UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
[FEE REQUIRED]
For the fiscal year ended 4/30/97
_______98
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
[NO FEE REQUIRED]
For the transition period from to
___________ __________
Commission file number 0-12459
_______
Biosynergy, Inc.
__________________________________________________________________
(Exact name of registrant as specified in its charter)
Illinois
36-2880990
__________________________________________________________________
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1940 East Devon Avenue, Elk Grove Village, Illinois 60007
___________________________________________________________________
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (847) 956-0471
______________
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
registrant
NONE NONE
____________________________ ____________________________
Securities registered pursuant to section 12(g) of the Act:
Common Stock, No Par Value
___________________________________________________________________
(Title of class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 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 _______.
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Page One of 5253 pages contained in the sequential number system. The
Exhibit Index may be found on page E-i of the sequential numbering
system.
1
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy
or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K [X]
The aggregate market value of the voting stock and non-voting stock
held by non-affiliates of the registrant on April 30, 1997 was approximately $75,126.1998 cannot be
ascertained with any certainty because there is no established trading
market due to limited and sporadic trades.
The number of shares of common stock outstanding on April 30, 19971998 was
13,806,511.
No documents have been incorporated by reference in this report except
for certain exhibits and schedules listed in Item 14.
Part I
______
Item 1. Description of Business
_______________________
General Development of Business
_______________________________
Biosynergy, Inc. (the "Company") was incorporated as an Illinois corpora-
tioncorporation
on February 9, 1976. The Company was formed primarily for the purpose of
developing, manufacturing, and marketing products utilizing cholesteric
liquid crystals. The Company presently manufactures and markets disposable
medical, laboratory and industrial thermometric and thermographic choles-
tericcholesteric
liquid crystal devices.
Although the Company did not enter into any agreements materially affecting
its operations during Fiscal 1997,1998, the Company extended its contract with the
American Association of Blood Banks for two years. See "Marketing and
Distribution." The Company experienced an increase in sales.sales during fiscal
1998. The Company's sales of $502,560$529,460 were the highest since fiscal 1982.
The Company realized a profit of $88,963$99,351 for the fiscal year ending April 30,
19971998 compared to a profit of $92,197$88,963 for fiscal 1996.1997. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations."
The Company continued to introduce its products directly to industrial
customers during Fiscal 1997.1998. Although the Company did not make any material
sales to customers in the industrial markets, the Company submit-
tedsubmitted various
proposals to potential customers for use of its time/temperature technology.
Although the ultimate results of these activities are not known, Management
believes there is a need for its products and technology in the industrial
markets.
Except as stated above, there were no other significant contracts or
developments with regard to the Company's business during the past fiscal
year.
2
Financial Information About Industry Segments
_____________________________________________
The Company generated revenues from sales of eleven medical and laboratory
products in the medical and laboratory industry segment during the fiscal
years ended April 30, 1995, 19961998, 1997 and 1997.1996. For a description of these
products, see "Narrative Description of Business" below.
Below is a schedule which presents the sales for each product and the
percentage of the Company's total sales attributable to each product for the
fiscal years ending April 30, 1998, 1997 1996 and 1995.
Fiscal Year Ending
April 30, 1997
_____________________________
Medical and Percentage
Laboratory Sales of of Total
Products Product Sales
_________________________ ______________ _____________1996.
Fiscal Year Ending
April 30, 1998
Medical and
Laboratory Sales of Percentage
Products Product of total Sales
---------------------- ------------ --------------
HemoTempR II BMD $444,005.90 83.8%
TempTrendR TI 31,165.50 5.9%
TempTrendR II TTD 13,136.00 2.5%
HemoTempR BMD 12,574.60 2.4%
LabTempR 20 ST 6,796.00 1.3%
LabTempR 40 ST 6,688.50 1.3%
Miscellaneous (1) 5,926.50 1.1%
HemoTempR II Activator 5,570.00 1.0%
Vena-VueR VAD 2,070.00 .4%
StaFreezR FTI 1,527.00 .3%
------------- --------------
$529,460.00(2) 100.0%
Fiscal Year Ending
April 30, 1997
-------------------------------
Medical and Percentage
Laboratory Sales of of Total
Products Product Sales
------------------ ---------------- ------------
HemoTempR II BMD $415,616.20 82.7%
TempTrendR TI 29,215.50 5.8%
TempTrendR II TTD 15,708.00 3.1%
HemoTempR BMD 14,496.00 2.9%
LabTempR 20 ST 9,042.50 1.8%
HemoTempR II Activator 6,164.00 1.3%
LabTempR 40 ST 5,589.50 1.1%
Vena-VueR VAD 2,635.00 .5%
Miscellaneous (1) 1,517.00 .5%
StaFreezR FTI 2,576.35 .3%
_____________ _____________
$502,560.05(2) 100.0%
Fiscal Year Ending
April 30, 1996
_____________________________
Medical and Percentage
Laboratory Sales of of Total
Products Product Sales
_________________________ ______________ _____________
HemoTempR II BMD $365,243.30 80.3%
TempTrendR TI 34,174.90 7.6%
TempTrendR II TTD 18,422.50 4.1%
HemoTempR BMD 13,329.00 2.9%
LabTempR 20 ST 7,884.50 1.7%
HemoTempR II Activator 6,423.00 1.4%
LabTempR 40 ST 4,587.00 1.0%
Vena-VueR VAD 2,000.00 0.4%
Miscellaneous (1) 1,487.45 0.3%
StaFreezR FTI 1,232.00 0.3%
______________ _____________
$454,783.65(2) 100.0%
3
Fiscal Year Ending
April 30, 1995
______________________________
Medical and Percentage
Laboratory Sales of of Total
Products Product Sales
_________________________ ______________ _____________
HemoTempR II BMD $354,572.32 80.0%
TempTrendR TI 30,733.00 6.9%
HemoTempR BMD 18,266.00 4.1%
TempTrendR II TTD 18,165.00 4.1%
LabTempR 20 ST 6,870.50 1.5%
LabTempR 40 ST 6,815.50 1.5%
Vena-VueR VAD 5,110.00 1.2%
StaFreezR FTI 2,087.00 .5%
Miscellaneous (1) 717.50 .2%
______________ _____________
$443,337.32(2) 100.0%
[FN]
_______________
Fiscal Year Ending
April 30, 1996
Medical and Percentage
Laboratory Sales of of Total
Products Product Sales
---------------------- --------------- --------------
HemoTempR II BMD $365,243.30 80.3%
TempTrendR TI 34,174.90 7.6%
TempTrendR II TTD 18,422.50 4.1%
HemoTempR BMD 13,329.00 2.9%
LabTempR 20 ST 7,884.50 1.7%
HemoTempR II Activator 6,423.00 1.4%
LabTempR 40 ST 4,587.00 1.0%
Vena-VueR VAD 2,000.00 0.4%
Miscellaneous (1) 1,487.45 0.3%
StaFreezR FTI 1,232.00 0.3%
$454,783.65(2) 100.0%
- ---------------
(1) Includes sales of LabTempR 60, L.C. Sheets, Tempa.SlideTM, and special
order thermometric and thermographic consumer and laboratory products.
(2) Includes discounts and returns.
See "Information About Foreign and Domestic Operations and Export Sales".
See also "Selected Financial Data" and "Financial Statements and Supplemen-
tarySupplement-
ary Data" for the operating profit and loss and identifiable assets related
to the Company's operations in its industry segment.
Narrative Description of Business.
_________________________________
As described in "General Development of Business", the Company is presently
engaged in the business of developing, manufacturing, and marketing
disposable thermometric and thermographic temperature indicators for the
medical and laboratory and industrial markets. Further information about
this business segment and proposed products of the Company are described
below.
Thermographic and Thermometric Devices and Accessories.
______________________________________________________
During the fiscal year ending April 30, 19971998 the Company manufactured and
marketed various medical, laboratory and consumer thermometric and thermo-
graphic devices. These products were sold to hospitals, clinical end-
users,end-users,
laboratories and product dealers.
1. The HemoTempR Blood Monitoring Device ("BMD") is designed to be a human
blood bag temperature indicator. Human blood must be maintained, optimal-
ly,optimally,
at 1-6o C., and not allowed to exceed 10o C. Since human blood is always in
short supply, it is critical that blood be maintained within these specificationsspecifica-
tions to avoid loss.
HemoTempR BMD monitors the core temperature of a blood bag from 1-12o C., and
replaces the impractical 4
mercury thermometer susceptible to breakage.
HemoTempR BMD once attached to the blood bag is usable throughoutusablethroughout the life of
the blood.
2. HemoTempR II BMD (patented 1989) is designed to warn blood bank personnel
whenever the internal temperature of the blood bag has exceeded 10-11o C.
HemoTempR II BMD has an irreversible indicator that is activated when the tag
is applied to the blood bag at approximately 4o C. After being activated, the
irreversible indicator remains blue colored for 72 hours unless the blood is
warmed to a temperature of 10-11o C. or above, in which case the indicator
loses its blue color. The irreversible indicator will not return to blue
even if the blood is subsequently recooled, indicating that the blood has
been warmed. The reversible portion of the indicator reversibly monitors
temperatures from 1-9o C. HemoTempR II BMD is non-reusable and must be
replaced each time the blood bag is returned to the blood bank and reissued.
3. HemoTempR II Activator, introduced during Fiscal 1995, is an electron-
ic,electronic,
portable block model heater developed to provide a reliable source of heat
necessary to activate the Company's HemoTempR II BMD. The HemoTempR II
Activator has a thermostatic control to permit precise setting and continuous
control of temperatures in the range for activation of the Company's HemoTempR
II BMD. This device is intended by the Company to be used with HemoTempR II
BMD as a system for blood monitoring. This device is the only product sold
by the Company during Fiscal 1997 which is not manufactured by the Company.
4. TempTrendR Temperature Indicator ("TI") is primarily used to monitor the
temperature of urine specimens collected for drug testing to detect
fraudulent urine specimens. Most common forms of drug testing require a
urine specimen. However, the test is valid only if a legitimate urine
specimen is collected which has not been altered by the subject to mask a
drug abuse problem. In order to eliminate altered or fraudulent urine
specimens in tests on federal employees, federal government guidelines
require that urine temperature be measured within four minutes of sample
collection, and that the temperature be 90.5-98.9o F. Temperature measurementsmeasure-
ments taken with TempTrendR TI are simply a matter of observing the color
illuminated number and recording the temperature. TempTrendR TI also
provides a non-invasive method of monitoring the actual surface temperature
trends of any body surface where temperature measurement is important, such
as near joints in rheumatoid arthritis and to assess blood circulation.
5. TempTrendR II Temperature Trend Device ("TTD") is a second generation
temperature trend device which is correlated to internal body temperature and
provides a non-invasive, readily visible means of monitoring changes in body
temperature. TempTrendR II TTD will reflect oral temperatures such as those
taken by glass thermometers. TempTrendR II TTD is used intraopera-
tivelyintraoperatively to
warn of developing hyper or hypothermic conditions. The indicator is also
excellent for monitoring a patient's temperature during any type of transfusion
procedure.
6. LabTempR 20, LabTempR 40 and LabTempR 60 Surface Temperature Indicators
("STI") are designed to reversibly indicate the temperature of laboratory
5
materials which require specific storage or use temperatures. LabTempR 20 STI
indicates temperatures between 0-21o C., LabTempR 40 STI monitors temperatures
between 19-21 and 24-41o C., while LabTempR 60 STI measures temperatures
between 40-60o C. These thermometers are designed to monitor the temperature
and changes in temperature of hundreds of laboratory chemicals and supplies
which require specific temperature conditions; however, these thermometers
are suitable for temperature measurement of any surface.
7. Tempa.SlideTM Temperature Indicator ("SLTI") is amicroscope glass slide
temperature indicator. The SLTI helps the viewer read the optimum tempera-
turetemperature
of a slide by indicating in large visible colors when the desired slide
temperature is reached. Tempa.SlideTM can be mounted on a glass microscope
slide and can be used continuously for over one year. These thermometers are
suitable for temperature monitoring of glass slides during antibody/antigen
tests when an optimum temperature of the cells and protein must be maintained
for accurate test results.
8. StaFreezR Freeze-Thaw Indicator ("FTI") is a freeze-thaw indicator which
will irreversibly indicate whether frozen material is warmed to greater than
- -20o C. Once the frozen product exceeds -20o C., the liquid crystal film will
turn from blue to gray to black, and refreezing the product at a lower
temperature will not bring back the original frozen state color.
