Edgar Filing: ADM TRONICS UNLIMITED INC/DE

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549

FORM 10-KSB

(Mark One)

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

For the fiscal year ended March 31, 2007

[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the transition period from __________ to __________

COMMISSION FILE NUMBER 0-17629

ADM TRONICS UNLIMITED, INC.
(Name of Small Business Issuer in its Charter)

Delaware 22-1896032
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)

224-S Pegasus Avenue, Northvale, New Jersey 07647
(Address of Principal Executive Offices) (Zip Code)

(201) 767-6040
(Issuer's Telephone Number)

SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:

Title of Each Class Name of Each Exchange on which Registered
None

SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:

COMMON STOCK, $.0005 PAR VALUE
(Title of 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. YES[X] NO[_]

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

Indicate by check mark whether the issuer is a shell company (as defined by in
Rule 12b-2 of the Exchange Act). YES [ ] No [X]

The issuer's revenues for its most recent fiscal year were approximately
$1,538,000.

The aggregate market value of the issuer's common stock, par value $.0005 per
share (the "Common Stock"), held by non-affiliates of the issuer as of June 19,
2007, based on the average of the closing bid and asked prices of $0.25, for
such shares on such date, was approximately $6,650,000. For purposes of such
calculation, shares of Common Stock held by each executive officer and director
and by each person who owns more than 5% of the outstanding shares of Common
Stock have been excluded in that such persons may be deemed to be affiliates.
This determination of affiliate status is not necessarily a conclusive
determination for other purposes.

The number of shares of the Common Stock outstanding as of June 19, 2007 was
53,882,037.

DOCUMENTS INCORPORATED BY REFERENCE

Not applicable.

Transitional Small Business Disclosure Format (check one): Yes [_] No [X]

FORWARD LOOKING STATEMENTS

This Annual Report on Form 10-KSB contains various forward-looking statements
made pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995 and information that is based on management's beliefs as well
as assumptions made by and information currently available to management.
Although we believe that the expectations reflected in such forward-looking
statements are reasonable, we can give no assurance that such expectations will
prove to be correct. When used in this report, the words "anticipate,"
"believe," "estimate," "expect," "predict," "project" and similar expressions
are intended to identify forward-looking statements. We cannot guarantee the
accuracy of the forward-looking statements, and you should be aware that our
actual results could differ materially from those contained in the
forward-looking statements due to a number of factors, including the statements
under "Risk Factors" set forth in "Item 1 - Description of Business" and the
statements under "Critical Accounting Policies" set forth in "Item 6 -
Management's Discussion and Analysis or Plan of Operation." Due to these
uncertainties and risks, readers are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date of this Annual
Report on Form 10-KSB.

Unless otherwise indicated in this prospectus, references to "we," "us," "our"
or the "Company" refer to ADM Tronics Unlimited, Inc. and its subsidiaries.

PART I

ITEM 1. DESCRIPTION OF BUSINESS

COMPANY OVERVIEW

The Company is a technology-based developer and manufacturer of diversified
lines of products and derive revenue from the following three areas: (1)
environmentally safe chemical products for industrial use; (2) therapeutic
non-invasive electronic medical devices; and (3) cosmetic and topical
dermatological products.

The Company is a corporation that was organized under the laws of the State of
Delaware on November 24, 1969. Our operations are conducted through ADM Tronics
Unlimited, Inc. ("ADM") and its subsidiaries, Ivivi Technologies, Inc. (through
October 18, 2006) ("Ivivi"), Pegasus Laboratories, Inc. ("Pegasus") and Sonotron
Medical Systems, Inc. ("SMI"). As of June 15, 2007, ADM owned approximately 100%
and 94% of the outstanding capital stock of Pegasus and SMI, respectively. Ivivi
has been deconsolidated as of October 18, 2006 upon the consummation of Ivivi's
initial public offering, as we no longer own a majority of the outstanding
common stock of Ivivi and do not control Ivivi's operations, but can exert
significant influence based on the percentage of Ivivi's stock owned by us. As a
result, our investment in Ivivi subsequent to October 18, 2006 is reported under
the equity method of accounting. As of June 15, 2007, we owned approximately 34%
of the outstanding capital stock of Ivivi.

COMPANY PRODUCTS

CHEMICAL PRODUCTS FOR INDUSTRIAL USE

We develop, manufacture and sell chemical products to industrial
users. Such products consist primarily of the following:

o Water-based primers and adhesives;
o Water-based coatings and resins; and
o Water-based chemical additives.

Water-based primers and adhesives are chemical compounds used to bind different
plastic films, metal foils and papers. Examples are the binding of polyethylene
to polyester, nylon, vinyl, aluminum, paper and cellophane. Our water-based
primers and adhesives are similar in function to solvent-based primers that are
widely used to bind plastic films, papers and foils. Solvent-based systems have
come under criticism since they have been found to be highly pollutant,
dangerous to health and generally caustic in nature. Based upon our experience
since 1969, including information furnished to us by certain of our customers,
we believe that water-based systems have no known polluting effects and pose no
known health hazards. There can, of course, be no assurance that any
governmental restrictions will not be imposed on our water-based products or
that such products will be accepted as replacements for solvent based products.

Coatings and resins for the printing industry are used to impart properties to
the printed substrate. Our coatings and resins can be used to coat
printed material for glossy or aesthetic appeal to make such material virtually
impervious to certain types of grease and to impart other characteristics
required or desired for various products and specifications.

Certain of our chemical additives are used to impart properties to inks and
other chemical products used in the food packaging and printing industries.
These additives are used for their ability to improve the performance of such
products.

None of our chemical products are protected by patents, although the names of
some of such products have been protected by trademarks. We do not believe that
any such trademarks are material to our business. As of March 31, 2007, the
dollar amount of backlog orders for our chemical products believed by us to be
firm, was not material.

THERAPEUTIC NON-INVASIVE MEDICAL DEVICES

SONOTRON TECHNOLOGY

SMI, a majority-owned subsidiary of ADM, has developed a technology, known as
the Sonotron Technology, to develop medical devices to treat subjects suffering
from the pain of inflammatory joint conditions. Although some of the devices
utilizing this technology are commercially available for the treatment of
animals, none of such devices have received clearance from the U.S. Food and
Drug Administration (the "FDA") for human application in the United States.

The Sonotron Technology is the subject of three United States patents (the
"Sonotron Patents"), which expire in 2011, 2012 and 2016. Foreign patents
relating to the Sonotron Technology have been issued in Brazil, Canada, France,
Holland, Italy, Japan, Sweden, Switzerland, the United Kingdom and West Germany,
which patents expire on various dates through 2009.

SMI intends to use data obtained from clinics utilizing the Sonotron Device as
well as additional data it may obtain from others in the Company's FDA
application, if filed. SMI believes that sufficient data may be collected from
these investigations to support a submission to the FDA; however, there can be
no assurance that such data will be sufficient or if sufficient data will result
in the filing of an application with the FDA. There can be no assurance that we
will obtain sufficient data in the foreseeable future, if at all, to file an FDA
application for FDA clearance of the Sonotron Device for marketing in the United
States for human application or that any data theretofore or thereafter obtained
by the Company will be satisfactory or will be sufficient to support our FDA
application. SMI does not intend to make any material changes to the Sonotron
Devices nor have any such changes been made since the completion of the research
and development. In the event that Sonotron Devices cannot be marketed pursuant
to FDA clearance and the data obtained by the Company are not favorable or, for
any other reason, our FDA application is not filed or, if filed, is not approved
by the FDA, neither the Company nor SMI will be able to market the Sonotron
Devices in the United States to others in connection with human applications,
other than for research purposes. Under such circumstances, it is probable that
the Sonotron Devices will not be able to be marketed with respect to human
applications thereof in many foreign countries.

In 1997, the Company developed a device which utilizes the Sonotron Technology
to non-invasively treat neural-cerebral conditions (the "NCCD Device"). The NCCD
Device is a non-invasive electronic therapy device which is designed to emit
certain radio and audio waves at prescribed power outputs to a patient's brain
and spinal cord. Since 1997, the NCCD Device has been in the prototype stage.
Limited initial preliminary tests on human subjects on a non-controlled basis
appear to indicate that treatment with the NCCD Device has a beneficial effect
on the symptoms related to certain neuro-cerebral disorders. The results ranged
from minor improvement in certain limited symptoms to dramatic overall
improvements. Based upon such results, subject to obtaining sufficient capital,
we intend to conduct extensive controlled clinical studies of the NCCD Device.
Testing involves applying radio and audio waves to the patients' spinal cords
and cerebrum on a weekly basis for several weeks to small groups of patients
having cerebral palsy, multiple sclerosis and Parkinson's Disease.

In order to commercially exploit the NCCD Device, we must successfully conduct
significant engineering and design work. Such work includes the design and
manufacture of a pre-production model and the production of approximately 40
similar units for use in the proposed clinical studies. If the clinical studies
establish the efficacy of the NCCD Device, we intend to seek FDA approval of the
NCCD Device. We also plan to file applications for certain foreign and domestic
patents in connection with the NCCD Device. There can be no assurance that any
clinical studies of the NCCD Device will yield successful results or that FDA
approval will be obtained. The Company believes that the cost of clinical
studies and the engineering and design work will be approximately $3,000,000.
Because we do not presently have sufficient funds to complete such tests and
studies, we have sought and will continue to seek financing for such purposes.
There can be no assurance that the Company will be able to obtain such financing
on terms not unfavorable to it, if at all.

As of March 31, 2007, the dollar amount of backlog orders for Sonotron Devices
was not material.

AUREX-3

The Company has developed an electronic device (the "Aurex-3") for the treatment
of Tinnitus. Tinnitus is a human medical condition which manifests itself in a
constant and annoying ringing in the ears. The Aurex-3 uses a probe that
transmits a vibratory and audio signal. In April 2001 United States patent was
issued with respect to the Tinnitus Device and such was assigned to the Company
by Dr. Di Mino. In May 1998, a 510-K Pre-market Notification ("PMN") was filed
by the Company with the FDA and in August 1998, the FDA notified the Company
that the PMN was accepted. Accordingly, we may market the product in the United
States for its intended indication, "[t]he treatment and control of tinnitus."
From August 1998 to November 1999, we finalized manufacturing plans for the
Aurex-3. Sales of the Aurex-3 have not been material. There can be no assurance
that we will receive significant orders for the Aurex-3 or, if such orders are
received, that we will be able to manufacture the Aurex-3 in sufficient
quantities.

NEEDLE EATER

In May 1999, the Company acquired certain assets related to the Needle-Eater, a
patented device used to dispose of used syringes and other medical sharps. The
Company acquired the worldwide rights to the patent covering the technology in
the Needle-Eater product, an inventory of finished units and parts, the rights
to trademarks and information needed to assist it in manufacturing the units.
The Company paid $14,206 to the previous owner of the Needle-Eater, and issued
options to purchase an aggregate of 500,000 shares of our common stock at an
exercise price of $.625 per share, all of which have expired. We also agreed to
pay a consulting fee of $750 per month for 24 months and a royalty of 5% on
gross sales of Needle-Eater products for the life of the patent as well as
certain other compensation. To date, sales of Needle Eater products have not
been material.

COSMETIC AND TOPICAL PRODUCTS

The Company, through its subsidiary, Pegasus, has developed several cosmetic and
topical products. We have not realized any significant revenues from such
products and there can be no assurance that any such products will account for
significant revenues or any profits in the future.

Although we believe that our proposed products can be successfully marketed for
over-the-counter use through one or more entities representing numerous retail
pharmacies and otherwise, there can be no assurance that sales of such products
will be material or that we will be able to derive any profits therefrom.

CUSTOMERS

During our fiscal years ended March 31, 2007 and 2006, sales of chemical
products accounted for approximately 48% and 50% of our operating revenues,
respectively; sales and/or rentals of medical device products accounted for
approximately 52%, and 50% of our operating revenues, respectively; and sales of
our cosmetic and topical dermatological products were not material. No contract
exists with any of our customers that would obligate any customer to continue to
purchase and/or rent products from us.

During the year ended March 31, 2007, four customers accounted for 59% of ADM' s
revenue. During the fiscal year ended March 31, 2006, no one customer accounted
for more than 10% of our revenue. As of March 31, 2007, two customers
represented 53% of our accounts receivable. The loss of these major customers
could have a material impact on our operations and cash flow.

MARKETING AND DISTRIBUTION

A majority of ADM's chemical product sales are distributed to customers directly
from ADM's headquarters. Customers place purchase orders with the Company and
chemical products are then shipped via common carrier truck delivery on an "FOB
shipping point" basis. A portion of the sales are accomplished through
distributors who place purchase orders with ADM for certain quantities of its
chemical products which are shipped by common carrier to their respective
warehouses. These stocking distributors then ship product to the ultimate
customer via common carrier from their inventory of ADM's chemical products.

MANUFACTURER AND SUPPLIERS

MANUFACTURER

ADM manufactures its chemical products and SMI's and Ivivi's medical device
products at its facilities located in Northvale, New Jersey.

ADM, Ivivi and SMI are parties to a manufacturing agreement, pursuant to which
ADM serves as the exclusive manufacturer of all current and future medical,
non-medical electronic and other devices or products to be produced by such
entities. Pursuant to the terms of the manufacturing agreement, for each product
that ADM manufactures for the entity, the entity pays ADM an amount equal to
120% of the sum of (i) the actual, invoiced cost for raw materials, parts,
components or other physical items that are used in the manufacture of the
product and actually purchased for the entity by the Company, if any, plus (ii)
a labor charge based on ADM's standard hourly manufacturing labor rate.

ADM warrants the products it manufactures for SMI and Ivivi against defects in
material and workmanship for a period of 90 days after the completion of
manufacture. After such 90-day period, ADM has agreed to provide repair services
for the products to the entity at its customary hourly repair rate plus the cost
of any parts, components or items necessary to repair the products unless the
entity provides such parts, components or items to ADM.

