cocaine and
              amphetamines; or THC, cocaine and methamphetamines.

         o    Four panel tests, designed for various non-clinical markets,
              including corporate/workplace and the criminal justice markets,
              that screen for cocaine, THC, opiates and alternatively
              amphetamines and methamphetamines.

         o    Five panel tests, designed for the corporate/workplace market,
              that screen for the "SAMHSA 5" (SAMHSA stands for the Substance
              Abuse and Mental Health Services Administration, an Agency of the
              US Department of Health and Human Services): cocaine, THC,
              opiates, PCP and amphetamine and 2 additional versions of this
              test with methamphetamines or benzodiazepines replacing PCP. A new
              standard configuration of THC, cocaine, opiates, methamphetamines
              and Oxycodone is also available.

         o    An eight panel test, designed for the clinical market, primarily
              for hospitals and physicians, that screens for the "SAMHSA 5"
              (listed above), plus benzodiazepines, methamphetamines and
              barbiturates.

         o    A nine panel test, also designed for the clinical market, that
              screens for drugs of abuse from the eight panel test, as well as
              tricyclic antidepressants (TCA).

         Rapid One(R): We manufacture the Rapid One product line which consists
of 13 single drug tests, each of which screens for the presence or absence of
drugs of abuse in a urine specimen. The Rapid One product line utilizes the same
technology as the Rapid Drug Screen. It includes a single dip platform, an
identification and date area, and does not require the use of pipettes or

                                       2
<PAGE>

reagents. The Rapid One is designed for correctional facilities and other
markets where the person subject to substance abuse testing is known to use a
specific drug. It can also be used to enhance a Rapid Drug Screen by means of
allowing screening of an additional drug. The Rapid One product line consists of
the following 12 classes of drugs: cocaine, THC (marijuana), opiates (available
at either 300 ng/ml or 2000 ng/ml), amphetamine, PCP, benzodiazepines,
methamphetamines, barbiturates, tricyclic antidepressants, methadone, Oxycodone
(a synthetic opiate found in several legitimate and effective pain medications,
including OxyContin(R), but is being used by drug abusers to create a
heroin-like high), and MDMA (Ecstasy), an illegal designer drug.

         OxyContin is becoming more widely abused. The number of persons
reported using OxyContin for non-medical purposes at least once in their
lifetime has increased from 221,000 in 1999, to 399,000 in 2000, to 957,000 in
2001. Currently we are the only company to offer a 510(k) cleared onsite test
for Oxycodone. (For more information on Food and Drug Administration ("FDA")
510(k) clearance, see "Government Regulations" found on page 9.) 510(k)
clearance allows a product to be sold in the clinical markets.

         Rapid Tec(R): In August 2001, we launched a new version of the Rapid
One called the Rapid Tec, in which one individual drug testing strip would
include the chemistry to detect more than one class of drug. The Rapid Tec is
designed for those customers who require a less expensive product but still need
to test for more than one drug of abuse utilizing one urine sample. The Company
initially shipped three versions of the Rapid Tec (the Rapid Tec-2, Rapid Tec-3
and Rapid Tec-4) in March 2002. Subsequently, in June 2002, the Company began
shipping a fourth version of the product, the Rapid Tec-5. The Company currently
offers the following versions of the Rapid Tec:

         o    Rapid Tec-2: screens for THC and cocaine
         o    Rapid Tec-3: screens for THC, cocaine and methamphetamines
         o    Rapid Tec-4: screens for THC, cocaine, methamphetamines and
              opiates
         o    Rapid Tec-5: screen for THC, cocaine, opiates, amphetamines and
              PCP

         Rapid Drug Screen Scan-R(TM): In August 2001, we launched a software
system that provides a rapid, clear and convenient method to document onsite
drug screening results. The patent pending system allows the operator to combine
the scanned image of the Rapid Drug Screen test card with a recording of the
actual test score on one result form. The simple easy-to-use software
automatically saves the document in a user definable format. The document,
complete with the image of the Rapid Drug Screen test card, can be saved,
printed or emailed for permanent documentation of the screening results. We
believe that the Rapid Drug Screen Scan-R greatly improves testing efficiency,
improves chain of custody issues for legal defensibility and optimizes protocol
proficiency. It also creates a database of results for future access and
retrieval. Subsequent to the launch of the Rapid Drug Screen Scan-R, and
throughout the year ending December 31, 2002, we continued to make modifications
and it has not yet been introduced into the widespread market.

         OralStat(R): In August 2001, we signed a licensing agreement with ANSYS
Technologies, Inc., to market an onsite saliva-based test for drugs of abuse.
The licensing agreement allows us to market this product to the criminal
justice, workplace and drug treatment sectors. We have trademarked this
saliva-based product the "OralStat." In August 2002, our trademark "OralStat"
was registered by the U.S. Patent and Trademark Office. The OralStat can
presently simultaneously test for six classes of drugs: THC, opiates, cocaine,
PCP, amphetamines and methamphetamines. Utilizing a simple saliva sample, it
delivers easy-to-read positive or negative results within 10-15 minutes. The
test requires no reader and no messy saliva collection or handling. Pending
submission for FDA 510(k) clearance, the product is labeled and made available
"for forensic use only", which means for use in legal determinations only; it is
not intended or promoted for a health or medical use or purpose.


                                       3
<PAGE>

         Since its introduction, the OralStat has been increasingly accepted in
the workplace/corporate markets, particularly in the temporary staffing segment.
In May 2002, we entered into a contract to provide the OralStat to one of the
leading providers of staffing services in the world.

         Drug Detector(TM): In January 2000, we licensed the right to distribute
and market a patented residue and/or trace drug detection system in select
markets in North and South America for a period of five years from Mistral
Security, Inc. We adopted the trademark "Drug Detector" for this product. The
Drug Detector tests surfaces for the presence or absence of residue from
marijuana, cocaine, heroin or methamphetamines without the need for urine, hair
or saliva samples. The Drug Detector consists of an aerosol spray for a
specified drug, special collection papers and instructions.

         In September 2002, we elected to discontinue distribution of the Drug
Detector product line upon mutual agreement with Mistral Security, Inc., due to
less than anticipated market acceptance.

         Rapid Tec Cup(TM): In July 2001, we began providing contract strip
manufacturing to Starplex Scientific, Inc. As a result of this relationship, in
December, 2002, we entered into a private-label agreement with Starplex
Scientific, Inc for its onsite drugs of abuse self-contained cup. We adopted the
trademark of Rapid Tec Cup for this product, as the strip utilized in the
product is the same as in our Rapid Tec product line. Currently we offer a 5
panel cup that tests for THC, cocaine, opiates, amphetamines and PCP. We expect
the Rapid Tec Cup will be useful in the Corporate/Workplace and
Corrections/Government markets where a self-contained product may be required.

         Contract Manufacturing

         Through the fiscal year ending December 31, 2002, we provided bulk
strip contract manufacturing services to a number of point of care diagnostic
companies. Currently we manufacture test components for the detection of
tuberculosis, drugs of abuse and HIV for 3 non-affiliated point of care
companies. While we do not currently derive a significant portion of our
revenues from contract manufacturing, we do expect that this will change in the
future and contract manufacturing will become a more substantial portion of our
revenues.

    Our Markets

         Corporate/Workplace
         -------------------

         We have developed a nationwide network of distributors and
administrators of workplace drug testing programs to sell our drugs of abuse
product line. Our direct sales team also sells in this market to key customers
and coordinates all sales efforts in this market. We believe that the market for
utilization of onsite drug screens for pre-employment and random employee
testing is expanding.

         o    In September 2001, the Office of National Drug Control Policy (the
              "ONDCP") reported that between 1992 and 1998, the overall cost of
              drug abuse to society increased at a rate of 5.9% annually. By
              1998, the societal cost of drug abuse was $143.4 billion.
              Furthermore, the ONDCP projected that by the year 2000, the
              societal cost of drug abuse would be $160.7 million.

         o    According to the 2001 SAMHSA National Household Survey on Drug
              Abuse, released in Sept 2002, 76.4% of adults who use illegal
              drugs are employed, either full or part-time.

         o    According to the U.S. Department of Labor, the annual cost to
              American employers of on-the-job substance abuse is estimated to
              be $100 billion. This figure includes lost productivity, theft,
              accidents and additional healthcare costs.


                                       4
<PAGE>

         o    Studies reported by the Institute for a Drug-Free Workplace show:

                 o   Of all workplace drug users who test positive, 52% are
                     daily users
                 o   Employees who test positive for drugs were 60% more likely
                     to be responsible for plant accidents, used a third more
                     sick leave and have many more unexcused absences.

         According to the American Management Association ("AMA"), drug testing
is performed by 65% of major U.S. firms. For the reasons, stated above, not only
are there financial benefits of drug testing, but a drug-free environment is a
safer one. Incentives encourage employers to adopt Drug Free Workplace Programs.
Drug testing is an integral part of a Drug Free Workplace Program. In some
states, there are workman's compensation and unemployment insurance premium
reductions, tax deductions and other incentives for adopting these programs. The
Drug Free Workplace Act requires employers receiving federal contracts of
$100,000 or more to enact a Drug Free Workplace program (the Federal Acquisition
Streamlining Act of 1994 (FASA) raised the threshold of contracts covered by the
Drug Free Workplace Act from $25,000 to those exceeding $100,000).

         Government, Corrections and Law Enforcement
         -------------------------------------------

         We utilize our network of distributors and our direct sales team to
sell our drugs of abuse screening products in this market. This market includes
federal, state and county level agencies, including correctional facilities,
pretrial agencies, probation, drug courts and parole departments at the federal
and state levels and juvenile correctional facilities. According to the Bureau
of Justice Statistics ("BOJ"), as of December 31, 2001, there were more than 1.4
million inmates in state and federal prisons and at midyear 2002; there were
702,000 in local jails. As of January 2003, approximately 54.7% of inmates in
federal prisons were sentenced as drug offenders according to the Federal Bureau
of Prisons. The BOJ also reported that as of December 31, 2001, approximately
3.9 million adults were under federal, state or local jurisdiction on probation,
and about 731,000 were on parole. Almost all persons (99%) on parole or
probation have one or more conditions to their sentence required by the court or
probation agency including periodic drug testing and substance abuse treatment.
Our products are aimed at this and other similar markets.

         Rehabilitation Centers
         ----------------------

         We utilize our network of distributors and our direct sales team to
sell our products in this market. This market for our products includes people
in treatment for substance abuse. There is a high frequency of testing in this
market. For example, in many residence programs, patients are tested each time
they leave the facility and each time they return. In outpatient programs,
patients are generally tested on a weekly basis.

         International Markets
         ---------------------

         We sell our products primarily through distributors in this market. We
have entered into distribution agreements with companies in several countries
and are pursuing a course of multinational distribution of our products through
both clinical and non-clinical distribution companies. As of February 2003, we
had 20 distributors representing 29 countries outside the United States.

         Clinics, Physicians, and Hospitals
         ----------------------------------

         This market includes emergency rooms, physician offices, hospitals and
clinics and rehabilitation facilities associated with hospitals. In their
preliminary estimates for January to June 2002, the Drug Abuse Warning Network
("DAWN") estimated that in the first 6 months of 2002, there were approximately
564,000 episodes, with an average of 1.8 drugs per episode, in emergency


                                        5

<PAGE>

departments in the United States in which drugs were mentioned. Our Rapid Drug
Screen nine panel test is used in this market as it provides fast and accurate
results when time is critical. We are continuing to negotiate an exclusive
distribution agreement with a multi-national diagnostics company focused on the
clinical point of care market.

         Consumer/Over-the-Counter
         -------------------------

         Our drugs of abuse screening products are not currently available for
sale in this market, as we have not yet received the necessary marketing
clearance from FDA. It is our intention to obtain the required marketing
clearance in the future.

         Educational Market
         ------------------

         According to the 2002 University of Michigan Monitoring the Future
study, 10.4% of 8th graders, 20.8% of 10th graders and 25.4% of 12th graders had
used an illicit drug within the prior 30 days of being interviewed for the
study. Furthermore, over half (53%) of young people have tried an illicit drug
by the time they finish high school. We believe our products could be an
integral part of helping schools test due to their ease of use and immediate,
accurate results.

         In June 2002, the Supreme Court, ruled by a 5-4 vote that public middle
and high schools can require drug tests for students in extracurricular
activities including band, choir, and other activities without violating their
privacy rights. Drug tests can be required without any suspicion of drug use,
and applies to students in grades 7 through 12 who sign up for activities such
as cheerleading, band, academic teams, and other extracurricular activities.
Students can be tested at the start of the school year and then randomly
throughout the year. It is our opinion that, with this decision, schools will be
more likely to implement a drug-testing program although, because the decision
came after many schools' annual district budgeting was complete for the
following year, we do not expect that our sales to the educational market to
increase until fiscal year ending December 31, 2004.

         Additional Markets
         ------------------

          We believe that the Department of Transportation ("DOT") and the
federally regulated markets could be a future market for our products.
Presently, the DOT market is not available to any onsite drug of abuse testing
device. Federal law requires that anyone with a commercial driving license be
randomly tested for use of drugs of abuse and that certified laboratories be
used in these testing situations. We believe that there is potential for growth
in this market as the regulatory agencies are considering implementing new
guidelines that will permit the use of onsite drug testing devices.

    Product Distribution

         We have a two-pronged distribution strategy that focuses both on
growing business through our valued third party distribution partners and
targeting key customers on a direct basis. We sell our products through third
party distribution channels whose ultimate customers are the
corporate/workplace, government, corrections and law enforcement agency markets,
and directly through a staff of highly experienced and well-trained sales
executives with drugs of abuse testing expertise.

         Our direct sales force consists of a National Sales Director, a
Director of Key Accounts and four Directors of Business Development in addition
to a staff of inside sales representatives. They call on non-clinical accounts
directly and support our worldwide distribution network. We intend to promote
our products through direct mail campaigns, selected advertising, participation
at high profile trade shows, use of key onsite advocate consultants and other
marketing activities.


                                       6
<PAGE>

         We have entered into national and international non-exclusive,
non-clinical market distribution agreements with a number of distributors. These
agreements permit our distributors to sell non-competitive products of other
manufacturers and permit us to sell our test kits to other distributors within
and outside the territory of each distributor. The agreements are cancelable by
either us or the distributor upon 30 days written notice.

         We will continue to recruit and utilize third party distribution
partners for select markets, including corporate/workplace,
government/corrections/law enforcement, international and education, in addition
to selling directly in these markets and to key customers. We intend to enter
into a distribution agreement with a multi-national diagnostics company for
sales to the clinical market.

    Competition

         Competition to our onsite urine-based products comes from onsite tests
developed by companies including, but not limited to, Roche Diagnostics (In
February 2003, Varian Inc. acquired the Roche Diagnostics product line for drugs
of abuse testing), Medtox Scientific, Inc. and Biosite Diagnostics.

         These and other competitors have longer operating histories than we do
and significantly greater financial, technical and marketing resources than us.
Currently the pricing of our products are cost competitive, however, these
competitors can devote substantially more resources than we can to business
development and may adopt more aggressive pricing policies.

         We compete on the following factors:

              o  effectiveness of pricing;

              o  quality of product;

              o  ease and user-friendliness of services; and

              o  timeliness of product delivery.

          Competitors' onsite urine tests generally use a collection or delivery
method different than our onsite urine tests. Our products do not require
pipetting of the specimen, adding or mixing of reagents or other manipulation of
the device by the user. Also, many of our competitors have products, which
combine the testing mechanism with the collection device, which increases the
potential of tampering with the testing mechanism by the person being tested.
With our products, the testing mechanism is not given to the person being
tested, but is held by the test administrator.

          Aside from onsite urine tests offering immediate results, some of our
competitors offer traditional laboratory testing, where a urine sample is sent
to a laboratory for analysis, and hair testing where a hair sample is sent to a
laboratory for analysis. These forms of drug testing are more expensive and take
longer to produce results than our products.

         Other competitors to our onsite urine tests are onsite tests with
platforms utilizing saliva instead of urine. Saliva-based drug tests have
limitations relative to detection time, generally detecting traces of drugs of
abuse in a 3 to 18 hour window compared to one to three days for urine-based
testing. However, this shorter window of detection can be useful in some market
segments, such as post-accident testing in the workplace. In August 2001, we
signed a licensing agreement with ANSYS Technologies, Inc., to market an onsite
saliva-based test for drugs of abuse (the OralStat). Some of our competitors in
the saliva-based testing market have been promoting their products longer and
therefore, have more experience in marketing saliva-based products to the
appropriate segment(s).


                                       7
<PAGE>

    Manufacturing

         In September 1999, we moved into a 30,000 square foot facility in
Kinderhook, New York, which houses assembly and packaging of our products in
addition to administration. We continue to contract-out the printing and
manufacture of specimen cup components of the Rapid Drug Screen. We do not
manufacture the OralStat product. In addition to manufacturing all of our own
individual test strips, we manufacture the test strips in the Rapid Tec Cup
product.

         We lease a 9,000 square foot R&D and production facility in Logan
Township, New Jersey that houses research and development and bulk strip
manufacturing.

