UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

(Mark One)

 

[X]

XQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period endedOctober 31, 2019

__ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period endedJanuary 31, 2018

[ ]       TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

 

For the transition period from __________ to ___________

 

Commission file number0 -12459

Biosynergy, Inc.

(Exact name of registrant as specified in its charter)

Illinois36-2880990

Illinois36-2880990
(State of other jurisdiction of incorporation or organization)(IRS Employer Identification No.)
1940 East Devon Avenue, Elk Grove Village, Illinois 60007847-956-0471
(Address of principal executive offices)(Registrant’s telephone number, including area code)

(State or other jurisdiction of incorporation or organization) (IRS Employer Identification No.)

1940 East Devon Avenue, Elk Grove Village, Illinois 60007847-956-0471

(Address of principal executive offices) (Registrant’s telephone number, including area code)

 

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. YesX No __

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data file required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files. YesX No __

 

Indicate by check mark whether the registrant is a large accelerated filing, an accelerated filer, a non-accelerated filer, or a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “smaller reporting“emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer_____Accelerated filer_____
Non-accelerated filer (Do not check if a smaller reporting company

Large accelerated filer ______ Accelerated filer ______

 

Non-accelerated filer (Do not check if a smaller reporting company) ______ Smaller reporting company ___X___

Emerging growth company ______

If an emerging growth company, indicated by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]

_____

Smaller reporting company

__X__

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes __ NoX

 

APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer’s classes of common equity,stock, as of JanuaryOctober 31, 2018: 2019:14,935,511

BIOSYNERGY, INC.

PART 1 – FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

 

Balance Sheets

ASSETS

 

January 31, 2018

Unaudited

April 30, 2017

Audited

Current Assets  
Cash $                1,132,692 $             1,040,582
Accounts receivable, trade (net of allowance for doubtful accounts of $500 at January 31, 2018 and April 30, 2017                      230,274                   267,545
Inventories                      133,939                   186,312
Prepaid expenses                        52,233                     32,165
Total Current Assets                   1,549,138                1,526,604
   
Equipment and leasehold improvements  
Equipment                     201,764                   201,764
Leasehold improvements                       23,447                    23,447
                      225,211                   225,211
Less accumulated depreciation and amortization                    (212,882)                 (205,326)

Total Equipment and Leasehold

Improvements Net

                       12,329                    19,885
   
Other Assets  
Patents less accumulated amortization                       63,858                    70,372
Pending patents                       69,420                    69,420
Deposits                         5,937                      5,937
Total Other Assets                     139,215                   145,729
   
  $                1,700,682 $             1,692,218

The accompanying notes are an integral part of the financial statements.

 
 

 

BIOSYNERGY, INC.

 

PART 1 –- FINANCIAL INFORMATION

 

Item 1.ITEMFinancial Statements and Supplementary Data

BALANCE SHEETS

Assets 

  October 31, 2019
Unaudited		 April 30, 2019
Audited
Current Assets
Cash
 $1,224,170  $1,180,125 
Accounts receivable, Trade (net of allowance for doubtful accounts of $500 at October 31, 2019 and April 30, 2019)
  242,190   246,363 
Inventories  156,959   162,678 
Prepaid expenses  39,836   57,658 
Total Current Assets  1,663,155   1,646,824 
Property, Plant and Equipment
Equipment		  201,489   201,489 
Leasehold improvements  25,809   25,809 
   227,298   227,298 
         
Less accumulated depreciation and amortization  (217,820)  (214,982)
Total Equipment and Leasehold Improvements Net  9,478   12,316 
Operating Lease Right of Use
Operating Lease Right of Use Asset		  44,550   89,100 
     Total Operating Lease Right of Use Asset  44,550   89,100 
 Other Assets        
                    Patents less accumulated amortization  111,881   118,702 
                    Deposits  5,937   5,937 
                            Total other assets  117,818   124,639 
  $1,835,001  $1,872,879 

The accompanying notes are an integral part of the financial statements.

BIOSYNERGY, INC.