9. The Vena-VueR Vein Assessment Device ("VAD") is designed to locate good
veins by assessing blood flow, and to assess vein depth, and size. It is
used primarily to minimize complications and reduce dis-
comfortdiscomfort for geriatric
patients, obese patients, diabetic patients, burn patients, drug addicts with
sclerosed veins, shock patients with collapsed veins and long-term hospitalized
or cancer chemotherapy patients with severely damaged and traumatized
veins. However, Vena-VueR VAD is also useful in helping to select the most
patent and least traumatized veins for the purpose of any venipuncture. Three
efficacy medical publications have been written about Vena-VueR VAD.
10. Specialty products include devices manufactured to the specification and
design of the customer, such as time/ temperature shipping labels for food
products under the tradename FoodGardeTM Time/Temperature Indicators and
liquid crystal thermometers for general purpose thermometry. The Company
anticipates continued manufacturing of these and additional specialty
products in the future.
The Company is also developing other devices. These include:
1. The Company intends to market new irreversible time/ temperature
indicators which will be used as shipping labels, and in other forms, for the
frozen food packaging industry (under the tradename FoodGardeTM), the
pharmaceutical industry, and for other industries requiring careful
monitoring of refrigerated or frozen materials. The devices will have
irreversible color changes at various temperatures determined to be critical
by the end-user. Therefore, a purchaser, whether an individual 6
consumer or
a merchant, will be able to instantaneously determine the temperature history
of the material. Although the liquid crystal formula-
tionsformulations are substantially
completed, the Company is uncertain at this time when these products will be
sold.
2.2.Hemo-CoolTM Thermoelectric Blood Cooling/Storage System ("TBCSS") is a
self-contained, portable blood storage and shipping device for use in
shipping whole blood from the blood bank to surgery, in the hospital setting,
or to other destinations outside the hospital. The device operates similar
to a portable refrigerator with a DC power supply, which is designed to
maintain a constant temperature suitable for human blood. The cooling device
is portable and can be used for storage and shipping of various other
biologicals that have to be maintained at a constant refrigerated temperature.
3. The Company has recognized a need exists for a simple, inexpensive
indicator to determine if sensitive materials have been subjected to freezing
temperatures. The Company is continuing its investigation of the feasibility
of such an indicator.
3.4. The Company has become aware that a need exists for products to augment
its current product line, such as the HemoTempR II Activator. The Company is
investigating the feasibility of additional products to systematize the use
of its thermometric and thermographic liquid crystal devices as well as
alternative technologies to supplement its current product line. The results
of such investigations are not predictable at this time.
The Company is currently investigating alternative thermometric and
thermographic technologies for use in applications where the Company's
current products are unsuitable. Since the investigation of these alterna-
tivealternative
technologies is not complete, there can be no assurance the Company will
be able to develop any commercial products as a result of this activity.
Manufacturing. ExceptThe Company manufactures all of its products except for the
HemoTempR II Activator the Company
manufactures all of its products. The HemoTempR II Activator isand Hemo-CoolTM TBCSS. These products are manufactured exclusively
for the Company by an unrelated companycompanies on an as needed basis. Raw materials
for the Company's other products are purchased, and assembly of the productsbut all manufacturing is
performed at the Company's production facility. Some chemical converting and coating, plus die
cutting, which are capital intensive, are done by outside manufacturers. All outside manufacturing is
done to specifications set by the Company. There are however, no commitments or firm
agreements for such outside manufacturers to provide servicesproducts for the Company, and
the Company does not anticipate it will enter into any such agreements in the
foreseeable future.
The Company has twenty-onetwenty-two years of experience working with various liquid
crystal formulations and thermometric and thermographic application methods.
The Company maintains complete records of manufacturing and quality assurance
testing of all of its products in compliance with Food and Drug Administration
("FDA") regulations. All products are manufactured according to "good
manufacturing practices" (GMP)("GMP") for medical devices.
Marketing and Distribution. The Company has traditionally targeted the
medical and laboratory markets. While novel products, such as the Company's
products, enjoy the advantage of no initial competition, they also initially
lack a demonstrated market and acceptance by medical and laboratory
personnel. Furthermore, cost savings programs and awareness have slowed down
the introduction of new products, particularly in the medical market. As a
result, the time required to achieve acceptance of the Company's medical
products is significantly increased, in Management's opinion.
7
Because of these conditions, the Company has been forced to rely heavily on
its own marketing and distribution efforts in the medical market, rather than
the use of the traditional medical product distributors, for a large portion
of its sales. Nevertheless, the Company's primary distributor in the United
States, Fisher Scientific Company ("Fisher"), previously Curtin
Matheson Scientific, Inc., and the Company's other product
distributors have increased their sales of the Company's products throughout
the United States duringover the past few years. During Fiscal 1997,1998, Fisher
accounted for 29.9%31.3% of the Company's sales. Although it is difficult to
predict the ultimate success of Fisher and other distributors in selling the
Company's products, management believes this trend will continue.
Effective March 31, 1996,1998, the Company renewed its contract with the American
Association of Blood Banks ("AABB") Group Purchasing Program for two-years. This amendment allows approximatelytwo years.
Approximately 2,500 AABB Member Institu-
tionsInstitutions throughout the United States are
eligible to purchase HemoTempR II blood bag temperature indicators and
HemoTempR II ActivatorActivators at a discount.discount under this contract. The Company is
required to pay a commission of 2% of all sales under this contract to the
AABB.
The Company continues to negotiate with various medical and laboratory
product companies for the distribution of its products under private labels
and to introduce its products in the industrial, pharmaceutical and
laboratory markets, the success of which cannot be assured. See "Thermo-
metric"Thermometric
and Thermographic Devices."
At the present time, two employees are engaged on a part-time basis in
marketing the Company's products. Since Fiscal 1994, theThe Company has also useduses the services of an
in-house sales representative for telemarketing on a commission only basis.
The Company does not have an outside sales force. Since the Company markets
its products to approximately 7,000 hospitals in the United States, hundreds
of laboratories and industrial end-users in the United States, and thousands
of hospitals and laboratories in foreign countries, it will continue to rely
upon the marketing efforts of indepen-
dentindependent dealers and sales representatives,
and is therefore aggressively seeking distributors for its products
throughout the world. The effect these independent dealers will have on
revenues has not yet been deter-
mined.determined.
The Company is unaware of its current market share for its medical and
laboratory products, although the Company is currently collecting data to be
used in marketing studies in the future.
Sources and Availability of Raw Materials. In general, the Company believes
its sources and availability of raw materials to be satisfactory. Presently,
there are a limited number of domestic manufacturers of liquid crystal
chemicals. Although it is expected that these domestic manufactur-
ersmanufacturers will
continue to supply the raw liquid crystals needed for the produc-
tionproduction of the
Company's products, which cannot be assured, if industrial
8
quantities of raw
liquid crystals are unavailable from domestic sources, the Company will need
to import these materials from foreign suppliers, or, as an alternative,
manufacture such materials itself. Other materials are currently available
from a variety of suppliers.
Patents and Trademarks. The Company has been granted or assigned five United
States and four foreign patents relating to liquid crystal technology. TheseFour
of the United States patents and all of the foreign patents, generally
relaterelated to liquid crystals or liquid crystal dispersion processes. Specifically, these patents
pertainprocesses, have
expired. The other patent relating to the venipuncture method utilized by the Company's vein
assessment device products (No. 4,175,543, which expired on November
27, 1996), the film application of those products (No. 4,161,557,
which expired on July 17, 1996), the material and die composition
of those products (No. 4,015,591, which expired on April 5, 1994), a
liquid crystal film laminate (No. 4,015,591, which expired on April
5, 1994), a liquid crystal film laminate (No. 4,310,577, which
expired on July 17, 1996), and a cholesteric liquid crystal formulationsformula
tions and temperature monitoring means relating tofor the Company's irreversible liquid
crystal products (No. 4,859,360, which4,859,360), expires on August 22, 2006).2006. Although
several of the Company's patents have expired, management does not believe
this will have an adverse material impact on the Company's operations,
revenues or properties.
The Company has received registered trademark protection on all product names
to date, excepting Temp-D-TekTM, Tempa.SlideTM, FoodGardeTM, LaproVueTM and
LaproVueTM.Hemo-CoolTM. The Company has retained, however, all the rights to the Temp-
D-TekTM,Temp-D-
TekTM, Temp.SlideTM, FoodGardeTM, LaproVueTM and LaproVueTMHemo-CoolTM common law
trademark. Additional trademark registrations will be applied for as needed.
Although patent and trademark protection is important, the Company believes
that no material adverse effects to the Company's operations will result in the
event that additional patents and/or trademarks are not obtained, or, if attained,
such patents and/or trademarks are held to be invalid. Certain processes and
chemical formulas will be maintained only as trade secrets. Management feels
that it will be difficult for potential competi-
tioncompetition to analyze or reproduce
the secret processes and formulas without substantial expenditures of capital
and resources.
Seasonal Aspect of Business. The business of the Company is not seasonal.
Working Capital Items. The Company has attempted to conserve working capital
whenever possible. To this end, the Company attempts to keep inventory at
minimum levels. The Company believes that it will be able to maintain
adequate inventory to supply its customers on a timely basis by careful
planning and forecasting demand for its products. However, the Company is
nevertheless required, as is customary in the medical and laboratory markets,
to carry inventory to meet the delivery requirements of customers and thus,
inventory represents a substantial portion of the Company's current assets.
The Company presently grants payment terms to customers and dealers of 30
days. The Company will not accept returns of products from its dealers
except for exchange, but does guarantee the quality of its products to the
end user.
9
As of April 30, 1997,1998, the Company had $121,674$161,092 of current assets available.
Of this amount, $45,956$50,148 was inventory and $61,468$75,955 was net trade receiv-
ables.receivables.
Management of the Company believes that it has sufficient working capital to
continue operations for the fiscal year ending April 30, 19981999 provided the
Company's sales and ability to collect accounts receivable are not adversely
affected. In the event the Company's sales decrease or the receivables of
the Company are impaired for any reason, it will be neces-
sarynecessary to obtain
additional financing to cover working capital items and keep current trade
accounts payable, of which there can be no assurance. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations."
Major Customers. Fisher, the Company's primary independent product distributor,distribu-
tor, was directly responsible for 10%31.3% or more of the Company's net sales
during the fiscal year ending April 30, 1997.1998. No other customer or
distributor accounted for 10% or more of the Company's net sales during the
past fiscal year. At April 30, 1997,1998, Fisher owed the Company $19,520.$26,723.
Management believes the loss of this customer would materially reduce the
revenues of the Company until the Company could retain the services of
another major product distributor.
Backlogs. The Company did not have any material backloghad backorders of orders$7,453 as of April 30, 1997.1998. All
back orders have been filled.
Government Contracts. The Company does not have a material portion of its
business that may be subject to renegotiation of profits or termination of
contracts or subcontracts at the election of any government entity.
Competition. The Company has no known commercial competitors of its
disposable vein assessment device or blood monitoring devices using liquid
crystal technology. Because of the Company's patent position, employment
agreements with former employees, and processing trade secrets, it does not
anticipate competition in these areas in the near future. In the area of
laboratory temperature monitoring, there are no other competitors who market
an infinitely thin liquid crystal temperature indicator. In the area of a
frozen food or drink safety indicator, there is no competition known to the
Company that utilizes liquid crystal technology. The Company believes that
the frozen food industry presently uses primarily physical and organoleptic
evaluation (e.g., evaluation of softness, texture, aroma, taste and the
like), as well as mercury thermometers and temperature sensitive inks to
monitor freshness. Labels containing wax encapsulated dyes with specific low
melting points and capillary action products produced by 3M under the
tradename MonitorMarkR and polymer/monomer indicators from Lifeline are also
available.
The Company's HEMOTEMPR II BMD (blood bag temperature monitor) competes in the
medical market against Safe-T-Vue (MonoTech) and MonitorMark (3M).
Management of the Company believes that the MonoTech and 3M products are
technically inferior to HEMOTEMPR II BMD in that they provide only an
irreversible monitor with nothing to warn the user that blood is approach-
ingapproaching
an unsafe temperature. In addition, the MonoTech product must be refrigerated
prior to use, and, because of their design, both products can readily be
dislodged from the blood bag. There is no known commercial competitors of
the Company's HemoTempR II Activator.