         Our present manufacturing equipment is sufficient to produce 200,000
drug test kits per month, assuming one shift per day, five days per week. In the
fiscal year ending December 31, 2002, we sold approximately 2,359,361 test kits.
Our facilities in Kinderhook, New York and Logan Township, New Jersey would
allow us to increase our production capacity if additional personnel are hired
and more equipment is installed. We could further increase capacity with
additional shifts. We expect to add additional assembly/packaging personnel
and/or equipment as production needs increase. (See Item 2. Description of
Property on page 16).

         We currently have approximately fifty suppliers who provide us with the
raw materials necessary to manufacture our drug testing strips and our drugs of
abuse screening products. (See Risk Factors beginning on page 10.)

    Patents and Trademarks/Licenses

         To date, we have been granted fourteen patents related to the Rapid
Drug Screen and/or Rapid One product lines, including four U.S. design patents
and four utility patents. We currently have an additional six United States
patent applications, and seven foreign patent applications pending.

         We have registered "ABM" and its logo in the United States, Canada,
Chile, Mexico and Europe. We have registered the "Rapid Drug Screen" trademark
in the United States, Mexico, Canada, Europe and Russia. We have also registered
Rapid One and its logo, Rapid Tec and its logo and OralStat in the United
States. We have additional trademark applications pending in the United States.
There can be no assurance that the additional patents and/or trademarks will be
granted or that, if granted, they will withstand challenge. (See "Risk Factors -
Intellectual Property Rights" on page 13).

         We have a licensing agreement with ANSYS Technologies, Inc., for the
OralStat that allows us to market the OralStat to the criminal justice,
workplace and drug treatment sectors.

         In connection with the settlement of a patent infringement suit we
filed against numerous parties in April 2001, we have a licensing and royalty
agreement with Phamatech, Inc., under which we were paid a licensing fee and
will continue to be paid a percentage of revenues of versions of the Phamatech
product that infringe on our Rapid Drug Screen patent. As of the date of this
report, Phamatech no longer sells the versions of their product that infringe on
our Rapid Drug Screen patent.

    Research and Development

         We currently manufacture all of our individual drug testing strips. Our
Research and Development, or R&D, efforts have been focused on enhancing and/or
maintaining the performance and reliability of our drug testing strips. In
addition, this fiscal year, our R&D team developed an additional version of the
Rapid Tec, the Rapid Tec-5, and completed the development process on contract
manufacturing projects. The R&D team continues to consider the potential of a
"CLUB-DRUG" panel that could be a useful tool against the latest drugs of


                                       8
<PAGE>


choice, such as Rohypnol, Ecstasy, Ketamine, Ritalin, GHB, Methamphetamines and
Methaqualone. Our R&D expenditures were $297,000 for the fiscal year ending
December 31, 2002 and $289,000 for the eight months ended December 31, 2001.

    Government Regulations

          The development, testing, manufacture and sale of our drugs of abuse
screening products and possible additional biomedical products are subject to
regulation by the United States and foreign regulatory agencies. Pursuant to the
Federal Food, Drug, and Cosmetic Act, and the regulations promulgated
thereunder, the FDA regulates the pre-clinical and clinical testing,
manufacture, labeling, distribution and promotion of medical devices. If the
Company fails to comply with applicable requirements it may be subject to fines,
injunctions, civil penalties, recall or seizure of products, total or partial
suspension of production, failure of the government to grant pre-market
clearance or pre-market approval for devices, withdrawal of marketing clearances
or approvals and criminal prosecution.

         Our products fall under the category of 510(k) submissions to FDA. A
510(k) is a premarketing submission made to FDA to demonstrate that the device
to be marketed is as safe and effective, that is, substantially equivalent, to a
legally marketed device that is not subject to premarket approval (PMA).
Applicants must compare their 510(k) device to one or more similar devices
currently on the U.S. market and make and support their substantial equivalency
claims. A legally marketed device is a device that was legally marketed prior to
May 28, 1976 (preamendments device), or a device that has been reclassified from
Class III to Class II or I, or a device which has been found to be substantially
equivalent to such a device through the 510(k) process, or one established
through Evaluation of Automatic Class III Definition. The legally marketed
device(s) to which equivalence is drawn is known as the "predicate" device(s).
Applicants must submit descriptive data and, when necessary, performance data to
establish that their device is substantially equivalent to a predicate device.

         Although FDA clearance is not required for non-clinical markets (such
as industry and corrections), it is required for clinical markets (such as
hospitals and physicians).

         We believe that clinical markets will become a major marketplace for
our drug screening products. We have received 510(k) clearance for our nine
panel test. With this approval, we can offer a variety of combinations to meet
customer requirements, both with our multiple panel tests and our individual
Rapid One tests. In November 2001, we received 510(k) clearance for our tests
for methadone and Ecstasy. In March 2002, we received 510(k) clearance for our
test for Oxycodone. In June 2002, the Starplex Scientific self-contained drug
testing device marketed by us under the trademark Rapid Tec Cup received 510(k)
clearance. In July 2002, we received 510(k) clearance for our Rapid Tec-5
product. The OralStat has not yet received 510(k) clearance from FDA and is
currently available for "forensic use only".

         Furthermore, in order to sell our products in Canada after November
2003, the Company must comply with ISO13485, The International Standards
Organization's Directive for Quality Systems for Medical Devices (MDD or Medical
Device Directive), and in order to sell our products in the European Union after
November 2003, the Company must obtain CE marking for all products intended for
sale which must be achieved by complying with the In Vitro Diagnostic Directive
(IVDD). Collectively, these standards are similar to the U.S. Federal
Regulations enforced by FDA, and are a reasonable assurance to the customer that
the manufacture of our products is conducted in a consistent manner to help
ensure that quality, defect-free goods are produced. In the European Union, a
"CE" standing for Community Europa, is affixed to the product for easy
identification of quality products. In order to prove compliance, the Company
will be audited and its technical documentation reviewed by a Notified Body, a
third party reviewer approved by at least one of the Member States of the
European Union as well as Canada. Preparation for this audit process began in
October of 2002 and is expected to be completed in the first half of 2003.


                                       9
<PAGE>

    Employees

         Currently, we have approximately 88 employees, of which 87 are
full-time and 1 is part-time. None of our employees are covered by collective
bargaining agreements, and we believe our relations with our employees are good.

    Risk Factors

We have a limited operating history, which may make it difficult to accurately
forecast our future revenues and other operating results.

         We began selling our drugs of abuse screening products in 1996 and
began providing contract manufacturing services for other point of care
companies in late 2001. As a result, we have only a limited operating history
upon which you may evaluate our business and prospects. Our limited operating
history may make it difficult or impossible for analysts or investors to
accurately forecast regarding our future revenues and other operating results
and the price of our securities could decline substantially.

We have a history of incurring net losses since we were formed.

         Since inception in 1992 through the transition period ended December
31, 2001, we incurred net losses. In the year ended December 31, 2002, we earned
net income of $719,000. Through December 31, 2002, we have an accumulated
deficit of $14.4 million. We expect to continue to make substantial expenditures
for sales and marketing, product development and other purposes. Our ability to
maintain profitability in the future will primarily depend on our ability to
increase sales of our products, reduce production and other costs and
successfully introduce new and enhanced versions of our existing products into
the marketplace. We cannot assure you that we will be able to increase our
revenues at a rate that equals or exceeds expenditures. Our failure to do so
will result in our incurring additional losses.

We depend on distributors for a significant portion of our sales and the loss
of, or reduction in sales by, our current distributors could harm our business.

         We derive a portion of our revenues, and expect to continue to derive a
portion of our revenues in the near future, from sales by our distributors.
Currently we have approximately 75 domestic and 20 international distributors.
For the fiscal year ending December 31, 2002, approximately 25.3%, or $2.6
million of our sales were made to distributors. No distributor accounted for
more than 10% of our total revenues in the fiscal year ending December 31, 2002.
Our success will somewhat depend upon the future sales by our distributors. The
loss of, or inability to replace any one or more of these distributors,
significant changes in their product requirements, delays of significant orders
or the occurrence of any sales fluctuations of our drugs of abuse products could
reduce our revenues.

Our products are sold in limited markets and the failure of any one of them to
achieve widespread market acceptance would significantly harm our results of
operation.

       We offer a number of drugs of abuse screening products that are sold in
limited markets, and we currently derive most of our revenues from sales of our
drugs of abuse screening product line. To attain break-even results of
operations, we must achieve approximately $3 million in quarterly revenues from
our products. If our products do not achieve and maintain this level of revenue,
our results of operations would be significantly harmed.

       In addition, we only began selling our drugs of abuse product line in
1996, and cannot yet predict whether they will gain further widespread market
acceptance. Achieving market acceptance for our drug tests will require
substantial marketing efforts and expenditure of significant funds to inform


                                       10
<PAGE>

potential distributors and customers of the distinctive characteristics,
benefits and advantages of our test kits. The OralStat was introduced into the
forensic markets in October 2001, the Rapid Tec into the non-clinical markets in
March 2002 and the Rapid Tec Cup into the non-clinical markets in December 2002.
We have no history upon which to base market or customer acceptance of these
products. Introduction of the OralStat, Rapid Tec and Rapid Tec Cup have
required, and may continue to require substantial marketing efforts and
expenditure of funds. The Rapid Drug Screen Scan-R has not yet been introduced
into the marketplace.

         Due to the variety and complexity of the environments in which our
customers operate, our products may not operate as expected. This could result
in cancelled orders, delays and increased expenses. In addition, the success of
competing products and technologies, pricing pressures or manufacturing
difficulties could further reduce our profitability and the price of our
securities.

If we fail to keep up with technological factors and fail to develop our
products, we may be at a competitive disadvantage.

       The onsite drug testing market is highly competitive. Several companies
produce drug tests that compete directly with our drugs of abuse product line,
including Roche Diagnostics (Varian, Inc.), Biosite Diagnostics and Medtox
Scientific, Inc. As new technologies become introduced into the onsite testing
market, we may be required to commit considerable additional efforts, time and
resources to enhance our current product portfolio or develop new products. Our
success will depend upon new products meeting targeted product costs and
performance, in addition to timely introduction into the marketplace. We are
subject to all of the risks inherent in product development, which could cause
material delays in manufacturing.

We rely on third parties for raw materials used in our drugs of abuse products
and in our contract manufacturing processes.

         We currently have approximately fifty suppliers who provide us with the
raw materials necessary to manufacture our drug testing strips and our drugs of
abuse screening products. The loss of one or more of these suppliers, the
non-performance of one or more of their materials or the lack of availability of
raw materials could suspend our manufacturing process related to our drugs of
abuse products. This interruption of the manufacturing process could impair our
ability to fill customers' orders as they are placed, which would put us at a
competitive disadvantage.

         Furthermore, we rely on a number of third-parties for supply of the raw
materials necessary to manufacture the test components we supply to other point
of care diagnostic companies under contract manufacturing agreements. The loss
of one or more of these suppliers could suspend the strip manufacturing process
and this interruption could impair our ability to perform contract manufacturing
services.

We depend on our Research & Development ("R&D") team for product development
and/or product enhancement.

        Product development and/or enhancement are performed by our R&D team.
There can be no assurance that our R&D team can successfully develop and/or
complete the enhancement of our current products and/or the development of new
products. Furthermore, the loss of one or more members of our R&D team could
result in the interruption or termination of new product development and/or
current product enhancement, affecting our ability to provide new or improved
products to the marketplace, which would put us at a competitive disadvantage.



                                       11
<PAGE>

Our products must be cost competitive and perform to the satisfaction of our
customers.

        Cost competitiveness and satisfactory product performance are essential
for success in the onsite drug testing market. There can be no assurance that
new products we may develop will meet projected price or performance objectives.
Moreover, there can be no assurance that unanticipated problems will not arise
with respect to technologies incorporated into our test kits or that product
defects, affecting product performance, will not become apparent after
commercial introduction of our additional test kits. In the event that we are
required to remedy defects in any of our products after commercial introduction,
the costs to us could be significant, which could have a material adverse effect
on our revenues or earnings.

We face significant competition in the drug testing market and potential
technological obsolescence.

        We face competition from other manufacturers of drugs of abuse screening
products such as Roche Diagnostics (Varian, Inc.), Medtox Scientific, Inc. and
Biosite Diagnostics. These competitors are more well known and have far greater
financial resources than us. The markets for drugs of abuse screening products
and related products are highly competitive. There can be no assurance that
other companies will not attempt to develop or market products directly
competitive with our drugs of abuse product line. We expect other companies to
develop technologies or products, which will compete with our products.

Possible inability to find and attract qualified personnel.

        We will need additional skilled, sales and marketing, technical and
production personnel to grow the business. If we fail to retain our present
staff or attract additional qualified personnel our business could suffer.

We depend on key personnel to manage our business effectively.

        We are dependent on the expertise and experience of our senior
management such as Gerald A. Moore, President and Chief Executive Officer, Stan
Cipkowski, Executive Vice President, Douglas Casterlin, Executive Vice President
of Operations, Martin Gould, Chief Scientific Officer and Keith E. Palmer, Chief
Financial Officer, for our future success. The loss of Messrs. Moore, Cipkowski,
Casterlin, Gould and/or Palmer could negatively impact our business and results
of operations. We do not maintain key man insurance for any of our management
employees.

Failure to effectively manage our growth and expansion could adversely affect
our business and operating results.

        We anticipate expansion of our operations in the coming year. Any
failure to manage our growth effectively will result in less efficient
operations, which could adversely affect our operating and financial results.

        To effectively manage our growth, we must, among other things:

              o  accurately estimate the number of employees we will require and
                 the areas in which they will be required;
              o  upgrade and expand our office infrastructure so that it is
                 appropriate for our level of activity;
              o  manage expansion into additional geographic areas; and
              o  improve and refine our operating and financial systems.

        We expect to devote considerable resources and management time to
improving our operating and financial systems to manage our growth. Failure to
accomplish any of these objectives would impede our ability to deliver products


                                       12
<PAGE>

and services in a timely fashion, fulfill existing customer orders and attract
and retain new customers, which impediment would have a material adverse effect
on our financial condition and results of operations.

Any adverse changes in our regulatory framework could negatively impact our
business.

        Approval from FDA is not currently required for the sale of our products
in non-clinical markets, but is required in the clinical and over-the-counter
markets. Recently, FDA informed onsite manufacturers that it intended to enforce
its draft guidance document related to the sale of onsite tests in the workplace
market, initially released in 1999. This enforcement would require that each
onsite device be priced to include, up-front, the cost of obtaining laboratory
confirmation of the results of the test. FDA also seeks to require the onsite
tests to meet over the counter (OTC) clearance or have a special industrial use
clearance (FDA has not yet published any guidance with respect to the applicable
standards for granting the special industrial clearance). Although our drugs of
abuse products have met FDA requirements for professional use, we have not
obtained OTC clearance from FDA. The workplace market is one of our primary
markets and the added cost of confirmation and additional FDA clearance may
raise the price of our products making it difficult to compete with laboratory
based testing, thereby negatively impacting our revenues. Furthermore, there can
be no assurance that if, and when, we are required to apply for either the OTC
clearance or the special industrial clearance, either clearance will be granted.
If either such clearance is not granted, we would be unable to sell our products
in the workplace market and our revenues would be negatively impacted.

        Although we are currently unaware of any changes in regulatory standards
related to the clinical and OTC markets, if regulatory standards were to change
in the future, there can be no assurance that FDA will grant us the approvals,
if and when we apply for them, required to comply with the changes.

We rely on intellectual property rights, and we may not be able to obtain patent
or other protection for our technology, products or services.

        We rely on a combination of patent, copyright, trademark and trade
secret laws, confidentiality procedures and contractual provisions to protect
our proprietary technology, products and services. We also believe that factors
such as the technological and creative skills of our personnel, new product
developments, frequent product enhancements and name recognition are essential
to establishing and maintaining our technology leadership position.

        We seek to protect our proprietary products under trade secret and
copyright laws, which afford only limited protection. We currently have a total
of 14 U.S. and foreign patents relating to the Rapid Drug Screen and/or Rapid
One product line. We have additional patent applications pending in the United
States, and other foreign countries, related to our drugs of abuse products. We
have trademark applications pending in the United States. Certain trademarks
have been registered in the United States and in other foreign countries.

        Despite our efforts to protect our proprietary rights, unauthorized
parties may attempt to copy aspects of our products or to obtain information
that we regard as proprietary. For example, our sales were adversely affected in
fiscal 2000 and fiscal 2001 (year ending April 30, 2001) as a result of sales of
products similar to ours. In April of 1999, we filed suit in a federal court
against Phamatech, Inc. of California, a former supplier of ours, and numerous
other parties to stop these sales. We incurred significant legal fees of $1.6
million attempting to enforce our patents. In April 2001, we settled with
Phamatech and all other defendants in this lawsuit. The settlement agreement
established a license and royalty arrangement under which we were paid a
licensing fee and will continue to be paid a percentage of revenues of the
infringing product. Under the terms of the settlement, each party has agreed not
to disclose to any third parties the terms and conditions of this agreement.