Under the manufacturing agreement, all inventions, patentable or otherwise,
trade secrets, discoveries, ideas, writings, technology, know-how, improvements
or other advances or findings relating to the entities' products and
technologies shall be and become the exclusive proprietary and confidential
information of such entity or any person to whom such entity may have assigned
rights therein. The Company has no rights in any such proprietary or
confidential information and is prohibited from using or disclosing any of such
proprietary or confidential information for its own benefit or purposes, or for
the benefit or purpose of any other person other than the entity without such
entity's prior written consent. ADM has also agreed to cooperate with each
entity in securing for it any patents, copyrights, trademarks or the like which
it may seek to obtain in connection therewith. If ADM breaches any of the
confidentiality agreements contained in the manufacturing agreement, or if these
agreements are not sufficient to protect the entity's technology or are found to
be unenforceable, the entity's competitors could acquire and use information
that it considers to be our trade secrets and the entity may not be able to
compete effectively.

Since ADM is the exclusive manufacturer of all of SMI's and Ivivi's current and
future products under the manufacturing agreement, if the operations of ADM are
interrupted or if orders or orders of other customers of the Company exceed our
manufacturing capabilities, we may not be able to deliver products on time and
the entities may not be able to deliver their respective products to their
respective customers on time. Under the terms of the manufacturing agreement, if
ADM is unable to perform its obligations thereunder or is otherwise in breach of
any provision thereof, the entities have the right, without penalty, to engage
third parties to manufacture some or all of their products. In addition, if an
entity elects to utilize a third- party manufacturer to supplement the
manufacturing being completed by ADM, such entity has the right to require us to
accept delivery of the products from these third-party manufacturers, finalize
the manufacture of the products to the extent necessary for such entity to
comply with FDA regulations and ensure that the design, testing, control,
documentation and other quality assurance procedures during all aspects of the
manufacturing process have been met.

As the exclusive manufacturer of the medical devices of SMI and Ivivi, ADM is
required to comply with quality requirements, which require manufacturers,
including third-party manufacturers, to follow stringent design, testing,
control, documentation and other quality assurance procedures during all aspects
of the manufacturing process. In addition, our manufacturing facility is
required to be registered as a medical device manufacturing site with the FDA
and is subject to inspection by the FDA. The Company has been registered by the
FDA as a Registered Medical Device Establishment since 1988 allowing it to
manufacture medical devices in accordance with procedures outlined in FDA
regulations, which include quality control and related activities. Such
registration is renewable annually and although we do not believe that the
registration will fail to be renewed by the FDA, there can be no assurance of
such renewal. Our failure to obtain any annual renewal would have a material
adverse effect on the entities if they were not able to secure another
manufacturer of their products.

SUPPLIERS

ADM purchases the raw materials used in the manufacture of its chemical products
from numerous sources. We believe that all necessary raw materials for our
chemical products are readily available and will continue to be so in the
foreseeable future. We have never had, nor do we anticipate experiencing, any
shortages of such materials. The raw materials for chemical products consist
primarily of water, resins, elastomers and catalysts. We generally maintain
sufficient quantities of inventories of our chemical products to meet customer
demands. When orders are received by us for our chemical products, our customers
require immediate shipment thereof. Accordingly, in order to satisfy its
customers' needs, we have maintained an inventory ranging, in dollar amounts,
from 15% to 30% of sales of chemical products in the form of either raw
materials or finished goods.

We purchase the raw materials, parts, components and other items that are
required to manufacture products for SMI and Ivivi. We rely on a limited number
of suppliers for such raw materials, parts, components and other items. Although
there are many suppliers for each of these raw materials, parts, components and
other items, we are dependent on a limited number of suppliers for many of the
significant raw materials and components. We do not have any long-term or
exclusive purchase commitments with any of our suppliers. The failure to
maintain existing relationships with suppliers or to establish new relationships
in the future could also negatively affect our ability to obtain raw materials
and components used in the products in a timely manner. If we are unable to
obtain ample supply of product from our existing suppliers or alternative
sources of supply, wet may be unable to satisfy SMI's and Ivivi's orders which
could reduce our revenues and adversely affect their relationships with their
customers.

RESEARCH AND DEVELOPMENT

During our fiscal years ended March 31, 2007 and 2006, we made no material
expenditures with respect to company-sponsored research and development
activities relating to our chemical business other than a portion of the regular
salaries of our executive officers and certain employees which may be allocated
thereto. During such fiscal years, we did not expend any funds on
customer-sponsored research and development activities with respect thereto.

During our fiscal years ended March 31, 2007 and 2006, other than the regular
compensation paid by us to our executive officers, we did not spend any
appreciable amounts on testing, application, clinical studies and
company-sponsored research and development activities in connection with the
Sonotron Technology and other activities determined in accordance with generally
accepted accounting principles. During each of such years no material amounts
were spent on customer-sponsored research and development activities relating to
the development of new products, services or techniques or the improvement of
any of the foregoing.

During our fiscal years ended March 31, 2007 and 2006, aside from research and
development performed by Ivivi, we made no material expenditures with respect to
company-sponsored research and development activities relating to our medical
device business.

COMPETITION

Our chemical business is highly competitive and substantially all of our
competitors possess greater experience, financial resources, operating history
and marketing capabilities than do we. Although we do not believe that there are
one or more dominant competitors in such industry, there can be no assurance
that we will be able to effectively compete with any or all of our competitors
on the basis of price, service or otherwise. Competitors may be better able to
withstand a change in conditions within the chemical products industry and
throughout the economy as a whole. In addition, current and anticipated future
consolidation among our competitors and customers may cause us to lose market
share as well as put downward pressure on pricing. Furthermore, there is a trend
in the chemical industry toward relocation of manufacturing facilities to
lower-cost regions such as Asia. Such relocation may permit some of our
competitors to lower their costs and improve their competitive position. If we
do not compete successfully, our business, operating margins, financial
condition, cash flows and profitability could be adversely affected.

Our results of operations depend, in part, on our ability to expand our chemical
product offerings. We are committed to remaining a competitive producer and
believe that our portfolio of new or re-engineered products is strong. However,
we may not be able to continue to develop new products, re-engineer existing
products successfully or bring them to market in a timely manner. While we
believe that the products, pricing and services we offer customers are
competitive, we may not be able to continue to attract and retain customers to
which to sell our chemical products.

INSURANCE

The Company may be exposed to potential product liability claims by those who
use our products. Therefore, we maintain a general liability insurance policy,
which includes aggregate product liability coverage of $2,000,000 for certain of
our products. The Company does not have product liability coverage for its
medical device products. We believe that our present insurance coverage is
adequate for the types of products currently marketed. There can be no
assurance, however, that such insurance will be sufficient to cover potential
claims or that the present level of coverage will be available in the future at
a reasonable cost.

EMPLOYEES

As of June 19, 2007, we had an aggregate of 16 employees. As of such date, we
had four salaried employees in executive or managerial positions.

RECENT DEVELOPMENTS

INITIAL PUBLIC OFFERING OF IVIVI

The Company's former majority owned subsidiary, Ivivi Technologies, Inc.
("Ivivi"), filed a Registration Statement with the Securities and Exchange
Commission ("SEC") for the initial public offering of a portion of its common
stock. The Registration Statement was declared effective by the SEC on October
18, 2006. As a result of the consummation of Ivivi's initial public offering,
the Company no longer owns a majority of the outstanding common stock of Ivivi
and does not control Ivivi's operations. The Company owns approximately 34% of
Ivivi's outstanding common stock and can exert significant influence based upon
the percentage of Ivivi's stock owned by it. As a result, the Company's
investment in Ivivi subsequent to October 18, 2006 is reported under the equity
method of accounting, whereby it recognizes its share of Ivivi's earnings or
losses as they are incurred.

RISK FACTORS

An investment in our stock involves a high degree of risk. You should carefully
consider the following information, together with other information in this
annual report, before buying shares of our stock. If any of the following risks
or uncertainties occur, our business, financial condition and results of
operations could be materially and adversely affected, the trading price of our
stock could decline and you may lose all or a part of the money you paid to buy
our stock.

RISKS RELATING TO OUR CHEMICAL BUSINESS

NEW ENVIRONMENTAL OR OTHER REGULATIONS COULD INCREASE THE COMPANY'S OPERATING
COSTS.

Like other manufacturers, the Company is subject to a broad range of Federal,
state and local laws and requirements, including those governing discharges in
the air and water, the handling and disposal of solid and hazardous substances
and wastes, the remediation of contamination associated with the release of
hazardous substances, work place safety and equal employment opportunities. We
have made expenditures to comply with such laws and requirements. We believe,
based on information currently available to management, that we are in
compliance with applicable environmental and other legal requirements and that
we will not require material capital expenditures to maintain compliance with
such requirements in the foreseeable future. Governmental authorities have the
power to enforce compliance with such laws and regulations, and violators may be
subject to penalties, injunctions or both. Third parties may also have the right
to enforce compliance with such laws and regulations. As ADM develops new
formulations for its chemical products, those products may become subject to
additional review and approval requirements governing the sale and use of its
products. Although our manufacturing processes do not currently result in the
generation of hazardous wastes, this may not always be the case and material
costs or liabilities may be incurred by us in the future as a result of the
manufacturing operations. It is also possible that other developments, such as
additional or increasingly strict requirements of laws and regulations of these
types, or enforcement policies thereunder, could significantly increase our
costs of operations.

BECAUSE WE USE VARIOUS MATERIALS AND SUBSTANCES IN MANUFACTURING OUR CHEMICAL
PRODUCTS, OUR PRODUCTION FACILITIES ARE SUBJECT TO OPERATING HAZARDS THAT COULD
CAUSE PERSONAL INJURY AND LOSS OF LIFE, SEVERE DAMAGE TO, OR DESTRUCTION OF,
PROPERTY AND EQUIPMENT AND ENVIRONMENTAL CONTAMINATION.

We are dependent on the continued operation of our production and distribution
facility. This facility is subject to hazards associated with the manufacture,
handling, storage and transportation of chemical materials and products,
including natural disasters, mechanical failure, unscheduled downtime, labor
difficulties, transportation interruptions, and environmental hazards, such as
spills, discharges or releases of toxic or hazardous substances and remediation
complications. These hazards can cause personal injury and loss of life, severe
damage to, or destruction of, property and equipment and environmental
contamination and other environmental damage and could have a material adverse
effect on our financial condition. In addition, due to the nature of our
business operations, we could become subject to scrutiny from environmental
action groups.

WE RELY SIGNIFICANTLY ON RAW MATERIALS IN THE PRODUCTION OF OUR CHEMICAL
PRODUCTS AND FLUCTUATIONS IN COSTS OF SUCH RAW MATERIALS WOULD INCREASE OUR
OPERATING EXPENSES.

Our manufacturing operations with respect to our chemical products depend upon
obtaining adequate supplies of our raw materials on a timely basis. The loss of
a key source of supply or a delay in shipments could have an adverse effect on
our business. We are exposed to price risks associated with these raw material
purchases. The availability and prices of raw materials may be subject to
curtailment or change due to, among other things, new laws or regulations,
suppliers' allocations to other purchasers, interruptions in production by
suppliers, changes in exchange rates, cost components of raw materials and
worldwide price levels. Our results of operations could be adversely affected if
we are unable to obtain adequate supplies of raw materials in a timely manner or
if the costs of raw materials increased significantly.

WE FACE COMPETITION FROM OTHER CHEMICAL COMPANIES, WHICH COULD ADVERSELY AFFECT
OUR REVENUE AND FINANCIAL CONDITION.

We actively compete with companies producing the same or similar products and,
in some instances, with companies producing different products designed for the
same uses. We encounter competition in price, delivery, service, performance,
product innovation and product recognition and quality, depending on the product
involved. For some of our products, our competitors are larger and have greater
financial resources. As a result, these competitors may be better able to
withstand a change in conditions within the industries in which we operate, a
change in the prices of raw materials or a change in the economy as a whole. Our
competitors can be expected to continue to develop and introduce new and
enhanced products, which could cause a decline in market acceptance of our
chemical products. Current and future consolidation among our competitors and
customers may also cause a loss of market share as well as put downward pressure
on pricing. Our competitors could cause a reduction in the prices for some of
our chemical products as a result of intensified price competition. Competitive
pressures can also result in the loss of major customers. If we cannot compete
successfully, our business, financial condition and results of operations could
be adversely affected.

WE FACE COMPETITION FROM OTHER CHEMICAL COMPANIES, WHICH COULD FORCE US TO LOWER
OUR PRICES THEREBY ADVERSELY AFFECTING OUR OPERATING MARGINS, FINANCIAL
CONDITION, CASH FLOWS AND PROFITABILITY.

The markets in which we operate are highly competitive, and this competition
could harm our business, results of operations, cash flow and financial
condition. Our competitors include major international producers as well as
smaller regional competitors. We believe that a significant competitive factor
for our products is selling price. We could be subject to adverse results caused
by our competitors' pricing decisions. In addition, current and anticipated
future consolidation among our competitors and customers may cause us to lose
market share as well as put downward pressure on pricing. Furthermore, there is
a trend in the chemical industry toward relocation of manufacturing facilities
to lower-cost regions such as Asia. Such relocation may permit some of our
competitors to lower their costs and improve their competitive position. Some of
our competitors are larger, have greater financial resources and have less debt
than we do. As a result, those competitors may be better able to withstand a
change in conditions within our industry and throughout the economy as a whole.
If we do not compete successfully, our business, operating margins, financial
condition, cash flows and profitability could be adversely affected.

FAILURE TO DEVELOP NEW CHEMICAL PRODUCTS AND/OR IMPROVE OUR EXISTING PRODUCTS
WILL MAKE US LESS COMPETITIVE.

Our results of operations depend, in part, on our ability to expand our chemical
product offerings. We are committed to remaining a competitive producer and
believe that our portfolio of new or re-engineered products is strong. However,
we may not be able to continue to develop new products, re-engineer our existing
products successfully or bring them to market in a timely manner. While we
believe that the products, pricing and services we offer customers are
competitive, we may not be able to continue to attract and retain customers to
which to sell our chemical products.

FAILURE TO MAKE CONTINUED IMPROVEMENTS IN OUR PRODUCTIVITY COULD HURT OUR
COMPETITIVE POSITION.

In order to obtain and maintain a competitive position, we believe that we must
continue to make improvements in our productivity. When we invest in new
technologies or processes, we face risks related to cost overruns and
unanticipated technical difficulties. Our inability to anticipate, respond to or
utilize changing technologies could have a material adverse effect on our
business and our results of operations.

