Item 2.01 Completion of Disposition of Assets
As previously reported, on December 19, 2022, American Bio Medica Corporation
(the "Company") entered into an Asset Purchase Agreement (the "Asset Purchase
Agreement") with Healgen Scientific Limited Liability Company, a Texas limited
liability company (the "Buyer"), pursuant to which the Company agreed, subject
to the approval of the Company's shareholders, to sell substantially all of the
operating assets of ABMC (excluding the Company's cash, accounts receivables
arising prior to the closing date, and certain other assets) to the Buyer (the
"Sale"). A copy of the Asset Purchase Agreement was filed as Annex A to the
Company's Definitive Proxy Statement filed on January 11, 2023.
On February 15, 2023, the Company held the 2023 Special Meeting of Shareholders
(the "Special Meeting") at the Company's corporate offices in Kinderhook, New
York, at which a quorum (27,863,899 shares of common stock of the 47,098,476
shares of common stock outstanding) was present in person or represented by
proxy. The approval of the Sale required the affirmative vote of the holders of
a majority of the outstanding shares of the Company's common stock (par value
$0.01) that were present in person or represented by proxy at the Special
Meeting. The shareholders approved the Asset Sale on February 15, 2023.
On February 28, 2023, the Company completed the Sale and disposition of
substantially all of the Company's assets. In connection with the closing of the
Sale, and in accordance with the terms of the Asset Purchase Agreement, the
Buyer paid an aggregate purchase price of $3 million ("Purchase Price").
$300,000 of the Purchase Price is being held back in a retention fund to cover
potential indemnification claims during the six months following the close. Net
proceeds in the amount of $247,000 were received by the Company after
satisfaction of 1) a loan with the Buyer in the amount of $965,000, 2) a
mortgage loan with Cherokee Financial, LLC, (totaling $1,031,000 for principal
and interest through February 27, 2023), an unsecured loan with Cherokee
Financial, LLC (totaling $252,000 for principal and interest through February
27, 2023), delinquent property related taxes in the amount of $193,000 and
$12,000 for current property related taxes.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
In connection with the Sale, Melissa A. Waterhouse, the Chief Executive
Officer/Principal Financial Officer of the Company, agreed to enter into an
employment agreement with the Buyer. Therefore, the employment agreement with
the Company's Chief Executive Officer/ Principal Financial Officer, Melissa
Waterhouse, was terminated effective March 1, 2023. Ms. Waterhouse has agreed to
provide consulting services for the Company for up to three months, or until
June 1, 2023 to assist with the Company's financial reporting obligations and to
assist with the Company's efforts to secure a new line of business and enter
into possible business combinations using the Company's publicly traded stock as
transaction consideration thereby enhancing shareholder value. Ms. Waterhouse
will receive a monthly retainer in the amount of $4,000 for her consulting
services; however, Ms. Waterhouse has agreed to suspend payment of the retainer
until receipt of the Company's ERC refund of $202,000 or release of the $300,000
in the retention fund previously referenced, whichever comes first. In addition,
Ms. Waterhouse has agreed to accept payment of a loan provided to the Company in
the amount of $43,000 upon closing of the Sale and suspend payment of her
deferred salary in the amount of $92,000 and current salary owed to her in the
amount of $29,000 until receipt of the Company's ERC refund of $202,000 or
release of the $300,000 in the retention fund previously referenced; whichever
comes first.
2
© Edgar Online, source Glimpses