                                       13
<PAGE>

        We may be required to incur significant costs to protect our
intellectual property rights. In addition, the laws of some foreign countries do
not ensure that our means of protecting our proprietary rights in the United
States or abroad will be adequate. Policing and enforcement against the
unauthorized use of our intellectual property rights could entail significant
expenses and could prove difficult or impossible. Additionally, there is no
assurance that the additional patents will be granted or that additional
trademarks will be registered.

Potential issuance and exercise of new warrants and exercise of outstanding
warrants could adversely affect the value of our securities.

        In connection with our sale of 1,408,450 common shares for $2,000,000
($1.42 per share) in a private placement to Seaside Partners, L.P. ("Seaside")
on April 28, 2000, we issued a 5-year warrant to Seaside to purchase 953,283
common shares of our stock at an exercise price of $1.17 per share. To settle a
penalty owed to Seaside because of a late effective registration statement, we
adjusted the exercise price of the 953,283 warrant shares from $1.17 to $0.95 in
February 2001. In May 2001, we issued a 5-year warrant to purchase 200,000
common shares of our stock at an exercise price of $1.50 per share to Brean
Murray & Co., Inc. ("Brean Murray") as compensation for their services as a
financial advisor. On August 22, 2001, we issued warrants, exercisable during a
54 month period beginning February 22, 2002, to purchase 1,274,500 common shares
of our stock at an exercise price of $1.05 per share in connection with the
private placement of 2,549,000 shares of common stock (the 1,274,500 warrants
issued in connection with the August 2001 private placement trade on the NASDAQ
SmallCap Market). We also issued, on August 22, 2001, warrants, exercisable
during a 54 month period beginning February 22, 2002, to purchase a total of
203,920 common shares of our stock at an exercise price of $1.20 per share, of
which warrants to purchase 152,940 common shares were issued to Brean Murray &
Co., Inc. as compensation for their services as placement agent and warrants to
purchase 12,745 common shares were issued to Axiom Capital Management, Inc.,
warrants to purchase 5,735 common shares were issued to Jeffrey Goldberg,
warrants to purchase 16,250 common shares were issued to Barry Zelin, warrants
to purchase 16,250 common shares were issued to David L. Jordon, for their
services as sub-agents of Brean Murray & Co., Inc. On November 15, 2001, we
issued a warrant to purchase 20,000 common shares at an exercise price of $1.00
to Hudson River Bank & Trust Company ("HRBT") in connection with the purchase of
our facility in Kinderhook, New York.

        If the Seaside warrant, the Brean Murray Warrants, the Private Placement
Warrants and the HRBT warrants are exercised, the common shares issued will be
freely tradable, increasing the total number of common shares issued and
outstanding. If these shares are offered for sale in the public market, the
sales could adversely affect the prevailing market price by lowering the bid
price of our securities. The exercise of any of these warrants could also
materially impair our ability to raise capital through the future sale of equity
securities because issuance of the common shares underlying the warrants would
cause further dilution of our securities. The warrants are subject to or contain
certain anti-dilution protection that may result in the issuance of additional
shares under some circumstances including, but not limited to, paying of a
dividend, subdivision of our outstanding shares into a greater number of shares,
combination of our outstanding shares into a smaller number of shares, an
issuance of shares of common stock by reclassification or in the case of the
Brean Murray and Seaside warrants, a sale of our common shares, or a security
convertible into common shares, for consideration per share less than the
exercise price of the warrants.

Potential issuance and exercise of new options and exercise of outstanding
options could adversely affect the value of our securities.

        The Board of Directors of the Company has adopted four (4) Nonstatutory
Stock Option Plans providing for the granting of options to employees,
directors, and consultants (see Note K [3]). As of December 31, 2002, there were
5,298,750 options issued and outstanding under all four plans combined, of which



                                       14
<PAGE>

3,047,390 were exercisable. As of December 31, 2002, there were 25,000 options
available for issuance under the Fiscal 2000 Plan and 1,311,500 options
available for issuance under the Fiscal 2001 Plan. There are no options
available for issuance under either the Fiscal 1997 Plan or the Fiscal 1998
Plan, as options expire or are cancelled under these latter two plans, they are
not re-issued.

        If these options are exercised, the common shares issued will be freely
tradable, increasing the total number of common shares issued and outstanding.
If these shares are offered for sale in the public market, the sales could
adversely affect the prevailing market price by lowering the bid price of our
securities. The exercise of any of these options could also materially impair
our ability to raise capital through the future sale of equity securities
because issuance of the common shares underlying the options would cause further
dilution of our securities. The options are subject to or contain certain
anti-dilution protection that may result in the issuance of additional shares
under some circumstances including, but not limited to, paying of a dividend in
common shares, a declaration of a dividend payable in a form other than common
shares in an amount that has a material effect on the price of common shares, a
combination or consolidation of the outstanding common shares (by
reclassification or otherwise) into a lesser number of common shares, a
recapitalization, a spin-off or a similar occurrence.

Substantial resale of restricted securities may depress the market price of our
securities.

        There are 5,204,655 common shares presently issued and outstanding as of
the date hereof that are "restricted securities" as that term is defined under
the Securities Act of 1933, as amended, (the "Securities Act") and in the future
may be sold in compliance with Rule 144 of the Securities Act, or pursuant to a
Registration Statement filed under the Securities Act. Rule 144 provides that a
person holding restricted securities for a period of one year or more may, in
any three month period, sell those securities in unsolicited brokerage
transactions or in transactions with a market maker, in an amount equal to the
greater of one percent of our outstanding common shares or the average weekly
trading volume for the prior four weeks. Sales of unrestricted shares by
affiliates of the Company are also subject to the same limitation upon the
number of shares that may be sold in any three-month period. Investors should be
aware that sales under Rule 144 or 144(k), or pursuant to a registration
statement filed under the Act, may depress the market price of our Company's
securities in any market that may develop for such shares.

We may need additional funding for our existing and future operations.

        The Company believes that its current cash balances, and cash generated
from operations will be sufficient to fund operations for the next twelve months
however, this estimate is based on certain assumptions and there can be no
assurance that unanticipated costs will not be incurred. Future events,
including the problems, delays, expenses and difficulties which may be
encountered in establishing and maintaining a substantial market for our
products, could make cash on hand insufficient to fund operations. If cash
generated from operations is insufficient to satisfy the Company's working
capital and capital expenditure requirements, the Company may be required to
sell additional equity or debt securities or obtain additional credit
facilities. There can be no assurance that such financing will be available or
that the Company will be able to complete financing on satisfactory terms, if at
all. Any financing may result in further dilution to existing shareholders.

Our ability to retain and attract market makers is important to the continued
trading of our securities.

        Our common shares trade on the NASDAQ SmallCap Market under the symbol
"ABMC", and our common stock purchase warrants trade on the NASDAQ SmallCap


                                       15
<PAGE>

Market under the symbol "ABMCW". In the event that the market makers cease to
function as such, public trading in our securities will be adversely affected or
may cease entirely.

If we fail to meet the continued listing requirements of the NASDAQ SmallCap
Market, our securities could be delisted.

         Our securities are listed on the NASDAQ SmallCap Market. The NASDAQ
Stock Market's Marketplace Rules impose requirements for companies listed on the
NASDAQ SmallCap Market to maintain their listing status, including minimum
common share bid price of $1.00, and $2,500,000 in shareholders' equity or
$500,000 in net income in the last fiscal year. Although as of the date of this
report our common shares are trading at, or higher than, levels of the minimum
bid requirement, recently our common shares have traded at levels lower than the
minimum bid requirement.

        Delisting could reduce the ability of investors to purchase or sell our
securities as quickly and as inexpensively as they have done historically and
could subject transactions in our securities to the penny stock rules.
Furthermore, failure to obtain listing on another market or exchange may make it
more difficult for traders to sell our securities. Broker-dealers may be less
willing or able to sell or make a market in our securities because of the penny
stock disclosure rules. Not maintaining a listing on a major stock market may
result in a decrease in the trading price of our securities due to a decrease in
liquidity and less interest by institutions and individuals in investing in our
securities. Delisting from the NASDAQ Stock Market would also make it more
difficult for us to raise capital in the future.

        ITEM 2. DESCRIPTION OF PROPERTY

        In September 1999 we began leasing a 30,000 square foot facility in
Kinderhook, New York, which houses administrative offices, assembly and
packaging, quality control/quality assurance and sales and marketing. We entered
into a Lease/Purchase Agreement with the landlord, Avoba, Inc., to purchase the
building by December 2001 for $1.3 million. In May 2001, we renegotiated the
purchase price down to $950,000 allocating $728,000 to the building, and
$222,000 to the 107 acres of land based upon an appraisal done in conjunction
with the acquisition. The State of New York, Columbia County and the town of
Stuyvesant agreed to provide incentives of more than $200,000 towards the
purchase price. In November 2001, we purchased the facility and the surrounding
107 acres. We obtained a mortgage from Hudson River Bank & Trust Company
("HRBT") in the amount of $360,000, a loan in the amount of $240,000 from the
New York State Business Development Corporation and a loan from the Columbia
Economic Development Corporation in the amount of $120,000. We intend to sell
approximately 85 of the 107 acres to a third party to offset the purchase price
of the facility.

        In August 1999, we leased a 3,900 square foot R&D and production
facility in Bridgeport, New Jersey. This facility was originally leased for a
period of three years. In March 2001 we expanded the New Jersey facility by
leasing an additional 5,200 square feet, for a total of approximately 9,000
square feet, until August 2002. Upon expiration of both leases, we had the
option to renew both leases. On August 20, 2002 we combined both leases and
renewed them for a total average monthly cost of $5,300, which includes the base
rental of $4,317 along with taxes and additional occupant costs.

        ITEM 3. LEGAL PROCEEDINGS

        In June 1999, Richard Davidson filed a lawsuit against the Company in
New York. Davidson claimed that two placement memoranda dated September 15, 1992
and February 5, 1993, obligated the Company to issue him 1,155,601 common shares
of the Company's stock. In addition, Davidson claimed a finder's fee of 5% of
the funds raised by the September 1992 private placement. He alleged that a sum
of $1 million was raised. He also claimed he was entitled to a consulting fee of
$24,000. Management denied the claims and vigorously contested the suit. (See
"Note C-Litigation" in the Company's Form 10-QSB for the quarter ending
September 30, 2002 filed with the U.S. Securities and Exchange Commission on


                                       16
<PAGE>

November 14, 2002 and incorporated herein by reference). In December 2002, the
Company settled any and all claims related to this case and paid Davidson the
sum of $150,000 for such settlement, which is evidenced with a note from Fortius
Capital (See Note H).

        ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

        None.

PART II
-------

        ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDERS MATTERS

        Our common shares trade on the National Association of Securities
Dealers Automated Quotation System Small Cap Market (NASDAQ SmallCap) under the
symbol ABMC and our common stock purchase warrants ("warrants") trade on the
NASDAQ SmallCap under the symbol ABMCW. The following table sets forth the high
and low sale prices of our securities as reported by the NASDAQ SmallCap Market
for the periods indicated.

<TABLE>
<CAPTION>
         Common Shares
         -------------

         Fiscal year ending December 31, 2002                               High                  Low
         ------------------------------------                               ----                  ---
         <S>                                                                <C>                   <C>
              Quarter ending December 31, 2002                              $1.48                 $0.86
              Quarter ending September 30, 2002                             $1.45                 $0.89
              Quarter ending June 30, 2002                                  $1.69                 $0.82
              Quarter ending March 31, 2002                                 $1.09                 $0.77


         Eight months ending December 31, 2001                              High                  Low
         -------------------------------------                              ----                  ---

              Transition period ending December 31, 2001                    $1.53                 $0.75
              Quarter ending October 31, 2001                               $1.20                 $0.65
              Quarter ending July 31, 2001                                  $1.30                 $0.75

         Warrants
         --------

         Fiscal year ending December 31, 2002                               High                  Low
         ------------------------------------                               ----                  ---

              Quarter ending December 31, 2002                              $0.74                 $0.46
              Quarter ending September 30, 2002                             $0.94                 $0.00
              Quarter ending June 30, 2002*                                 $0.00                 $0.00

</TABLE>

        * Our warrants began trading on the NASDAQ SmallCap Market on June 17,
2002; however, there was no trading activity on this security until July 18,
2002.

        As of March 25, 2003, there were approximately 4,500 holders of our
securities. As of March 25, 2003 there were outstanding 20,609,548 common shares
and 1,274,500 warrants. The Company has not declared any dividends on our common
shares and does not expect to do so in the foreseeable future.

        On March 21, 2003, the last reported sale price for our common shares as
reported on the NASDAQ SmallCap Market was $1.07 per share and the last reported
sale price of our warrants was $0.63 per warrant. Average daily trading volume
on our common shares and warrants during the three-month period from December
25, 2002 to March 25, 2003 was approximately 58,672 common shares and 311
warrants respectively.


                                       17
<PAGE>

        Recent sales of unregistered securities

        None

        ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

        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 except for the description of historical
facts contained herein, this Form 10-KSB contains certain forward-looking
statements that involve risks and uncertainties as detailed herein and from time
to time in the Company's 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, risks associated with international operations
and regulatory, competitive and contractual risks and product development; (b)
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; and (c)
acquisitions.

Critical Accounting Policies and Estimates

        American Bio Medica Corporation's ("ABMC's") discussion and analysis of
its financial condition and results of operations are based upon ABMC's
financial statements, which have been prepared in accordance with accounting
principles generally accepted in the United States of America. The preparation
of these financial statements requires ABMC to make estimates and judgments that
affect the reported amounts of assets, liabilities, revenues and expenses, and
related disclosure of contingent assets and liabilities. On an on-going basis,
ABMC evaluates its estimates, including those related to customer programs and
incentives, product returns, bad debts, inventories, income taxes, financing
operations, warranty obligations, and contingencies and litigation. ABMC bases
its estimates on historical experience and on various other assumptions that are
believed to be reasonable under the circumstances, the results of which form the
basis for making judgments about the carrying values of assets and liabilities
that are not readily apparent from other sources. Actual results may differ from
these estimates under different assumptions or conditions.

        ABMC believes the following critical accounting policies affect its more
significant judgments and estimates used in the preparation of its financial
statements. ABMC records estimated reductions to revenue for customer returns
and allowances. If market conditions were to decline, ABMC may take actions to
increase customer incentive offerings possibly resulting in an incremental
reduction of revenue at the time the incentive is offered. ABMC recognizes
revenue upon shipment to customers. ABMC maintains allowances for doubtful
accounts for estimated losses resulting from the inability of its customers to
make required payments. If the financial condition of ABMC's customers were to
deteriorate, resulting in an impairment of their ability to make payments,
additional allowances may be required. ABMC writes down its inventory for
estimated obsolescence or unmarketable inventory equal to the difference between
the cost of inventory and the estimated market value based upon assumptions
about future demand and market conditions. If actual market conditions are less
favorable than those projected by management, additional inventory write-downs
may be required. ABMC records a valuation allowance to reduce its deferred tax
assets to the amount that is more likely than not to be realized. While ABMC has
considered future taxable income and ongoing prudent and feasible tax planning
strategies in assessing the need for the valuation allowance, in the event ABMC
were to determine that it would be able to realize its deferred tax assets in
the future in excess of its net recorded amount, an adjustment to the deferred
tax asset would increase income in the period such determination was made.
Likewise, should ABMC determine that it would not be able to realize all or part
of its net deferred tax asset in the future, an adjustment to the deferred tax
asset would be charged to income in the period such determination was made.


                                       18
<PAGE>

Change in Year-End.

        In the prior year, ABMC changed its fiscal year-end from April 30 to
December 31. An eight-month transition period from April 30, 2001 through
December 31, 2001 (the "Transition Period") precedes the start of the 2002
fiscal year. Accordingly, the following discussion includes unaudited data for
the twelve months ended December 31, 2001 and the eight months ended December
31, 2000 for comparability purposes.

Results of operations for the twelve months ended December 31, 2002 (audited) as
compared to the twelve months ended December 31, 2001 (unaudited)

         The following table presents certain financial information for the 12
months ended December 31, 2002 and 2001 respectively:

<TABLE>
<CAPTION>

                                                                             Twelve Months Ended

                                                                   December 31, 2002       December 31, 2001
                                                                   -----------------       -----------------
                                                                                              (unaudited)
<S>                                                                    <C>                     <C>
Revenues                                                             $10,312,000             $ 6,501,000
                                                                     ===========             ===========
Gross profit                                                         $ 5,836,000             $ 3,714,000
                                                                     ===========             ===========

Net Income/(Loss)                                                    $   719,000             $(2,237,000)
                                                                     ===========             ============

Basic and fully diluted Income/(Loss) per common share                   $.03                   $(.12)
                                                                         -----                  ------
Weighted average common shares outstanding-basic                      20,610,000              18,907,000
                                                                     -----------             -----------
Weighted average common shares outstanding-
Fully diluted                                                         21,326,000              18,907,000
                                                                     -----------             -----------
</TABLE>

        Net sales were $10,312,000 for the twelve months ended December 31, 2002
as compared to $6,501,000 for the twelve months ended December 31, 2001,
representing an increase of $3,811,000 or 58.6%. Continued strong direct sales,
increased sales in telemarketing and international and steady distributor sales
contributed to the growth during the year. During the twelve months ended
December 31, 2002, the Company continued its program to market and distribute
its primary product, the Rapid Drug Screen, together with its saliva test
(OralStat) and its newly developed Rapid Tec series.