CHANGES IN OUR CUSTOMERS' PRODUCTS COULD REDUCE THE DEMAND FOR OUR CHEMICAL
PRODUCTS, WHICH MAY DECREASE OUR NET SALES AND OPERATING MARGINS.

Our chemical products are used for a broad range of applications by our
customers. Changes, including technological changes, in our customers' products
or processes may make our chemical products unnecessary, which would reduce the
demand for those products. Other customers may find alternative materials or
processes that no longer require our products. If the demand for our chemical
products is reduced, our net sales and operating margins may be reduced as well.

WE HAVE FEW PROPRIETARY RIGHTS WITH RESPECT TO OUR CHEMICAL PRODUCTS, THE LACK
OF WHICH MAY MAKE IT EASIER FOR OUR COMPETITORS TO COMPETE AGAINST US.

None of our chemical products are protected by patents. We do attempt to protect
the names of some of our chemical products through trademarks and some of our
other limited proprietary property through trade secret, nondisclosure and
confidentiality measures; however, such protections may not preclude competitors
from developing similar technologies.

RISKS RELATING TO OUR MEDICAL DEVICE BUSINESS

SMI AND IVIVI OUTSOURCE THE MANUFACTURING OF THEIR PRODUCTS TO US AND IF OUR
OPERATIONS ARE INTERRUPTED OR IF OUR ORDERS EXCEED OUR MANUFACTURING
CAPABILITIES, THEY MAY NOT BE ABLE TO DELIVER THEIR PRODUCTS TO CUSTOMERS ON
TIME.

Pursuant to a manufacturing agreement between SMI, Ivivi and us, we are the
exclusive manufacturer of the products of SMI and Ivivi. We operate a single
facility and have limited capacity that may be inadequate if SMI's or Ivivi's
customers place orders for unexpectedly large quantities of their products, or
if our other customers place large orders of products, which could limit our
ability to produce the products of SMI or Ivivi. In addition, if our operations
were halted or restricted, even temporarily, or we are unable to fulfill large
orders, SMI and Ivivi could experience business interruption, increased costs,
damage to their reputations and loss of their customers. Although SMI and Ivivi
have the right to utilize other manufacturers if we are unable to perform under
our agreement, manufacturers of their products need to be licensed with the FDA,
and identifying and qualifying a new manufacturer to replace us as the
manufacturer of their products could take several months during which time, they
would likely lose customers and our revenues could be materially delayed and/or
reduced. In addition, our failure to produce such products could result in
claims against us. See "Item 1. Business - Manufacturer and Suppliers."

WE DEPEND ON A LIMITED NUMBER OF SUPPLIERS FOR THE COMPONENTS AND RAW MATERIALS
USED IN OUR PRODUCTS AND THE PRODUCTS MANUFACTURED FOR THIRD PARTIES, INCLUDING
SMI AND IVIVI, AND ANY INTERRUPTION IN THE AVAILABILITY OF THESE COMPONENTS AND
RAW MATERIALS COULD REDUCE OUR REVENUE.

We rely on a limited number of suppliers for the components and raw materials
used in the products that we manufacture for others, including SMI and Ivivi.
Although there are many suppliers for each of their component parts and raw
materials, we are dependent on a single or limited number of suppliers for many
of the significant components and raw materials. This reliance involves a number
of significant risks, including:

o unavailability of materials and interruptions in delivery of components and
raw materials from suppliers;
o manufacturing delays caused by such unavailability or interruptions in
delivery; and
o fluctuations in the quality and the price of components and raw materials.

We do not have any long-term or exclusive purchase commitments with any of our
suppliers. Failure to maintain existing relationships with suppliers or to
establish new relationships in the future could also negatively affect our
ability to obtain components and raw materials used in these products in a
timely manner. If we are unable to obtain ample supply of product from existing
suppliers or alternative sources of supply, we may be unable to satisfy our
customers' orders which could reduce our revenues and adversely affect our
relationships with these customers. See "Item 1. Business - Manufacturers and
Suppliers."

OUR ABILITY TO EXECUTE OUR BUSINESS PLAN DEPENDS ON THE SCOPE OF OUR
INTELLECTUAL PROPERTY RIGHTS AND NOT INFRINGING THE INTELLECTUAL PROPERTY RIGHTS
OF OTHERS. THE VALIDITY, ENFORCEABILITY AND COMMERCIAL VALUE OF THESE RIGHTS ARE
HIGHLY UNCERTAIN.

Our ability to compete effectively with other companies is materially dependent
upon the proprietary nature of our technologies. We rely primarily on patents
and trade secrets to protect our medical device technologies.

Third parties may seek to challenge, invalidate, circumvent or render
unenforceable any patents or proprietary rights owned by us based on, among
other things:

o subsequently discovered prior art;
o lack of entitlement to the priority of an earlier, related application; or
o failure to comply with the written description, best mode, enablement or
other applicable requirements.

In general, the patent position of medical device companies is highly uncertain,
still evolving and involves complex legal, scientific and factual questions. We
are at risk that:

o other patents may be granted with respect to the patent applications filed
by us; and
o any patents issued to us may not provide commercial benefit to us or will
be infringed, invalidated or circumvented by others.

The United States Patent and Trademark Office currently has a significant
backlog of patent applications, and the approval or rejection of patents may
take several years. Prior to actual issuance, the contents of United States
patent applications are generally published 18 months after filing. Once issued,
such a patent would constitute prior art from its filing date, which might
predate the date of a patent application on which we rely. Conceivably, the
issuance of such a prior art patent, or the discovery of "prior art" of which we
are currently unaware, could invalidate a patent of ours or prevent
commercialization of a product claimed thereby.

Although we generally conduct a cursory review of issued patents prior to
engaging in research or development activities, we may be required to obtain a
license from others to commercialize any of our new products under development.
If patents that cover our existing or new products are issued to other
companies, there can be no assurance that any necessary license could be
obtained on favorable terms or at all.

There can be no assurance that we will not be required to resort to litigation
to protect our patented technologies and other proprietary rights or that we
will not be the subject of additional patent litigation to defend our existing
and proposed products and processes against claims of patent infringement or any
other intellectual property claims. Such litigation could result in substantial
costs, diversion of management's attention, and diversion of our resources.

We also have applied for patent protection in several foreign countries. Because
of the differences in patent laws and laws concerning proprietary rights between
the United States and foreign countries, the extent of protection provided by
patents and proprietary rights granted to us by the United States may differ
from the protection provided by patents and proprietary rights granted to us by
foreign countries.

We attempt to protect our trade secrets, including the processes, concepts,
ideas and documentation associated with our technologies, through the use of
confidentiality agreements and non-competition agreements with our current
employees and with other parties to whom we have divulged such trade secrets. If
our employees or other parties breach our confidentiality agreements and
non-competition agreements or if these agreements are not sufficient to protect
our technology or are found to be unenforceable, our competitors could acquire
and use information that we consider to be our trade secrets and we may not be
able to compete effectively. Most of our competitors have substantially greater
financial, marketing, technical and manufacturing resources than we have and we
may not be profitable if our competitors are also able to take advantage of our
trade secrets.

We may decide for business reasons to retain certain knowledge that we consider
proprietary as confidential and elect to protect such information as a trade
secret, as business confidential information or as know-how. In that event, we
must rely upon trade secrets, know-how, confidentiality and non-disclosure
agreements and continuing technological innovation to maintain our competitive
position. There can be no assurance that others will not independently develop
substantially equivalent proprietary information or otherwise gain access to or
disclose such information.

IF THE FDA OR OTHER STATE OR FOREIGN AGENCIES IMPOSE REGULATIONS THAT AFFECT OUR
MEDICAL DEVICE PRODUCTS, OUR DEVELOPMENT, MANUFACTURING AND MARKETING COSTS WILL
BE INCREASED.

The testing and production of medical devices are subject to regulation by the
FDA as devices under the 1976 Medical Device Amendments to the Federal Food,
Drug and Cosmetic Act. In the United States, medical devices must be:

o manufactured in registered and quality approved establishments by the FDA; and
o produced in accordance with the FDA Quality System Regulation ("QSR") for
medical devices.

As a result we, as the manufacturer of Ivivi's and other parties' devices, are
required to comply with QSR requirements and if we fail to comply with these
requirements, Ivivi and other third parties will need to find another company to
manufacture its devices. In addition, the Company's manufacturing facility:

o is required to be registered as a medical device manufacturing site with the
FDA; and
o is subject to inspection by the FDA.

The FDA can impose civil and criminal enforcement actions and other penalties on
us if we fail to comply with stringent FDA regulations.

Medical device manufacturing facilities must maintain records, which are
available for FDA inspectors documenting that the appropriate manufacturing
procedures were followed. The FDA has authority to conduct inspections of our
facility, as well as the facility of our manufacturer. Labeling and promotional
activities are also subject to scrutiny by the FDA and, in certain instances, by
the Federal Trade Commission. Any failure by us or the manufacturer of our
products to take satisfactory corrective action in response to an adverse
inspection or to comply with applicable FDA regulations could result in
enforcement action against us or our manufacturer, including a public warning
letter, a shutdown of manufacturing operations, a recall of our products, civil
or criminal penalties or other sanctions. From time to time, the FDA may modify
such requirements, imposing additional or different requirements which may
require us to alter our business methods which could result in increased
expenses. RISKS RELATED TO OUR COMPANY

WE HAVE A HISTORY OF SIGNIFICANT AND CONTINUED OPERATING LOSSES AND A
SUBSTANTIAL ACCUMULATED EARNINGS DEFICIT AND WE MAY CONTINUE TO INCUR
SIGNIFICANT LOSSES.

We have incurred substantial net losses of approximately $8.1 million and $7.1
million for the fiscal years ended March 31, 2007 and 2006, respectively. At
March 31, 2007, we had an accumulated deficit of $24.7 million. We expect to
incur additional operating losses, as well as negative cash flow from
operations, for the foreseeable future.

WE MAY BE EXPOSED TO PRODUCT LIABILITY CLAIMS FOR WHICH OUR INSURANCE MAY BE
INADEQUATE.

Our business exposes us to potential product liability risks, which are inherent
in the testing, manufacturing and marketing of chemical products and medical
devices. Although we maintain a general liability insurance policy, which
includes aggregate product liability coverage of $2,000,000 for certain of our
products, there can be no assurance, that such insurance will be sufficient to
cover potential claims or that the present level of coverage will be available
in the future at a reasonable cost.

We do not have product liability coverage for our medical device products. While
we are not aware of side-effects resulting from the use of any of our products,
there may be unknown long-term effects of their use that may result in product
liability claims in the future. Further, we cannot provide any assurance that:

o our insurance will provide adequate coverage against potential liabilities
if a product causes harm or fails to perform as promised;
o adequate product liability insurance will continue to be available in the
future; or
o our insurance can be maintained on acceptable terms.

The obligation to pay any product liability claim in excess of whatever
insurance we are able to obtain would increase our expenses and could greatly
reduce our assets. See "Item 1. Business - Insurance."

THE LOSS OF ANY OF OUR EXECUTIVE OFFICERS OR KEY PERSONNEL MAY ADVERSELY AFFECT
OUR OPERATIONS AND OUR ABILITY TO EXECUTE OUR GROWTH STRATEGY.

Our ability to execute our business plan depends upon the continued services of
Andre' DiMino, our President and Chief Executive Officer, as well as our key
technology, marketing, sales and support personnel. We do not have employment or
consulting agreements containing non-compete agreements with Mr. DiMino and
certain of our key personnel, and we may not be able to retain these
individuals. If we lost the services of Mr. DiMino or our key personnel, our
business may be adversely affected and our stock price may decline. In addition,
our ability to execute our business plan is dependent on our ability to attract
and retain additional highly skilled personnel.

Andre' DiMino, our President and Chief Executive Officer, also serves as Vice
Chairman and Co-Chief Executive Officer of Ivivi. While Mr. DiMino devotes a
substantial portion of his work-time toward ADM Tronics, the remaining amount of
his work-time may be devoted elsewhere, including at Ivivi. As a result, Mr.
DiMino's attention to our business and operations may be diverted by his
obligations elsewhere, including at Ivivi, and we may not be able to have access
to Mr. DiMino as needed by us.

OUR EXECUTIVE OFFICERS AND DIRECTORS AND ENTITIES AFFILIATED WITH THEM HAVE
SUBSTANTIAL CONTROL OVER US, WHICH COULD DELAY OR PREVENT A CHANGE IN OUR
CORPORATE CONTROL FAVORED BY OUR OTHER SHAREHOLDERS.

Our executive officers and directors and entities affiliated with them may be
deemed to beneficially own, in the aggregate, approximately 51.7% of our
outstanding common stock. In particular, Mr. DiMino, together with members of
the DiMino family, may be deemed to beneficially own approximately 38.7% of the
outstanding shares of our common stock. The interests of our current officer and
director shareholders may differ from the interests of our other shareholders.
As a result, the current officers and directors would have the ability to
exercise substantial control over all corporate actions requiring shareholder
approval, irrespective of how our other shareholders may vote, including the
following actions:

o the election of directors;
o adoption of stock option plans;
o the amendment of charter documents; or
o the approval of certain mergers and other significant corporate
transactions, including a sale of substantially all of our assets.

PENNY STOCK REGULATIONS MAY IMPOSE CERTAIN RESTRICTIONS ON MARKETABILITY OF OUR
SECURITIES.

Our common stock is subject to penny stock rules, which may discourage
broker-dealers from effecting transactions in our common stock or affect their
ability to sell our securities. As a result, purchasers and current holders of
our securities could find it more difficult to sell their securities. Our stock
is traded on the OTC Bulletin Board. Trading volume of OTC Bulletin Board stocks
have been historically lower and more volatile then stocks traded on an exchange
or the Nasdaq Stock Market. In addition we may be subject to rules of the
Securities and Exchange Commission that impose additional requirements on
broker-dealers when selling penny stocks to persons other than established
customers and accredited investors. In general, an accredited investor is a
person with assets in excess of $1,000,000 or annual income exceeding $200,000
individually, or $300,000 together with his or her spouse. The relevant
Securities Exchange Commission regulations generally define penny stocks to
include any equity security not traded on an exchange or the Nasdaq Stock Market
with a market price (as defined in the regulations) of less than $5 per share.
Under the penny stock regulations, a broker-dealer must make a special
suitability determination as to the purchaser and must have the purchaser's
prior written consent to the transaction. Prior to any transaction in a penny
stock covered by these rules, a broker-dealer must deliver a disclosure schedule
about the penny stock market prepared by the Securities Exchange Commission.
Broker-dealers must also make disclosure concerning commissions payable to both
the broker-dealer and any registered representative and provide current
quotations for the securities. Finally, broker-dealers are required to send
monthly statements disclosing recent price information for the penny stock held
in an account and information on the limited market in penny stocks.