PART 1 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAINFORMATION 

 

BALANCE SHEETS

 

 

LIABILITIES AND SHAREHOLDERS EQUITYLiabilities and Shareholders’ Equity

 

 

 

January 31, 2018

Unaudited

April 30, 2017

Audited

Current Liabilities  
Accounts payable $                    12,835 $                   3,842
Accrued compensation and payroll taxes                       18,903                    42,472
Other accrued liabilities                         1,369                      3,589
Accrued Vacation                       18,656                    21,795
Total Current Liabilities                       51,763                    71,698
   
Deferred Income Taxes                       34,800                    34,800
   
Shareholder's Equity  
Common stock, no par value: 20,000,000 authorized shares issued: 14,935,511 shares at January 31, 2018 and April 30, 2017                     660,988                   660,988
Receivable from affiliate                     (19,699)                   (19,699)
Retained earnings                     972,830                   944,431
Total Shareholders' Equity                  1,614,119                1,585,720
   
  $                1,700,682 $             1,692,218
   

  October 31, 2019 Unaudited April 30, 2019
Audited
Current Liabilities
Accounts payable		 $6,306  $4,538 
Accrued compensation and payroll taxes  9,681   39,766 
Accrued vacation  31,324   21,578 
Other accrued liabilities  434   209 
Operating lease liability  45,100   90,200 
Total Current Liabilities  92,845   156,291 
   Deferred income taxes  24,272   24,272 
         
Shareholders’ Equity        
Common stock, no par value: 20,000,000 authorized
shares issued: 14,935,511 shares at October 31, 2019 and April 30, 2019		  660,988   660,988 
Receivable from affiliate    (19,699)  (19,699)
Retained earnings    1,076,595   1,051,027 
Total Shareholders' Equity  1,717,884   1,692,316 
  $1,835,001  $1,872,879 

 

 

 

The accompanying notes are an integral part of the financial statements

BIOSYNERGY, INC.

Statements of Operations

(unaudited)

  Three Months Ended Six Months Ended
  October 31 October 31
  

2019

 2018 2019 2018
Net sales $312,303  $328,429  $629,085  $646,258 
Cost of sales  108,553   107,885   215,727   211,799 
Gross profit  203,750   220,544   413,358   434,459 
Operating expenses                
Marketing  43,766   48,265   91,568   93,973 
General and administrative  97,678   97,615   208,194   214,955 
Research and development  39,175   38,911   79,097   75,832 
Total Operating Expenses  180,619   184,791   378,859   384,760 
                 
Income from operations  23,131   35,753   34,499   49,699 
Other income                
Interest income  150   132   300   224 
Other income  480   480   960   960 
Total Other Income  630   612   1,260   1,184 
                 
Net income before income taxes  23,761   36,365   35,759   50,883 
                 
Provision for income taxes  6,771   10,368   10,191   14,507 
Net income $16,990  $25,997  $25,568  $36,376 
Net income per common share - basic and                
diluted
Weighted-Average Shares of Common Stock		 $.0011  $.0017  $.0017  $.0024 
     Outstanding - Basic and Diluted  14,935,511   14,935,511   14,935,511   14,935,511 

The accompanying notes are an integral part of the financial statements.

BIOSYNERGY, INC.

STATEMENT OF SHAREHOLDERS' EQUITY

SIX MONTHS ENDED OCTOBER 31, 2019

Unaudited

Common Stock

  Shares Amounts Receivable from Affiliate Retained Earnings Total
 

Balance, May 1, 2019

 

   14,935,511  $660,988  $(19,699) $1,051,027  $1,692,316 
 

Net Income

 

   

-

__________

   

-

_________

   

-

__________

  $25,568  $25,568 
 Balance, October 31,                     
 2019   14,935,511  $660,988  $(19,699) $1,076,595  $1,717,884 

The accompanying notes are an integral part of the financial statements.

 
 

 

BIOSYNERGY, INC.