        The Company continued its program of rebuilding relationships with key
distributors, and executed agreements with several new distributors, hired a
Director of Marketing, further expanded the sales group to focus on the
Company's core business, the sale of the Rapid Drug Screen and other drugs of
abuse test kits, and began development of diagnostic tests or components using
immunoassay technology to diversify its product line into the areas of
veterinary medicine, mycotoxin detection, tuberculosis and HIV testing.
Management believes 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 twelve months ended December 31, 2002 was
$4,476,000 or 43.4% of net sales as compared to $2,787,000 or 42.9% of net sales
for the twelve months ended December 31, 2001. Costs of raw materials, labor and
overhead associated with manufacturing have remained relatively consistent
during the twelve months ended December 31, 2002.

        While revenues increased 58.6% in the twelve months ended December 31,
2002, research and development costs decreased $247,000, or 45.4%, selling and
marketing expenses increased $21,000 or 0.9%, and general and administrative


                                       19
<PAGE>

costs decreased $1,387,000 or 36.3%. Total operating expenses were $5,087,000 or
49.3% of net sales for the twelve months ended December 31, 2002 compared to
$6,700,000 or 103.1% of net sales for the twelve months ended December 31, 2001.

Research and development
------------------------

        Research and development ("R&D") expenses for the twelve months ended
December 31, 2002 were $297,000 or 2.9% of net sales compared to $544,000 or
8.4% of net sales for the twelve months ended December 31, 2001. The decrease in
expense and associated percentage of net sales is due to several factors; the
twelve months ended December 31, 2001 included costs relating to the completion
of the Company's joint project with Abbott Laboratories as well as consulting
expense incurred for product design modifications, neither of which recurred in
2002. Also impacting R&D expense in the current twelve months are reductions of
$50,000 resulting from funding received from a vendor for whom the Company
performed R&D services. Finally, as sales increased substantially from year to
year, $187,000 more in R&D resources were allocated to the production of test
strips to meet increased demand in 2002 than the same period in 2001. Management
expects increases in R&D as it explores new markets and uses for its immunoassay
technology.

Selling, general and administrative
-----------------------------------

        Selling and marketing expense was $2,357,000 for 2002 compared to
$2,336,000 in 2001 representing an increase of $21,000 in the twelve months
ended December 31, 2002. This is primarily due to a $208,000 increase in
salaries and wages and an increase of $53,000 in travel expense offset by
decreases in trade show expense of $84,000.

        Marketing and promotion expense decreased $138,000 in 2002 primarily due
to the advertising and promotion decrease of $65,000 and the recovery of $50,000
of rent expense resulting from a favorable settlement with the former landlord
of property occupied by Company marketing personnel in Boca Raton Florida in
1999 and 2000. In 2001, most of the Company's sales literature was redesigned
and reproduced, an expense that did not recur in 2002. Also, in 2001, the
Company incurred approximately $16,000 in expense on a joint project with a new
distributor; this expense did not recur in 2002.

        General and administrative expense decreased $1,387,000 to $2,433,000 in
the twelve months of 2002 compared to the same period in 2001. This is the
result of the following:

        Investor relations costs decreased $145,000 in the twelve months ended
December 31, 2002 compared to the same period in 2001. These costs included two
full time positions in addition to travel expenses for two board members
representing the Company in 2001. In 2002 one of the two full time investor
relations positions is now accounted for as office salaries as a result of a
change in responsibilities. Travel is limited to the one individual still
included in Investor Relations. Also occurring in 2001 were travel and SEC
filing expenses associated with securing the private placement that generated
$2.3 million in capital. These expenses did not recur in 2002.

        Consulting expense decreased $53,000 in 2002. In 2001 consulting expense
was incurred for the redesign of company publications, as well as $25,000 for an
executive search. These expenses did not recur in 2002. Further, the Company
paid two of its board members $21,600 during 2001 for transitioning the role of
CEO.

        Building rental expense decreased $125,000 year over year, offset by an
increase of $23,000 in depreciation expense resulting from the purchase of the
Kinderhook facility in December 2001.

        Legal fees for the twelve months ended December 31, 2002 decreased
$444,000 compared to the twelve months ended December 31, 2001 primarily due to
the settlement of all outstanding litigation in 2001 and 2002.



                                       20
<PAGE>

        Accounting fees for the twelve months ended December 31, 2002 also
decreased when compared to the same period a year ago. 2001 included a year-end
audit for the twelve months ended April 30, 2001 that did not recur in 2002 as
the Company changed its fiscal year end to December 31 at the end of 2001. Total
accounting expense was $72,000 in 2002 compared to $400,000 in 2001, a decrease
of $328,000.

        Non-cash compensation expense decreased $203,000 for the twelve months
ended December 31, 2002 compared to the same period in 2001. The Company issued
numerous stock option grants during 2001 for services. During 2002 no stock
options or warrants were issued by the Company to non-employees for products or
services.

        Management believes that the amount of selling and marketing costs and
general and administrative costs may increase as the Company creates the
necessary infrastructure to achieve the Company's worldwide drug test marketing
and sales goals, continues its penetration of the direct sales market and
leverages new product initiatives. However, management has implemented
initiatives to control the rate of increase of these costs to be more consistent
with the expected sales growth rate of the Company.

Results of operations for the eight months ended December 31, 2001 (the
transition period) compared to the eight months ended December 31, 2000
(unaudited).

        The following table presents certain financial information for the 8
months ended December 31, 2001 and 2000 respectively:

<TABLE>
<CAPTION>
                                                                          Eight Months Ended

                                                              December 31, 2001    December 31, 2000
                                                              -----------------    -----------------
                                                                                       (unaudited)
<S>                                                                <C>                  <C>
Revenues                                                         $ 4,155,000         $ 5,192,000
                                                                 ===========         ===========
Gross profit                                                     $ 2,331,000         $ 3,464,000
                                                                 ===========         ===========

Net loss                                                         $(1,631,000)        $(1,274,000)
                                                                 ===========         ===========
Earnings per common share                                        $      (.08)        $      (.07)
                                                                 -----------         -----------
Weighted average common shares outstanding                        19,345,000          18,044,000
                                                                 -----------         -----------
</TABLE>

        Net sales were $4,155,000 for the transition period compared to
$5,192,000 for the eight months ended December 31, 2000. Sales to distributors
were $1,409,000 for the transition period compared to $2,709,000 for the eight
months ended December 31, 2000. The decrease is a result of some distributors
selling competing products, including a similar product that was the subject of
our patent litigation. The decline in distributor sales was partially offset by
an increase in direct sales of $675,000 during the transition period and an
increase in sales from our telemarketing efforts. Direct sales continued growth
is consistent with management's business plan and will surpass sales from
distributors during the first or second quarter of 2002. The Company's
telemarketing efforts focus on smaller volume clients who are contacted directly
by individuals who work out of the Company's headquarters. Efforts include but
are not limited to cold calls to potential customers and direct mail campaigns.

        Gross profit for the transition period was $2,331,000, or 56.1% of net
sales, as compared to $3,464,000, or 66.7% of net sales, for the eight months
ended December 31, 2000. Gross profit decreased as a percentage of net sales as
a result of increased large volume, lower margin sales to direct customers, as
well as the inclusion of $111,000 of net adjustments to inventory in cost of
sales during the transition period relating to shrinkage and inventory write
downs, and $112,000 to establish a reserve for returns of consignment inventory.
Costs of raw materials, labor and overhead associated with manufacturing have



                                       21
<PAGE>

remained consistent during the transition period when compared to the eight
months ended December 31, 2000.

        Selling, general and administrative costs were $3,967,000, or 95.5% of
net sales, for the transition period compared to $4,370,000, or 84.2% of net
sales, for the eight months ended December 31, 2000. This increase as a
percentage of sales for the transition period was primarily due to the inclusion
of $85,000 in severance costs in office salaries, $235,000 of non-cash
compensation for financial advisory services, accounting fees of approximately
$67,000 and legal fees of approximately $44,000 related to the filing of the S3
registration statement for the private placement completed in August 2001 and
the resultant SEC comment letters, approximately $114,000 reserved for the
settlement of legal matters, and additional accounting fees of $50,000 relating
to the year end audit and financial reporting for the transition period.

        Sales salaries increased during the transition period as compared to the
eight months ended December 31, 2000 primarily due to the inclusion of the
salaries of the Directors of Business Development driving the direct sales
efforts. Also included in the salaries are the related commissions associated
with the growth in direct sales. Sales travel declined as part of a management
initiative to control spending. Consulting and other selling expenses declined
primarily due to the inclusion of $454,000 in non-cash compensation in the eight
months ended December 31, 2000 related to a one year consulting agreement with
an individual knowledgeable in the medical diagnostic testing area. In
connection therewith, the Company issued 300,000 common shares and granted
options to purchase 200,000 common shares at $2.00 per share, vesting as of
December 15, 2000.

        Marketing and promotion costs declined during the eight months ended
December 31, 2001 compared to the same period ending December 31, 2000 primarily
due to the discontinuation of the Company's promotion of the Drug Detector. In
the eight month period ended December 31, 2000, marketing and promotion costs
included salaries and benefits of two individuals responsible for the sale and
promotion of Drug Detector.

        Investor relations costs have increased in the transition period as
compared to the eight months ended December 31, 2000. The increase is primarily
due to the inclusion of an executive vice president previously included in
office salaries, the filing of the registration statement related to the equity
private placement completed in August of 2001, and non-cash expense related to
the issuance of warrants to several firms for financial advisory services for a
one year term ending in April 2002.

        Legal expenses of $844,000 in the eight months ended December 31, 2000
related primarily to the patent litigation that was settled in the fourth
quarter of fiscal 2001 [see notes C to the financial statements]. A settlement
relating to the fees was reached with the Company's attorneys following
settlement of the litigation and a gain on settlement of $259,000 was recognized
in the transition period. Included in our legal fees for the transition period
are approximately $44,000 relating to the filing of our S-3 registration
statement for registration of the securities related the equity private
placement completed in August 2001, and $221,000 of accruals for legal
settlements. We expect our legal fees to be significantly lower in fiscal 2002
as a result of the settlement of patent infringement litigation.

        Accounting fees increased $200,000 for the transition period compared to
the same period ending December 31, 2000. This increase is primarily related to
the fees for filing of the S-3 registration statement for registration of the
securities related the equity private placement completed in August 2001.
Accounting fees of approximately $67,000 were incurred from our prior auditors
relating to the filing of our S-3 registration statement for registration of the
securities related the equity private placement completed in August 2001.
Further, on October 2, 2001, the Board of Directors of the Company approved the
discharge of Eisner LLP and the appointment of PricewaterhouseCoopers LLP as the
Company's independent auditors. (See the Company's Form 8-K filed with the U.S.
Securities and Exchange Commission on October 4, 2001, and incorporated herein


                                       22
<PAGE>

by reference). This transition required coordination with both firms for the
filing of our 10-QSB for the quarter ended October 31, 2001 as well as the
10-KSB for the transition period.

        Office salaries increased in the transition period compared to the eight
months ended December 31, 2000 due to the addition of our former CEO, Robert
Aromando. Also during the transition period an employee's salary previously
reported in investor relations was reported in office salaries due to a change
in responsibilities.

        Payroll taxes and insurance increased in the transition period compared
to the eight months ended December 31, 2000 commensurate with the inclusion of
the new CEO as well as associated increases in insurance for benefits, property
and casualty, and workers compensation.

        Bad debt expense increased to $58,000 in the transition period from
$1,000 in the eight month period ended December 31, 2000. One account comprised
$48,000 of this write off, deemed uncollectable after all efforts to collect the
debt were exhausted.

        Other administrative expenses remained flat for the eight months ending
December 31, 2001 compared to the same period ending December 31, 2000. During
the transition period, the Company incurred $10,000 of non-cash expense for
warrants, management travel and entertainment increased $29,000 to support the
transition of the CEO, purchasing department increases of $12,000 representing a
full eight months in 2001 (only 4 months in 2000), increased freight costs to
ship product of $19,000, building rental increases of $24,000 relating to higher
rent in Kinderhook and added space in New Jersey, and D&O insurance increase of
$8,000. These increases were partially offset by decreases of $92,000 in outside
service fees, $8,000 in postage, $6,000 in utilities, $16,000 in miscellaneous
expense and $10,000 in bank service fees.

        Depreciation and amortization expense was $90,000 for the transition
period compared to $82,000 for the eight months ended December 31, 2000.
Depreciation expense is expected to increase in 2002 due to the acquisition of
the Kinderhook facility in December 2001, as well as the addition of capital
equipment. The increase in depreciation is expected to be offset by a reduction
in facility cost related to the Kinderhook headquarters of approximately $50,000
annually.

        Research and development expenses were $289,000 for the transition
period compared to $361,000 in the eight months ended December 31, 2000. This is
expected to increase in 2002 as the Company pursues projects in conjunction with
OEM contracts and new product development.

        Net other income was $35,000 for the transition period comprised of
interest income and expense and a loss on disposal of assets no longer in
service of $4,000. Net other income was $71,000 in the eight months ended
December 31, 2000 comprised of interest income and expense.

        Net loss attributable to common shareholders was $1,631,000 for the
transition period, resulting in basic and diluted net loss per common share of
$.08 compared to a net loss of $1,274,000 in the eight months ended December 31,
2000 and a basic and diluted net loss per common share of $.07.

LIQUIDITY AND CAPITAL RESOURCES AS OF DECEMBER 31, 2002

        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 continue research and development activities. The Company will
examine other growth opportunities including strategic alliances and expects
such activities will be funded from existing cash and cash equivalents, issuance


                                       23
<PAGE>

of additional equity 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.

        The Company has working capital of $2,578,000 at December 31, 2002 as
compared to working capital of $1,492,000 at December 31, 2001. The Company has
historically satisfied its net working capital requirements 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.

        At December 31, 2002 and 2001, the Company had cash and cash equivalents
of $231,000 and $288,000, respectively. In addition the Company has a $40,000
revolving line of credit bearing an interest rate of prime plus 1.75% secured by
its accounts receivable. At December 31, 2002, the Company had no outstanding
balance on this line of credit.

        The Company realized $235,000 from the sale of 175,000 shares of
treasury stock during the twelve months ended December 31, 2002. There are
currently 225,000 shares held in treasury stock as of December 31, 2002, which
the Company intends to sell for the purpose of generating cash to be used in
operations.

        At December 31, 2002, the Company is in the final stages of selling
approximately 87 acres of land at its Kinderhook facility for $150,000. The sale
of the land has been approved by the Town of Stuyvesant Zoning Board. The final
sale is subject to securing releases from two of the Company's lenders, which
the lenders have committed to provide the Company, pending the procurement and
assignment of life insurance policies for four of its officers.

        The Company's primary short-term capital and working capital needs are
to increase and improve its manufacturing and production capabilities, maintain
adequate inventory levels to support expected sales, continue to support its
research and development programs, seek new distribution opportunities and focus
sales efforts on high potential sectors of the drugs of abuse testing market.

Effect of Recent Accounting Pronouncements

         In June 2001, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 143, Accounting for
Asset Retirement Obligation. SFAS No. 143 requires entities to record the fair
value of a liability for an asset retirement obligation in the period in which
it is incurred. When the liability is initially recorded, an entity capitalizes
a cost by increasing the carrying amount of the long-lived asset. Over time, the
liability is accreted to its present value each period and the capitalized cost
is depreciated over the useful life of the related asset. Upon settlement of the
liability, an entity either settles the obligation for its recorded amount or
incurs a gain or loss upon settlement. SFAS No. 143 is effective for fiscal
years beginning after June 15, 2002. The Company does not believe the adoption
of this Statement will have a material impact on its financial statements.

         In July 2002, the FASB issued SFAS No. 146, Accounting for Costs
Associated with Exit or Disposal Activities. SFAS No. 146 addresses financial
accounting and reporting for costs associated with exit or disposal activities
and nullifies Emerging Issues Task Force (EITF) Issue No. 94-3, Liability
Recognition for Certain Employee Termination Benefits and Other Costs to Exit an
Activity (including Certain Costs Incurred in a Restructuring). This Statement


                                       24
<PAGE>

is effective for exit and disposal activities initiated after December 31, 2002.
The Company does not believe the adoption of this Statement will have a material
impact on its consolidated financial statements.

         In November 2002, FASB issued FASB Interpretation No. 45, Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others, an interpretation of FASB Statement No. 5,
57, and 107 and Rescission of FASB Interpretation No. 34 ("FIN 45"). FIN 45
clarifies the requirements of SFAS No. 5, Accounting for Contingencies, relating
to the guarantor's accounting for, and disclosure of, the issuance of certain
types of guarantees. FIN 45 requires that upon issuance of a guarantee, the
guarantor must recognize a liability for the fair value of the obligation it
assumes under that guarantee. FIN 45 specifically excludes certain guarantee
contracts from its scope. Additionally, certain guarantees are not subject to
FIN 45's provisions for initial recognition and measurement but are subject to
its disclosure requirements. The initial recognition and measurement provisions
are effective for guarantees issued or modified after December 31, 2002. The
disclosure requirements are effective for our annual financial statements for
the year ended December 31, 2002. The Company has made appropriate disclosures
regarding warranties as of December 31, 2002 and is currently reviewing this
Statement to determine its further effect on its financial statements.