OUR STOCK PRICE, LIKE THAT OF MANY SMALL COMPANIES, HAS BEEN AND MAY CONTINUE TO
BE VOLATILE.

We expect that the market price of our common stock will fluctuate as a result
of variations in our quarterly operating results and other factors beyond our
control. These fluctuations may be exaggerated if the trading volume of our
common stock is low.

WE HAVE NOT PAID DIVIDENDS IN THE PAST AND DO NOT EXPECT TO PAY DIVIDENDS IN THE
FUTURE, AND ANY RETURN ON INVESTMENT MAY BE LIMITED TO THE VALUE OF YOUR STOCK.

We have never paid any cash dividends on our common stock and do not anticipate
paying any cash dividends on our common stock in the foreseeable future and any
return on investment may be limited to the value of your stock. We plan to
retain any future earnings to finance growth.

ITEM 2. DESCRIPTION OF PROPERTY

We are headquartered at 224-S Pegasus Avenue, Northvale, New Jersey. We lease
approximately 16,000 square feet of combined office and warehouse space from an
unaffiliated third party with a monthly rent of $7,200. The lease expires in
June, 2008. The Company, its subsidiaries and Ivivi utilize portions of the
leased space. Pursuant to a management services agreement to which the Company,
its subsidiaries and Ivivi are parties, the Company determines, on a monthly
basis, the portion of space utilized by each entity during such month, and each
entity reimburses the Company for their portion of the lease costs, real
property taxes and related costs.

We believe that our existing facilities are suitable as office, storage and
laboratory space, and are adequate to meet our current needs. We further believe
that such properties are adequately covered by insurance.

We do not own any real property for use in our operations or otherwise.

ITEM 3. LEGAL PROCEEDINGS

We are not a party to, and none of our property is the subject of, any pending
legal proceedings other than routine litigation that is incidental to our
business. To our knowledge, no governmental authority is contemplating any such
proceedings.

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

None.

PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

MARKET INFORMATION

The Company's common stock trades on the OTC-Bulletin Board under the symbol
"ADMT." For the periods indicated, the following table sets forth the high and
low bid quotations for the Company's common stock, as reported by the National
Quotation Bureau, Inc. The quotations represent inter-dealer quotations without
retail mark-up, mark-down or commission and may not necessarily represent actual
transactions.

Quarter Ended High Bid Low Bid

Fiscal 2006
June 30, 2005 0.29 0.28
September 30, 2005 0.33 0.32
December 31, 2005 0.25 0.25
March 31, 2006 0.27 0.27

Fiscal 2007
June 30, 2006 0.43 0.23
September 30, 2006 0.40 0.20
December 31, 2006 0.50 0.23
March 31, 2007 0.30 0.18

HOLDERS OF RECORD

As of March 31, 2007, 53,882,037 shares of the Company's common stock were
issued and outstanding. On March 31, 2007 there were 1,381 shareholders of
record.

DIVIDENDS

The Company has never paid any cash dividends on its common stock and has no
intention of paying cash dividends in the foreseeable future. The Company
intends to retain all earnings, if any, for use in the operation and expansion
of its business.

EQUITY COMPENSATION PLAN

As of June 19, 2007, we do not have any compensation plans (including individual
compensation arrangements) under which our equity securities were authorized for
issuance.

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

FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-KSB contains forward-looking statements within the
meaning of the "safe harbor" provisions under section 21E of the Securities and
Exchange Act of 1934 and the Private Securities Litigation Act of 1995. We use
forward-looking statements in its description of our plans and objectives for
future operations and assumptions underlying these plans and objectives.
Forward-looking terminology includes the words "may", "expects", "believes",
"anticipates", "intends", "forecasts", "projects", or similar terms, variations
of such terms or the negative of such terms. These forward-looking statements
are based on management's current expectations and are subject to factors and
uncertainties which could cause actual results to differ materially from those
described in such forward-looking statements. We expressly disclaim any
obligation or undertaking to release publicly any updates or revisions to any
forward-looking statements contained in this Form 10-KSB to reflect any change
in our expectations or any changes in events, conditions or circumstances on
which any forward-looking statement is based. Factors which could cause such
results to differ materially from those described in the forward-looking
statements include those set forth under "Item. 1 Description of Business - Risk
Factors" and elsewhere in, or incorporated by reference into this Annual Report
on Form 10-KSB.

CRITICAL ACCOUNTING POLICIES

REVENUE RECOGNITION:

Sales revenues from our chemical products are recognized when products are
shipped to end users. Shipments to distributors are recognized as sales where no
right of return exists.

We recognize medical device revenue primarily from the rental and, to a lesser
extent, from the sale of our medical devices. Revenue from the rental and sales
of medical devices was primarily generated by our former subsidiary Ivivi. The
Ivivi operations have been consolidated in these financial statements through
October 18, 2006.

After October 18, 2006, we recognize revenue from the sale of the medical
devices we manufacture for Ivivi upon completion of the manufacturing process.

Rental revenue from medical devices, resulting from the Ivivi operations, has
been recognized as earned on either a monthly or pay-per- use basis in
accordance with individual customer agreements.

Sales of medical devices are recognized when our products are shipped to end
users including medical facilities and distributors. Our products are
principally shipped on a "freight collect" basis. Shipping and handling charges
and costs are immaterial. We have no post shipment obligations and sales returns
have been immaterial.

USE OF ESTIMATES:

Our discussion and analysis of our financial condition and results of operations
are based upon our financial statements, which have been prepared in accordance
with accounting principles generally accepted in the United States of America.
The preparation of these consolidated financial statements requires us to make
estimates and judgments that affect the reported amounts of assets, liabilities,
revenues and expenses, and related disclosures of contingent assets and
liabilities. On an ongoing basis, we evaluate our estimates, including those
related to reserves, deferred tax assets and valuation allowance, impairment of
long-lived assets, fair value of equity instruments issued to consultants for
services and fair value of equity instruments issued to others. We base our
estimates on historical experience and on various other assumptions that we
believe to be reasonable under the circumstances, the results of which form the
basis for making judgments about the carrying value of assets and liabilities
that are not readily apparent from other sources. Actual results may differ from
these estimates under different assumptions or conditions; however, we believe
that our estimates, including those for the above- described items, are
reasonable.

RECENT ACCOUNTING PRONOUNCEMENTS

On July 13, 2006, FASB released its final interpretation on uncertain tax
positions, FIN 48, "Account for Uncertainty in Income Taxes." FIN 48 addresses
the recognition and measurement of uncertain income tax positions using a
"more-likely-than-not" threshold and introduces a number of new disclosure
requirements. The guidance will become effective as of the beginning of a
company's fiscal year beginning after December 15, 2006, for both public and
non-public companies. We believe this new pronouncement will have an immaterial
impact on our financial statements in future periods.

In September 2006, FASB issued Statement of Financial Accounting Standards No.
157 ("FAS 157"), Fair Value Measurements, which defines fair value, establishes
a framework for measuring fair value in generally accepted accounting principles
("GAAP"), and expands disclosures about fair value measurements. FAS 157 applies
under other accounting pronouncements that require or permit fair value
measurements. Prior to FAS 157, there were different definitions of fair value
and limited guidance for applying those definitions in GAAP. Moreover, that
guidance was dispersed among the many accounting pronouncements that require
fair value measurements. Differences in that guidance created inconsistencies
that added to the complexity in applying GAAP. The changes to current practice
resulting from the application of FAS 157 relate to the definition of fair
value, the methods used to measure fair value, and the expanded disclosures
about fair value measurements. FAS 157 is effective for financial statements
issued for fiscal years beginning after November 15, 2007, and interim periods
within those fiscal years. We do not expect the adoption of FAS 157 to have an
effect on our financial statements.

In September 2006, the staff of the Securities and Exchange Commission issued
Staff Accounting Bulletin No. 108 ("SAB 108") which provides interpretive
guidance on how the effects of the carryover or reversal of prior year
misstatements should be considered in quantifying a current year misstatement.
SAB 108 becomes effective in fiscal 2007. We do not expect the adoption of FAS
157 to have an effect on our financial statements.

In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for
Financial Assets and Financial Liabilities." SFAS 159 permits entities to choose
to measure many financial instruments, and certain other items, at fair value.
SFAS 159 applies to reporting periods beginning after November 15, 2007. The
adoption of SFAS 159 is not expected to have a material impact on our financial
condition or results of operations.

BUSINESS OVERVIEW

ADM is a corporation that was organized under the laws of the State of Delaware
on November 24, 1969. During the years ended March 31, 2007 and 2006, our
operations were conducted through ADM itself and its subsidiaries, Ivivi
Technologies, Inc. (through October 18, 2006), Pegasus Laboratories, Inc. and
Sonotron Medical Systems, Inc. Ivivi has been deconsolidated as of October 18,
2006 upon the consummation of Ivivi's initial public offering, as we no longer
own a majority of the outstanding common stock of Ivivi and do not control
Ivivi's operations, but can exert significant influence based on the percentage
of Ivivi's stock owned by us. As a result, our investment in Ivivi subsequent to
October 18, 2006 is reported under the equity method of accounting.

We are a technology-based developer and manufacturer of diversified lines of
products in the following three areas: (1) environmentally safe chemical
products for industrial use, (2) therapeutic non-invasive electronic medical
devices and (3) cosmetic and topical dermatological products. We have
historically derived most of our revenues from the development, manufacture and
sale of chemical products, and, to a lesser extent, from our therapeutic
non-invasive electronic medical devices and topical dermatological products.
However, during the nine months ended December 31, 2006, we derived an increased
amount of our revenue from the sale and rental of our therapeutic non-invasive
medical devices, through Ivivi. With the consummation of Ivivi's IPO, our
continuing revenues will once again be derived primarily from the development,
manufacture and sale of chemical products, and, to a lesser extent, from our
therapeutic non- invasive electronic medical devices and topical dermatological
products. Our current medical segment includes our Sonotron subsidiary.

RESULTS OF OPERATIONS FOR THE YEAR ENDED MARCH 31, 2007 AS COMPARED TO MARCH 31,
2006

REVENUES

We have included the operations of our Ivivi subsidiary in our consolidated
results of operations through October 18, 2006. For the years ended March 31,
2007 and 2006, revenues from such operations were $615,307 and $786,512,
respectively.

Revenues excluding revenue generated by Ivivi's operations were $922,553 for the
year ended March 31, 2007 as compared to $937,757 for the year ended March 31,
2006, a decrease of $15,204, or 1.6%. The decrease resulted from an overall
reduction in sales volume as a result of the significant time commitment related
to the completion of Ivivi's IPO and the successful negotiation and execution of
Ivivi's agreement with Allergan. Gross profit was $508,647 and $451,981 for the
years ended March 31, 2007 and 2006, respectively. The primary reason for the
increase in gross profit during the year ended March 31, 2007 was an inventory
write down during the year ended March 31, 2006, with no comparable item in
2007.

INTEREST AND FINANCING COSTS

Net interest and financing costs are primarily related to Ivivi debt and consist
of interest expense and accrued penalties and amortization of discount on the
convertible notes issued in Ivivi private placements partially offset by
interest earned from amounts invested in money market funds. We also recorded
changes in the fair value of our derivative instruments, all related to the
Ivivi private placements.

NET LOSS

We have included the operations of our Ivivi subsidiary in our consolidated
results of operations through October 18, 2006. For the years ended March 31,
2007 and 2006, net loss from the Ivivi operations was $6,315,624 and $6,902,965,
respectively.

Net loss excluding Ivivi's operations for the year ended March 31, 2007 was
$1,850,262 compared to a net loss for the year ended March 31, 2006 of $268,165.
Selling, general and administrative expenses increased by $455,103, or 51%, from
$889,964 to $1,345,067, mainly due to a $319,500 increase in consulting and
professional fees and employee stock based compensation expense of $276,201
during the year ended March 31, 2007, with no such expense in the comparable
period. We also recorded an equity method investment loss of $1,069,563 for the
year ended March 31, 2007 from our investment in Ivivi. Interest income
increased $45,070, to $55,897 for the year ended March 31, 2007 from $10,827 for
the year ended March 31, 2006, due to increased funds invested in a money market
account.

LIQUIDITY AND CAPITAL RESOURCES

At March 31, 2007, we had cash and equivalents of $2,498,276 as compared to
$982,670 at March 31, 2006. The increase was primarily the result of the payment
by Ivivi of approximately $2.6 million representing the balance due from Ivivi
for product manufacturing and allocations of personnel, professional services,
rent, utilities, insurance and office support services provided to Ivivi for the
period from March 1989 to October 2006. These proceeds will be used for
increased administrative and marketing costs in order to attempt to increase our
revenue. Additionally, as a result of the consummation of Ivivi's initial public
offering, we no longer have debt outstanding or any related warrant obligations.
This debt, which amounted to approximately $8.1 million, was converted
automatically into shares of Ivivi's common stock on the initial public offering
date. The market value of our investment in Ivivi at March 31, 2007 was
$13,487,500. However, our common shares of Ivivi have not been registered with
the SEC and are subject to restriction as a result of securities laws and a
lock-up agreement for 12 months from Ivivi's IPO that has been executed by us.

OPERATING ACTIVITIES

Net cash used by operating activities was $672,721 for the year ended March 31,
2007 as compared to net cash used by operating activities of $3,719,371 for the
year ended March 31, 2006. The use of cash during the year ended March 31, 2007
was primarily due to a net loss of $8,165,886, related mostly to Ivivi's
operations, partially offset by non cash charges for the amortization of loan
costs and amortization of discount of $1,692,354 on the convertible notes issued
in the private placements, stock based compensation of $1,779,913, equity based
penalty expense of $1,355,837, equity investment loss of $1,069,563 and a change
in fair value of derivative liabilities of $196,682, and increases in accounts
payable and accrued expenses of $1,331,569.