10
The Company's TempTrendR II competes in the medical market against Temp-A-
Strip (Johnson & Johnson), Stick-Temp (Trademark Sales) and Temp-A-Dot (PyMaH
Corp). Stick-Temp is distributed on a limited basis and there is little
information available concerning it. Management of the Company believes that
the Johnson & Johnson product is less technically advanced than the Company's
TempTrendR TTD and is primarily distributed in the Consumer market. Temp-A-DotTemp-A-
Dot is a wax impregnated strip of paper inserted into the mouth to monitor
core temperature. Although it is reported to cost less than TempTrendR II
thermometers, it has the disadvantage of single reading, invasive methodology
and cannot be used to monitor tempera-
turetemperature trends. Recently, a few private
label indicators have been introduced to the market. These are manufactured
by Dijinni Industries, PyMaH Corporation, Hallcrest Products and American
Thermometer, who compete with the Company in the consumer market for forehead
temperature indicators and in the drug testing market for urine thermometers.
Other companies, such as Eurand American, are only involved in the manufac-
turemanufacture
of liquid crystal raw materials and do not directly compete with the
Company for sale of medical, industrial or consumer products. Mercury and
electronic thermometers are used in several competitive applications. They
are generally more costly, non-disposable or not usable in most applica-
tionsapplications
where liquid crystal thermometry and temperature indicators are utilized.
Research and Development. During Fiscal 1998, 1997 1996 and 1995,1996, the Company
spent $36,070, $32,265 $27,995 and $27,179,$27,995, respectively, on Company-
sponsoredCompany-sponsored
research and development activities. All expenditures for research and
development are expensed currently with the exception of significant
equipment and set-up charges which are capitalized and depreciated or
amortized over their estimated useful life.
The Company is conducting research and development of products, which are
discussed under "Thermographic and Thermometric Devices." In this regard,
the Company may require financing to complete the development of these
products. The success of the Company in obtaining financing for research
and development will largely determine whether the Company will continue the
research and development for such products or expand its research and
development to other products.
Government Regulations. The Company does not currently plan to market
diagnostic or therapeutic products which are subject to stringent United
States Food and Drug Administration (FDA) review and pre-market approval in
the near future. Present commercial products of the Company are classified
by the FDA as Class I or Class II. These are subject only to general
regulations requiring that manufacturers adhere to certain guidelines to
provide reasonable assurance of utility, safety, and effectiveness. These
guidelines include labeling requirements, registration with the FDA as a
manufacturer, listing of devices in commercial distribution with the FDA,
notification to FDA of devices proposed to be marketed, conformance to
specified current good manufacturing practices in the manufacture of the
devices, conformance to certain record-keeping requirements, and, in the case
of Class II devices, conformance to certain performance standards. At 11
the
present time, the Company believes that it is in compliance with regulations
set forth by the FDA.
Information About Foreign and Domestic Operations and Export Sales. The
Company had export sales of $22,145$17,077 during the last fiscal year, and export
sales of $16,956$22,145 and $13,115$16,956 during the fiscal years ending in 19961997 and 1995,1996,
respectively. The Company also believes that some of its medical devices
were sold to distributors within the United States who resold the devices in
foreign markets. However, the Company does not have any information
regarding such sales, and such sales are not considered to be material.
The Company does not rely on any foreign operations other than its dealers
and marketing representatives in their respective marketing areas. See
"Marketing and Distribution." It is anticipated export sales will continue
to be important to the Company although not material to operating revenues or
income of the Company. Foreign sales are contingent upon, among other
factors, foreign trade regulations, value of the United States Dollar and,
where required, government approval of the Company's products.
Environmental Protection Expenditures. The Company's operations are not
subject to any federal, state or local laws regulating the discharge of
materials into the environment which materially affect earnings or the
competitive position of the Company, although the Company is subject to such
laws. There were no material capital expenditures made during the last
fiscal year to comply with such laws, nor are any such expenditures
anticipated for Fiscal 1998.1999.
Employees. The Company presently has five full-time employees comprised of
the President (who also presently serves as the Director of Marketing and
Technical Operations), two Vice Presidents and a manufacturing/packaging
employee. The Company also employs a secretary/receptionist. Certain
employees of the Company provide limited services, primarily bookkeeping
and clerical, for Stevia Company, Inc., an affiliate of the Company, on an
"as needed" basis, which is not expected to be a material portion of their
time.
Item 2. Properties
__________
The Company's production facilities, research facilities, and administra-
tiveadministrative
offices are located at 1940 East Devon, Elk Grove Village, Illinois 60007, in
a 10,400 square foot facility leased from an unaffiliated third party. The
Company sub-leases 1,560 square feet to Stevia Company, Inc., an affiliate.
The lease for these facilities expires on January 31, 2001. See footnote 9
of the "Financial Statements."
A majority of the Company's Elk Grove Village facility is currently in use;
however, Management believes this facility is adequate for its needs in the
foreseeable future. Located at the Company's facility is equipment utilized
for research, development, and manufacturing of the Company's products.
12
Item 3. Legal Proceedings
_________________
There is no material litigation threatened or pending against the Company or
any of its properties.
Item 4. Submission of Matters to a Vote of Security Holders.
___________________________________________________
None
13
PART II
_______
Item 5. Market for Registrant's Common Stock and Related Shareholder Matters.
Market Information. Although the common stock of the Company is traded in
the over-the-counter market, there is no established public trading market
due to limited and sporadic trades. Information regarding these trades is
compiled by the Stock Section of the National Daily Quotation Service ("Pink
Sheets") and selected broker-dealers trading such common stock. These quotationsquota-
tions do not necessarily reflect actual transactions nor represent the actual
value or trading price of the Company's common stock. Such over-the-counter
quotations reflect inter-dealer prices, without retail markup, markdown, or
commission. Trading and pricing information for Fiscal 1995, 1996, 1997 and 19971998
was not available to the Company, although the management of the Company does
not believe there were sufficient trades to establish a market for its common
stock.
Holders. As of April 30, 1997,1998, there were approximately 863854 shareholders of
record of the Company's common stock.
Dividends. The Company has never declared any dividends and does not intend
to do so until such time as the Company sustains a profitable status and has
provided for all of its capital requirements.
Item 6. Selected Financial Data
_______________________
Fiscal Years Ending
______________________
1997 1996 1995 1994 1993
________ _______ ______ ________ ________
Fiscal Years Ending
-------------------------------------------------------
1998 1997 1996 1995 1994
-------------------------------------------------------
Operating Revenues $529,460 $502,560 $454,784 $443,337 $403,963 $362,536
Other Revenues 3,460 8,104 5,677 6,863 4,445 5,701
Net Income/(Loss) 99,351 88,963 92,197 47,824 24,513 17,691
after Taxes
Net Income/(Loss) .0072 .0064 .0066 .0035 .002 .001
per Share After
Taxes
Total Assets 521,062 455,579 428,331 409,320 395,722 354,836
Long Term Debt - - - - -
Stockholder Equity/
(Deficit) 467,786 368,435 279,472 187,275 139,451
114,938
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Net Sales. Net sales for the fiscal year ending April 30, 19971998 were $47,776,$26,900,
or 10.5%5.4%, higher than the previous fiscal year, and $59,223,$74,676, or 13.36%16.42%, higher
than the fiscal year ending in 1995.1996. The increase in sales during Fiscal
19971998 was due to the growing acceptance of the Company's HemoTempR II blood
temperature indicators. The Company experienced an increase of $50,373,$28,390, or
14%6.8%, in sales of its HemoTempR II product in Fiscal 1998 as compared to
Fiscal 1997, and an increase of $50,373, or 14%, in Fiscal 1997 as compared
to Fiscal 1996, and an increase
of $10,671, or 3.01%, in Fiscal 1996 as compared to Fiscal 1995.
14
1996.
Other Revenues. During Fiscal 1997,1998, the Company realized $8,104$3,460 of
miscellaneous income. This income was related to contract printing
for a non-affiliate, leasing a portion of its
computer time to Stevia Company, Inc., an affiliate, sub-leasing a portion of
the Company's storage space to a non-affiliate, and interest.contract printing for a
non-affiliate.
Costs and Expenses. Costs and expenses for the fiscal year ending April 30,
19971998 increased by $40,657$11,868 compared to the fiscal year ending in 1996,1997, and
increased by $19,324$52,525 as compared to the fiscal year ending in 1995.1996. The
increasedoverall increase in costs and expenses for Fiscal 1997 was1998 were generally related
to a company wide increase in salaries and wages and increased production
costs related to increased sales, and an
increase in rent expense.sales. Generally, with the exception of the
increase in employee salary and related expenses, the overhead expenses of
the Company have remained substantially constant. In order for the Company
to continue without materially altering its present operations, the overall
operating costs and expenses for the ensuing fiscal year are expected to be
similar to or slightly higher than 36.94% those of the last fiscal year.
Cost of Sales. As a percentage of net sales, the cost of sales was 36.94%35.77%
for the fiscal year ending April 30, 1997, 35.81%1998, 36.94% for the fiscal year ending
in 19961997 and 39.98%35.81% for the fiscal year ending in 1996. The Company expects
that the cost of sales as a percentage of net sales will remain substantially
the same over the next fiscal year in the absence of a material decrease in
sales.sales or increase in raw material cost.
Research and Development Expenses. Research and development expenses
increased during the fiscal year ending in 19971998 by $4,270,$3,805, or 15.25%11.79%, as
compared to the fiscal year ending in 1996,1997, and increased by $5,086,$13,161, or
18.71%47.01%, as compared to the fiscal year ending in 1995. For the past
several years,1996. Historically, the
Company's research and development activities were limited to improvement of
the current product line and development of products which were natural
extensions thereof. Recently however, the Company has noted there appears to be a
need for other products and accessories complimentary to its current product
line. These products would alsowill help systematize the use of the Company's current
products. As an example, the Company developed the HemoTempR II Activator.
See "Narra-
tive"Narrative Description of Business - Thermographic and Thermometric
Devices and Accessories." Although the Company intends to continue to
improve its current product line, the Company is also investigating the
possibility of developing other products using technologies other than liquid
crystal technology to augment its current product line. Although it is not
anticipated that the development of such products will materially increase
the Company's research and development expenses, there is insufficient
information available to determine the extent the Company will be required to
allocate its resources to develop these products. In addition, the Company
will continue to develop products 15
pursuant to contracts with unrelated
entities. The increase in research and development costs as a result of such
development contracts will be directly related to the revenues derived
therefrom.
Marketing Expenses. The Company's marketing expenses were $51,077 in 1998
and $54,075 in 1997, and $45,685 in 1996, as compared to $35,854$45,685 for the fiscal year ending in
1995.1996. The Company continuedcontinues to increase its marketing activities during Fiscal 1997 which
management believes is necessary to continue the Company's growth. Also, includedIncluded
in marketing expenses for Fiscal 1997 is an increase in1998 are commissions related to sales by an
unsalaried salesperson. Subject to availability of
resources, the Company intends to further expand its marketing activities.
General and Administrative Expenses. The Company's general and admini-
strativeadministrative
costs increased by $5,924$7,475 as compared to the 19961997 fiscal year, and
decreasedincreased by $7,027$13,399 as compared to the fiscal year ending in 1995.1996. The
primary reason for the decrease as compared to fiscal
1995 is due to the resignation of the Company's bookkeeper in May,
1995 and the resulting decrease in employee expenses. The increase
in Fiscal 1997 was primarily the result of a company wide increaseincreases in salaries and
wages. See "Cost and Expenses" above. Management of the Company has
generally stabilized general and administrative expenses over the past three years.expenses. Except for
extraordinary items, and salary and related employee expenses, it is unlikely
general and administrative expenses will materially change in the near future.during Fiscal
1999.
Net Income/Loss. The Company experienced a net income of $89,086,
a decrease$99,351, an
increase of $3,111$10,388 over Fiscal 1996,1997, and an improvement of $41,262$7,154 over
Fiscal 1995. The decrease in net income as compared to Fiscal 1996 is due
to extraordinary income in Fiscal 1996 of $12,770 due to the write off of
certain payables. Net Income, however, exclusive of the extraordinary
item, was $9,546 more in Fiscal 1997 than
Fiscal 1996. The overall increase in net operating income is primarily due
to an increase in netproduct sales. See "Net Sales", "Other Revenues", and "Costs and Expenses"
above. Management realizes that the continued profitability of the Company
depends upon achievingimproving and maintaining sales of the Company's products. To this extent,
theThe
Company has continued its efforts to improve sales. However, there can be no
assurance the Company will be able to continue to increase or maintain the
current level of net sales.