         In December 2002, the FASB issued SFAS No. 148, Accounting for Stock
Based Compensation--Transition and Disclosure, an amendment to FASB Statement
No. 123. This Statement amends SFAS No. 123, Accounting for Stock-Based
Compensation, to provide alternative methods of transition for a voluntary
change to the fair value based method of accounting for stock-based employee
compensation. In addition, this Statement amends the disclosure requirements of
Statement No. 123 to require prominent disclosures in both annual and interim
financial statements about the method of accounting for stock-based employee
compensation and the effect of the method used on reported results. Finally,
SFAS No. 148 amends APB Opinion No. 28, Interim Financial Reporting, to require
disclosure about those effects in interim financial reporting. For entities that
voluntarily change to the fair value based method of accounting for stock-based
employee compensation, the transition provisions are effective for fiscal years
ending after December 15, 2002. For all other companies, the disclosure
provisions and the amendment to APB No. 28 are effective for interim periods
beginning after December 15, 2002. The Company does not intend to adopt the
transition provisions of the Statement and has made all required disclosures as
of December 31, 2002.

         In January 2003, the FASB issued FASB Interpretation No. 46,
Consolidation of Variable Interest Entities ("FIN 46"). FIN 46 requires a
variable interest entity to be consolidated by a company if that company is
subject to a majority of the risk of loss from the variable interest entity's
activities or entitled to receive a majority of the entity's residual returns or
both. FIN 46 also requires disclosures about variable interest entities that a
company is not required to consolidate but in which it has a significant
variable interest. The consolidation requirements of FIN 46 apply immediately to
variable interest entities created after January 31, 2003. The consolidation
requirements apply to existing entities in the first fiscal year or interim
period beginning after June 15, 2003. Certain of the disclosure requirements
apply in all financial statements issued after January 31, 2003, regardless of
when the variable interest entity was established. The Company does not believe
the adoption of this Statement will have a material impact on its financial
statements.

        ITEM 7.  FINANCIAL STATEMENTS

        The Company's Financial Statements are set forth beginning on page F-1.




                                       25
<PAGE>


        ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
                 FINANCIAL DISCLOSURE.

        On October 2, 2001, the Board of Directors of the Company approved the
discharge of Eisner LLP and the appointment of PricewaterhouseCoopers LLP as the
Company's independent auditors. (See the Company's Form 8-K filed with the U.S.
Securities and Exchange Commission on October 4, 2001, and incorporated herein
by reference).

PART III
--------

        ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS;
                 COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

           The information required by this item is contained in our definitive
Proxy Statement with respect to our Annual Meeting of Shareholders for the
fiscal year ending December 31, 2002, under the captions "Election of
Directors--Nominees", and "Security Ownership of Management and Certain
Beneficial Owners", and is incorporated herein by reference.

        ITEM 10. EXECUTIVE COMPENSATION

            The information required by this item is contained in our definitive
Proxy Statement with respect to our Annual Meeting of Shareholder for the fiscal
year ending December 31, 2002, under the caption "Executive Compensation", and
is incorporated herein by reference.

        ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

             The information required by this item is contained in our
definitive Proxy Statement with respect to the Annual Meeting of Shareholders
for the fiscal year ending December 31, 2002, under the caption "Security
Ownership of Management and Certain Beneficial Owners", and is incorporated
herein by reference.

        ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

           The information required by this item is contained in our definitive
Proxy Statement with respect to the Annual Meeting of Shareholder for the fiscal
year ending December 31, 2002, under the caption "Certain Relationships and
Related Transactions", and is incorporated herein by reference.


         ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

          (a)  Exhibits

                  See Exhibit Index on page E-1, incorporated herein by
reference.


          (b)  Reports on Form 8-K

                On October 24, 2002, the Company filed a Form 8-K related to
         the resignation of Robert L. Aromando Jr. from its Board of Directors.


         ITEM 14. CONTROLS AND PROCEDURES

         On February 4, 2003, the Company's CEO and CFO reviewed the Company's
disclosure controls and procedures. Based on this evaluation, the Company,
including the CEO and CFO, have concluded that the Company's disclosure controls


                                       26
<PAGE>


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.
















                                       27
<PAGE>


AMERICAN BIO MEDICA CORPORATION


SIGNATURES


         In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.


                                           AMERICAN BIO MEDICA CORPORATION


                                           By /s/ Gerald A. Moore
                                              ----------------------------------
                                              Gerald A. Moore
                                              Chairman, President & CEO

Date: March 25, 2003


         In accordance with the Exchange Act, this report has been signed below
by the following persons on behalf of the registrant and in the capacities
indicated on March 25, 2003:


/s/ Gerald A. Moore                       Chairman, President & Chief Executive
------------------------------------      Officer
Gerald A. Moore

/s/ Stan Cipkowski                        Executive Vice President & Director
------------------------------------
Stan Cipkowski

/s/ Edmund Jaskiewicz                     Director
------------------------------------
Edmund Jaskiewicz

/s/ D. Joseph Gersuk                      Director
------------------------------------
D. Joseph Gersuk

/s/ Dr. Denis O'Donnell                   Director
------------------------------------
Dr. Denis O'Donnell

/s/ Dr. Gerald W. Lynch                   Director
------------------------------------
Dr. Gerald W. Lynch

/s/ Daniel W. Kollin                      Director
------------------------------------
 Daniel W. Kollin

/s/ Keith E. Palmer                       Chief Financial Officer
------------------------------------      (Principal Financial Officer)
Keith E. Palmer


                                      S-1
<PAGE>

AMERICAN BIO MEDICA CORPORATION


CERTIFICATIONS
--------------

I, Gerald A. Moore, certify that:

         1. I have reviewed this annual report on Form 10-KSB of American Bio
Medica Corporation;

         2. Based on my knowledge, this annual report does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this
annual report;

         3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

         4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

                  a) designed such disclosure controls and procedures to ensure
         that material information relating to the registrant, including its
         consolidated subsidiaries, is made known to us by others within those
         entities, particularly during the period in which this annual report is
         being prepared;

                  b) evaluated the effectiveness of the registrant's disclosure
         controls and procedures as of a date within 90 days prior to the filing
         date of this annual report (the "Evaluation Date"); and

                  c) presented in this annual report our conclusions about the
         effectiveness of the disclosure controls and procedures based on our
         evaluation as of the Evaluation Date;

         5. The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent functions):

                  a) all significant deficiencies in the design or operation of
         internal controls which could adversely affect the registrant's ability
         to record, process, summarize and report financial data and have
         identified for the registrant's auditors any material weaknesses in
         internal controls; and

                  b) any fraud, whether or not material, that involves
         management or other employees who have a significant role in the
         registrant's internal controls; and

         6. The registrant's other certifying officers and I have indicated in
this annual report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.


Date: March 25, 2003


/s/ Gerald A. Moore
---------------------------
Gerald A. Moore
Principal Executive Officer
Chairman, CEO and President


                                      C-1
<PAGE>

AMERICAN BIO MEDICA CORPORATION


CERTIFICATIONS
--------------

I, Keith E. Palmer, certify that:

         1. I have reviewed this annual report on Form 10-KSB of American Bio
Medica Corporation;

         2. Based on my knowledge, this annual report does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this
annual report;

         3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

         4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

                  a) designed such disclosure controls and procedures to ensure
         that material information relating to the registrant, including its
         consolidated subsidiaries, is made known to us by others within those
         entities, particularly during the period in which this annual report is
         being prepared;

                  b) evaluated the effectiveness of the registrant's disclosure
         controls and procedures as of a date within 90 days prior to the filing
         date of this annual report (the "Evaluation Date"); and

                  c) presented in this annual report our conclusions about the
         effectiveness of the disclosure controls and procedures based on our
         evaluation as of the Evaluation Date;

         5. The registrant's other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent functions):

                  a) all significant deficiencies in the design or operation of
         internal controls which could adversely affect the registrant's ability
         to record, process, summarize and report financial data and have
         identified for the registrant's auditors any material weaknesses in
         internal controls; and

                  b) any fraud, whether or not material, that involves
         management or other employees who have a significant role in the
         registrant's internal controls; and

         6. The registrant's other certifying officers and I have indicated in
this annual report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.


Date: March 25, 2003


/s/ Keith E. Palmer
--------------------------------
Keith E. Palmer
Principal Financial Officer
Executive Vice President Finance


                                      C-2
<PAGE>

AMERICAN BIO MEDICA CORPORATION




CONTENTS

                                                                            PAGE
                                                                            ----

FINANCIAL STATEMENTS

   Independent auditors' report                                              F-2

   Report of prior independent auditors                                      F-3

   Balance sheets                                                            F-4

   Statements of operations                                                  F-5

   Statements of changes in stockholders' equity                             F-6

   Statements of cash flows                                                  F-7

   Notes to financial statements                                             F-9





                                      F-1


<PAGE>



INDEPENDENT AUDITORS' REPORT

To the Stockholders and Board of Directors of
American Bio Medica Corporation:

In our opinion, the financial statements listed in the accompanying index
present fairly, in all material respects, the financial position of American Bio
Medica Corporation at December 31, 2002 and 2001, and the results of its
operations and its cash flows for the year ended December 31, 2002 and for the
eight months ended December 31, 2001, in conformity with accounting principles
generally accepted in the United States of America. These financial statements
are the responsibility of the Company's management; our responsibility is to
express an opinion on these financial statements based on our audits. We
conducted our audits of these statements in accordance with auditing standards
generally accepted in the United States of America, which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion. The
Statements of Operations, Changes in Stockholders' Equity and of Cash Flows of
the Company for the year ended April 30, 2001 were audited by other independent
accountants whose report dated June 20, 2001 expresses an unqualified opinion on
those statements.

The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note A to the financial
statements, the Company has an accumulated deficit, has experienced continuing
operating cash flow deficits and has historically been largely dependent on its
ability to sell additional shares of its common stock. These factors raise
substantial doubt about the Company's ability to continue as a going concern.
Management's plans in regard to future operations are also described in Note A
to the financial statements. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.


/s/PricewaterhouseCoopers LLP

Albany, New York
January 31, 2003




                                      F-2
<PAGE>



INDEPENDENT AUDITORS' REPORT


To the Stockholders and Board of
Directors of American Bio Medica Corporation

We have audited American Bio Medica Corporation's statements of operations,
changes in stockholders' equity and cash flows for the year ended April 30,
2001. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit. We did not audit the financial information as of
and for the period ended December 31, 2000.

We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the results of operations and cash flows of American Bio
Medica Corporation for the year ended April 30, 2001, in conformity with
accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note A to the
financial statements, the Company has experienced recurring net losses and
negative cash flows from operations that raise substantial doubt about its
ability to continue as a going concern. Management's plans in regard to these
matters are also described in Note A. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.

/s/ Eisner LLP

Eisner LLP
(formerly Richard A. Eisner & Company, LLP)

New York, New York
June 20, 2001

With respect to Note B
July 23, 2001




                                      F-3

<PAGE>


AMERICAN BIO MEDICA CORPORATION

<TABLE>
<CAPTION>
Balance Sheets

                                                                                                    December 31,     December 31,
                                                                                                        2002             2001
                                                                                                    ------------     -------------
              <S>                                                                                     <C>               <C>
                                                 ASSETS
                                                 ------
              Current assets
                 Cash and cash equivalents                                                          $    231,000      $   288,000
                 Accounts receivable - net of allowance for doubtful accounts of $70,000
                  at December 31, 2002 and 2001                                                        1,075,000          882,000
                 Other receivables                                                                        30,000          171,000
                 Inventory                                                                             2,795,000        2,087,000
                 Prepaid expenses                                                                         53,000           90,000
                                                                                                     ----------------------------
                 Total current assets                                                                  4,184,000        3,518,000

              Property, plant and equipment, net                                                       1,457,000        1,455,000
              Restricted cash                                                                                             106,000
              Other assets                                                                                 7,000            7,000
                                                                                                     ----------------------------

                  Total Assets                                                                       $ 5,648,000      $ 5,086,000
                                                                                                     ============================

                                  LIABILITIES AND STOCKHOLDERS' EQUITY
                                  ------------------------------------
              Current liabilities
                 Accounts payable                                                                    $   908,000      $ 1,064,000
                 Accrued expenses                                                                        300,000          562,000
                 Customer advance deposits                                                                                243,000
                 Wages payable                                                                           213,000          114,000
                 Current portion of capital lease obligations                                             10,000           19,000
                 Current portion of notes payable                                                        174,000           24,000
                                                                                                     ----------------------------
                 Total current liabilities                                                             1,605,000        2,026,000

                 Long-term portion of capital lease obligations                                                            10,000
                 Long-term portion of notes payable                                                      673,000          696,000
                 Long-term portion of unearned grant                                                      50,000
                                                                                                     ----------------------------
                 Total liabilities                                                                     2,328,000        2,732,000

                 Commitments and contingencies (Note L)

              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; 20,609,548 shares issued and outstanding at
                    December 31, 2002 and 2001                                                           206,000          206,000
                 Treasury stock, at cost, 225,000 shares at December 31, 2002 and
                    25,000 shares at December 31, 2001                                                  (239,000)         (23,000)
                 Additional paid-in capital                                                           17,788,000       17,767,000
                 Due from Officer/Director/Shareholder                                                                   (437,000)
                 Subscription receivable                                                                                   (5,000)
                 Accumulated deficit                                                                 (14,435,000)     (15,154,000)
                                                                                                     ----------------------------

                 Total stockholders' equity                                                            3,320,000        2,354,000
                                                                                                     ----------------------------

                 Total liabilities and stockholders' equity                                          $ 5,648,000      $ 5,086,000
                                                                                                     ============================
</TABLE>

See notes to financial statements

                                      F-4


<PAGE>

Statements of Operations

<TABLE>
<CAPTION>


                                                                      For the Year      For the Eight      For the Year
                                                                         Ended          Months Ended          Ended
                                                                      December 31,       December 31,        April 30,
                                                                           2002              2001               2001
                                                                      ------------      --------------     ------------
                    <S>                                                  <C>                <C>                <C>
                    Net sales                                        $   10,312,000      $   4,155,000     $  7,484,000
                    Cost of goods sold                                    4,476,000          1,824,000        2,571,000
                                                                     ---------------------------------------------------

                    Gross profit                                          5,836,000          2,331,000        4,913,000
                                                                     ---------------------------------------------------
                    Operating expenses (income):
                       Research and development                             297,000            289,000          614,000
                       Selling, general and administrative                4,790,000          3,967,000        6,689,000
                       Gain on settlement                                                     (259,000)
                                                                     ---------------------------------------------------

                    Operating income/(loss)                                 749,000         (1,666,000)      (2,390,000)
                                                                     ---------------------------------------------------
                    Other income (expense):
                       Loss on sale of investments                                                             (124,000)
                       Loss on disposition of assets                                            (4,000)         (60,000)
                       Licensing and royalty settlement                                                         604,000
                       Other income/(expense)                                (6,000)
                       Interest income                                       34,000             51,000          106,000
                       Interest expense                                     (58,000)           (12,000)         (16,000)
                                                                     ---------------------------------------------------

                    Net income/(loss) attributable to common
                      shareholders                                   $      719,000      $  (1,631,000)    $ (1,880,000)
                                                                     ===================================================

                    Basic and fully diluted  income/(loss) per
                      common share                                             $.03              $(.08)           $(.10)
                                                                               ====              =====            =====

                    Weighted average number of shares outstanding
                      - basic                                            20,610,000         19,345,000       18,034,000
                    Dilutive effect of stock options and warrants           716,000
                                                                     ---------------------------------------------------
                    Weighted average number of shares
                      outstanding - fully diluted                        21,326,000         19,345,000       18,034,000
                                                                     ===================================================

</TABLE>

See notes to financial statements

                                      F-5

<PAGE>

AMERICAN BIO MEDICA CORPORATION


Statements of Changes in Stockholders' Equity

<TABLE>
<CAPTION>

                                  Preferred      Common Stock                  Additional                      Due from
                                    Stock      ------------------   Treasury    Paid-in     Subscription   Officer/Director
                                    Shares     Shares    Amount      Stock      Capital      Receivable       Shareholder
                                  ---------    ------    ------     --------   ----------   -------------  ----------------
<S>                                <C>         <C>         <C>      <C>        <C>             <C>            <C>
Balance - April 30, 2000                    18,045,548  $ 180,000            $15,210,000      $(5,000)

Warrant registration penalty                                                      26,000
Cancellation of common stock                   (50,000)                          (38,000)
Amortization of compensatory
  stock and options
Non-employee granted options
   fully vested                                                                 (165,000)
Common stock options issued
    to consultants                                                                19,000
Due from officer/director/
   shareholder repayable with
   common stock                                                                                              $  (472,000)
Net loss
Other comprehensive loss:
Net change in unrealized loss
   on securities available
   for sale