The use of cash during the year ended March 31, 2006 was primarily due to a net
loss of $7,171,130 related mostly to Ivivi's operations, partially offset by non
cash charges for the amortization of loan costs and amortization of discount of
$705,780 on the convertible notes issued in the private placements, stock based
compensation of $705,900, change in fair value of derivative liabilities of
$290,349 and equity based penalty expense of $788,107. In addition, we recorded
an increase in accounts payable of $751,564.

INVESTING ACTIVITIES

For the year ended March 31, 2007, cash used in investing activities was
$93,373. Of this amount, $25,890 was used for the purchase of office equipment
and $67,483 was retained by Ivivi after its IPO. For the year ended March 31,
2006, $22,320 was used for the purchase of equipment.

FINANCING ACTIVITIES

During the year ended March 31, 2007, we paid $571,291 for deferred costs
related to the private placements as compared to $183,062 during the year ended
March 31, 2006. During the years ended March 31, 2007 and 2006, Ivivi had net
proceeds from notes payable of $245,725 and $1,895,792, respectively. During
year ended March 31, 2007, we received repayments of advances made to Ivivi of
$2,607,266.

We do not have any material external sources of liquidity or unused sources of
funds.

Our revenues, operations and cash flows over the past few years have declined.
Management has recognized the situation and has developed a business plan to
enhance the activities of its operations. Such plan includes retaining a sales
representative and seeking to hire additional sales employees as well as seeking
strategic relationships to help market and promote certain of our product lines.
Although we expect that our available funds and funds generated from our
operations, will be sufficient to meet our anticipated needs for a minimum of 12
months, we may need to obtain additional capital to continue to operate and grow
our business. Our cash requirements may vary materially from those currently
anticipated due to changes in our operations, including our marketing and sales
activities, product development, and the timing of our receipt of revenues. We
do not have any material external sources of liquidity or unused sources of
funds. Our ability to obtain additional financing in the future will depend in
part upon the prevailing capital market conditions, as well as our business
performance. There can be no assurance that we will be successful in our efforts
to arrange additional financing on terms satisfactory to us or at all.

ITEM 7. FINANCIAL STATEMENTS

ADM TRONICS UNLIMITED, INC. AND SUBSIDIARIES
MARCH 31, 2007

I N D E X

FINANCIAL STATEMENTS: Page NO.

Report of Independent Registered Public Accounting Firm F-1

Consolidated Balance Sheet as of March 31, 2007 F-2

Consolidated Statements of Operations
For the Years Ended March 31, 2007 and 2006 F-3

Consolidated Statements of Changes in
Stockholders' Equity
For the Years Ended March 31, 2007 and 2006 F-4

Consolidated Statements of Cash Flows
For the Years Ended March 31, 2007 and 2006 F-5

Notes to Consolidated Financial Statements F-6

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and
Stockholders of ADM Tronics Unlimited, Inc.

We have audited the accompanying consolidated balance sheet of ADM Tronics
Unlimited, Inc. and subsidiaries as of March 31, 2007, and the related
consolidated statements of operations, stockholders' equity, and cash flows for
each of the two years then ended. These consolidated financial statements are
the responsibility of the company's management. Our responsibility is to express
an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also 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, 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 financial position of ADM Tronics Unlimited, Inc. and
subsidiaries as of March 31, 2007, and the results of its operations and its
cash flows for each of the two years then ended in conformity with accounting
principles generally accepted in the United States of America.

/s/ Raich Ende Malter & Co. LLP
East Meadow, New York
June 29, 2007

F-1

ADM TRONICS UNLIMITED, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
MARCH 31, 2007

ASSETS

Current assets:
Cash and cash equivalents $ 2,498,276
Accounts receivable, net of allowance for doubtful
accounts of $8,361 89,598
Receivables - Ivivi 36,657
Inventories 205,517
Prepaid expenses and other current assets 35,130
------------

Total current assets 2,865,178

Property and equipment, net of accumulated depreciation
of $5,467 37,989

Inventory - long term portion 81,573
Investment in Ivivi 2,638,562
Loan receivable and accrued interest, officer 92,933
Other assets 89,772
------------

Total assets $ 5,806,007
============

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Accounts payable $ 180,935
Accrued expenses and other current liabilities 35,290
------------

Total current liabilities 216,225
------------

Stockholders' equity:
Preferred stock, $.01 par value; 5,000,000 shares authorized,
no shares issued and outstanding -
Common stock, $.0005 par value; 150,000,000 shares
authorized, 53,882,037 shares issued and outstanding 26,941
Additional paid-in capital 30,297,955
Accumulated deficit (24,735,114)
------------

Total stockholders' equity 5,589,782
------------

Total liabilities and stockholders' equity $ 5,806,007
============

The accompanying notes are an integral part of these consolidated financial statements.

F-2

ADM TRONICS UNLIMITED, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED MARCH 31, 2007 AND 2006

2007 2006
------------ ------------

Revenues $ 1,537,860 $ 1,724,269
------------ ------------

Costs and expenses:
Cost of sales 485,365 692,998
Research and development 298,521 544,426
Selling, general and administrative 4,371,611 5,468,651
------------ ------------

Total operating expenses 5,155,497 6,706,075
------------ ------------

Operating loss (3,617,637) (4,981,806)

Interest and financing costs, net (3,100,653) (1,898,975)
Change in fair value of warrant and
registration rights liabilities (378,033) (290,349)
Equity in net loss of Ivivi (1,069,563) -
------------ ------------

Net loss $ (8,165,886) $ (7,171,130)
============ ============

Net loss per share, basic and diluted: $ (0.15) $ (0.13)
============ ============

Weighted average shares outstanding 53,882,037 53,882,037

The accompanying notes are an integral part of these consolidated financial
statements.

F-3

ADM TRONICS UNLIMITED, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED MARCH 31, 2007 AND 2006

Additional
Common Stock Paid-in Deferred Accumulated
Shares Amount Capital Compensation Deficit Total
------------ ------------ ------------ ------------ ------------ ------------

Balance, March 31, 2005 53,882,037 $ 26,941 $ 10,003,561 $ (743,537) $ (9,398,098) $ (111,133)

Reclassify deferred compensation - - (743,537) 743,537 - -

Beneficial conversion feature - - 133,776 - - 133,776

Share based compensation - - 705,900 - - 705,900

Warrants issued with debt - - 242,780 - - 242,780

Net loss - - - - (7,171,130) (7,171,130)
------------ ------------ ------------ ------------ ------------ ------------

Balance, March 31, 2006 53,882,037 26,941 10,342,480 - (16,569,228) (6,199,807)

Share based compensation - - 1,779,913 - - 1,779,913

Reclassification of warrant liability
upon effectiveness of subsidiary
registration statement - - 630,312 - - 630,312
Reclassification of unamortized loan
costs and discount upon conversion
of subsidiary debt - - (669,347) - - (669,347)

Adjustment to reflect net assets
of equity method investment - - 3,401,810 - - 3,401,810

Adjustment to reflect increase in
investee paid in capital - - 305,315 - - 305,315

Adjustment for deconsolidation
of former subsidiary - - 14,507,472 - - 14,507,472

Net loss - - - - (8,165,886) (8,165,886)
------------ ------------ ------------ ------------ ------------ ------------

Balance, March 31, 2007 53,882,037 $ 26,941 $ 30,297,955 $ - $(24,735,114) $ 5,589,782
============ ============ ============ ============ ============ ============

The accompanying notes are an integral part of these consolidated financial statements.

F-4

ADM TRONICS UNLIMITED, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED MARCH 31, 2007 AND 2006

2007 2006
------------ ------------

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (8,165,886) $ (7,171,130)
Adjustments to reconcile net loss to net cash
used by operating activities:
Depreciation and amortization 22,360 72,278
Loss from equity investment 1,069,563 -
Stock based compensation 1,779,913 705,900
Amortization of loan costs and discount 1,692,354 705,780
Share based financing penalties 1,355,837 788,107
Bad debts 20,666 84,512
Change in fair value of warrant and registration rights liabilities 196,682 290,349
Amortization of deferred revenue (4,833) -
Changes in operating assets and liabilities:
(Increase) decrease in:
Accounts receivable (79,433) (276,984)
Inventory (9,462) 59,363
Prepaid expenses and other current assets (133,919) 272,365
Other assets (1,475) (1,475)
Increase (decrease) in:
Accounts payable and accrued expenses 1,331,569 751,564
Deferred revenue 290,000 -
------------ ------------

Net cash used by operating activities (636,064) (3,719,371)
------------ ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
Cash retained by former consolidated subsidiary (67,483) -
Purchases of property and equipment (25,890) (22,320)
Receivable from Ivivi 2,570,609 -
------------ ------------

Net cash provided (used) by investing activities 2,477,236 (22,320)
------------ ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from notes payable, net 245,725 1,895,792
Deferred offering costs (571,291) (183,062)
------------ ------------

Net cash (used) provided by financing activities (325,566) 1,712,730
------------ ------------

Net increase (decrease) in cash 1,515,606 (2,028,961)

Cash and cash equivalents, beginning of period 982,670 3,011,631
------------ ------------

Cash and cash equivalents, end of period $ 2,498,276 $ 982,670
============ ============

Cash paid for:
Interest $ 166,174 $ 170,164
Income taxes - -

The accompanying notes are an integral part of these consolidated financial statements.

F-5

ADM TRONICS UNLIMITED, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2007 AND 2006

NOTE 1 - ORGANIZATIONAL MATTERS

ADM Tronics Unlimited, Inc. ("we", "us", "the company" or "ADM"), was
incorporated under the laws of the state of Delaware on November 24, 1969. We
are authorized under our Certificate of Incorporation to issue 150,000,000
common shares, with $.0005 par value, and 5,000,000 preferred shares with $.01
par value.

NATURE OF BUSINESS

We are a manufacturer and engineering concern whose principal lines of business
are the production and sale of chemical products and manufacturing, selling and
leasing of medical devices. Our chemical product line is principally comprised
of water-based chemical products used in the food packaging and converting
industries. These products are sold to customers located in the United States,
Australia, and Europe. Medical equipment is manufactured in accordance with
customer specification on a contract basis. Our medical device product line
consists principally of proprietary devices used in the treatment of joint pain,
postoperative edema, and tinnitus. These devices are FDA cleared medical devices
known as "Electroceutical" units. These products are sold or rented to customers
located principally in the United States.

IVIVI OPERATIONS

Our former majority owned subsidiary, Ivivi Technologies, Inc. ("Ivivi"), filed
a Registration Statement with the Securities and Exchange Commission ("SEC") for
the initial public offering of a portion of its common stock. The Registration
Statement was declared effective by the SEC on October 18, 2006. As a result of
the consummation of Ivivi's initial public offering, we no longer own a majority
of the outstanding common stock of Ivivi and do not control Ivivi's operations.
We do own approximately 34% of Ivivi's outstanding common stock and can exert
significant influence based upon the percentage of Ivivi's stock owned by us. As
a result, our investment in Ivivi subsequent to October 18, 2006 is reported
under the equity method of accounting, whereby we recognize our share of Ivivi's
earnings or losses as they are incurred.

GOING CONCERN

In connection with the consummation of Ivivi's initial public offering during
October 2006, (i) Ivivi repaid advances made to it by us aggregating
approximately $2.6 million and (ii) our outstanding convertible notes were
converted into shares of Ivivi's common stock. While we continue to suffer
operating and net losses and negative cash flows from operations, we believe
that we can continue as a going concern for the next 12 months as a result of
the inflow of cash from financing activities and the elimination of our long
term debt.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

CONSOLIDATION

The consolidated financial statements include the accounts of ADM Tronics
Unlimited, Inc. and its subsidiaries. All significant intercompany balances and
transactions have been eliminated in consolidation.

F-6

USE OF ESTIMATES

These financial statements have been prepared in accordance with accounting
principles generally accepted in the United States and, accordingly, require
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Significant
estimates made by management include expected economic life and value of our
Sonotron devices, deferred tax assets, option and warrant expenses related to
compensation to employees and directors, consultants and investment banks, the
value of warrants issued in conjunction with convertible debt, allowance for
doubtful accounts, and warranty reserves. Actual results could differ from those
estimates.

FAIR VALUE OF FINANCIAL INSTRUMENTS

For certain of our financial instruments, including accounts receivable,
inventories, accounts payable and accrued expenses, the carrying amounts
approximate fair value due to their relatively short maturities.

CASH AND EQUIVALENTS

Cash equivalents are comprised of certain highly liquid investments with
maturity of three months or less when purchased. We maintain our cash in bank
deposit accounts, which at times, may exceed federally insured limits. We have
not experienced any losses to date as a result of this policy.

REVENUE RECOGNITION

CHEMICAL PRODUCTS:

Sales revenues are recognized when products are shipped to end users. Shipments
to distributors are recognized as sales where no right of return exists.

MEDICAL DEVICES:

We recognize revenue primarily from the rental and to a lesser extent from the
sale of our medical devices. Revenue from the rental and sales of medical
devices was primarily generated by our former subsidiary Ivivi. The Ivivi
operations have been consolidated in these financial statements through October
18, 2006.

After October 18, 2006, we recognize revenue from the sale of the medical
devices we manufacture for Ivivi upon completion of the manufacturing process.

Rental revenue, resulting from the Ivivi operations, has been recognized as
earned on either a monthly or pay-per-use basis in accordance with individual
customer agreements.

Sales are recognized when our products are shipped to end users including
medical facilities and distributors. Our products are principally shipped on a
"freight collect" basis. Shipping and handling charges and costs are immaterial.
We have no post shipment obligations, and sales returns have been immaterial.

We provide an allowance for doubtful accounts determined primarily through
specific identification and evaluation of significant past due accounts,
supplemented by an estimate applied to the remaining balance of past due
accounts.

INVENTORY

Chemical product inventories are stated at the lower of cost (first-in,
first-out method) or market. Our medical device inventories consist principally
of Sonotron Units, FDA cleared devices and are also stated at the lower of cost
(first-in, first-out method) or market. Inventory that is expected to be sold
within one operating cycle (1 year) is classified as a current asset. Inventory
that is not expected to be sold within 1 year, based on historical trends, is
classified as Inventory - long term.