As of April 30, 1997,1998, the Company had net operating loss carryovers
aggregating $2,062,922.$1,869,860. Therefore, no income taxes are due for Fiscal 1997.1998.
See "Financial Statements," for the effect of the net operating loss
carryforwards on the Company's income tax position. The Tax Reform Act of
1986 did not alter the Company's net operating loss carryforward position,
and the net operating loss carryforwards will be available and expire, if not
used, as set forth in Footnote 8 to the Financial Statements for the year
ending April 30, 1997.1998. See "Financial Statements."
16
Assets. Since April 30, 1996,1997, the Company's assets have increased by
$27,248.$65,483. This is primarily due to increases in amounts Due From Affiliates
(see below). Other changes in specific items do not reflect changes outside
the ordinary course of business.
The Company was owed $278,874$298,335 by Stevia Company, Inc. ("Stevia"), an
affiliate, and $12,921$13,221 by F.K. Suzuki International, Inc. ("FKSI"), an
affiliate, at April 30, 1997.1998. These affiliates owed $258,360$278,874 and $12,660$12,921 at
April 30, 1996,1997, respectively. These accounts primarily represent common
expenses which are charged by one company to the other for reimbursement.
These expenses include certain rent, salaries for common employees, insurance
and employee benefits, and legal fees. See "Financial State-
ments.Statements." These
expenses are incurred in the ordinary course of business. As a result of the
increase in amounts due from affiliates, the Company has reduced its owns
liquid resources. Although management believes it is cost effective to share
common expenses with its affiliates, the Company has reduced the amount of
advances and common expenses charged to Stevia and FKSI until these
affiliates are in a position to reimburse the Company. CollectibilityCollectability of the
amounts due from the affiliates cannot be assured without the liquidation of
all or a portion of their assets, and thus such receivables have been
classified as non-current assets.
Liabilities. The Company's overall liabilities have decreased by $62,782$33,868
since April 30, 1996.1997. This is primarily due to improved cash flow from
operations which has been used for payment ofto satisfy liabilities. See also "Assets" and
"Liquidity and Capital Resources."
Current Assets/Liabilities Ration.Ratio. The ratio of current assets to current
liabilities, 1.403.02 to 1, has increased from .791.40 to 1 at April 30, 1996.1997.
Although the Company realized income in Fiscal 1997,1998, the Company used $20,774$19,761
of its cash to pay expenses incurred by the Company on behalf of Stevia and
FKSI, which werewas not reimbursed. Thus,To this extent, the Company's current assets
were converted to long-term receivables thereby reducing its current
assets/liabilities ratio. In order to continue to improve the current
asset/liability ratio, the Company's operations must remain profitable and
the Company must curtail the use of its current assets for the benefit of
Stevia and FKSI.
Although Management of the Company believes this is
possible, there is a risk the Company's current asset/liability ratio may
not be adequate for the Company's future needs.
Liquidity and Capital Resources. During the fiscal year ending April 30,
1997,1998, the Company had an increase in net working capital of $66,340.72,239. The
increase in net working capital is primarily due to improved cash flow from
operations which was used to retire company debt.
In viewCash provided by operating activities was $50,709 during Fiscal 1998, $30,652
during Fiscal 1997 and $42,155 during Fiscal 1996. This increase primarily
is the result of overall growth and net income from operations. Although the
Company experiences varying collection periods of its accounts receivable,
the Company believes that uncollectible accounts receivable will not have a
significant effect on future liquidity.
The Company's cash flows from operations are considered adequate to fund the
short term capital needs of the fact thatCompany. However, the Company has incurred substantial losses in
prior years, Management of the Company recognizes the Company's ability to
continue as a going concern is subject to maintaining and improving sales,
profitable operations, the collection of accounts receivable and the
ability of the company to raise money, when needed, of which there is no
assurance. Management intends to continue introducing the Company's
products in marketsdoes not previously recognized as viable markets. Finally,
17
Management intends to seek financing opportunities, including sale of its
common stock if necessary. There can be no assurance the Company will be
able to find any financing orhave
a working line of credit, on acceptable terms.
Irrespectiveand does not anticipate obtaining a working line of
credit in the near future. There is therefore a risk additional financing
may be necessary to fund long-term capital needs of the Company's workingCompany. However,
there is no currently known long-term capital deficit in the past, the
Company has not been refused goods or services from any of its vendors.needs.
Due to the limited availability of cash to the Company during the fiscal
years ending April 30, 1995, 1996, 1997 and 19971998 and the inability of the company
to borrow the funds required, the Company chose not to have its financial
statements audited. The cost of such an audit would be approximately $15,000
per year.
Effects of Inflation. With the exception of inventory and labor costs
increasing with inflation, inflation has not had a material effect on the
Company's revenues and income from continuing operations in the past three
(3) years. Inflation is not expected to have a material effect in the
foreseeable future.
Except for its operating capital needs, the Company does not have any other
material contingencies for which it must provide.
Item 8. Financial Statements and Supplementary Data.
___________________________________________
The information required by this item is set forth in pages F-1 to F-12.
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure.
None.
Part III
________
The information contained in items 10, 11, 12, and 13 is the same informa-
tioninformation
to be included in the Registrant's definitive proxy statement, if any, to be
filed with the Commission, and is included herein for convenience only.
Item 10. Directors and Executive Officers of the Registrant.
__________________________________________________
The executive officers and directors of the Company are:
Positions Served in
Name Age with Company Office Since
_____ ___ _____________ ____________
Fred K. Suzuki 67 President, Treasurer, February, 1976 (1)
Director of Research
and Development,
Director of Marketing
and Sales, and Chairman
of the Board of Directors
Mary K. Friske 37 Vice President - September, 1993
Administration,
Manager of Sales
18
Laurence Mead 35 Vice President - April, 1994
Manufacturing,
Manager of Financial
and Product Development
Lauane C. Addis 41 Corporate Counsel, February, 1984
Secretary and December, 1985
Director February, 1987
James F. Schembri 62 Director November, 1990
[FN]
_______________
Positions Served in
Name Age with Company Office Since
________________ _____ _____________________ __________________
Fred K. Suzuki 68 President, Treasurer, February, 1976 (1)
Director of Research
and Development,
Director of Marketing
and Sales, and Chairman
of the Board of Directors
Mary K. Friske 38 Vice President , September, 1993
Administration,
Manager of Sales
Laurence Mead 36 Vice President, April, 1994
Manufacturing,
Manager of Financial
and Product Development
Lauane C. Addis 42 Corporate Counsel, February, 1984
Secretary and December, 1985
Director February, 1987
James F. Schembri 63 Director November, 1990
________________
(1) Mr. Suzuki did not serve as President from August 1982 through February
1983. Prior to October, 1984, Mr. Suzuki served as Treasurer of the Company,
and was once again appointed Treasurer on June 30, 1991.
As an incentive for his investment in the Company, the Board of Directors
agreed to nominate James F. Schembri as a candidate for election to the Board
of Directors of the Company. Other than the foregoing, there are no
arrangements or understandings between any of the directors or officers of
the Company and any other person pursuant to which any director or officer
was or is to be selected as a director or officer.
The term of office for the members of the Board of Directors extends to the
next regular meeting of shareholders or until they resign, and until their
successors are duly elected. The term of office for the officers of the
Company extends until they resign, are not re-elected by the Board of
Directors, or are otherwise replaced by the Board of Directors of the
Company.
Family Relationships.
____________________
Lauane C. Addis is the son-in-law of Fred K. Suzuki. Otherwise, there is no
family relationship between any director, executive officer, or person
nominated or chosen by the Company to become a director or executive officer.
Involvement in Certain Legal Proceedings.
________________________________________
None of the officers or directors are or have been involved in any legal
proceedings which are material to an evaluation of the ability or integrity
of same.
Business Experience.
___________________
Certain information regarding the business experience of the directors,
officers, significant employees and consultants of the Company are set forth
below:
FRED K. SUZUKI, Jr., Chairman of the Board, President, Treasurer, Director of
Research and Development and Director of Marketing and Sales. Mr. Suzuki is
founder of the Company and has served as President of the Company
19
since its
inception in 1976 to August 1982 and from February 1983 to the present. He
has served as Chairman of the Board of Directors of the Company since its
inception to the present, and as Treasurer from its inception to October,
1984 and from July, 1991 to the present. Mr. Suzuki is also President and
Chairman of the Board of Directors of F.K. Suzuki International, Inc.
("FKSI"), President and Chairman of the Board of Directors of Stevia Company,
Inc. ("Stevia"), President and Chairman of the Board of Directors of Medlab
Products, Inc. ("Medlab"), affiliates of the Company. Mr. Suzuki is the sole
owner, President and Director of Suzuki International, Inc. ("SI"). FKSI is
a holding company of Medlab, Stevia, and the Company. As such, it has no
other business operations. See "Security Ownership of Certain Beneficial
Owners and Management." Medlab is a dormant company, organized to develop,
manufacture, and market scientific products. Stevia is in the business of
developing, manufactur-
ing,manufacturing, and marketing natural sweeteners and other
products derived from Stevia rebaudiana plant. SI is in the business of
marketing various products. Mr. Suzuki has developed several patents or
patents pending for clinical instruments and has licensed them to unaffiliated
corporations. These patents do not inure to the benefit of the Company.
Mr. Suzuki has developed several patents in the area of Diterpene glycosides,
chemistry derived from the Stevia rebaudiana plant. Mr. Suzuki also holds
patents in the area of liquid crystal chemistry. Mr. Suzuki attended
Roosevelt University from 1951 to 1954, where he studied Chemistry and
Biology.
MARY K. FRISKE, Vice President - Administration and Manager of Sales. Ms.
Friske joined the office staff in July, 1983. Ms. Friske served as an
Executive Secretary for several years and was promoted to Office Manager in
1989. In September, 1993, Ms. Friske was appointed Vice President -
Administration and Manager of Sales. Ms. Friske also provides services on an
as-needed basis for an affiliate of the Company, Stevia Company, Inc. Ms.
Friske received her Bachelor of Science degree in May, 1981 from Eastern
Illinois University where she majored in Personnel Management.
LAURENCE MEAD, Vice President - Manufacturing and Manager of Financial and
Product Development. Mr. Mead joined the production department of the
Company in 1980, and has served as the Company's Production Manager since
1984. In April, 1994, Mr. Mead was appointed Vice President - Manufactur-
ingManufacturing
and Manager of Financial and Product Development. Mr. Mead received his
Bachelor of Science degree in August, 1992 from Roosevelt University where he
majored in Accounting.
LAUANE C. ADDIS, Secretary, Corporate Counsel, and Director. Mr. Addis joinedis
currently a member of the law firm Katz, Karacic, Helmin & Addis, P.C.,
Chicago, Illinois. Mr. Addis served the Company infrom February, 1984 to June,
1991 as its Vice President - Finance and Chief Financial Officer on a part-timepart-
time basis and was employed in the equivalent capacity on a part-time basis
by Stevia Company, Inc., an affiliate of the Company, and as a self-employed attorney.Company. From December, 1985
thru June, 1991, Mr. Addis also served as Executive Vice President, Chief
Operating Officer, Chief Financial Officer, and Treasurer of the Company. In
July, 1991, Mr. Addis resigned from these positions to return to the full-timefull-
time private practice of law. Mr. Addis is also the Secretary and a director
of Stevia Company, Inc. and an officer and director of FKSI, an affiliate of
the Company. Mr. Addis is currently a member of the law firm,
20
Katz, Karacic, Helmin & Addis, P.C., Chicago, Illinois. Mr. Addis graduat-
edgraduated from Andrews University with a B.A. in
History and Business Administra-
tionAdministration in June, 1978. He received his Doctor of
Jurisprudence from Baylor University in 1981 and his Master of Laws in
taxationTaxation from the University of Denver in 1982. Mr. Addis is a member of the
Colorado, Illinois and Texas Bar Associations.
JAMES F. SCHEMBRI, Director. Mr. Schembri was elected to the Board of
Directors on November 15, 1990. Mr. Schembri is the founder and President of
Schembri & Associates (formerly Automatic Controls Company). This company
was a manufacturer's representative with offices in Michigan, Ohio and
Kentucky. It currently is involved in specialized lending situations with
Equity Funding, Inc. of West Bloomfield, Michigan. Mr. Schembri is one of
the founders and President of Fenton Systems, Inc., Burton, Michi-
gan.Michigan. In
addition to these activities, Mr. Schembri is founder and Presi-
dentPresident of
Wickfield Leasing Company, which leases automobiles and office equipment.