Comprehensive loss
                                ----------  ----------  -------- ---------   -----------     --------        -----------

Balance - April 30, 2001                    17,995,548   180,000              15,052,000       (5,000)          (472,000)

Equity private placement                     2,549,000    25,000               2,307,000
Amortization of compensatory
  stock and options
Shares issued in settlement
  of litigation                                115,000     1,000                 105,000
Options issued as severance                                                       85,000
Due from officer/director/
  shareholder accrued interest                                                                                   (36,000)
Warrants issued for financial
  advisory services                                                              265,000
Shares received as payment
  on loan                                      (50,000)           $ (23,000)     (48,000)                         71,000
Net loss
Comprehensive loss
                                ----------  ----------  --------    ---------   ----------     --------        -----------
Balance-December 31, 2001                   20,609,548   206,000    (23,000)  17,766,000       (5,000)          (437,000)

Shares received as payment on
  loan                                                             (425,000)                                     425,000
Forgiveness of debt                                                                                               12,000
Treasury shares sold                                                209,000       26,000
Write off receivable                                                              (5,000)       5,000
Net Income

Comprehensive Loss
                                ----------  ----------  --------  ---------   -----------     --------       -----------
Balance-December 31, 2002                   20,609,548  $206,000  $(239,000)  $17,788,000     $      0       $         0
                                            ==========  ========  =========   ===========     ========       ===========

</TABLE>

<PAGE>

[RESTUBBED TABLE]

<TABLE>
<CAPTION>
                                                                   Accumulated
                                                                       Other
                                  Comprehensive      Unearned      Comprehensive    Accumulated
                                  Income/(Loss)    Compensation         Loss          Deficit         Total
                                  -------------    ------------    -------------    -----------      -------
<S>                                <C>              <C>              <C>              <C>             <C>
Balance - April 30, 2000                            $ (454,000)      $(77,000)     $(11,643,000)    $  3,211,000

Warrant registration penalty                                                                              26,000
Cancellation of common stock                                                                             (38,000)
Amortization of compensatory
  stock and options                                    289,000                                           289,000
Non-employee granted options
   fully vested                                        165,000
Common stock options issued
    to consultants                                     (19,000)
Due from officer/director/
   shareholder repayable with
   common stock                                                                                         (472,000)
Net loss                          $ (1,880,000)                                      (1,880,000)      (1,880,000)
Other comprehensive loss:
Net change in unrealized loss
   on securities available
   for sale                             77,000                         77,000                             77,000
                                  ------------
Comprehensive loss                  (1,803,000)
                                  ============       ---------      ---------       ------------     -----------

Balance - April 30, 2001                               (19,000)                      (13,523,000)      1,213,000

Equity private placement                                                                               2,332,000
Amortization of compensatory
  stock and options                                     19,000                                            19,000
Shares issued in settlement
  of litigation                                                                                          106,000
Options issued as severance                                                                               85,000
Due from officer/director/
  shareholder accrued interest                                                                           (36,000)
Warrants issued for financial
  advisory services                                                                                      265,000
Shares received as payment
  on loan                                                                                                      0
Net loss                          (1,631,000)                                         (1,631,000)     (1,631,000)
Comprehensive loss                (1,631,000)
                                 ============        ---------      ---------       ------------     -----------
Balance-December 31, 2001                                                            (15,154,000)      2,353,000

Shares received as payment on
  loan
Forgiveness of debt                                                                                       12,000
Treasury shares sold                                                                                     235,000
Write off receivable                                                                                           0
Net Income                            719,000                                            719,000         719,000
                                 ------------
Comprehensive Loss               $    719,000
                                 ============        ---------      ---------       ------------     -----------
Balance-December 31, 2002                            $       0      $       0       $(14,435,000)    $ 3,320,000
                                                     =========      =========       ============     ===========
</TABLE>

See notes to financial statements

                                      F-6

<PAGE>

AMERICAN BIO MEDICA CORPORATION

Statements of Cash Flows

<TABLE>
<CAPTION>
                                                                           Year             Eight Months         Year
                                                                           Ended               Ended             Ended
                                                                        December 31,        December 31,        April 30,
                                                                           2002                 2001              2001
                                                                        ------------        ------------       -----------
         <S>                                                              <C>                 <C>               <C>
       Cash flows from operating activities:
         Net Income/(Loss)                                              $   719,000        $ (1,631,000)     $ (1,880,000)
         Adjustments to reconcile net loss:
            Amortization and depreciation                                   154,000              91,000           123,000
            Penalty charge for late registration                                                                   26,000
            Provision for bad debts                                                             (16,000)           (5,000)
            Compensatory stock and stock options                                                477,000           289,000
            Accrued interest on debt and due from
                officer/director/shareholder                                                    (36,000)          (55,000)
            Loss on disposition of assets                                                         4,000           184,000
            Forgiveness of shareholder debt                                  12,000
            Changes in:
              Accounts receivable                                          (193,000)            144,000           145,000
              Other receivables                                             141,000             179,000          (350,000)
              Inventory                                                    (708,000)           (644,000)         (112,000)
              Prepaid expenses                                               37,000             (49,000)            5,000
              Restricted cash                                                                                     (34,000)
              Other assets                                                                       29,000            18,000
              Accounts payable                                             (156,000)           (389,000)          140,000
              Accrued expenses                                             (262,000)            150,000            70,000
              Customer advance deposits                                    (243,000)            243,000
              Wages payable                                                  99,000            (402,000)          516,000
                                                                      -----------------------------------------------------

                Net cash used in operating activities                      (400,000)         (1,850,000)         (920,000)
                                                                      -----------------------------------------------------

       Cash flows from investing activities:
         Purchase of property, plant and equipment                         (156,000)         (1,202,000)          (73,000)
         Loan to BioSys, Inc.                                                                                    (100,000)
         Proceeds from sales and maturity of investments                                                          407,000
         Loans to officer/director/shareholder                                                                   (120,000)
         Restricted cash                                                    106,000              40,000
                                                                      -----------------------------------------------------

                Net cash (used in) provided by investing activities         (50,000)         (1,162,000)          114,000
                                                                      -----------------------------------------------------

       Cash flows from financing activities:
         Proceeds from private placement                                                      2,332,000
         Repayment of note payable to shareholder                                                                (125,000)
         Proceeds from debt financing                                       150,000             720,000
         Proceeds from convertible grant                                     50,000
         Proceeds from sale of treasury stock                               235,000
         Long term debt payments                                            (23,000)
         Repayment of capital lease obligations                             (19,000)            (17,000)          (11,000)
                                                                      -----------------------------------------------------
                Net cash provided by (used in) financing activities         393,000           3,035,000          (136,000)
                                                                      -----------------------------------------------------

                Net (decrease) increase in cash and cash equivalents        (57,000)             23,000          (942,000)
         Cash and cash equivalents - beginning of period                    288,000             265,000         1,207,000
                                                                      -----------------------------------------------------
         Cash and cash equivalents - end of period                    $     231,000        $    288,000      $    265,000
                                                                      =====================================================

</TABLE>

                                      F-7

<PAGE>


AMERICAN BIO MEDICA CORPORATION

Statements of Cash Flows (continued):

<TABLE>
<CAPTION>
                                                                           Year             Eight Months         Year
                                                                           Ended               Ended             Ended
                                                                        December 31,        December 31,        April 30,
                                                                           2002                 2001              2001
                                                                        ------------        ------------       -----------
         <S>                                                              <C>                 <C>               <C>
        Supplemental disclosures of cash flow information:
          Cash paid during the year for:
            Interest                                                    $    53,000          $   12,000         $   16,000

        Noncash activities:
         Acquisition of property under capital leases                                                               10,000
         Common stock received in repayment of loan from
             officer/director/shareholder                                   425,000              71,000             38,000
         Conversion of equity investment in BioSys, Inc.                                                           380,000
         Non-employee options granted fully vested                                                                 165,000

</TABLE>


See notes to financial statements





                                      F-8

<PAGE>


AMERICAN BIO MEDICA CORPORATION
Notes to Financial Statements
December 31, 2002


NOTE A - THE COMPANY AND ITS SIGNIFICANT ACCOUNTING POLICIES

The Company:
------------

         American Bio Medica Corporation ("ABMC" or the "Company") was
incorporated in the state of New York on April 10, 1986 and is in the business
of manufacturing, developing and marketing biomedical technologies and products.
The Company currently owns two technologies for screening drugs of abuse, a
workplace screening test and a preliminary test for use by laboratories.

         The Company's financial statements have been prepared assuming the
Company will continue as a going concern, which assumes the realization of
assets and the satisfaction of liabilities in the normal course of business. For
the year ended December 31, 2002 the Company had net income of $719,000 and has
an operating cash flow deficit of ($400,000). As of December 31, 2002, the
Company had an accumulated deficit of ($14,435,000). Historically, the Company
has been largely dependent on its ability to sell additional shares of its
common stock to fund its operations. During Fiscal 2001 and continuing through
the current fiscal year, the Company commenced implementing programs to improve
its financial prospects including entering into national and international
distribution agreements with a number of distributors, completing and refining
its in-house strip manufacturing program to reduce costs, and other measures to
enhance profit margins.

         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.

         The Company's history of operating cash flow deficits raises
substantial doubt about its ability to continue as a going concern and its
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.

Significant Accounting Policies:
--------------------------------

[1]    Cash Equivalents:

         The Company considers all highly liquid debt instruments purchased with
a maturity of three months or less to be cash equivalents.

[2]     Inventory:

         Inventory is stated at the lower of cost or market; cost is determined
by the first-in-first-out method.

[3]     Income Taxes:

         The Company accounts for income taxes in accordance with Statements of
Financial Accounting Standards (SFAS) No. 109, Accounting for Income Taxes.
Deferred tax assets and liabilities are determined based on differences between
financial reporting and tax bases of assets and liabilities, and are measured
using the enacted laws and tax rates that will be in effect when the differences
are expected to reverse. The measurement of deferred tax assets is reduced, if
necessary, by a valuation allowance for any tax benefits that are not expected
to be realized. The effect on deferred tax assets and liabilities of a change in
tax rates are recognized in the period that such tax rate changes are enacted.

[4]    Depreciation and amortization:

         Property, plant and equipment assets are depreciated on the
straight-line method over their estimated useful lives; 3-5 years for equipment
and 30 years for buildings. Leasehold improvements and capitalized lease assets
are amortized by the straight-line method over the shorter of their estimated
useful lives or the term of the lease.

                                      F-9
<PAGE>


AMERICAN BIO MEDICA CORPORATION
Notes to Financial Statements
December 31, 2002

[5]    Revenue recognition:

         The Company recognizes revenue when title transfers upon shipment. No
obligation on the part of ABMC exists for customer acceptance. The Company's
price is fixed and determinable at the date of sale. The buyer has paid the
Company or is obligated to pay the Company and the obligation is not contingent
on the resale of the product. The buyer's obligation would not be changed in the
event of theft or physical destruction or damage to the product. The buyers
acquiring the product for resale (i.e. distributor/wholesaler) have economic
substance apart from that provided by the Company and the Company does not have
significant obligations for future performance to directly bring about the
resale of the product. All distributors have economic substance apart from
customers and the payment terms are not conditional. The transactions with
distributors are on terms similar to the terms given to the Company's other
customers. No agreements exist with the distributors that offer a right of
return. Revenue from consignment sales is not recognized until all conditional
terms have been met.

[6]    Research and development:

         Research and development ("R&D") costs are charged to operations when
incurred. These costs include salaries, benefits, travel, supplies, depreciation
of R&D equipment and other miscellaneous expenses.

[7]    Income or loss per common share:

         Basic income/(loss) per share is calculated by dividing net
income/(loss) by the weighted average number of outstanding common shares during
the period. For the year ended December 31, 2002, diluted net income per share
includes the dilutive effect of 589,000 stock options and 2,452,000 warrants. No
effect has been given to potential issuances of common stock including
outstanding options and warrants in the diluted computation as of December 31
and April 30, 2001, as their effect would be antidilutive.

         Potential common shares outstanding as of December 31, 2002 and 2001
and April 30, 2001:

                        December 31, 2002    December 31, 2001    April 30, 2001
                        -----------------    -----------------    --------------

       Warrants              2,651,703           2,656,703             953,283
       Options               5,298,750           4,374,000           3,620,000


[8]    Use of estimates:

         The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that effect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.

[9]    Impairment of long-lived assets:

         The Company records impairment losses on long-lived assets used in
operations when events and circumstances indicate that the assets might be
impaired and the undiscounted cash flows estimated to be generated by those
assets are less than the carrying amounts of those assets.

[10]  Financial Instruments:

         The carrying amounts of cash and cash equivalents, accounts receivable
- net, other receivables, due from officer/director/shareholder, restricted
cash, accounts payable, accrued expenses and debt approximate their fair value
based on the nature of those items.

         Estimated fair value of financial instruments is determined using
available market information. In evaluating the fair value information,
considerable judgment is required to interpret the market data used to develop
the estimates. The use of different market assumptions and/or different
valuation techniques may have a material effect on the estimated fair value
amounts.


                                      F-10

<PAGE>

AMERICAN BIO MEDICA CORPORATION
Notes to Financial Statements
December 31, 2002


         Accordingly, the estimates of fair value presented herein may not be
indicative of the amounts that could be realized in a current market exchange.

[11]   Accounting for stock-based compensation:

         The Company accounts for its stock-based compensation plans using the
intrinsic value method under Accounting Principles Board Opinion (APB) No. 25,
Accounting for Stock Issued to Employees and related interpretations. The
Financial Accounting Standards Board issued SFAS No. 123, Accounting for
Stock-Based Compensation, which establishes a fair value-based method of
accounting for stock-based compensation plans. The Company has adopted the
disclosure-only alternative under SFAS No. 123, which requires disclosure of the
pro forma effects on net income/(loss) per share as if stock-based employee
compensation was measured under SFAS No. 123, as well as certain other
information. The Company accounts for stock-based compensation to non-employees
using the fair value method in accordance with SFAS No. 123.

[12]  Concentration of credit risk:

         The Company sells its drug testing products primarily to United States
distributors. Credit is extended based on an evaluation of the customer's
financial condition. The Company establishes an allowance for doubtful accounts
based on factors surrounding the credit risk of specific customers and other
information.

         The Company maintains certain cash balances at a financial institution
that is federally insured and at times the balances have exceeded federally
insured limits.

[13] Reporting comprehensive loss:

         The Company reports comprehensive loss in accordance with the
provisions of SFAS No. 130, Reporting Comprehensive Income. The provisions of
SFAS No. 130 require the Company to report the change in the Company's equity
during the period from transactions and events other than those resulting from
investments by, and distributions to, the shareholders.

[14]  Reclassifications:

         Certain items have been reclassified from the prior years to conform
with the current year presentation.

[15]  New accounting pronouncements:

         In June 2001, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 143, Accounting for
Asset Retirement Obligation. SFAS No. 143 requires entities to record the fair
value of a liability for an asset retirement obligation in the period in which
it is incurred. When the liability is initially recorded, an entity capitalizes
a cost by increasing the carrying amount of the long-lived asset. Over time, the
liability is accreted to its present value each period and the capitalized cost
is depreciated over the useful life of the related asset. Upon settlement of the
liability, an entity either settles the obligation for its recorded amount or
incurs a gain or loss upon settlement. SFAS No. 143 is effective for fiscal
years beginning after June 15, 2002. The Company does not believe the adoption
of this Statement will have a material impact on its financial statements.

         In July 2002, the FASB issued SFAS No. 146, Accounting for Costs
Associated with Exit or Disposal Activities. SFAS No. 146 addresses financial
accounting and reporting for costs associated with exit or disposal activities
and nullifies Emerging Issues Task Force (EITF) Issue No. 94-3, Liability
Recognition for Certain Employee Termination Benefits and Other Costs to Exit an
Activity (including Certain Costs Incurred in a Restructuring). This Statement
is effective for exit and disposal activities initiated after December 31, 2002.
The Company does not believe the adoption of this Statement will have a material
impact on its financial statements.

         In November 2002, FASB issued FASB Interpretation No. 45, Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others, an interpretation of FASB Statement No. 5,
57, and 107 and Rescission of FASB Interpretation No. 34 ("FIN 45"). FIN 45
clarifies the requirements of SFAS No. 5, Accounting for Contingencies, relating
to the guarantor's accounting for, and disclosure of, the issuance of certain

                                      F-11
<PAGE>

AMERICAN BIO MEDICA CORPORATION
Notes to Financial Statements
December 31, 2002


types of guarantees. FIN 45 requires that upon issuance of a guarantee, the
guarantor must recognize a liability for the fair value of the obligation it
assumes under that guarantee. FIN 45 specifically excludes certain guarantee
contracts from its scope. Additionally, certain guarantees are not subject to
FIN 45's provisions for initial recognition and measurement but are subject to
its disclosure requirements. The initial recognition and measurement provisions
are effective for guarantees issued or modified after December 31, 2002. The
disclosure requirements are effective for our annual financial statements for
the year ended December 31, 2002. The Company is currently reviewing this
Statement to determine its future impact on its financial statements.