F-7

PROPERTY & EQUIPMENT

We record our equipment at historical cost. We expense maintenance and repairs
as incurred. Depreciation is provided for by the straight-line method over five
to fourteen years, the estimated useful lives of the property and equipment.

LONG-LIVED ASSETS

We follow SFAS No. 144, "Accounting for Impairment of Disposal of Long-Lived
Assets", which established a "primary asset" approach to determine the cash flow
estimation period for a group of assets and liabilities that represents the unit
of accounting for a long lived asset to be held and used. Long-lived assets to
be held and used are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. The carrying amount of a long-lived asset is not recoverable if it
exceeds the sum of the undiscounted cash flows expected to result from the use
and eventual disposition of the asset. Long-lived assets to be disposed of are
reported at the lower of carrying amount or fair value less cost to sell. During
the years ended March 31, 2007 and 2006, no impairment loss was recognized.

ADVERTISING COSTS

Advertising costs are expensed as incurred and amounted to approximately $56,000
and $333,000 for the years ended March 31, 2007 and 2006, respectively. Costs
incurred in connection with the sponsorship of a PBS promotional medical
television program were capitalized until the completion and initial airing of
the program, at which time they were expensed in full. Capitalized costs were
$101,500 at March 31, 2005, and these costs were charged to expense during the
year ended March 31, 2006.

RESEARCH AND DEVELOPMENT COSTS

Research and development costs consist of expenditures for the research and
development of patents and technology, which are not capitalizable. Our research
and development costs consist mainly of payments for third party research and
development arrangements.

DEFERRED LOAN COSTS

Deferred loan costs have been amortized on a straight- line basis over a five
year period through the maturity date of the related convertible notes. There
was no material difference between the straight-line basis of amortization of
debt costs and the effective interest method.

STOCK OPTIONS AND WARRANTS

In April 2006, we adopted the fair value recognition provisions of SFAS No.
123(R), Accounting for Stock-Based Compensation, to account for compensation
costs under our stock option plans and those of our subsidiary. We previously
utilized the intrinsic value method under Accounting Principles Board Opinion
No. 25, Accounting for Stock Issued to Employees (as amended) ("APB 25"). Pro
forma information is computed using the Black-Sholes option pricing model at the
date of grant of the options based on the following assumptions ranges: risk
free interest rates of 3.62% to 4.6%; dividend yield of 0%; volatility factors
of the expected market price of our common stock of 60% to 67%; and expected
lives of the options of 2.5 to 5 years. The foregoing option valuation model
requires input of highly subjective assumptions. Because common share purchase
options granted to employees and directors have characteristics significantly
different from those of traded options, and because changes in the subjective
input assumptions can materially affect the fair value of estimates, the
existing model does not in the opinion of the Company's management necessarily
provide a reliable single measure of fair value of common share purchase options
that we have granted to our employees and directors.

Pro forma information relating to employee and director common share purchase
options is as follows:

F-8

FOR THE YEAR
ENDED
MARCH 31, 2006
--------------

Net loss as reported ......................... $(7,171,130)
Stock-based compensation expense included in
reported net loss ......................... 11,424
Stock compensation calculated under fair value
method .................................... (46,511)
------------

Pro forma net loss ........................... $(7,206,217)
============

Basic and diluted loss per share as
reported .................................. $ (0.13)

Pro forma basic and diluted loss per share ... $ (0.13)

INCOME TAXES

We report the results of our operations as part of a consolidated tax return
with our subsidiaries. We have entered into a tax sharing arrangement where each
of the members compensates each other to the extent that their respective taxes
are affected as a result of this arrangement. Deferred income taxes result
primarily from temporary differences between financial and tax reporting.
Deferred tax assets and liabilities are determined based on the difference
between the financial statement bases and tax bases of assets and liabilities
using enacted tax rates. A valuation allowance is recorded to reduce a deferred
tax asset to that portion that is expected to more likely than not be realized.

NET LOSS PER SHARE

We use SFAS No. 128, "Earnings Per Share" for calculating the basic and diluted
loss per share. We compute basic loss per share by dividing net loss and net
loss attributable to common shareholders by the weighted average number of
common shares outstanding. Diluted loss per share is computed similar to basic
loss per share except that the denominator is increased to include the number of
additional common shares that would have been outstanding if the potential
shares had been issued and if the additional shares were dilutive. Common
equivalent shares are excluded from the computation of net loss per share if
their effect is antidilutive.

Per share basic and diluted net loss amounted to $0.15 for the year ended March
31, 2007 and $0.13 for the year ended March 31, 2006. The assumed exercise of
common stock equivalents was not utilized for the years ended March 31, 2007 and
2006 since the effect would be antidilutive. There were 11,626,854 common stock
equivalents at March 31, 2007 and 50,182,341 at March 31, 2006.

CONVERTIBLE DEBT

In accordance with EITF 00-27, a portion of the proceeds of our convertible debt
was allocated to the warrants issued with the debt based on their fair value.
This allocation resulted in a discount on the debt and the discount was
amortized over the term of the notes to their conversion to Ivivi common stock
during October, 2006. When the fair value of the underlying common stock is
greater than the effective conversion price, we record a beneficial conversion
feature, which has also been amortized over the term of the notes to their
conversion to Ivivi common stock during October, 2006.

F-9

In conjunction with the issuance of the convertible debt, we issued warrants
that had registration rights for the underlying shares. As the contracts were
required to be settled by the delivery of registered shares, pursuant to EITF
00-19, "Accounting for Derivative Financial Instruments Indexed to, and
Potentially Settled in, a Company's Own Stock", the value of the warrants at the
date of issuance was recorded as a warrant liability on the balance sheet. We
have included the change in fair value from April 1, 2006 to October 18, 2006
(the date of cancellation upon the registration of the underlying Ivivi common
stock) and from the date of issuance to March 31, 2006 in other income
(expense), in accordance with EITF 00-19. The fair value of the warrant
liability was $630,312 on October 18, 2006 and $433,630 at March 31, 2006. Upon
the registration statement being declared effective, the fair value of the
warrants on that date was reclassified as equity.

RECENT ACCOUNTING PRONOUNCEMENTS

On July 13, 2006, FASB released its final interpretation on uncertain tax
positions, FIN 48, "Account for Uncertainty in Income Taxes." FIN 48 addresses
the recognition and measurement of uncertain income tax positions using a
"more-likely-than-not" threshold and introduces a number of new disclosure
requirements. The guidance will become effective as of the beginning of a
company's fiscal year beginning after December 15, 2006, for both public and
nonpublic companies. We believe this new pronouncement will have an immaterial
impact on our financial statements in future periods.

NOTE 3 - INVENTORY

Inventory at March 31, 2007 consists of the following:

Current Long Term Total
---------- ---------- ----------
Raw materials $ 136,351 $ 79,071 $ 215,422
Finished goods 69,166 2,502 71,668
---------- ---------- ----------
$ 205,517 $ 81,573 $ 287,090
========== ========== ==========

F-10

NOTE 4 - INVESTMENT IN IVIVI AND RELATED CAPITAL TRANSACTIONS

On October 18, 2006, Ivivi's Registration Statement on Form SB-2 related to its
initial public offering was declared effective by the Securities and Exchange
Commission (the "SEC"). As a result, unsecured convertible notes in the
aggregate principal amount of $6,087,500, issued in our December 2004 and
February 2005 joint private placement with Ivivi, automatically converted into
shares of Ivivi common stock. Also upon effectiveness of the Registration
Statement, unsecured convertible notes in the aggregate principal amount of
$2,000,000 issued in connection with Ivivi's November 2005 and March 2006
private placement to four institutional investors automatically converted into
shares of Ivivi common stock.

Upon the conversion of the above debt into Ivivi common stock, unamortized loan
costs and loan discount in the aggregate amount of $669,347 were charged to
additional paid-in capital. Unamortized discount in the amount of $1,218,657
related to a beneficial conversion feature of the convertible debt was charged
to interest expense upon conversion.

Upon the effectiveness of Ivivi's Registration Statement, certain ADM warrants
which contained registration rights were cancelled. The fair value of these
warrants was carried as a liability on our balance sheet. At October 18, 2006,
the liability related to these warrants in the amount of $630,312 was
reclassified to additional paid-in capital. For the period from April 1 through
October 18, 2006, we recorded an expense related to the change in fair value of
these warrants in the amount of $197,082.

Upon the consummation of Ivivi's initial public offering, we no longer own a
majority of the outstanding common stock of Ivivi and do not control Ivivi's
operations, but can exert significant influence based upon the percentage of
Ivivi's stock owned by us. As a result, we have deconsolidated the operations of
Ivivi subsequent to October 18, 2006. We have recorded a credit to additional
paid-in capital in the amount of $3,401,810 to record our proportionate
investment in the net assets of Ivivi at October 18, 2006. Any future change of
interest gains or losses related to our investment in Ivivi will be recorded as
a credit or charge to additional paid-in capital.

During the period from October 18, 2006 to March 31, 2007, Ivivi recorded an
increase in additional paid-in capital as a result of the recognition of
compensation expense related to option grants to employees and others. We have
recorded a proportional increase in our investment in Ivivi in the amount of
$305,315, with a related credit to additional paid-in capital.

In addition, Ivivi paid approximately $2.6 million to us representing the
balance in intercompany accounts at October 24, 2006 due to ADM from Ivivi for
product manufacturing and allocations of personnel, professional services, rent,
utilities, insurance and office support services provided by ADM to Ivivi for
the period from March 1989 to October 2006.

The market value of our investment in Ivivi at March 31, 2007 was $13,487,500.
However, our common shares of Ivivi have not been registered with the SEC and
are subject to restriction as a result of securities laws and a lock-up
agreement for 12 months from Ivivi's IPO that has been executed by us.

F-11

The following table sets forth summarized results of operations of Ivivi for the
year ended March 31, 2007:

April 1, 2006 October 19, 2006
to to
October 18, 2006 March 31, 2007
---------------- ----------------

Revenue $ 615,307 $ 567,033
Costs and expenses 5,277,786 3,683,165
---------------- ----------------

Net loss $ (4,662,479) $ (3,116,132)
================ ================

Assets at March 31, 2007 $ 9,303,473
Liabilities at March 31, 2007 $ 1,516,590

NOTE 5 - NONCASH FINANCING AND INVESTING ACTIVITIES

As a result of Ivivi's Registration Statement on Form SB-2 being declared
effective by the SEC, unsecured convertible notes in the aggregate principal
amount of $6,087,500, issued in our December 2004 and February 2005 joint
private placement with Ivivi, automatically converted into shares of Ivivi
common stock. Also upon effectiveness of the Registration Statement, unsecured
convertible notes in the aggregate principal amount of $2,000,000 issued in
connection with Ivivi's November 2005 and March 2006 private placement to four
institutional investors automatically converted into shares of Ivivi common
stock.

Upon the conversion of the above debt into Ivivi common stock, unamortized loan
costs and loan discount in the aggregate amount of $669,347 were charged to
additional paid-in capital.

Upon the effectiveness of Ivivi's Registration Statement, certain ADM warrants
which contained registration rights were cancelled. At October 18, 2006, the
liability related to these warrants in the amount of $630,312 was reclassified
to additional paid-in capital.

Upon the consummation of Ivivi's initial public offering, we no longer own a
majority of the outstanding common stock of Ivivi and do not control Ivivi's
operations but can exert significant influence based upon the percentage of
Ivivi's stock owned by us. As a result, we have deconsolidated the operations of
Ivivi subsequent to October 18, 2006. We have recorded a credit to additional
paid-in capital in the amount of $3,401,810 to record our proportionate
investment in the net assets of Ivivi at October 18, 2006.

NOTE 6 - CONCENTRATIONS

During the year ended March 31, 2007, four customers accounted for 59% of our
revenue. As of March 31, 2007, two customers represented 53% of our accounts
receivable.

F-12

NOTE 7 - SEGMENT INFORMATION

Information about segments is as follows:

Chemical Medical Total
-------- ------- -----

Year ended March 31, 2007
Revenues from external customers $ 738,865 $ 798,995 $ 1,537,860
Segment loss (operating loss) (863,704) (2,753,933) (3,617,637)

Year ended March 31, 2006
Revenues from external customers 861,806 862,463 1,724,269
Segment loss (operating loss) (231,091) (4,750,715) (4,981,806)

Total assets at March 31, 2007 5,765,775 40,232 5,806,007

NOTE 8 - PROPERTY AND EQUIPMENT

Our property and equipment as of March 31, 2007 is as follows:

Computer equipment $ 1,109
Machinery and equipment 42,346
----------
43,455
Accumulated depreciation and amortization 5,466
----------

Property and equipment, net $ 37,989
==========

Depreciation and amortization expense related to property and equipment amounted
to $14,420 and $13,271 during the years ended March 31, 2007 and 2006,
respectively.

NOTE 9 - INCOME TAXES

Net operating losses for tax purposes of approximately $3,607,000 at March 31,
2007 are available for carryover. The net operating losses will expire from 2010
through 2027. We have provided a 100% valuation allowance for the deferred tax
benefit resulting from the net operating loss carryover due to our limited
operating history. In addressing the realizability of deferred tax assets,
management considers whether it is more likely than not that some portion or all
of the deferred tax assets will not 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 are deductible. A
reconciliation of the statutory Federal income tax rate and the effective income
tax rate for the years ended March 31, 2007 and 2006 follows:

Significant components of deferred tax assets and liabilities are as follows:

2007 2006
------------ ------------

Deferred tax assets:
Bad debts $ 3,000 $ 8,000
Net operating loss carryforward 1,443,000 4,627,000
------------ ------------

Deferred tax assets 1,446,000 4,635,000
Valuation allowance (1,446,000) (4,635,000)
------------ ------------

Net deferred tax assets $ - $ -
============ ============

The provision for income taxes at March 31, 2007 and 2006 differs from that
amount using the statutory federal income tax rate as follows:

2007 2006
------------ ------------

Statutory federal income tax rate (34)% (34)%
State income taxes, net of federal taxes (6%) (6)%
Nondeductible items 23% 12%
Valuation allowance 17% 28%
------------ ------------

Effective income tax rate 0% 0%
============ ============

F-13

NOTE 10 - OPTIONS AND WARRANTS OUTSTANDING

ADM has an aggregate of 8,126,854 common stock purchase warrants outstanding as
of March 31, 2007. The warrants have a weighted average exercise price of $0.33
per share, are all exercisable at March 31, 2007, and have a weighted average
remaining life of 2.5 years at March 31, 2007.