Mr. Schembri is a director of Stevia Company, Inc., an affili-
ate.affiliate. Mr.
Schembri received his Bachelor of Science Degree in Mechanical Engineering
from the University of Detroit in June, 1957.
Item 11. Executive Compensation.
______________________
The following summary compensation table sets forth a summary of compensa-
tioncompensation
for services in all capacities to the Company during the fiscal years ended
April 30, 1998, 1997 1996 and 19951996 paid to the Chief Executive Officer. None of
the Company's other executive officers received annual salaries and bonuses
for such fiscal years exceeding $100,000.
Summary Compensation Table
__________________________
Annual Compensation Long Term Compensation/Awards
___________________ _____________________________
Name and Other
Principal Annual All Other
Position Year Salary Bonus Compensation (1) Options (#) Compensa-
tion
___________ ____ ______ _____ ____________ ___________ _________
Fred K. Suzuki 1997 $56,827 - - - -
President, 1996 $47,525 - (2) - $1,342 (3)
Chairman of 1995 $44,196 - (2) - $2,140 (3)
the Board and
Chief Executive
Officer
[FN]
_______________
(1) No executive officer received perquisites in excess of the lesser of
$50,000 or 10% of the aggregate of such officer's salary and bonus.
(2) In addition, salary of $6,970 and $5,000 was accrued but not paid
during Fiscal 1995 and 1996 respectively.
21
(3) Interest on loans made by Mr. Suzuki to the Company, aggregating $2,140
and $1,342 was paid or accrued in 1995 and 1996 respectively.
Summary Compensation Table
Annual Compensation Long Term Compensation/Awards
Name and Other
Principal Annual All Other
Position Year Salary Bonus Compensation (1) Options (2) Compensation
-------- ----- ------ ----- ------------ ------- ------------
Fred K.
Suzuki 1998 $60,770 - - - -
President, 1997 $56,827 - - - -
Chairman of 1996 $47,525 - (3) - $1,342 (4)
the Board and
Chief Executive
Officer
- -----------------
(1) No executive officer received perquisites in excess of the lesser of
$50,000 or 10% of the
aggregate of such officer's salary and bonus.
(2) See "Stock Options" below.
(3) In addition, salary of $5,000 was accrued but not paid during Fiscal 1996.
(4) Interest on loans made by Mr. Suzuki to the Company, aggregating $1,342,
was paid or accrued in 1996. See "Certain Relationships and Related Party
Transactions."
All officers and directors are reimbursed for out-of-pocket expenses incurred
in connection with the Company's business. Messrs. Suzuki, Addis and
Schembri are not remunerated in their capacities as directors. See, however,
"Certain Relationships and Related Party Transactions."
The Company does not have any pension or profit sharing plans in effect for
the benefit of its employees, including its officers and directors. Such
plans may be adopted in the future if deemed in the best interests of the
Company by its Board of Directors.
Stock Options
_____________
During the fiscal year ended in 1983, the Company adopted a special
incentive plan for personnel of the Company pursuant to which certain key
individual employees, consultants, officers and directors of the Company
could be granted stock options and/or stock appreciation rights pursuant to
the option agreements. The period for granting options under the stock
incentive plan expired on May 19, 1989. An aggregate of 350,000 shares
were reserved for issuance under the stock incentive plan. All options,
for an aggregate of 131,500 shares, expired on October 14, 1996.
During Fiscal 1997,1998, no stock options were granted to the Chief Executive
Officer or the Company's four other most highly compensated executive
officers (other than the Chief Executive Officer) whose total annual salary
and bonus for fiscal year 19971998 exceeded $100,000, and such officers did not
exercise any options during fiscal year 1997.1998. The following table sets forth
the aggregate value as of April 30, 19971998 of unexercised options held by such
individuals.
Aggregated Option Exercises in Last Fiscal Year
_______________________________________________
and Fiscal Year-End Option Values
_________________________________
Number of Value of
Unexercised Unexercised
Options at in-the-Money
Shares Fiscal Year Options at
Acquired End (#) Fiscal Year-End
on Value Exercisable/ Exercisable/
Name Exercise (#) Realized ($) Unexercisable Unexercisable
____ ____________ ____________ _____________ _____________
Fred K.
Suzuki - - - -
President
and - - 670,000/0 (1) $0/0
Chairman of
the Board - - 3,000,000/0 (2) $0/0
[FN]
__________________
(1) Effective January 31, 1990, the Company entered into an agreement with
Fred K. Suzuki pursuant to which the Company granted an option to convert
all or a portion of Mr. Suzuki's accrued but unpaid compensation into
shares of the Company's no par value common stock at a conversion rate of
$0.05 per share. At April 30, 1997, the total deferred compensation
payable to Mr. Suzuki was $33,500, thereby entitling Mr. Suzuki to convert
such deferred compensation into 670,000 shares of the Company's common
stock. This option has no value in excess of the fair market value of the
Company's Common Stock. This option is conditioned upon the Company having
sufficient liquid assets to pay all employee taxes due at the time the
conversion. This option may be exercised until the optionee is no longer
owed accrued but unpaid salary. The accrued but unpaid salary arose as a
result of Mr. Suzuki's agreement to defer salary when the Company was not
financially able to pay salaries on a regular basis. This option contains
non-dilutive provisions in the event of corporate capital reorganizations.
22
(2) On August 1, 1993, the Company entered into a Stock Option Agreement
with Fred K. Suzuki, President, granting Mr. Suzuki an option to purchase
3,000,000 shares of Company's common stock at an option price of $0.025 per
share. This Stock Option Agreement was granted to Mr. Suzuki in consider-
ation of his loaning money to the Company on an unsecured basis from time
to time. This option has no value in excess of the fair market value of
the Company's common stock. The option contains anti-dilutive provisions
in the event of corporate capital reorganizations. As of April 30, 1997,
Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year-End Option Values
Number of Value of
Unexercised Unexercised
Options at in-the-Money
Shares Fiscal Year Options at
Acquired End (#) Fiscal Year-End
on Value Exercisable/ Exercisable/
Name Exercise (#) Realized ($) Unexercisable Unexercisable
- ------------ ------------ ------------ --------------- ----------------
Fred K.
Suzuki-- - - - -
President
and - - 60,000/0 (1) $0/0
Chairman of
the Board - - 3,000,000/0 (2) $0/0
- -------------
(1) Effective January 31, 1990, the Company entered into an agreement with
Fred K. Suzuki pursuant to which the Company granted an option to convert all
or a portion of Mr. Suzuki's accrued but unpaid compensation into shares of
the Company's no par value common stock at a conversion rate of $0.05 per
share. At April 30, 1998, the total deferred compensation payable to
Mr. Suzuki was $3,000, thereby entitling Mr. Suzuki to convert such deferred
compensation into 60,000 shares of the Company's common stock. This option
has no value in excess of the fairmarket value of the Company's Common Stock.
This option is conditioned upon the Company having sufficient liquid assets
To pay all employee taxes due at the time the conversion. This option may be
exercised until the optionee is no longer owed accrued but unpaid salary. The
accrued but unpaid salary arose as a result of Mr. Suzuki's agreement to
defer salary when the Company was not financially able to pay salaries on a
regular basis. This option contains non-dilutive provisions in the event of
corporate capital reorganizations.
(2) On August 1, 1993, the Company entered into a Stock Option Agreement
with Fred K. Suzuki, President, granting Mr. Suzuki an option to purchase
3,000,000 shares of Company's common stock at an option price of $0.025 per
share. This Stock Option Agreement was granted to Mr. Suzuki in considera-
tion of his loaning money to the Company on an unsecured basis from time to
time. This option has no value in excess of the fair market value of the
Company's common stock. The option contains anti-dilutive provisions in the
event of corporate capital reorganizations. As of April 30, 1998, no portion
of this Option has been exercised.
Compensation Committee. The Company does not have a Compensation Committee
of its Board of Directors. The Board of Directors makes all decisions
concerning the President's compensation including, but not limited to, the
granting of options to acquire common stock of the Company. The President of
the Company, Fred K. Suzuki, has the sole authority, as granted by the Board
of Directors, to make compensation decisions for other employees of the
Company other than the granting of Options to acquire the common stock of the
Company.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
______________________________________________________________
The following table sets forth information as of April 30, 1997,1998, as to the
voting securities of the Company owned by the officers and directors of the
Company and by each person who owns of record, or is known by the Company to
own beneficially, more than 5% of any class of voting securities.
Amount and Nature
Name and Address of Beneficial Percent of
Title of Class of Beneficial Owner Ownership Class
______________ ___________________ _________________ __________
Common Stock Fred K. Suzuki 4,497,146 shares 32.57%
710 S. Kennicott of record and
Arlington Heights, beneficial (1)
Illinois 60005
23
Common Stock F.K. Suzuki Inter- 2,597,146 shares 18.81%
national, Inc. record and bene-
1940 E. Devon Ave. ficial
Elk Grove Village, IL
60007
Common Stock Stevia Company, Inc. 1,900,000 shares 13.76%
1940 E. Devon Ave. of record and
Elk Grove Village, IL beneficial (1,2)
60007
Common Stock Lauane C. Addis 4,506,146 shares 32.64%
1819 Orleans Circle record and bene-
Elk Grove Village, IL ficial (3)
60007
Common Stock James F. Schembri 1,785,500 shares 12.93%
19115 W. Eight Mile Rd. of record and
Detroit, MI 48219 beneficial (3)
Common Stock Mary K. Friske (4) 1,000 shares of .01%
940 Bradley Court record and
Palatine, IL 60074 beneficial
Common Stock Laurence C. Mead (5) 1,250 shares of .01%
7820 Northway Drive record and
Hanover Park, IL 60103 beneficial
Common Stock All directors and 6,293,896 45.59%
officers as a
group (5 members)
[FN]
_______________
(1) Fred K. Suzuki is President of F.K. Suzuki International, Inc.
("FKSI") and owns 35.6% of the outstanding common stock of FKSI. Mr.
Suzuki is also President and Chairman of the Board of Stevia Company,
Inc. ("Stevia") of which FKSI owns 55.84% of its outstanding common
stock. Mr. Suzuki does not personally hold of record any shares of
the company's common stock; however he is deemed to be beneficial
owner by reason of voting and disposition control 4,497,146 shares
which includes 2,597,146 shares which are owned by FKSI and 1,900,000
shares owned by Stevia. The above table does not include an option
granted to Mr. Suzuki to convert all or a portion of his deferred
salary into shares of the Company's common stock at a conversion rate
of $.05 per share, or an option to acquire 3,000,000 shares of the
24
Company's common stock at $0.025 per share. See "Executive Compensa-
tion" and "Certain Relationships and Related Party Transactions."
(2) Mr. Addis personally owns 9,000 shares of the outstanding Common Stock
of the Company. In addition, Mr. Addis owns 32.7% of the outstanding
Common Stock of FKSI, which owns 55.84% of the outstanding Common
Stock of Stevia and 18.95% of the Common Stock of the Company. Mr.
Addis is also an officer and director of Stevia which owns 1,900,000
shares of the Company's Common Stock. Mr. Addis is therefore deemed
to be beneficial owner by reason of voting and disposition control of
2,597,146 shares owned by FKSI, and is deemed to be the beneficial
owner by reason of voting and disposition control over 1,900,000
shares owned by Stevia.
(3) Included in the shares owned beneficially by Mr. Schembri are 91,000
shares held in trust for the benefit of Mr. Schembri, 31,000 shares
held in Individual Retirement Accounts for the benefit of Mr.
Schembri, 8,000 shares owned by Midwest Valve Services, of which Mr.
Schembri has sole dispositive and voting control, and 500,000 shares
owned in joint tenancy with Mr. Schembri's son.
(4) In addition to the Shares of outstanding common stock of the Company
owned by Mary K. Friske, she also owns 200 shares, or approximately
.2%, of the outstanding common stock of FKSI, which owns 55.84% of the
outstanding common stock of Stevia and 18.95% of the common stock of
the Company.
(5) In addition to the common stock of the Company owned by Laurence C.