         In December 2002, the FASB issued SFAS No. 148, Accounting for Stock
Based Compensation--Transition and Disclosure, an amendment to FASB Statement
No. 123. This Statement amends SFAS No. 123, Accounting for Stock-Based
Compensation, to provide alternative methods of transition for a voluntary
change to the fair value based method of accounting for stock-based employee
compensation. In addition, this Statement amends the disclosure requirements of
Statement No. 123 to require prominent disclosures in both annual and interim
financial statements about the method of accounting for stock-based employee
compensation and the effect of the method used on reported results. Finally,
SFAS No. 148 amends APB Opinion No. 28, Interim Financial Reporting, to require
disclosure about those effects in interim financial reporting. For entities that
voluntarily change to the fair value based method of accounting for stock-based
employee compensation, the transition provisions are effective for fiscal years
ending after December 15, 2002. For all other companies, the disclosure
provisions and the amendment to APB No. 28 are effective for interim periods
beginning after December 15, 2002. The Company does not intend to adopt the
transition provisions of the Statement and has made all required disclosures as
of December 31, 2002.

         In January 2003, FASB issued FASB Interpretation No. 46, Consolidation
of Variable Interest Entities ("FIN 46"). FIN 46 requires a variable interest
entity to be consolidated by a company if that company is subject to a majority
of the risk of loss from the variable interest entity's activities or entitled
to receive a majority of the entity's residual returns or both. FIN 46 also
requires disclosures about variable interest entities that a company is not
required to consolidate but in which it has a significant variable interest. The
consolidation requirements of FIN 46 apply immediately to variable interest
entities created after January 31, 2003. The consolidation requirements apply to
existing entities in the first fiscal year or interim period beginning after
June 15, 2003. Certain of the disclosure requirements apply in all financial
statements issued after January 31, 2003, regardless of when the variable
interest entity was established. The Company does not believe the adoption of
this Statement will have a material impact on its financial statements.

NOTE B - RESTRICTED CASH

         There was no restricted cash at December 31, 2002. Restricted cash at
December 31, 2001 consisted of one certificate of deposit in the amount of
$106,000 including accrued interest at a rate of 1.5%, which was collateral for
a bank loan in the name of Stan Cipkowski, an officer/director/shareholder, that
was payable on demand in the amount of $100,000. The bank loan in the name of
Mr. Cipkowski was fully satisfied during 2002 and the cash from this certificate
was subsequently transferred to operating cash. As of April 30, 2001 the
restricted cash consisted of two certificates of deposit aggregating $146,000,
accruing interest at 5.35%. The first certificate, in the amount of $119,000 was
collateral for a bank loan, that was payable on demand in the amount of
$100,000. The other certificate, in the amount of $27,000 collateralized a
corporate credit card in the amount of $7,000, in the name of Mr. Cipkowski. On
July 23, 2001, the outstanding amounts due on the collateralized credit card
were paid, the account closed and all restrictions on the $27,000 certificate of
deposit released. The cash was subsequently transferred to operating cash.

NOTE C - LICENSING AND ROYALTY SETTLEMENT

         On April 3, 2001, the Company settled a patent infringement lawsuit
against Phamatech Inc. (Phamatech) and other defendants. The agreement
establishes a license and royalty arrangement under which Phamatech may continue
to market its line of products for drugs-of-abuse testing, and the Company would
be paid a percentage of revenues of the infringing products. In return, the
Company dismissed the lawsuit against Phamatech and the other defendants. No
significant royalties from the continued sale of infringing products are
expected. Under the terms of the settlement, each party has agreed not to
disclose to any third parties the terms and conditions of this agreement.

                                      F-12

<PAGE>

AMERICAN BIO MEDICA CORPORATION
Notes to Financial Statements
December 31, 2002


NOTE D - INVENTORY

      Inventory is comprised of the following:

<TABLE>
<CAPTION>
                                                                        December 31,         December 31,
                                                                            2002                 2001
                                                                        ------------         ------------
         <S>                                                             <C>                   <C>
         Raw Materials                                                    $1,393,000           $  913,000
         Work In Process                                                   1,004,000              597,000
         Finished Goods including $0 held on consignment on
            December 31, 2002 and $167,000 on December 31, 2001.
            Net of reserve for returns of $0 at December 31,
            2002 and $112,000 at December 31, 2001.                          398,000              577,000
                                                                          ----------           ----------

                                                                          $2,795,000           $2,087,000
                                                                          ==========           ==========
</TABLE>

NOTE E - PROPERTY, PLANT AND EQUIPMENT

         In December 2001, the Company purchased its previously leased facility
in Kinderhook, N.Y. for $950,000, including a building and 107 acres of land.
The Company partially financed the purchase through mortgage loans with the
Hudson River Bank and Trust Company for $360,000, the New York State Business
Development Corporation for $240,000, and the Columbia Economic Development
Corporation for $120,000.

           Property, plant and equipment, at cost, are as follows:

<TABLE>
<CAPTION>
                                                                        December 31,         December 31,
                                                                            2002                 2001
                                                                        ------------         ------------
         <S>                                                             <C>                   <C>
         Land                                                            $ 222,000            $ 222,000
         Buildings and improvements                                        835,000              835,000
         Manufacturing and warehouse equipment, including $42,000
           in leased equipment at December 31, 2002 and 2001,
           respectively.                                                   597,000              584,000

         Office equipment, including $29,000 in leased
           equipment at December 31, 2002 and 2001,
           respectively.                                                   227,000              240,000
                                                                         ---------            ---------
                                                                         1,881,000            1,881,000
         Less accumulated depreciation                                     424,000              426,000
                                                                         ---------            ---------
                                                                        $1,457,000           $1,455,000
                                                                        ==========           ==========
</TABLE>

         Depreciation and amortization expense was $154,000, $91,000 and
$123,000 for the year ended December 31, 2002, the transition period ended
December 31, 2001 and for the year ended April 30, 2001, respectively.

NOTE F - DUE FROM OFFICER/DIRECTOR/SHAREHOLDER

         At December 31, 2001 and April 30, 2001, the Company had a loan due
from an officer/director/shareholder, Stan Cipkowski, for $437,000 and $472,000,
respectively, partially evidenced by a note bearing interest at 11.5% per annum
and payable on demand. In October 2002, the Board of Directors agreed to accept
200,000 shares of stock from Mr. Cipkowski in full satisfaction of the then
outstanding loan balance of $248,000. The closing stock price on the date of

                                      F-13

<PAGE>

AMERICAN BIO MEDICA CORPORATION
Notes to Financial Statements
December 31, 2002


surrender was $1.03 resulting in the forgiveness of accrued interest totaling
$42,000, including $30,000 in 2002 and $12,000 from prior periods. Mr. Cipkowski
has surrendered a total of 500,000 shares since December 2000, of which 100,000
shares were cancelled. During 2002 the Company sold 175,000 treasury shares for
$235,000. The remaining 225,000 shares surrendered remain in treasury stock for
sale by the Company at a future date.

         During the first quarter of the year ended April 30, 2001 and during
the year ended April 30, 2000, the Company advanced $120,000 and $32,000,
respectively to Mr. Cipkowski. Interest income in connection with the note
receivable for the year ended December 31, 2002, transition period ended
December 31, 2001 and the twelve months ended April 30, 2001 was $0 (after
forgiveness of debt), $36,000 and $55,000, respectively.

         Mr. Cipkowski had provided 1,000,000 common shares as collateral for
the loan and was surrendering to the Company, 25,000 common shares each quarter
valued at the closing price on the second day following the earnings release, to
reduce the outstanding loan balance. During the transition period, 75,000 common
shares valued at $71,000 were redeemed to pay down the loan. During the year
ended December 31, 2002, 375,000 shares were surrendered completely satisfying
all amounts outstanding on the loan to Mr. Cipkowski. 225,000 of the shares
surrendered have been retained by the Company and are included as treasury stock
on the accompanying balance sheet. 175,000 shares of treasury stock were sold
during 2002 generating $235,000 in cash used in the operations of the Company.
Such loan is reflected in the Company's financial statements as a reduction of
stockholder's equity.

NOTE G - IMPAIRMENT OF ASSETS

         On September 1, 1999, the Company sold its book sales business
including all inventories and accounts receivable to an entity in exchange for a
$250,000 five year secured promissory note. During the year ended April 30,
2000, the Company repossessed certain assets, upon the default of the note and
collected $23,000. In April 2001, the $60,000 carrying value of the assets of
the book business were determined to be impaired and were written off.

NOTE H - DEBT

         Long term debt at December 31, 2002 and December 31, 2001 consisted of
the following:
<TABLE>
<CAPTION>

                                                                                    December 31, 2002         December 31, 2001
                                                                                 -------------------------------------------------
         <S>                                                                         <C>                           <C>
         Hudson River Bank and Trust Co.:
             Mortgage payable in equal monthly installments of $3,209 including
             interest at 8.75% through January 1, 2012 with a final lump sum
             payment of $255,000 at maturity, collateralized by the building
             and land                                                                    $ 354,000                $ 360,000
         New York Business Development Corporation:
             Mortgage payable in equal monthly installments of $1,996 including
             interest at 7.92% through January 1, 2012 with a final lump sum
             payment of $164,000 at maturity, collateralized by the building and
             land, equipment, and furnitures and fixtures                                  234,000                  240,000
         Columbia Economic Development Corporation:
             Mortgage payable in equal monthly installments of $1,159 including
             interest at 3.00% collateralized by building and land through
             January 1, 2012                                                               109,000                  120,000
                                                                                         ---------                ---------
                                                                                           697,000                  720,000
         Less current portion                                                              (24,000)                 (24,000)
                                                                                         ---------                ---------
         Non-current portion                                                             $ 673,000                $ 696,000
                                                                                         =========                =========
</TABLE>

                                      F-14
<PAGE>

AMERICAN BIO MEDICA CORPORATION
Notes to Financial Statements
December 31, 2002


         At December 31, 2002, the following are the maturities of long-term
debt for each of the next five years:



                 2003                      $  24,000
                 2004                         25,000
                 2005                         27,000
                 2006                         29,000
                 2007                         30,000
                 Thereafter                  562,000
                                           ---------
                                           $ 697,000
                                           =========

         The Company signed an uncollateralized note payable for $150,000 on
December 31, 2002 to Fortius Capital. The funds were used to settle a litigation
that had been outstanding since 1999. The note is payable in equal monthly
installments of $12,996 including interest at a rate of 7.25% per annum through
December 31, 2003. There is no prepayment penalty associated with this note.

NOTE I - CAPITAL LEASE OBLIGATIONS

         The Company leases certain equipment under a capital lease. As of
December 31, 2002 minimum future lease payments on the capital leases are
$10,000.

 Note J - Income Taxes

         A reconciliation of the U.S. Federal statutory income tax rate to the
effective income tax rate is as follows:

<TABLE>
<CAPTION>
                                                                                         Transition
                                                             Year Ended                 Period Ended               Year Ended
                                                          December 31, 2002          December 31, 2001           April 30, 2001
                                                          -----------------          -----------------           --------------
<S>                                                          <C>                        <C>                       <C>
Tax (benefit)/expense at federal statutory rate                (34%)                      (34%)                      (34%)
State tax (benefit)/expense, net of federal tax
  effect                                                        (5)                        (5)                        (5)
Valuation allowance                                             39                         39                         39
                                                     ----------------------------------------------------------------------------
Effective income tax rate                                        0%                         0%                         0%
                                                     ============================================================================
</TABLE>

         Significant components of the Company's deferred tax assets are as
follows:

<TABLE>
<CAPTION>
                                                                   December 31,            December 31,
                                                                      2002                     2001
                                                             --------------------------------------------
           <S>                                                   <C>                       <C>
           Inventory                                             $     21,000             $     68,000
           Stock based compensation                                   477,000                  291,000
           Allowance for doubtful accounts                             27,000                   27,000
           Property, plant, and equipment                             (72,000)                 (84,000)
           Capital losses                                              73,000                   41,000
           Accrued expenses                                            34,000
           Net operating loss carry-forward                         3,964,000                4,290,000
                                                             --------------------------------------------
           Total gross deferred tax assets                          4,524,000                4,633,000
           Less valuation allowance                                (4,524,000)              (4,633,000)
                                                             --------------------------------------------
           Net deferred tax assets                               $         -              $         -
                                                             =============================================
</TABLE>

         The valuation allowance for deferred tax assets as of December 31, 2002
and 2001 was $4,524,000, $4,633,000 respectively. The net change in the
valuation allowance was a decrease of $109,000 for the year ended December 31,
2002, an increase of $821,000 for the eight months ended December 31, 2001 and
an increase of $312,000 for the year ended April 30, 2001.


                                      F-15

<PAGE>

AMERICAN BIO MEDICA CORPORATION
Notes to Financial Statements
December 31, 2002


         At December 31, 2002 the Company has Federal and New York state net
operating loss carry forwards for income tax purposes of approximately
$10,164,000, which begin to expire in 2009. The Company has federal and New York
state capital losses of approximately $186,000, which begin to expire in 2005.

         In assessing the realizability of deferred tax assets, management
considers whether or not it is more likely than not that some portion or all
deferred tax assets will be realized. The ultimate realization of deferred tax
assets is dependent upon the generation of future taxable income during the
periods in which those temporary differences become deductible. Management
considers the projected future taxable income and tax planning strategies in
making this assessment.

         The Company's ability to utilize the operating loss carry forwards may
be subject to an annual limitation in future periods pursuant to Section 382 of
the Internal Revenue Code of 1986, as amended, if future changes in ownership
occur.

NOTE K - STOCKHOLDERS' EQUITY

[1]  Common Stock Purchase Agreement:

         On April 28, 2000, the Company entered into an agreement with Seaside
Partners, L.P. (Investor) to issue and sell 1,408,450 common shares at a per
share price of $1.42 (the closing price) for a total of $2 million. In
conjunction with the agreement, the Company agreed to issue a five-year warrant
to the Investor to purchase up to 1,877,934 common shares pursuant to a formula
based on the Company's stock price on the ten consecutive trading days prior to
the six-month anniversary of the closing date. The agreement provided that if
the six-month anniversary price per share was $2.13 or more per share, the
Company would not be required to issue any warrants. If the anniversary price
was less than $2.13 per share, the Company would be required to issue warrants
exercisable at the anniversary price into a number of common shares based on a
formula. The anniversary price was not $2.13 and the Company issued 953,283
warrants with an exercise price of $1.17. These warrants were subsequently
repriced to a $0.95 exercise price in lieu of the Company paying liquidated
damages of $109,000 resulting from the registration statement with respect to
the common shares and the warrants not being declared effective by the SEC by
the negotiated deadline. Denis O'Donnell, M.D., one of the Company's directors,
is a member of Seaside Advisors, LLC, which is the general partner of Seaside
Partners, L.P.

[2]   August 2001 Private Placement:

         On August 22, 2001, the Company raised gross proceeds of $2,549,000,
with net proceeds of $2,332,000 after placement, legal, transfer agent and
accounting fees, in a private placement of its securities to a number of
accredited investors. The private placement consisted of 2,549,000 units. Each
unit consisted of one common share of American Bio Medica Corporation stock, par
value $0.01 per share, at a purchase price of $1.00 per share, and one warrant
to purchase 0.5 common share at an exercise price of $1.05 per share,
exercisable during a 54-month period beginning on February 22, 2002. Therefore,
in connection with the private placement the Company issued 2,549,000 common
shares and 1,274,500 warrants to purchase one common share. In consideration of
services as placement agents in the August 2001 private placement, the Company
issued 203,920 warrants to purchase one common share at an exercise price of
$1.20 per share, exercisable during a 54 month period beginning on February 22,
2002 to Brean Murray and Co., Inc. and their sub-agents.

[3]   Stock Option Plans:

         The Company adopted the Fiscal 1997 Nonstatutory Stock Option Plan (the
"1997 Plan"), the Fiscal 1998 Nonstatutory Plan (the "1998 Plan"), the Fiscal
2000 Nonstatutory Stock Option Plan (the "2000 Plan"), and the 2001 Nonstatutory
Stock Option Plan (the "2001 Plan"). The 1997 Plan provides for the granting of
options to purchase up to 2,000,000 shares of common stock, the 1998 Plan and
the 2000 Plan provide for the granting of options to purchase up to 1,000,000
common shares each and the 2001 Plan provides for granting of options to
purchase up to 4,000,000 common shares. These Plans are administered by the


                                      F-16
<PAGE>

AMERICAN BIO MEDICA CORPORATION
Notes to Financial Statements
December 31, 2002


Option Committee of the Board of Directors, which determines the terms of
options exercised, including the exercise price, the number of shares subject to
the option and the terms and conditions of exercise. Options granted under the
1997 and 1998 Plans have lives of 5 years and vest over periods from 0 to 4
years. Options granted under the 2000 and 2001 Plans have lives of 10 years and
vest over periods from 0 to 4 years.

[4]   Stock Options:

         During the year ended December 31, 2002, the Company issued a total of
1,409,000 options to purchase shares of common stock, of which 1,340,000 were
issued to employees and 69,000 were issued to Board members.