During the year ended March 31, 2007 ADM granted an aggregate of 3,500,000 stock
options to employees and consultants. The options have an exercise price of
$0.29, were fully vested at the date of grant and expire August 30, 2009. The
options were valued at $351,529 using the Black Scholes option pricing model
with the following assumptions: risk free interest rate of 4.9%, volatility of
85%, estimated life of 1.5 years and dividend rate of 0%. The options have a
remaining life of 2.4 years at March 31, 2007.

NOTE 11 - COMMITMENTS AND CONTINGENCIES

We lease our office and manufacturing facilities under noncancelable operating
leases. The approximate future minimum annual rental under these leases at March
31, 2007 are as follows:

Years Ending:

March 31, 2008 85,000
March 31, 2009 22,000
--------

$107,000
========

Other leases are month-to-month.

Rent expense for all facilities for the years ended March 31, 2007 and 2006 was
approximately $109,000 and $152,000, respectively.

NOTE 12 - LEGAL PROCEEDINGS

We are involved, from time to time, in litigation and proceedings arising out of
the ordinary course of business. There are no pending material legal proceedings
or environmental investigations to which we are a party or to which our property
is subject.

NOTE 13 - RELATED PARTY TRANSACTIONS

ADVANCES TO RELATED PARTIES

At March 31, 2007, ADM has advances to an officer aggregating $49,188. No
advances have been made since 2000. The advances bear interest at the rate of 3%
per year. Interest accrued for the years ended March 31, 2007 and 2006 was
$1,476 in each year and total accrued interest at March 31, 2007 was $36,429.

At March 31, 2007, ADM has advances to an employee, the wife of the above
referenced officer, aggregating $7,316. No advances have been made since 2000.
This advance bears no interest.

MANAGEMENT SERVICES AGREEMENT

ADM entered into a management services agreement with Ivivi under which ADM
provides Ivivi with management services and allocates portions of its real
property facilities for use by Ivivi for the conduct of its business. The
management services provided by ADM under the management services agreement
include managerial and administrative services, marketing and sales services,
clerical and communication services, the maintenance of a checking account and
the writing of checks, the maintenance of accounting records and other services
in the ordinary course of business. Ivivi pays ADM for such services on a
monthly basis pursuant to an allocation determined by ADM and Ivivi based on a
portion of its applicable costs plus any invoices it receives from third parties
specific to Ivivi. ADM and Ivivi also use office, manufacturing and storage
space in a building located in Northvale, New Jersey, currently leased by ADM,
pursuant to the terms of the management services agreement. ADM determines the
portion of space allocated to Ivivi on a monthly basis, and Ivivi is required to
reimburse ADM for its portion of the lease costs, real property taxes and
related costs.

F-14

Ivivi had approximately $108,000 in management services provided to it by ADM
pursuant to the management services agreement during the period from October 19,
2006 (date of deconsolidation) to March 31, 2007.

MANUFACTURING AGREEMENT

ADM and Ivivi are parties to a manufacturing agreement, dated as of August 15,
2001, and as amended in February, 2005. Under the terms of the agreement, ADM
has agreed to serve as the exclusive manufacturer of all current and future
medical and nonmedical electronic and other devices or products to be sold or
rented by Ivivi. For each product that ADM manufactures, Ivivi pays ADM an
amount equal to 120% of the sum of (i) the actual, invoiced cost for raw
materials, parts, components or other physical items that are used in the
manufacture of the product and actually purchased for such entity by ADM, if
any, plus (ii) a labor charge based on ADM's standard hourly manufacturing labor
rate, which ADM believes is more favorable than could be attained from
unaffiliated third parties. Ivivi generally purchases and provides ADM with all
of the raw materials, parts and components necessary to manufacture its
products. Under the terms of the agreement, if ADM is unable to perform its
obligations to Ivivi under the manufacturing agreement or is otherwise in breach
of any provision of the manufacturing agreement, Ivivi has the right, without
penalty, to engage third parties to manufacture some or all of its products. In
addition, if Ivivi elects to utilize a third-party manufacturer to supplement
the manufacturing being completed by ADM, Ivivi has the right to require ADM to
accept delivery of its products from these third-party manufacturers, finalize
the manufacture of the products to the extent necessary and ensure that the
design, testing, control, documentation and other quality assurance procedures
during all aspects of the manufacturing process have been met.

ADM has charged Ivivi approximately $24,000 for the Company's manufacture of
Ivivi's products pursuant to the manufacturing agreement during the period from
October 19, 2006 (date of deconsolidation) to March 31, 2007.

F-15

ITEM 8A. CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES.

We maintain disclosure controls and procedures (as such term is defined in Rules
13a-15(e) and 15d - 15(e) under the Securities Exchange Act of 1934, as amended
(the "Exchange Act")) that are designed to ensure that information required to
be disclosed in our Exchange Act reports is recorded, processed, summarized and
reported within the time periods specified in the Securities and Exchange
Commission's rules and forms, and that such information is accumulated and
communicated to management, including the Chief Executive Officer and Chief
Financial Officer, as appropriate, to allow timely decisions regarding required
disclosure. Management necessarily applies its judgment in assessing the costs
and benefits of such controls and procedures, which, by their nature, can
provide only reasonable assurance regarding management's control objectives.

As of the end of the period covered by this Annual Report on Form 10- KSB, we
carried out an evaluation, with the participation of our management, including
our Chief Executive Officer and Chief Financial Officer, of the effectiveness of
our disclosure controls and procedures pursuant to Securities Exchange Act Rule
13a-15. Based on that evaluation as of March 31, 2007, the Company's principal
executive officer and principal financial officer concluded that the Company's
disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)
under the Securities Exchange Act of 1934) are effective, as of the date of
their evaluation, to ensure that the information required to be disclosed by the
Company in the reports that it files or submits under the Securities Exchange
Act of 1934 is recorded, processed, summarized and reported within the time
periods specified in SEC rules and forms.

INTERNAL CONTROL OVER FINANCIAL REPORTING.

There were no changes in the Company's internal control over financial reporting
that occurred during the Company's last fiscal quarter to which this report
relates that have materially affected, or are reasonably likely to materially
affect, the Company's internal control over financial reporting.

ITEM 8B. OTHER INFORMATION

None.

PART III

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

The following table sets forth the names, positions and ages of the Company's
executive officers and directors. All of the Company's directors serve until the
next annual meeting of stockholders or until their successors are elected and
qualify. Officers are elected by the board of directors and their terms of
offices are, except to the extent governed by employment contracts, at the
discretion of the board of directors.

Name Age Position

Andre' DiMino 51 President, Chief Executive
Officer, Chief Financial Officer
and Director
Vincent DiMino 81 Vice President of Production
and Director
David Saloff 54 Director

Andre' DiMino has served as President of the Company since December 2001 and a
director and chief Financial Officer of the Company since 1987. Prior thereto,
Mr. DiMino served as Executive Vice President and Chief Operating Officer since
1991 and Secretary and Treasurer of the Company since 1978. Mr. DiMino also
served as the Technical Director of ADM Tronics from 1982 to 1991. Mr. DiMino
currently serves as Vice Chairman and Co-Chief Executive Officer of
Ivivi,Technologies, Inc., a publicly traded company on the American Stock
Exchange, and also served as Chairman and Chief Financial Officer from January
2004 until October 2006 and served as President of Ivivi from 1989 to January
2004.

Vincent DiMino has served as Vice President of Production of the Company since
1969 and as a director of the Company since August 1987.

David Saloff has served as a director of the Company since 2001. From 1999 to
2003, Mr. Saloff served as President of Lifewaves International Inc., a health
and wellness start-up company. Prior thereto Mr. Saloff served as Vice President
of Electropharmacology, Inc., from which the Company acquired the SofPulse
technology referred to elsewhere herein. Mr. Saloff currently serves as
President and Co-Chief Executive Officer of Ivivi,Technologies, Inc. and also
served as President and Chief Executive Officer from 2004 until October 2006 and
has served as a director of Ivivi since 2004.

The terms of office of each of the directors and officers expire upon the
election of their respective successors.

Vincent DiMino is Andre' DiMino's uncle. There is no other family relationship
between any of the Company's directors or executive officers.

AUDIT COMMITTEE AND AUDIT COMMITTEE FINANCIAL EXPERT

Because of the Company's ongoing efforts to engage qualified board members, the
Company does not have a separately designated audit committee or compensation
committee at this time. Accordingly, the Company's Board of Directors also has
determined that the Company does not have an audit committee financial expert.
The Company continues to seek new board members in order to appoint a separately
designated audit committee. The functions which would be performed by an audit
committee are performed by the Board of Directors as a whole.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act, and the rules and regulations of the
Securities and Exchange Commission promulgated thereunder, requires the
Company's directors, executive officers and persons who own beneficially more
than 10% of the Company's common stock to file reports of ownership and changes
in ownership of such stock with the Securities and Exchange Commission. Based
solely upon a review of such reports, the Company believes that all of its
directors, executive officers and 10% stockholders complied with all applicable
Section 16(a) filing requirements during the Company's last fiscal year.

CODE OF ETHICS

The Company has adopted a code of ethics that applies to its principal executive
officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions. A copy of such Code of
Ethics has been filed as Exhibit 14.1 to the Annual Report on Form 10-K for the
fiscal year ended March 31, 2005.

ITEM 10. EXECUTIVE COMPENSATION

The following table provides certain summary information for the fiscal years
ended March 31, 2007 and 2006 concerning compensation paid, or accrued, by ADM
to, or on behalf of, ADM's President, Chief Executive Officer and Chief
Financial Officer (the "Named Officer"). Other than ADM's President and Chief
Executive Officer, the Company does not have any executive officers of the
Company whose total annual salary and bonus exceeded $100,000 during the fiscal
year ended March 31, 2007.

------------------------------------------------------------------------------------------------------------------------------------
Name & Principal Position Year Salary ($) Bonus ($) Option Awards ($) All Other Compensation ($) Total ($)
------------------------------------------------------------------------------------------------------------------------------------

Andre DiMino 2007 99,840 - 130,572 (1) - 230,412
Chief Executive 2006 101,760 - - - 101,760
Officer

(1) Represents the expense to the Company pursuant to FAS 123(R) for a five year
option to purchase 1,300,000 shares of ADM common stock at an exercise price of
$0.29 per share granted to Mr. DiMino on August 30, 2006. See notes to the
Company's financial statements for the fiscal years ended March 31, 2007 and
2006 for the assumptions used for valuing the options under FAS 123(R).

Option Awards
---------------------------------------------------------------------------------------------------------------------
Equity Incentive Estimated
Plan Awards: Per Share
Number of Number of Market Value
Number of Securities Securities at Grant
Securities Underlying Underlying Date if
Underlying Unexercised Unexercised Option Greater than Option
Unexercised Options Options (#) Unearned Exercise Exercise Expiration
Name (#) Exercisable Unexercisable Options (#) Price ($) Price ($) Date
---------------------------------------------------------------------------------------------------------------------

Andre DiMino 1,300,000 - - 0.29 N/A 8/30/2011

DIRECTORS' COMPENSATION

The Company does not pay fees to its directors, nor does it reimburse its
directors for expenses incurred.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS

The following table sets forth information regarding ownership of shares of
Company's common stock, as of June 19, 2006, by (i) each person known to ADM to
be the owner of 5% or more of ADM's common stock (ii) each director and director
nominee of ADM, (iii) each Named Officer, and (iv) all directors and officers of
ADM as a group. Except as otherwise indicated, each person and each group shown
in the table has sole voting and investment power with respect to the shares of
the Company's common stock indicated. For purposes of the table below, in
accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as
amended, a person is deemed to be the beneficial owner, for purposes of any
shares of Common Stock over which he or she has or shares, directly or
indirectly, voting or investment power; or of which he or she has the right to
acquire beneficial ownership at any time within 60 days after June 19, 2007. As
used herein, "voting power" is the power to vote or direct the voting of shares
and "investment power" includes the power to dispose or direct the disposition
of shares. Common Stock beneficially owned and percentage ownership is based on
53,882,037 shares of Common Stock outstanding as of June 19, 2007.

Number of Shares
Name and Address Beneficially Owned Percentage

Andre' DiMino ............................ 22,456,935 (1) 40.5%
c/o ADM Tronics Unlimited, Inc.
224-S Pegasus Ave.
Northvale, NJ 07647

Vincent DiMino ........................... 7,487,928 (2) 13.8%
c/o ADM Tronics Unlimited, Inc.
224-S Pegasus Ave.
Northvale, NJ 07647

David Saloff .............................. 300,000 (3) 0.6%
c/o ADM Tronics Unlimited, Inc.
224-S Pegasus Ave.
Northvale, NJ 07647

Eugene Stricker ........................... 4,250,000 (4) 7.9%
c/o Fifth Avenue Venture Capital Partners
42 Barrett Road
Lawrence, NY 11559

All Executive Officers and Directors
as a group (three persons)................. 25,144,863 (5) 44.7%

(1) Includes 9,172,696 shares of the Company's common stock directly owned by
Andre DiMino; 1,700,000 shares of the Company's common stock held by the Andre'
DiMino Irrevocable Trust, a Trustee and the beneficiary of which is Andre'
DiMino, who may be deemed to be a beneficial owner of such shares; 1,700,000
shares of the Company's common stock held by the Maria Elena DiMino Trust, a
Trustee of which is Andre' DiMino, who may be deemed to be a beneficial owner of
such shares by reason of his power to vote such shares; 1,700,000 shares of the
Company's common stock held by the Maurice DiMino Irrevocable Trust, a Trustee
of which is Andre' DiMino, who may be deemed to be a beneficial owner of such
shares by reason of his power to vote such shares; 1,004,239 shares of the
Company's common stock, which are held by the Estate of Dr. Alfonso DiMino (the
"DiMino Estate"), the administrator of which is Andre' DiMino who may be deemed
to be a beneficial owner of such shares by reason of his power to vote such
shares, and of which Andre DiMino, as a beneficiary of the DiMino Estate, is
entitled to receive 167,374 shares; 1,300,000 shares which may be acquired by
Andre' Dimino upon the exercise of options; 300,000 shares which may be acquired
By Jenny DiMino, the spouse of Andre' DiMino, upon the exercise of options;
1,330,000 shares of the Company's common stock, which the DiMino Estate has the
power to vote pursuant to an agreement dated July 8, 1987, and with respect to
which Andre' Di Mino may be deemed to be a beneficial owner by reason of his
power to vote such shares in his capacity as administrator of the Di Mino
Estate; and 4,250,000 shares of the Company's common stock held by Eugene
Stricker, of which Andre' DiMino may be deemed to be a beneficial owner by
reason of his power to vote such shares pursuant to an agreement.