 

PART 1 – FINANCIAL INFORMATIONSTATEMENTS OF CASH FLOWS

 

ITEM 1 – FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Unaudited

 

Six Months Ended October 31

STATEMENTS OF INCOME

(unaudited)

 Three Months EndedNine Months Ended
 January 31January 31
 2018201720182017
     
Net sales $          309,653 $          342,320$       933,072$       982,713
Cost of sales              115,861               89,898         303,072         277,075
Gross profit             193,792             252,422         630,000         705,638
Operating expenses    
Marketing               47,820               45,821         141,355         139,400
General and administrative               96,472               92,325         320,568         305,799
Research and development               43,038               41,856         133,603         121,747
Total Operating Expenses             187,330             180,002         595,526         566,946
     
Income from operations                6,462               72,420           34,474         138,692
Other income    
Interest income                      89                      98                304                313
Other income                    480                    480             1,440             1,440
Total Other Income                    569                    578             1,744             1,753
     
Net income before income taxes                7,031               72,998           36,218          140,445
     
Provision for income taxes                1,934               23,392             7,819            44,381
Net income $             5,097 $            49,606 $        28,399 $         96,064
     
Net income per common share - basic and diluted $                .000 $                .003 $            .002 $            .006
Weighted-Average Shares of Common Stock Outstanding - Basic and Diluted       14,935,511      14,935,511   14,935,511   14,935,511
Cash flows from operating activities      2019           2018
Net income
Adjustments to reconcile net income to cash provided by operating activities		 $25,568  $36,376 
Depreciation and amortization  9,659   9,760 
Noncash lease expense  44,550   44,550 
                                      Changes in assets and liabilities��       
Accounts receivable  4,173   10,131 
Inventories  5,719   (2,309)
Prepaid expenses and other  17,822   26,657 
Accounts payable and accrued expenses  (18,346)  (40,339)
Building lease liability for right of use asset  (45,100)  (44,000)
Total adjustments  18,477   4,450 
         
Net cash provided by operating activities
Cash flow from investing activities		  44,045   40,826 
Purchase of equipment  —     (3,541)
Net cash used in investing activities  —     (3,541)
Increase in cash and cash equivalents  44,045   37,285 
Cash beginning period  1,180,125   1,140,428 
Cash ending period
Supplemental cash flow information		 $1,224,170  $1,177,713 
         
Interest paid $—    $—   
Income taxes paid $—    $—   

Non-Cash Transactions

 

        
   Record Right of Use Asset and Operating Lease Liability $—    $178,200 

 

The accompanying notes are an integral part of the financial statements.

BIOSYNERGY, INC.

STATEMENT OF SHAREHOLDERS EQUITY

Nine Months Ended January 31, 2018

(Unaudited)

 

 

 Common Stock   
 SharesAmountOther and RelatedReceivableRetainedEarningsTotal

Balance,

May 1, 2017

14,935,511 $     660,988 $     (19,699) $     944,431 $    1,585,720
      
Net income                   -                   -                      -             28,399            28,399
      

Balance,

January 31, 2018

14,935,511 $     660,988 $     (19,699) $     972,830 $    1,614,119

The accompanying notes are an integral part of the financial statements.

 
 

 

BIOSYNERGY, INC.

STATEMENT OF CASH FLOWSNotes to Financial Statements

(Unaudited)Six Months Ended October 31, 2019 and 2018

 Nine Months Ended January 31
 20182017
Cash flows from operating activities  
Net income $             28,399 $            96,064
Adjustments to reconcile net income to cash (used in) provided by operating activities  
Depreciation and amortization                14,070               12,894
Changes in assets and liabilities  
Accounts receivable               37,271             (80,048)
Inventories               52,373             (76,193)
Prepaid expenses and other              (20,068)               (6,733)
Accounts payable and accrued expenses              (19,935)                  (756)
Total adjustments                63,711           (150,836)
   
Net cash (used in) provided by operating activities               92,110             (54,772)
   
Cash flow from investing activities  
Patents and patents pending                     ---               (8,632)
Purchase of equipment                     ---               (6,737)
   
Net cash used in investing activities                     ---             (15,369)
   
Increase (decrease) in cash and cash equivalents                92,110              (70,141)
Cash beginning period           1,040,582            1,091,649
Cash ending period $        1,132,692 $         1,021,508
   
Supplemental cash flow information  
Interest paid$                        - $                      -
Income taxes paid $              21,300 $          29,400

 

The accompanying notes are an integral part of the financial statements.

Note 1 - Company Organization and Description

 

In the opinion of management, the accompanying unaudited condensed financial statements contain all adjustments, consisting of normal recurring adjustments which are necessary for a fair presentation of the financial position and results of operations for the periods presented. The unaudited condensed financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all the information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America. These condensed financial statements should be read in conjunction with the audited financial statements and notes included in the Company’s April 30, 20172019 Annual Report on Form 10-K.10-K/A. The results of operations for the ninesix months ended JanuaryOctober 31, 20182019 are not necessarily indicative of the operating results for the full year.