Mead, he also owns 2,900 shares, or approximately 2.9%, of the out-
standing common stock of FKSI, which owns 55.84% of the outstanding
common stock of Stevia and 18.95%
Amount and Nature
Name and Address of Beneficial Percent of
Title of Class of Beneficial Owner Ownership Class
- ---------------- -------------------- -------------------- ------------
Common Stock Fred K. Suzuki 4,497,146 shares 32.57%
710 S. Kennicott of record and
Arlington Heights, beneficial (1)
Illinois 60005
Common Stock F.K. Suzuki Inter- 2,597,146 shares 18.81%
national, Inc. record and bene-
1940 E. Devon Ave. ficial
Elk Grove Village, IL
60007
Common Stock Stevia Company, Inc. 1,900,000 shares 13.76%
1940 E. Devon Ave. of record and
Elk Grove Village, IL beneficial (1,2)
60007
Common Stock Lauane C. Addis 4,506,146 shares 32.64%
1819 Orleans Circle record and bene-
Elk Grove Village, IL ficial (3)
60007
Common Stock James F. Schembri 1,799,500 shares 13.03%
19115 W. Eight Mile Rd. of record and
Detroit, MI 48219 beneficial (3)
Common Stock Mary K. Friske (4) 1,000 shares of .01%
940 Bradley Court record and
Palatine, IL 60074 beneficial
60194
Common Stock Laurence C. Mead (5) 1,250 shares of .01%
1151 Warwick Cir. North record and
Hoffman Estates IL beneficial
Common Stock All directors and 6,307,896 45.69%
officers as a
group (5 members)
- -------------
(1) Fred K. Suzuki is President of F.K. Suzuki International, Inc. ("FKSI")
and owns 35.6% of the outstanding common stock of FKSI. Mr. Suzuki is also
President and Chairman of the Board of Stevia Company, Inc. ("Stevia") of
which FKSI owns 55.84% of its outstanding common stock. Mr. Suzuki does not
personally hold of record any shares of the company's common stock; however
he is deemed to be beneficial owner by reason of voting and disposition
control 4,497,146 shares which includes 2,597,146 shares which are owned by
FKSI and 1,900,000 shares owned by Stevia. The above table does not include
an option granted to Mr. Suzuki to convert all or a portion of his deferred
salary into shares of the Company's common stock at a conversion rate of
$.05 per share, or an option to acquire 3,000,000 shares of the Company's
common stock at $0.025 per share. See "Executive Compensation" and "Certain
Relationships and Related Party Transactions."
(2) Mr. Addis personally owns 9,000 shares of the outstanding Common Stock
of the Company. In addition, Mr. Addis owns 32.7% of the outstanding Common
Stock of FKSI, which owns 55.84% of the outstanding Common Stock of Stevia
and 18.8% of the Common Stock of the Company. Mr. Addis is also an officer
and director of Stevia which owns 1,900,000 shares of the Company's Common
Stock. Mr. Addis is therefore deemed to be beneficial owner by reason of
voting and disposition control of 2,597,146 shares owned by FKSI, and is
deemed to be the beneficial owner by reason of voting and disposition
control over 1,900,000 shares owned by Stevia.
(3) Included in the shares owned beneficially by Mr. Schembri are 35,000
shares held in Auto Controls Profit Sharing Plan for the benefit of Mr.
Schembri and 508,000 shares owned in joint tenancy with Mr. Schembri's son.
(4) In addition to the Shares of outstanding common stock of the Company
owned by Mary K. Friske, she also owns 200 shares, or approximately .2%, of
the outstanding common stock of FKSI, which owns 55.84% of the outstanding
common stock of Stevia and 18.8% of the common stock of the Company.
(5) In addition to the common stock of the Company owned by Laurence C.
Mead, he also owns 2,900 shares, or approximately 2.9%, of the outstanding
common stock of FKSI, which owns 55.84% of the outstanding common stock of
Stevia and 18.8% of the common stock of the Company.
Changes in Control
__________________
The Company does not know of any arrangements, the operation of which may at
a subsequent date result in a change in control in the Company nor has a
change in the control of the Company occurred during the last fiscal year.
Item 13. Certain Relationships and Related Party Transactions.
____________________________________________________
During the fiscal year ending April 30, 1997,1998, the Company shared common
areasexpenses and office space with an affiliate,two affiliates, Stevia Company, Inc.
("Stevia") and F.K. Suzuki International, Inc. ("FKSI"). It is believed by
management that by sharing common areas and office space with Stevia and
FKSI, expenses will be reduced and kept at minimum levels. It is anticipated
by the Company that they will continue to share common areas and office space
with Stevia and FKSI in the future. The Company and Steviathese affiliates
reimburse each other for such common area expenses as appropriate. As of April
30, 1997,1998, Stevia owed $278,874$298,335 and FKSI owed $13,221 to the Company in
connection with the shared common area expenses. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations."
25
On September 20, 1996, the Company loaned Stevia $3,000 for payment of real
estate taxes on Stevia's Pueblo, Colorado facility. The loan was evidenced
by an Installment Promissory Note providing for two monthly payments of
principal and interest, with interest computed at 11.5%. The loan was
repaid on December 12, 1996.
Effective January 31, 1990, the Company entered into an agreement with Fred
K. Suzuki, President, pursuant to which the Company granted an option to
convert all or a portion of Mr. Suzuki's accrued but unpaid compensation into
shares of the Company's no par value common stock at a conversion rate of
$0.05 per share. At April 30, 1997,1998, the total deferred compensation payable
to Mr. Suzuki was $33,500,$3,000, thereby entitling Mr. Suzuki to convert such
deferred compensation into 670,00060,000 shares of the Company's common stock. The
option is conditioned upon the Company having sufficient liquid assets to pay
all employee taxes due at the time of conversion. The option is exercisable
until Mr. Suzuki's is no longer owed accrued salary. The accrued but unpaid
salary arose as a result of Mr. Suzuki's agreement to defer salary when the
Company was not financially able to pay salaries on a regular basis. The
option contains non-dilutive provisions in the event of corporate capital
reorganizations.
On August 1, 1993, the Company entered into a Stock Option Agreement with
Fred K. Suzuki, President, granting Mr. Suzuki an option to purchase
3,000,000 shares of the Company's common stock at an option price of $0.025
per share. This Stock Option Agreement was granted to Mr. Suzuki in
consideration of his loaning money to the Company on an unsecured basis
from time to time. The option contains anti-dilutive provisions in the event
of corporate capital reorganizations. As of April 30, 1997,1998, no portion of
this option has been exercised.
Lauane C. Addis, Secretary and Director, as a member of the law firm of Katz,
Karacic, Helmin & Addis, P.C., has represented the Company with respect to
the preparation and filing of this Report. Mr. Addis, and other members of
Katz, Karacic, Helmin & Addis, P.C., perform other legal services for the
Company from time to time, and it is anticipated such services will be
performed by Mr. Addis and other members of Katz, Karacic, Helmin & Addis,
P.C., in the future. During Fiscal 1997,1998, the Company paid $4,472.97$5,329 in legal
fees to Katz, Karacic, Helmin & Addis, P.C., some of which inured to the
benefit of Mr. Addis in the form of salary and bonuses. Mr. Addis is an
officer, director and major shareholder of the Company, and is also the son-in-law
of Fred K. Suzuki, President and Chairman of the Board of Directors. See
"Directors and Executive Officers of the Regis-
trant"Registrant" and "Security Ownership
of Certain Beneficial Owners and Manage-
ment.Management."
Except with regard to the above, there were no other material transactions
involving management of the Company or any third party during the last fiscal
year which accrued to the benefit of officers or directors of the Company.
26
PART IV
_______
Item 14. Exhibits, Financial Statements Schedules and Reports on Form 8-K
________________________________________________________________
The following financial statements, schedules and exhibits are filed as a
part of this report:
(a) (1) Financial statements.
____________________
Balance sheet for the fiscal years ending April 30, 19961997 and 1997.1998.
Statements of operations for the fiscal years ending April 30,
1995, 1996, 1997 and 1997.1998.
Statements of Shareholders' Equity (Deficit) for the fiscal years
ended April 30, 1995, 1996, 1997 and 1997.1998.
Statements of Cash Flows of the Company for fiscal years ending
April 30, 1995, 1996, 1997 and 1997.1998.
Notes to financial statements.
(a) (2) List of Financial Statement Schedules:
_____________________________________
The followingNo financial schedules for the fiscal years ending April 30, 1998,
1997 and 1996 and 1995 are submitted herewith:
Schedule I - Marketable Securities - Other Investments - P. S-1.
Schedule V - Property, Plant and Equipment - P. S-2.
Schedule VI - Accumulated Depreciation, Depletion and Amortization
of Property, Plant and Equipment - P. S-3.
Schedule VIII - Valuation and Qualifying Accounts - P. S-4.
Schedule X - Supplementary Income Statement
Information - P. S-5.submitted.
Except as listed above, there are no financial statement schedules
required to be filed by Item 8 of this Form 10-K except for those otherwise
shown on the financial statements or notes thereto contained in this report.
(b) Reports on Form 8K. No current reports on Form 8K were filed during the
last quarter covered by this report.
(c) The Following Exhibits are Filed as a Part of this Report:
__________________________________________________________
3. a. Articles3a.Articles of Incorporation and By-Laws (1)
4. Instruments4.Instruments Defining the Rights of Security Holders, Including
Indentures - none.
27
9. Voting9.Voting Trust Agreements - none.
10. Material Contracts
(a) Deferred Compensation Option Agreement, dated January 31,
1990, between the Company and Fred K. Suzuki (2)
(b) Stock Option Agreement, dated August 1, 1993, between the
Company and Fred K. Suzuki (3)
(c) Installment Promissory Note, dated September 20, 1996, in the
amount of $3,000 payable by Stevia Company, Inc. to the Company. P. E-1.
11. Statement11.Statement Regarding Computation of Earnings Per Share - none.
12. Statements12.Statements Regarding Computation of Ratios - none.
13. Annual Report to Security Holders - none.
16. Letter Regarding Change in Certifying Accountants - none.
18. Letter Regarding Change in Accounting Principles - none.
19. Previously Unfiled Documents - none.
22. Subsidiaries of Registrant - none.
23. Published Report Regarding Matters Submitted to Vote of Security
Holders - none.
24. Consent of Experts and Counsel - none.
25. Power of Attorney - none.
27. Financial Data Schedule - P. E-3.E-1.
28. Additional Exhibits - none.
29. Information From Reports Furnished to State Insurance Regulatory
Agencies. N/A
________________
[FN]
_______________
(1) Incorporated by reference to a Registration Statement filed on Form
S-
18S-18 with the Securities and Exchange Commission, 1933 Act Registration
Number 2-83015C, under the Securities Act of 1933, as amended, and
Incorpo-
ratedIncorporated by reference, with regard to Amended By-Laws, to the Company's
Annual Report on Form 10K for fiscal year ending April 30, 1986 filed with the
Securities and Exchange Commission.
(2) Incorporated by reference to the Company's Annual Report on Form 10K for
fiscal year ending April 30, 1990 filed with the Securities and Exchange
Commission.
28
(3) Incorporated by reference to the Company's Annual Report on Form 10K for
fiscal year ending AprilendingApril 30, 1994 filed with the Securities and Exchange
Commission.
29
SIGNATURES
__________
Pursuant to the requirement 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, duly authorized.
REGISTRANT: BIOSYNERGY, INC.
________________________________ _________________- --------------------------------------- ----------------
Fred K. Suzuki, Chairman of the Date
Board of Directors and President
Pursuant to the requirements of the Securities and Exchange Act of 1934, this
report has been signed by the following persons on behalf of the registrant
in the capacities on the dates indicated.
________________________________ _________________- --------------------------------------- -------------
Fred K. Suzuki, Chairman of the Date
Board of Directors, President,
Treasurer and Chief Accounting
Officer
________________________________ _________________- --------------------------------------- -------------
Lauane C. Addis, Corporate Date
Counsel, Secretary and Director
30
SIGNATURES
__________
Pursuant to the requirement 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, duly authorized.
REGISTRANT: BIOSYNERGY, INC.
/s/ FRED K. SUZUKI JULY 25, 1997
________________________________ _________________10, 1998
__________________________ ____________
Fred K. Suzuki, Chairman of the Date
Board of Directors and President
Pursuant to the requirements of the Securities and Exchange Act of 1934, this
report has been signed by the following persons on behalf of the registrant
in the capacities on the dates indicated.
/s/ FRED K. SUZUKI JULY 25, 1997
________________________________ _________________10, 1998
______________________________________ ______________
Fred K. Suzuki,Suzukii, Chairman of the Date
Board of Directors, President,
Treasurer and Chief Accounting
Officer
/s/ LAUANE C. ADDIS JULY 25, 1997
________________________________ _________________10, 1998
______________________________________ _____________
Lauane C. Addis, Corporate Date
Counsel, Secretary and Director
30
BIOSYNERGY, INC.