(2) Includes 1,287,928 shares of the Company's common stock directly owned by
Mr. Vincent DiMino, 300,000 shares of the Company's common stock owned by the
spouse of Vincent DiMino, as to which Mr. DiMino disclaims beneficial ownership;
300,000 shares of the Company's common stock owned by a child of Mr. DiMino, who
resides in Mr. DiMino's home, as to which Mr. DiMino disclaims beneficial
ownership; 500,000 shares which may be acquired by Vincent DiMino upon the
exercise of options; and 5,100,000 shares of the Company's common stock of which
1,700,000 shares are held by each of the Andre' DiMino Irrevocable Trust, the
Maria Elena DiMino Irrevocable Trust and the Maurice DiMino Irrevocable Trust, a
Trustee of which is Vincent DiMino, who may be deemed to be a beneficial owner
of the shares held by such trusts by reason of his power to vote such shares.

(3) Represents shares that may be acquired by David Saloff upon the exercise of
options.

(4) Mr. Di Mino may be deemed to be a beneficial owner of such shares by reason
of his power to vote such shares pursuant to an agreement. Reference is also
made to Footnote No. 1.

(5) Reference is made to Footnote Nos. 1 and 2.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

From time to time, the Company has loaned funds to Andre' Di Mino at an interest
rate of 3% per annum. The largest aggregate amount of indebtedness, including
interest, outstanding at any time since the beginning of the Company's fiscal
year ended March 31, 2003 was approximately $89,900 and the amount of principal
and interest outstanding as of March 31, 2007 was approximately $86,000.

TRANSACTIONS WITH IVIVI

Andre' Di Mino, the Company's President, Chief Executive Officer and Chief
Financial Officer, owns approximately 13.4% of the outstanding common stock of
Ivivi and serves as Chairman and Chief Financial Officer of Ivivi. During fiscal
2007, ADM and Ivivi have engaged in the transactions set forth below:

AMOUNTS OWED TO THE COMPANY.

As of March 31, 2006, Ivivi owed approximately $2.6 million to ADM. No interest
is payable on such amount. Such amount was incurred in connection with the
funding of operations under the terms of the management services agreement, as
well as in connection with the manufacturing of Ivivi's SofPulse device under
the terms of the manufacturing agreement, since 1998. Each of such agreements
are described below. In connection with the consummation of Ivivi's initial
public offering during October 2006, Ivivi repaid the advances made to it by us.

MANAGEMENT SERVICES AGREEMENT

ADM entered into a management services agreement, dated as of August 15, 2001,
with Ivivi, SMI and Pegasus under which the Company provides such entities with
management services and allocates portions of its real property facilities for
use by such entities for the conduct of their respective businesses. The
management services provided by the Company under the management services
agreement include managerial and administrative services, marketing and sales
services, clerical and communication services, the maintenance of a checking
account and the writing of checks, the maintenance of accounting records and
other services in the ordinary course of business. The entities pay ADM for such
services on a monthly basis pursuant to an allocation determined by ADM and such
entities based on a portion of its applicable costs plus any invoices it
receives from third parties specific to each such entity. ADM's subsidiaries and
Ivivi also use office, manufacturing and storage space in a building located in
Northvale, New Jersey, currently leased by the Company, pursuant to the terms of
the management services agreement. ADM determines the portion of space allocated
to each entity on a monthly basis, and the subsidiaries and Ivivi are required
to reimburse the Company for their respective portions of the lease costs, real
property taxes and related costs.

Ivivi had approximately $227,000 and $243,000 in management services provided to
it by ADM pursuant to the management services agreement during the fiscal years
ended March 31, 2006 and 2007, respectively.

MANUFACTURING AGREEMENT

ADM, Ivivi and SMI are parties to a manufacturing agreement, dated as of August
15, 2001, and as amended in February, 2005. Under the terms of the agreement,
the Company has agreed to serve as the exclusive manufacturer of all current and
future medical and non-medical electronic and other devices or products to be
sold or rented by the entities. For each product that ADM manufactures for each
entity, the entity pays ADM an amount equal to 120% of the sum of (i) the
actual, invoiced cost for raw materials, parts, components or other physical
items that are used in the manufacture of the product and actually purchased for
such entity by the Company, if any, plus (ii) a labor charge based on the
Company's standard hourly manufacturing labor rate, which the Company believes
is more favorable than could be attained from unaffiliated third-parties. The
Company generally purchases and provides ADM with all of the raw materials,
parts and components necessary to manufacture the entities' products. Under the
terms of the agreement, if the Company is unable to perform its obligations to
either entity under the manufacturing agreement or is otherwise in breach of any
provision of the manufacturing agreement, such entity has the right, without
penalty, to engage third parties to manufacture some or all of its products. In
addition, if the entity elects to utilize a third-party manufacturer to
supplement the manufacturing being completed by ADM, such entity has the right
to require ADM to accept delivery of its products from these third-party
manufacturers, finalize the manufacture of the products to the extent necessary
and ensure that the design, testing, control, documentation and other quality
assurance procedures during all aspects of the manufacturing process have been
met. Reference is made to "Item 1. Description of Business--Manufacturers and
Suppliers."

Ivivi has accrued amounts owed to the Company of approximately $10,000 and
$12,000 for the Company's manufacture of its products pursuant to the
manufacturing agreement during the fiscal years ended March 31, 2006 and 2007,
respectively. The amounts owed to the Company by SMI for the Company's
manufacture of its products pursuant to the manufacturing agreement during such
periods were not material.

ITEM 13. EXHIBITS

Exhibit
No. Description

3.1 Certificate of Incorporation and amendments thereto filed on August 9,
1976 and May 15, 1978 is incorporated by reference to Exhibit 3(a) to the
Company's Registration Statement Form 10 (File No. 0-17629) (the "Form
10").
3.2 Certificate of Amendment to Certificate of Incorporation filed December
9, 1996 is incorporated by reference to Exhibit 3(a) to the Company's
Annual Report on Form 10-KSB for the fiscal year ended March 31, 1997.
3.3 By-Laws are incorporated by reference to Exhibit 3(b) to the Form 10.
4.1 Warrant issued to the Global Opportunity Fund Inc. is incorporated by
reference to Exhibit 4.1 to Amendment No. 1 to the Company's Annual
Report on Form 10-KSB for the fiscal year ended March 31, 1998.
4.2 Warrant issued to Heiko H. Thieme is incorporated by reference to Exhibit
4.2 to the Company's Annual Report on Form 10-KSB for the fiscal year
ended March 31, 1999.
4.3 Form of Company Warrant issued to certain investors (one in a series of
warrants with identical terms) is incorporated by reference to Exhibit
4.1 to the Company's Current Report on Form 8-K dated February 11, 2005
4.4 Form of Ivivi Warrant issued to certain investors (one in a series of
warrants with identical terms) is incorporated by reference to Exhibit
4.2 to the Company's Current Report on Form 8-K dated February 11, 2005
4.5 Form of Note issued to certain investors (one in a series of notes with
identical terms) is incorporated by reference to Exhibit 4.3 to the
Company's Current Report on Form 8-K dated February 14, 2005.
9.1 Trust Agreements of November 7, 1980 by and between Dr. Alfonso DiMino et
al. are incorporated by reference to Exhibit 9 to the Company's Annual
Report on Form 10-KSB for the fiscal year ended March 31, 1993.
10.1 Memorandum of Lease by and between the Company and Cresskill Industrial
Park III dated as of August 26, 1993 is hereby incorporated by reference
to Exhibit 10(a) to the Company's Annual Report on Form 10-KSB for the
fiscal year March 31, 1994.
10.2 Agreement of July 8, 1987 by and between Donna DiMino, Dr. Alfonso
DiMino, et al. is hereby incorporated by reference to Exhibit 10(q) to
the Company's Annual Report on Form 10-KSB for the fiscal year ended
March 31, 1993.
10.3 Agreement of March 21, 2002 by and between the Company and New England
Acquisitions, Inc. is hereby incorporated by reference to Exhibit 10.8 to
the Company's Annual Report on Form 10-KSB for the fiscal year ended
March 31, 2002.
10.4 Agreement of April 29, 2003 by and between Vet-Sonotron Systems, Inc. and
THM Group, LLC is hereby incorporated by reference the Exhibit 10.4 to
the Company's Annual Report on Form 10-KSB for the fiscal year ended
March 31, 2003.
10.5 Agreement of January 17, 2003 by and between the Company and Fifth Avenue
Venture Capital Partners is hereby incorporated by reference to Exhibit
10.5 to the Company's Annual Report on Form 10-KSB for the fiscal year
ended March 31, 2003.
10.6 Amended and Restated Manufacturing Agreement, dated February 10, 2005,
among the Company, Ivivi Technologies, Inc. and Sonotron Medical Systems,
Inc. is incorporated by reference to the Company's Annual Report on Form
10-KSB form the fiscal year ended March 31, 2005.
10.7 Management Services Agreement, dated August 15, 2001, among the Company,
Ivivi Technologies, Inc., Sonotron Medical Systems, Inc. and Pegasus
Laboratories, Inc., as amended. is incorporated by reference to the
Company's Annual Report on Form 10-KSB form the fiscal year ended March
31, 2005.
10.8 Agreement of April 3, 2004 by and between the Company and Carepoint Group
is incorporated by reference to Exhibit 10.6 to the Company's Annual
Report on Form 10-KSB for the fiscal year ended March 31, 2004.
10.9 Placement Agency Agreement of May 20, 2004 by and between the Company and
Maxim Group LLC. is incorporated by reference to Exhibit 10.1 to the
Company's Current Report on Form 8-K dated December 1, 2005.
10.10 Agreement of April 1, 2005 by and between Ivivi Technologies, Inc. and
Global Medical, L.L.C. is incorporated by reference to Exhibit 10.11 of
Amendment No. 2 to the Registration Statement on SB-2 of Ivivi
Technologies, Inc. File No. 333-122768.
10.11 Master Clinical Trial Agreement, dated as of January 9, 2006, between
Ivivi Technologies, Inc. and Cleveland Clinic Florida is incorporated by
reference to Exhibit 10.11 of Amendment No. 4 to the Registration
Statement on SB-2 of Ivivi Technologies, Inc. File No. 333-122768.
10.12 Promissory Note, dated June 16, 2006, made in the principal amount of
$250,000 by Ivivi Technologies, LLC in favor of Ajax Capital LLC. is
incorporated by reference to Exhibit 10.5 of Amendment No. 4 to the
Registration Statement on SB-2 of Ivivi Technologies, Inc. File No.
333-122768.

10.13 Option Agreement, dated as of June 16, 2006, between Ivivi Technologies,
Inc. and Steven M. Gluckstern is incorporated by reference to Exhibit
10.17 of Amendment No. 4 to the Registration Statement on SB-2 of Ivivi
Technologies, Inc. File No. 333-122768.
10.14 Share Purchase Agreement, dated as of November 8, 2005, between Ivivi
Technologies, Inc. and Steven Gluckstern is incorporated by reference to
Exhibit 10.18 of Amendment No. 4 to the Registration Statement on SB-2 of
Ivivi Technologies, Inc. File No. 333-122768.
14.1 Code of Ethics is incorporated by reference to the Company's Annual
Report on Form 10-KSB for the fiscal year ended March 31, 2005.
21.1 Subsidiaries of the Company.
31.1 Certification of the Chief Executive Officer of the Company pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
31.2 Certification of the Chief Financial Officer of the Company pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
32.1 Certification of the Chief Executive Officer and Chief Financial Officer
of the Company pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
99.1 Audited financial statements of Ivivi Technologies, Inc. included
pursuant to Rule 3-09.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

AUDIT FEES

The aggregate fees billed for professional services rendered by Raich Ende
Malter & Co. LLP ("Raich") for the audit of the Company's annual consolidated
financial statements for the fiscal years ended March 31, 2007 and 2006, and for
the reviews of the financial statements included in the Company's Quarterly
Reports on Form 10-QSB for the fiscal years ended March 31, 2007 and 2006, were
$150,926 and $55,057, respectively.

AUDIT-RELATED FEES

The aggregate fees billed for each of the fiscal years ended March 31, 2007 and
2006 for assurance and related services by Raich that are reasonably related to
the performance of the audit or review of the Company's financial statements
were $2,244 and $0, respectively.

TAX FEES

The aggregate fees billed for each of the fiscal years ended March 31, 2007 and
2006 for professional services rendered by Raich for tax compliance were $38,267
and $0, respectively.

ALL OTHER FEES

The aggregate fees billed in each of the fiscal years ended March 31, 2007 and
March 31, 2006 for products and services provided by Raich were $77,555 and
$141,658 respectively. The other fees billed in the years ended March 31, 2006
and 2005 were for audit services rendered in connection with Ivivi's
Registration Statement on Form SB-2.

AUDIT COMMITTEE ADMINISTRATION OF THE ENGAGEMENT

The Company does not have an audit committee.

Less than 50% of hours expended on the principal accountant's engagement to
audit the Company's financial statements for Raich Ende Malter & Co., LLP were
attributed to work performed by persons other than Raich Ende Malter & Co. LLP's
full-time, permanent employees.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized this 29th day of June,
2007.

ADM TRONICS UNLIMITED, INC.

By: /s/ Andre' DiMino
-----------------
Andre' Di Mino
Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.

Signature Title Date

/s/ Andre' Di Mino Chief Executive Officer (Principal June 29, 2007
Andre' Di Mino Executive Officer, Principal
Financial Officer and Principal
Accounting Officer) and Director

/s/ Vincent Di Mino Director June 29, 2007
Vincent Di Mino

/s/ David Saloff Director June 29, 2007
David Saloff