         Stock option activity is summarized as follows:

<TABLE>
<CAPTION>
                                             Year Ended                 Eight Months Ending                Year Ended
                                             December 31,                  December 31,                     April 30,
                                                2002                           2001                            2001
                                   ------------------------------------------------------------------------------------------
                                                     Weighted     |                  Weighted    |                   Weighted
                                                      Average     |                  Average     |                   Average
                                                      Exercise    |                  Exercise    |                   Exercise
                                        Shares         Price      |    Shares         Price      |    Shares          Price
    <S>                                <C>              <C>              <C>           <C>            <C>             <C>
    Options                                                       |                              |
    outstanding at                                                |                              |
    beginning of year                  4,374,000       $1.85      |   3,620,000        $2.15     |   2,990,000         $2.63
    Granted                            1,409,000        0.96      |     966,000         1.05     |   1,173,000          1.19
    Exercised                                  0        0.00      |           0         0.00     |           0          0.00
    Cancelled/expired                   (484,000)       1.71      |    (212,000)        2.85     |    (543,000)         2.88
                                       ---------                  |   ---------                  |   ---------
    Options                                                       |                              |
    outstanding at end                                            |                              |
    of year                            5,299,000        1.62      |   4,374,000         1.85     |   3,620,000          2.15
                                       =========                  |   =========                  |   =========
    Options exercisable                                           |                              |
    at end of year                     3,047,000        2.11      |   2,525,000         2.42     |   2,418,000          2.54
                                       =========                  |   =========                  |   =========
</TABLE>

     The following table presents information relating to stock options
outstanding as of December 31, 2002:
<TABLE>
<CAPTION>

                                                       Options Outstanding                        Options Exercisable
                                        -------------------------------------------------      --------------------------
                                                         Weighted             Weighted                          Weighted
                                                          Average             Average                            Average
             Range of Exercise                            Exercise           Remaining                          Exercise
                   Price                  Shares           Price           Life in Years         Shares           Price
             -----------------          ---------       -----------      -----------------      --------       ----------
               <S>                          <C>              <C>               <C>                 <C>            <C>
               $0.85 - $1.99             3,025,000         $0.98               8.32               812,000         $1.06
               $2.00 - $2.99             1,977,000         $2.41               3.95             1,938,000         $2.40
               $3.00 - $3.50               297,000         $3.01               0.66               297,000         $3.01
                                        ----------                                             ----------
                   TOTAL                 5,299,000                                              3,047,000
                                        ==========                                             ==========
</TABLE>

         As of December 31, 2002, there are no stock options available for
issuance under the 1997 or the 1998 Plan. Pursuant to the plans, as of April 30,
2000 no further options could be issued under the 1997 Plan and as of April 30,
2001, no further options could be issued under the 1998 Plan.


                                      F-17

<PAGE>

AMERICAN BIO MEDICA CORPORATION
Notes to Financial Statements
December 31, 2002


[5]  Warrants:

             On May 2, 2001, the Company issued a 5 year warrant
immediately exercisable and non-forfeitable, to purchase 200,000 common
shares of American Bio Medica Corporation stock at an exercise price of
$1.50 per share to Brean Murray & Co., Inc. as compensation for its future
services as a financial advisor to the Company. The warrants were valued at
$134,000 using the Black Scholes pricing model and the following
assumptions, dividend yield of 0%, volatility of 95%, risk free interest
rate 4.8% and expected life of 5 years and has been recorded as a charge to
operations in the transition period ending December 31, 2001. The closing
price of American Bio Medica Corporation's common shares on May 2, 2001, as
listed on The NASDAQ SmallCap Market, was $0.95 per share.

            On August 22, 2001, the Company issued 54-month warrants,
exercisable beginning on February 22, 2002 and non-forfeitable, to purchase
1,274,500 common shares of American Bio Medica Corporation stock at an
exercise price of $1.05 per share to a number of accredited investors who
purchased common shares in the Company's August 2001 private placement of
the Company's securities. The value of these warrants was accounted for as
a cost of the financing.

         On November 15, 2001, the Company issued a 4 year warrant, immediately
exercisable and non-forfeitable, to purchase 20,000 common shares of American
Bio Medica Corporation stock at an exercise price of $1.00 per share to Hudson
River Bank & Trust Company in connection with the Company's purchase of its
facility located in Kinderhook, New York. The warrants are valued at $10,000
using the Black Scholes pricing model and the following assumptions, dividend
yield of 0.0%, volatility of 90.8%, risk free interest rate of 5.1% and expected
life of 5 years. The closing price of American Bio Medica Corporation common
shares on November 15, 2001, as listed on the NASDAQ SmallCap Market, was $0.85
per share.

[6]  Stock-based compensation:

         The Company applies APB No. 25 in accounting for its stock option plans
and, accordingly, recognizes employee compensation expense for the difference
between the fair value of the underlying common shares and the exercise price of
the option at the date of grant. The effect of applying SFAS No. 123 on pro
forma net loss as stated below is not necessarily representative of the effects
on reported net loss for future years due to, among other things (1) the vesting
period of the stock options and (2) the fair value of additional stock options
in future years. The weighted average fair value of options granted during the
twelve months ended December 31, 2002, the transition period ended December 31,
2001 and the twelve months ended April 30, 2001 was approximately $0.96, $0.84
and $0.94 respectively. The following pro forma information 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 ranging
from 87% to 90% for 2002, 91% to 92% for the transition period, and 92% for
2001, risk free interest rates of ranging from 4.98% - 6.04% for 2002, 4.88% -
5.62% for the transition period, and 5.29% - 6.22% for 2001 and an expected life
of 10 years for 2002 and the transition period and three years for the year
ended April 30, 2001.

<TABLE>
<CAPTION>
                                                                                  Eight months
                                                          Year ended                  ended                Year Ended
                                                          December 31,            December 31,              April 30,
                                                              2002                     2001                   2001
                                                     --------------------------------------------------------------------
         <S>                                               <C>                      <C>                    <C>
         Net Income/(loss):
               As reported                                $  719,000              $(1,631,000)            $(1,880,000)
               Pro forma                                  $ (162,000)             $(2,325,000)            $(2,144,000)

         Basic and fully diluted income/(loss)
          per share
              As reported                                  $  .03                    $(.08)                  $(.10)
              Pro forma                                    $ (.01)                   $(.12)                  $(.11)
</TABLE>

                                      F-18
<PAGE>

AMERICAN BIO MEDICA CORPORATION
Notes to Financial Statements
December 31, 2002


         During the year ended April 30, 2001, the Company granted 1,148,000
options to employees and directors at exercise prices greater than or equal to
fair market value of the underlying common shares at dates of grant. In
addition, during the year ended April 30, 2001, the Company granted 25,000
options to consultants at fair market value. The options granted to consultants
were valued at $19,000 using the Black Scholes pricing model and the following
assumptions, dividend yield of 0%, volatility of 95%, risk free interest rate of
5.79% and expected life of 5 years and are being amortized over the consulting
term of 1 year.

         During the transition period ended December 31, 2001, the Company
granted 708,000 options to employees and directors at exercise prices greater
than or equal to fair value of the underlying common shares at dates of grant.
In addition, during the transition period ended December 31, 2001, the Company
granted 158,000 options to consultants at fair market value and 100,000 options
at fair market value to a former employee as part of a severance agreement. The
options granted to consultants were valued at $47,000 using the Black Scholes
pricing model and the following assumptions, dividend yield of 0.0%, volatility
of 92.3%, risk free interest rate of 5.3% and expected life of 10 years. The
options granted to the former employee as part of a severance agreement were
valued using the Black Scholes pricing model and the following assumptions
dividend yield of 0.0%, volatility of 93.6%, risk free interest rate of 5.7% and
expected life of 5 years.

         During the year ended December 31, 2002, the Company granted 1,409,500
options to employees and directors/board members at exercise prices greater than
or equal to the fair market value of the underlying common shares at dates of
grant.

NOTE L - COMMITMENTS, CONTINGENCIES AND OTHER MATTERS

[1]    Operating leases:

         The Company leases office and R&D/production facilities under operating
leases expiring through August 2007. At December 31, 2002, the future minimum
rental payments under the operating leases are $242,000.

         Rent expense was $12,000 for 2002 including a recovery of $53,000
resulting from the favorable settlement of an outstanding dispute with a former
landlord of property rented from 1999 to 2000 in Boca Raton, Florida. Rent
expense was $116,000 and $141,000 for the transition period and twelve months
ended April 30, 2001, respectively.

[2]   Employment agreements:

         The Company has employment agreements with four officers, of which two
are directors and three are shareholders, providing for aggregate annual
salaries of $630,000. These agreements expire on April 30, 2003 and provide for
the issuance of bonuses and the granting of options.

[3]   Litigation:

         In June 1999, Richard Davidson filed a lawsuit against the Company in
New York. Davidson claimed that two placement memoranda dated September 15, 1992
and February 5, 1993, obligated the Company to issue him 1,155,601 common shares
of the Company's stock. In addition, Davidson claimed a finder's fee of 5% of
the funds raised by the September 1992 private placement. He alleged that a sum
of $1 million was raised. He also claimed he was entitled to a consulting fee of
$24,000. Management denied the claims and vigorously contested the suit. (See
"Note C-Litigation" in the Company's Form 10-QSB for the quarter ending
September 30, 2002 filed with the U.S. Securities and Exchange Commission on
November 14, 2002 and incorporated herein by reference). In December 2002, the
Company settled any and all claims related to this case and paid Davidson the
sum of $150,000 for such settlement.

         In June 1995 the Company filed a lawsuit against Jackson Morris, the
lawyer engaged to draft and advise the Company on the Share Exchange Agreement
with Dr. Robert Friedenberg. Morris, who had been recommended to the Company by
Dr. Friedenberg and whose fees were paid by the Company, was alleged to have
breached his fiduciary duty to the Company in several ways, including by later
advising Friedenberg, individually, on how to rescind the Share Exchange
Agreement as well as testifying for Friedenberg over the Company's objections
and in violation of his obligations to the Company. Morris was also charged with


                                      F-19
<PAGE>

AMERICAN BIO MEDICA CORPORATION
Notes to Financial Statements
December 31, 2002


negligence in drafting the Share Exchange Agreement. The Company's lawsuit
demanded damages in the amount of $1,000,000. Morris counterclaimed as a party
to the Share Exchange Agreement and sought common shares. The basis of all of
Mr. Morris' claims stemmed from the Friedenberg claim. On July 27, 2001, the
Company settled the lawsuit against Mr. Morris and issued 115,000 common shares
of the Company's stock to Mr. Morris as settlement of all outstanding claims.
The Company filed a registration statement related to these common shares which
was declared effective June 14, 2002.

NOTE M - TRANSITION PERIOD COMPARATIVE DATA:

         The following table presents certain financial information for the 12
months ended December 31, 2002 and 2001, respectively, and for the 8 months
ended December 31, 2001 and 2000 respectively.
<TABLE>
<CAPTION>
                                                                Twelve Months Ended                     Eight Months Ended
                                                         December 31,         December 31,       December 31,          December 31,
                                                             2002                 2001              2001                   2000
                                                                              (unaudited)                              (unaudited)
                                                      ------------------------------------------------------------------------------
     <S>                                                    <C>                  <C>                  <C>                 <C>
     Revenues                                              $10,312,000         $ 6,501,000           $ 4,155,000        $ 5,192,000
                                                           ===========         ===========           ===========        ===========
     Gross profit                                          $ 5,836,000         $ 3,714,000           $ 2,331,000        $ 3,464,000
                                                           ===========         ===========           ===========        ===========
     Net Income/(Loss)                                     $   719,000         $(2,237,000)          $(1,631,000)       $(1,274,000)
                                                           ===========         ===========           ===========        ===========
     Basic and fully diluted
     Income/(Loss) per common share                             $  .03              $ (.12)              $  (.08)           $  (.07)
                                                                ------              ------               -------            -------
     Weighted average common shares
      outstanding - basic                                   20,610,000          18,907,000            19,345,000         18,044,000
                                                           -----------         -----------           -----------        -----------
     Dilutive effect of stock options and
      warrants                                                 716,000

     Weighted average common shares
      outstanding - fully diluted                           21,326,000          18,907,000            19,345,000         18,044,000
                                                           ===========         ===========           ===========        ===========
</TABLE>


NOTE N - GEOGRAPHIC INFORMATION

         Information concerning net sales by principal geographic location is as
follows:

<TABLE>
<CAPTION>
                                                                                            Eight months
                                                                      Eight months             ended
                                                  Year ended             ended               December 31,       Year ended
                                                 December 31,         December 31,              2000             April 30,
                                                     2002                 2002               (unaudited)           2001
                                                ---------------------------------------------------------------------------
             <S>                                    <C>                 <C>                   <C>               <C>
             United States                       $  9,352,000          $ 3,604,000           $ 4,561,000       $ 6,312,000

             North America (not domestic)             647,000              397,000               449,000           867,000

             Europe                                   197,000              123,000                98,000           150,000

             Asia/Pacific Rim                          62,000               23,000                18,000            55,000

             South America                             54,000                8,000                66,000           100,000
                                                 ------------          -----------           -----------       -----------

                                                 $ 10,312,000          $ 4,155,000           $ 5,192,000       $ 7,484,000
                                                 ============          ===========           ===========       ===========
</TABLE>


                                      F-20

<PAGE>

<TABLE>
<CAPTION>

 Number                                                 Description of Exhibits
 ------                                                 -----------------------
<S>                <C>
 3.5               Bylaws(1)
 3.50              Amended and Restated Bylaws(5)
 3.6               Fifth amendment to the Certificate of Incorporation (filed as Exhibit 3.6 to the Company's Form
                   SB-2 filed on November 21, 1996 and incorporated herein by reference)
 3.7               Sixth amendment to the Certificate of Incorporation(5)
 4.2               Investor Registration Rights Agreement, dated August 22, 2001, among American Bio Medica
                   Corporation and the investors(4)
 4.3               Placement Agent Registration Rights Agreement, dated August 22, 2001, among American Bio Medica
                   Corporation and the placement agent and its sub-agents(4)
 4.4               Form of Warrant Agreement and Warrant among American Bio Medica Corporation and the investors(4)
 4.5               Form of Warrant Agreement and Warrant among American Bio Medica Corporation and the placement
                   agent and its sub-agents(4)
 4.6               Fiscal 1997 Nonstatutory Stock Option Plan (filed as part of the Company's Proxy Statement for
                   its Fiscal 1997 Annual Meeting and incorporated herein by reference) (a)
 4.14              Fiscal 1998 Nonstatutory Stock Option Plan (filed as part of the Company's Proxy Statement for
                   its Fiscal 1998 Annual Meeting and incorporated herein by reference) (a)
 4.15              Fiscal 2000 Nonstatutory Stock Option Plan (filed as part of the Company's Proxy Statement for
                   its Fiscal 2000 Annual Meeting and incorporated herein by reference) (a)
 4.16              Common Stock Purchase Agreement dated April 28, 2000 by and between the Company and Seaside
                   Partners, L.P.(2)
 4.17              Fiscal 2001 Nonstatutory Stock Option Plan (filed as part of the Company's Proxy Statement for
                   its Fiscal 2002 Annual Meeting and incorporated herein by reference) (a)
 10.6              Contract of Sale dated May 19, 1999/Kinderhook, New York facility(2)
 10.7              Agreement of Lease dated May 13, 1999/Kinderhook, New York facility(2)
 10.8              Lease dated August 1, 1999/New Jersey facility(2)
 10.9              Amendment dated March 23, 2001 to Lease dated August 1, 1999/New Jersey facility(3)
 10.10             Amended Contract of Sale dated May, 2001/Kinderhook, New York facility(3)
 10.11             Financial Advisory Agreement dated May 2, 2001 by and between Brean Murray & Co., Inc. and the
                   Company(3)
 10.12             Employment contract between the Company and Robert L. Aromando, Jr. (a)(3)
 10.13             Employment contract between the Company and Stan Cipkowski (a)(3)
 10.14             Employment contract between the Company and Douglas Casterlin (a)(3)
 10.15             Employment contract between the Company and Keith E. Palmer (a)(3)
 10.16             Warrant Agreement dated November 15, 2001 by and between the Company and Hudson River Bank &
                   Trust Company(5)
 10.17             Amendment No.3 dated August 20, 2002/New Jersey facility
 10.18             Employment contract between the Company and Gerald A. Moore (a)
 23.1              Consent of Independent Auditors

</TABLE>

(a)  indicates an employee benefit plan, management contract or compensatory
     plan or arrangement in which a named executive officer participates.

(1)  Filed as the exhibit number listed to the Company's Form 10-SB filed on
     November 21, 1996 and incorporated herein by reference.

(2)  Filed as the exhibit number listed to the Company's Form 10-KSB filed on
     August 11, 2000 and incorporated herein by reference.

(3)  Filed as the exhibit number listed to the Company's Form 10-KSB filed on
     August 13, 2001 and incorporated herein by reference.

(4)  Filed as the exhibit number listed to the Company's Form S-3 filed on
     September 26, 2001 and incorporated herein by reference.

(5)  Filed as the exhibit number listed to the Company's Form 10-KSB filed on
     April 15, 2002 and incorporated herein by reference.


                                      E-1