AMERICAN BIO MEDICA CORPORATION (OTCMKTS:ABMC) Files An 8-K Entry into a Material Definitive Agreement

Entry into a Material Definitive Agreement

PRIVATE PLACEMENT

On February 20, 2020, American Bio Medica Corporation (the “Company”) entered into a Securities Purchase Agreement (the “Purchase Agreement”) with Chaim Davis (the Chairman of our Board of Directors) and certain other accredited investors (the “Investors”), to which the Company has agreed to issue and sell to the Investors in a private placement (the “Private Placement”), 2,842,857 Units (the “Units”).

Each Unit consists of one (1) share of the Company’s common stock, par value $0.01 per share (“Common Share”), at a price per Unit of $0.07 (the “Purchase Price”) for aggregate gross proceeds of approximately $199,000. The Company received net proceeds of $199,000 from the Private Placement as expenses related to the Private Placement were minimal. The Company did not utilize a placement agent for the Private Placement. The company intends to use the net proceeds for working capital and general corporate purposes.

The Company does not intend to register the Units issued under the Private Placement; rather the Units issued will be subject to the holding period requirements and other conditions of Rule 144.

The Purchase Agreement contains customary representations, warranties and covenants made solely for the benefit of the parties to the Purchase Agreement. The Purchase Agreement is incorporated herein by reference, but only to provide information regarding the terms of the Purchase Agreement and not to provide any other factual information regarding the Company or its business, and should be read in conjunction with the disclosures in the Company’s periodic reports and other filings with the SEC. Although our Chairman of the Board is an investor in the Private Placement, the pricing of the Units was determined by the non-affiliate investors.

The foregoing description of the material terms of the Purchase Agreement is qualified in its entirety by reference to the full text of the Purchase Agreement, which is filed as Exhibit 4.27 to this Current Report on Form 8-K and incorporated herein by reference.

CHEROKEE FINANCIAL LLC LOAN EXTENSIONS

On February 24, 2020 (the “Closing Date”), American Bio Medica Corporation (the “Company”) completed a transaction related to a one-year Extension Agreement dated February 14, 2020 (the “Extension Agreement”) with Cherokee Financial, LLC (“Cherokee”) under which Cherokee has extended the due date of the Company’s credit facilities (a $900,000 (mortgage) Term Note and a $200,000 2019 Term Loan) to February 15, 2021. No terms of either facility were changed under the Extension Agreement. For consideration of the Extension Agreement, the Company agreed to issue 1.5% of the $200,000 principal, or $3,000, in 42,857 restricted shares of the Company’s common stock to Cherokee and, 2% of the $900,000 principal, or $18,000, in 257,143 restricted shares of the Company’s common stock to Cherokee on behalf of their investors.

The Company also agreed to pay Cherokee’s legal fees in the amount of $1,000.

The information set forth above under Private Placement in Item 1.01 is hereby incorporated by reference into this Item 3.02. The issuance of the Common Shares shall be made to Section 4(2) of the Securities Act of 1933, as amended, and the rules promulgated thereunder, to accredited investors.

(d)Exhibits

4.27Form of Securities Purchase Agreement

AMERICAN BIO MEDICA CORP Exhibit
EX-4.27 2 abmc_ex427.htm INSTRUMENTS DEFINING THE RIGHTS OF SECURITY HOLDERS,…
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About AMERICAN BIO MEDICA CORPORATION (OTCMKTS:ABMC)

American Bio Medica Corporation develops, manufactures and sells immunoassay tests, primarily for the immediate, point of collection testing (POCT) for drugs of abuse (DOA) in urine and oral fluids. The Company’s DOA POCT products offer employers, law enforcement, government, healthcare and education professionals to identify illicit drug use. In addition to the manufacture and sale of DOA POCT products, the Company provides bulk test strip manufacturing services to unaffiliated third parties on a contract basis. Its Rapid Drug Screen (RDS) is a POCT product that detects the presence or absence of 2 to 10 DOA simultaneously in a single urine specimen. The Rapid ONE product line consists of single drug tests, each of which tests for the presence or absence of a single drug of abuse in a urine specimen. The RDS InCup is a POCT product that detects the presence or absence of 1 to 12 DOA in a single urine specimen. The POCT products for oral fluid-based DOA testing include OralStat.