FINANCIAL STATEMENTS
FOR THE YEARS ENDED APRIL 30, 1998, 1997 1996 AND 1995
1996
Board of Directors and Shareholders
Biosynergy, Inc.
Elk Grove Village, Illinois
The accompanying balance sheet of BIOSYNERGY, INC. at April 30, 19971998 and
1996,1997, and the related statements of operations, shareholders' equity and cash
flows for the fiscal years ending April 30, 1998, 1997 1996 and 19951996 were not
audited due to the Company's lack of available cash to pay for such audit;
however, the financial statements for the fiscal years ending April 30, 1998,
1997 1996 and 19951996 reflect all adjustments (consisting only of normal reoccurring
adjustments) which are, in opinion of management, necessary to provide a fair
statement of the results of operations for the period presented.
The financial statements for the fiscal year ending April 30, 1991 were
examined by the Company's accountants, KPMG Peat Marwick, and they expressed
a qualified opinion on them in their report dated June 7, 1991. These
opinions were qualified as to the Company's ability to continue as a going
concern. The Company's accountants have not performed any auditing
procedures since June 7, 1991.
BIOSYNERGY, INC.
July 1, 19971998
BIOSYNERGY, INC.
BALANCE SHEET
April 30,
________________________1998 1997 1996
_________ _________
Unaudited Unaudited
_________ _________
ASSETS
______CURRENT ASSETS
CURRENT ASSETS
Cash 31,150 12,420 9,733
Accounts Receivable, Trade, Net of
Allowance for Doubtful Accounts of
$500 in 1998 and 1997 and 199675,955 61,030
56,750
Inventories 50,148 45,956 47,894
Prepaid Expenses 3,792 2,268 2,795
_________ _________
Total Current Assets 161,045 121,674 111,752
_________ _________
Due From Affiliates (Note 3) 311,556 291,795 271,020
Equipment and Leasehold Improvements:
Equipment 170,670 161,320 154,036
Leasehold Improvements 15,140 12,216
12,216
_________ _________185,810 173,536 166,252
Less: Accumulated Depreciation and
Amortization 165,897 163,010
162,063
_________ _________19,913 10,526 4,189
_________ _________
OTHER ASSETS
Patents, Net of Accumulated
Amortization 22,553 25,533
29,805
Deposits 5,995 6,051 6,145
Investment in Affiliated Company
(Note 3) - -
_________ __________28,548 31,584
35,950
_________ __________521,062 455,579 428,331
========= ==========
The accompanying notes are an integral part of the financial statements.
F-2
April 30,
________________________1998 1997
1996
_________ _________
Unaudited Unaudited
_________ _________
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
CURRENT LIABILITIES
Accounts Payable 8,875 12,873 46,422
Accrued Executive Compensation 37,355 67,856 99,435
Other Accrued Compensation 3,060 2,137 1,102
Accrued Payroll Taxes 254 791 -
Deferred Rent 1,783 1,751 317
Other Accrued Expenses 1,949 1,736 1,583
_________ _______
Total Current Liabilities 53,276 87,144 148,859
COMMITMENTS AND CONTINGENCIES (Note 7) - -
SHAREHOLDERS' EQUITY (DEFICIT) (Notes 3 and 5)
Common Stock, No Par Value, 20,000,000
Shares Authorized as of April 30, 19961997
and 1997;1998;
13,806,511 Issued and Outstanding
as of April 30, 19961997 and 19971998 632,663 632,663
Additional Paid in Capital 100 100
(164,977) (264,328)
(353,291)
__________ __________467,786 368,435
279,472521,062 455,579 428,331
__________ __________
---------- ----------
The accompanying notes are an integral part of the financial statements.
F-3
BIOSYNERGY, INC.
STATEMENT OF OPERATIONS
YEAR ENDED APRIL 30,
______________________________________1998 1997 1996 1995
_____________ _____________ _________
Unaudited Unaudited Unaudited
_____________ _____________ __________----------- --------- -----------
REVENUES
REVENUES
Net Sales 529,460 502,560 454,784
443,337
Interest Income - 54 1,453 41
Computer Rentals and Services 600 600 600
Other Income 2,860 7,450 3,624 6,222
_____________ _____________ _________2,860
532,920 510,664 460,461 450,200
_____________ _____________ _________
COST AND EXPENSES
Cost of salesSales and other
operating chargesOther
Operating Charges 189,398 185,667 162,864 177,262
Research and Development 36,070 32,265 27,995
27,179
Marketing 51,077 54,075 45,685 35,854
General and Administrative 156,692 149,217 143,293
156,244
Interest Expense 332 477 2,206
5,837
___________ _____________ _________________ _______ _______
433,569 421,701 381,044
402,377
___________ _____________ _________________ _______ _______
INCOME (LOSS) BEFORE INCOME
TAXES AND EXTRAORDINARY
ITEMS 99,351 88,963 79,417
47,824
INCOME TAXES 29,392 25,104 26,438 11,218
___________ _____________ _________
INCOME (LOSS) BEFORE
EXTRAORDINARY ITEMS 69,959 63,859 52,979 36,606
___________ _____________ _________
EXTRAORDINARY ITEMS
Reduction of Income Taxes arising from
Utilization of prior years'- Net
Operating Losses (Note 8) 29,392 25,104 26,438 11,218
Write Off Accounts Payable - - 12,770
-
___________ _____________ _________29,392 25,104 39,718 11,218
___________ _____________ _________
NET INCOME (LOSS) 99,351 88,963 92,197
47,824
___________ _____________ _________
----------- ------------- -------------------
INCOME (LOSS) PER COMMON SHARE
(Note 6):
Before Extraordinary Items .0027 .0050 .0038
.0027
___________ _____________ _________
Extraordinary Items .0008 .0014 .0028 .0008
___________ _____________ _________
NET INCOME (LOSS) .0072 .0064 .0066 .0035
___________ _____________ _________
----------- ------------- ---------
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING 13,806,511 13,806,511 13,806,511
_____________ ___________ ____________
------------- ----------- ------------------------- --------------
The accompanying notes are an integral part of the financial statements.
F-4
BIOSYNERGY, INC.
STATEMENT OF SHAREHOLDERS' EQUITY (DEFICIT)
YEARS ENDED APRIL 30, 1998, 1997 1996 AND 19951996
Common Stock Additional
____________________ Paid-In
Shares Amount Capital Deficit Total
______ ______ __________ ________ ___________ _________ ____________ ______
BALANCE,
May 1, 19951996
(Unaudited) 13,806,511 632,663 100 ( 445,488) 187,275
__________ ________ ___________ __________ _______
---------- -------- ----------- ---------- -------
NET INCOME - - - 92,197 92,197
__________ ________ ___________ __________ _______
BALANCE,
April 30, 1996 13,806,511 632,663 100 ( 353,291) 279,472
__________ ________ ___________ __________ _______
(Unaudited) ---------- -------- ----------- ----------------- ----------- --------- -------
NET INCOME - - - 88,963 88,963
__________ ________ ___________ __________ _______
BALANCE,
April 30, 1997 13,806,511 632,663 100 ( 264,328) 368,435
__________ ________ ___________ __________ _______
(Unaudited) ---------- ------------------- ------- ----------- --------- -------
NET INCOME - - - 99,351 99,351
BALANCE,
April 30, 1998 13,806,511 632,663 100 ( 164,977) 467,786
(Unaudited) ----------- ------- ----------- ---------- -------
The accompanying notes are an integral part of the financial statements.
F-5
BIOSYNERGY, INC.
STATEMENTS OF CASH FLOW
YEAR ENDED APRIL 30,
_____________________________
1998 1997 1996 1995
_________ _________ _________
Unaudited Unaudited Unaudited
_________ _________ _________
OPERATING ACTIVITIES:
Net Income (Loss)
Adjustments to Reconcile Net
Cash Provided 99,351 88,963 92,197 47,824
By (Used In) Operating Activities:
Depreciation and Amortization 5,867 5,219 7,063 9,330
Changes in Assets and Liabilities:
Accounts Receivable, Net (4,280)(14,925) ( 4,280) 1,402 (17,403)
Inventories and Prepaid Expenses ( 5,716) 2,465 ( 1,609) 12,115
Accounts Payable and Accrued
Expenses (33,868) (61,715) (56,898) (22,112)
_________ _________ _________
Net Cash Provided By (Used In)
Operating Activities 50,709 30,652 42,155 29,754
INVESTING ACTIVITIES:
Advances to Affiliated Companies
(Note 3) (19,761) (20,775) (21,014) (18,245)
Purchase of Equipment (7,284) -(12,274) ( 1,049)7,284) --
Deposits 56 94 360 -
_________ ________ _________
Net Cash Provided By (Used In) Investing
Activities (31,979) (27,965) (20,654) (19,294)
FINANCING ACTIVITIES:
Net Proceeds from Borrowing
(Repayments) - - (16,288) (12,114)
_________ _________ _________
Net Cash Provided By (Used In) Financing
Activities - (16,228) (12,114)- (16,288)
Increase (Decrease) in Cash and Cash
Equivalents 18,730 2,687 5,213 ( 1,654)
_________ _________ _________
Cash and Cash Equivalents at Beginning
of Year 12,420 9,733 4,520 6,174
Cash and Cash Equivalents at End of
Year 31,150 12,420 9,733
4,520
_________ __________ ________
SUPPLEMENTALUPPLEMENTAL DISCLOSURE:
Cash Paid for Interest 332 2,687 5,231
1,547
_________ _________ __________
--------- --------- -------------------
The accompanying notes are an integral part of the financial statements.
F-6
BIOSYNERGY, INC.
NOTES TO FINANCIAL STATEMENTS
1. Summary of Significant Accounting Policies:
Inventories - Inventories are valued at the lower of cost using the FIFO
(first-in, first-out) method or market (using net realizable value).
Equipment and Leasehold Improvements - Equipment and leasehold improvements
are stated at cost. Depreciation is computed primarily on the straight-
linestraight-line
method over the estimated useful lives of the respective assets. Repairs and
maintenance are charged to expense as incurred; renewals and betterments
which significantly extend the useful lives of existing equipment are
capitalized. Significant leasehold improvements are capital-
izedcapitalized and
amortized over the term of the lease.
Research and Development, and Patents - Research and development expendi-
turesexpenditures
are charged to operations as incurred. The cost of obtaining patents,
primarily legal fees, are capitalized and amortized over the life of the
respective patent on the straight-line method.
2. Company Organization and Description:
Biosynergy, Inc. (Company) was incorporated under the laws of the State of
Illinois on February 9, 1976. It is primarily engaged in the development and
marketing of medical, consumer and industrial thermometric and thermo-
graphicthermographic
products that utilize cholesteric liquid crystals.
3. Related Party Transactions:
The Company and its affiliates are related through common stock ownership as
follows as of April 30, 1997:1998:
F-7
BIOSYNERGY, INC.
NOTES TO FINANCIAL STATEMENTS
S T O C K O F A F F I L I A T E S
___________________________________________
F.K. Suzuki
Stevia Biosynergy International Medlab
Stock Owner Company Inc. Inc. Inc.
_________________________________ _________ _____________________ _____________ ______
Stevia Company, Inc. - 13.8% - -
Biosynergy, Inc. .4% - - -
F.K. Suzuki
International, Inc. 55.8% 18.8% - 100.0%
Fred K. Suzuki, Officer - - 35.6% -
Lauane C. Addis,
Officer .1% .1% 32.7% -
James F. Schembri, - 12.9% - -
Director
Mary K. Friske, Officer - .1% .2% -
Laurence C. Mead, Officer .1% .1% 2.9% -
Upon the completion of the Company's public offering on July 7, 1983, the
Company issued 2,000,000 shares of its no par value common stock, repre-
sentingrepresent-
ing 19% of the outstanding common stock of the Company, in exchange for
1,058,181 shares of the common stock of Stevia Company, Inc., which was
approximately 4.4%of the then outstanding common stock of Stevia Company,
Inc. The common stock of Stevia Company, Inc. had no book value at the time
of the exchange and, as a consequence, the Company recorded the exchange at
zero dollar value.
Biosynergy owned 130,403 shares of Stevia Company, Inc. Common Stock at April
30, 1997,1998, representing a .4% interest in Stevia. Although the Common Stock
of Stevia Company, Inc. is traded in the over-the-counter market, there is no
established public trading market for such Common Stock due to limited and
sporadic trades. As of April 30, 1997,1998, the bid price of the common stock of
Stevia Company, Inc. was approximatelyestimated to be $.001 per share.
Common offices are shared with Stevia Company, Inc. Intercompany charges for
shared expenses are made by whichever company incurs such changes. Such
intercompany charges, together with funds advanced by Stevia in prior years,
have resulted in the following balances at April 30:
April 30, 19961998 - $258,360$298,335
April 30, 1997 - $278,874
At April 30, 1997,1998, the financial condition of Stevia Company, Inc. was such
that it is unlikely to be able to repay Biosynergy during the next year
without liquidating a portion of its assets.
F-8
BIOSYNERGY, INC.
NOTES TO FINANCIAL STATEMENTS
The following balances were due from F.K. Suzuki International, Inc. at April
30:
April 30, 19961998 - $12,660$13,221
April 30, 1997 - $12,921
The balances result for an allocation of common expenses offset by advances
received from time to time. At April 30, 1997,1998, the financial condition of
F.K. Suzuki International, Inc. was such that it unlikely to be able to repay
Biosynergy during the next year without liquidating a portion of its assets.
During the fiscal year ending April 30, 1994, Fred K. Suzuki, President of
the Company, made several loans to the Company. These loans were repaid
during Fiscal 1996. See Note 5 for a description of such loans.
See also Note 6.
4. Inventories:
Components of inventories are as follows:
April 30, 19961998 April 30, 1997
______________ ______________
Raw Materials $30,015$31,789 $30,583
Work-in process 16,16116,049 10,257
Finished Goods 1,7182,310 5,116
_____________ ______________
------------- --------------
$47,894$50,148 $45,956
_____________ ______________
------------- --------------
F-9
BIOSYNERGY, INC.
NOTES TO FINANCIAL STATEMENTS
5. Common Stock:
The Company's stock is traded in the Over-The-Counter market. However, there
is no established public trading market due to limited and sporadic trades.
The Company's common stock is not listed on a recognized market or stock
exchange.
All of the stock options and stock appreciation rights for 131,500 shares
of stock granted to four advisors, directors, officers, consultants, and
employees of the Company under the Company's employee stock incentive plan
expired on October 14, 1996. The Company had reserved 350,000 shares of
its common stock for this plan.
As of April 30, 1996, under an employee stock incentive plan, stock options
and stock appreciation rights which are exercisable for 131,500 shares of
stock were granted to five advisors, directors, officers, consultants,
and/or employees of the Company. The exercise price is $.05 per share for
these shares. The Company has reserved 350,000 shares of its common stock
for this plan. The period for granting options under this plan expired May
19, 1989.
Effective January 31, 1990, the Company entered into an agreement with its
President, Fred K. Suzuki, pursuant to which the Company granted an option to
convert all or a portion of his accrued but unpaid compensation into shares
of the Company's no par value common stock at a conversion rate of $.05 per
share. The option is conditioned upon the Company having suffi-
cientsufficient liquid
assets to pay all employee taxes due at the time of the conversion. The
option may be exercised until the optionee is no longer owed accrued but
unpaid salary. The accrued but unpaid salary arose as a result of the
individual agreeing to defer salaries when the Company was not financially
able to pay salaries on a regular basis. The options contain non-dilutive
provisions in the event of corporate capital reorgani-
zations.reorganizations. At April 30,
1997,1998, an aggregate of 670,00060,000 shares of the Company-
'sCompany's common stock was subject
to Mr. Suzuki's option.
On August 1, 1993, the Company entered into a Stock Option Agreement with
Fred K. Suzuki, President, granting Mr. Suzuki an option to purchase
3,000,000 shares of the Company's common stock at an option price of $0.025
per share. This Stock Option Agreement was granted to Mr. Suzuki in
consideration of his loaning money to the Company on an unsecured basis from
time to time. The option contains anti-dilutive provisions in the event of
corporate capital reorganizations. As of April 30, 1997,1998, no portion of this
Option has been exercised.
F-10
BIOSYNERGY, INC.
NOTES TO FINANCIAL STATEMENTS
6. Income or (Loss) Per Shares:
Net income or (loss) per common share is computed using the weighted average
number of common shares outstanding during the period, after giving effect to
stock splits. The weighted average number of common shares outstanding were
13,806,511 at April 30, 1998, 1997 1996 and 1995.1996. The affect of conversion of
stock options has not been presented as conversion would be anti-dilutive.
7. Lease Commitments:
In 1996 the Company entered a new lease agreement for its current facili-
tiesfacilities
which expires January 31, 2001. The base rent under the lease, of which 15%
is allocated to Stevia Company, Inc., escalates over the life of the lease.
Total rent payments for each fiscal year are as follows:
Year ending April 30 Total Base Rent
____________________ _______________
1996 11,000
1997 66,733
1998 68,200
1999 68,567
2000 69,300
2001 51,975
Also included in the lease agreement are escalation clauses for the lessor's
increases in property taxes and other operating expenses. Rent expense was
$58,002, $46,784,$58,002, and $49,490$46,784 for the fiscal years ending on April 30, 1998,
1997 1996 and 1995,1996, respectively. The lease can be extended for an additional
five year term.
8. Income Taxes:
At April 30, 1997,1998, net operating loss carryforwards were available and
expire, if not used, as follows:
Year Ending Net Operating
April 30, Losses
____________ ______________
1998 $193,062
1999 677,671
2000 455,166
2001 449,142
2002 132,470
2003 85,822
2004 41,176
2006 160
2007 28,253
____________ _____________
$2,062,922
_____________
-------------__________
$1,869,860
F-11
BIOSYNERGY, INC.
NOTES TO FINANCIAL STATEMENTS
The Company has adopted Statement of Financial Accounting Standards (SFAS)
No. 109, "Accounting for Income Taxes" as required by SFAS No. 109. The
effect, if any, of adopting Statement No. 109 on pretax income from
continuing operations is not material. The Company has elected not to
retroactively adopt the provisions allowed in SFAS No. 109, however all
provisions of the document have been applied since the beginning of fiscal
year 1994.
9. Major Customers:
Shipments to one customer amounted to approximately 29.9%31.3% of sales in Fiscal
1997.1998. At April 30, 19971998 there was an outstanding accounts receiv-
ablereceivable from
this customer of approximately $19,520.$26,723.
10. Management's Plans:
In view of the fact the Company has incurred substantial losses in prior
years, managementManagement of the Company recognizes the Company's ability to continue as a
going concern is subject to continuing sales performance and the ability of
the Company to raise money, when needed. To this extent, management has
endeavored to introduce the Company's products to new markets and expand its
marketing efforts in the traditional medical market. Finally, management
intends to continue pursuing financing opportunities, including selling its
common stock to private investors, if necessary.
11. Forward-Looking Statements:
This report may contain statements which, to the extent they are not
recitations of historical fact, constitute "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995
(the "Reform Act"). Such forward-looking statements involve risks and
uncertainties. Actual results may differ materially from such forward-
looking statements for reasons including, but not limited to, changes to and
developments in the legislative and regulatory environments effecting the
Company's business, the impact of competitive products and services, changes
in the medical and laboratory industries caused by various factors, as well
as other factors as set forth in this report. Thus, such forward-looking
statements should not be relied upon to indicate the actual results which
might be obtained by the Company. No representation or warranty of any kind
is given with respect to the accuracy of such forward-looking information.
The forward-looking information has been prepared by the management of the
Company and has not been reviewed or compiled by independent public
accountants.
F-12
BIOSYNERGY, INC.
SCHEDULE I
Marketable Securities - Other Investments
Amount at
which each
Portfolio
of Equity
Number of Security
Shares or Issues and
Units - Market Each Other
Name of Principal Value of Security
Issuer and Amount of Each Issue Issue Carried
Title of Bonds and Cost of at Balance in the
each Issue Notes Each Issue Sheet Date Balance Sheet (1)
____________ __________ __________ __________ _________________
Stevia Co., 130,403 --- 130 ---
April 30, Inc., Common
1996 Stock
_________
Stevia Co., 130,403 --- 130 ---
April 30, Inc., Common
1997 Stock
_________
_______________
(1) Balance Sheet caption - Investment in Affiliated Company.
S-1
BIOSYNERGY, INC.
SCHEDULE V
Property, Plant and Equipment
Additions Other
Balance at to Cost Retirements Charges Balance
_________ ___________ _______ at end
Classifi- Beginning of
cation of Year Amount Amount Amount Year
___________ __________ ______ ______ ______ _______
Year
Ending
April 30,
1996
___________
Equipment 154,036 --- --- --- 154,036
Leasehold
Improve-
ments 12,216 --- --- --- 12,216
_________
TOTAL 165,252 --- --- --- 166,252
_________ _______
--------- ------- ------- ------- -------
Year
Ending
April 30,
1997
___________
Equipment 154,036 7,284 --- --- 161,320
Leasehold
Improve-
ments 12,216 --- --- --- 12,216
_________
TOTAL 166,252 7,284 --- --- 173,536
_________ _______
--------- ------- ------- ------- -------
S-2
BIOSYNERGY, INC.
SCHEDULE VI
Accumulated Depreciation, Depletion and
Amortization of Property, Plant and Equipment
Additions
Balance at Charged to Balance
Beginning Costs and Other Changes at End
Description of Year Expenses Retirements Description Amount of Year
___________ __________ __________ ___________ ___________ ______ _______
Year Ending
April 30,
1996
___________
Equipment 149,578 269 --- --- 149,847
Leasehold
Improve-
ments 10,341 1,875 --- --- 12,216
________ ________ _______
TOTAL 159,919 2,144 --- --- 162,063
________ ________ _______
-------- -------- ------------ ------ -------
Year Ending
April 30,
1997
___________
Equipment 149,847 947 --- --- 150,794
Leasehold
Improve-
ments 12,216 --- --- --- 12,216
________ ________ _______
TOTAL 162,063 947 --- --- 163,010
________ ________ _______
-------- -------- ------------ ------ -------
S-3
BIOSYNERGY, INC.
SCHEDULE VIII
Valuation and Qualifying Accounts
Additions Deductions
_____________________ _________________
Balance
Year at Begin- Charged to Balance
Ending ning of Costs and Descrip- at End
April 30, Description Year Expenses Other tion Amount Year
_________ ___________ _________ ___________ ________ _________ _______ _______
Uncollect-
1997 Allowance
For Un-
collectible
Accounts 500 123 --- --- 123 500
1996 Allowance
For Un-
collectible
Accounts 500 --- --- --- --- 500
S-4
BIOSYNERGY, INC.
SCHEDULE X
Supplementary Income Statement Information
Charged to Costs
Item and Expenses
____ ________________
Year Ending
April 30, 1995 1. Maintenance and Repairs $4,012
______________
2. Depreciation and Amortization
Depreciation of Equipment 1,348
Amortization of Patent Expense 5,476
Amortization of Leasehold Improvements 2,506
5. Advertising Costs 2,490
Year Ending
April 30, 1996 1. Maintenance and Repairs $4,371
______________
2. Depreciation and Amortization
Depreciation of Equipment 269
Amortization of Patent Expense 4,919
Amortization of Leasehold Improvements 1,875
5. Advertising Costs 3,568
Year Ending
April 30, 1997 1. Maintenance and Repairs 4,886
______________
2. Depreciation and Amortization
Depreciation of Equipment 947
Amortization of Patent Expense 4,272
5. Advertising Costs 3,890
S-5
____________________________________________________________________________
____________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10K
Annual Report Pursuant to Section 13 or 15(d)
of
THE SECURITIES AND EXCHANGE ACT OF 1934
For the period ending April 30, 1997
Commission File Number - 0-12459
BIOSYNERGY, INC.
________________________________________________
(Exact name of registrant as specified in charter)
1940 East Devon Avenue, Elk Grove Village, IL 60007, (847) 956-0471
(Address and telephone number of registrant's principal executive office on a
principal place of business)
________________________________________________
EXHIBITS
____________________________________________________________________________
_________________________________________________________________________________________________________________________________________________
_____________________________________________________________________
EXHIBIT INDEX
_____________
Page Number
Pursuant to
Sequential
Exhibit Numbering
Number Exhibit System
_______ ___________________ _________ ____________
10(c) Installment Promissory Note, dated
September 20, 1996, payable by Stevia
Company, Inc. to the Company. E-1
27 Financial Data Schedule E-3E-1