 

Biosynergy, Inc. (the 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 thermographic products that utilize cholesteric liquid crystals. The Company’s primary product, the HemoTempR II Blood Monitoring Device, accounted for approximately 91.03%91.89% of the sales during the quartersix months ending JanuaryOctober 31, 20182019 and 92.18%90.84% during the nine month periodsix months ending JanuaryOctober 31, 2018. The products are sold to hospitals, clinical end-users, laboratories and product dealers located throughout the United States.

 

Note 2 - Summary of Significant Accounting Policies

 

Cash

Cash

 

The Company maintains all of its cash in various bank deposit accounts, which at times may exceed federally insured limits. No losses have been experienced on such accounts.

 

Receivables

Receivables

 

Receivables are carried at original invoice less estimates made for doubtful receivables. Management determines the allowances for doubtful accounts by reviewing and identifying troubled accounts on a periodic basis and by using historical experience applied to an aging of accounts. A receivable is considered to be past due if any portion of the receivable balance is outstanding beyond the stipulated due date. Receivables are written off when deemed uncollectible. Recoveries of receivables previously written off are recorded when received.

Inventories

Inventories

 

Inventories are valued at the lower of cost or market using the FIFO (first-in, first-out) method.

 

Depreciation

Depreciation

 

Equipment and leasehold improvements are stated at cost. Depreciation is computed using the straight-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 capitalized and amortized over the term of the lease; equipment is depreciated over three to ten years.

Depreciation expense was $7,556$2,837 and $6,380$4,176 for the ninesix month periods ending JanuaryOctober 31, 20182019 and 2017,2018, respectively.

Note 2 – Summary of Significant Accounting Policies (Continued)

Prepaid Expenses

 

Certain expenses, primarily insurance and income taxes, have been prepaid and will be used within one year.

 

Revenue Recognition

 

In May 2014, the Financial Accounting Standards Board (FASB) issued an Accounting Standards Update (ASU) 2014-09, "Revenue from Contracts with Customers (Topic 606)", which supersedes the revenue recognition requirements in Accounting Standards Codification (ASC) 605,Revenue Recognition. Several additional ASUs have subsequently been issued amending and clarifying the standard. The core principle of ASU 2014-09 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance provides a five-step process to achieve that core principle and to determine when and how revenue is recognized. The updates may be applied retrospectively for each period presented or as a cumulative-effect adjustment at the date of adoption.

The Company adopted this standard on May 1, 2018, using the modified retrospective approach. The impact of the adoption of ASU 2014-09 on the Company’s financial statements is as follows:

The Company’s revenue is primarily generated from the sales of products directly to customers or through distribution channels, based on purchase orders and not supply contracts providing for additional goods or services once the products are transferred to the customer. The Company’s performance obligations underlying such sales, and the timing of revenue recognition related thereto, remain substantially unchanged following the adoption of this ASU.

The adoption of ASU No. 2014-09 requires that the Company recognize its sales return allowance on a gross

basis rather than as a net liability. As such, the Company now recognizes a return asset for the right to recover the goods returned by the customer, measured at the former carrying amount of the products, less any expected recovery costs (recorded as an increase to prepaid expenses and other current assets), and a return liability for the amount of expected returns (recorded as an increase to other current liabilities). The Company’s analysis of sales returns over the past several years noted that sales returns are nominal and therefore no sales return allowance is deemed necessary.

There was no adjustment necessary for fiscal year ending April 30, 2018 or prior in relation to the change in the revenue recognition policy and no significant effects on the six month period ending October 31, 2019.

Shipping and Handling

Shipping and handling fees billed to customer, if any, are netted against the related costs which are included in cost of sales. The net sales revenue uponcost is not material.

Income Taxes

Income taxes are provided for the shipmenttax effects of producttransactions reported in the financial statements and consist of taxes currently due and deferred taxes related primarily to customers.differences in the methods of accounting for patents, inventories, certain accrued expenses and bad debt expenses for financial and income tax reporting purposes. The deferred income taxes represent the future tax consequences of those differences, which will be taxable in the future.

The Company files tax returns in the U.S. federal jurisdiction and with the state of Illinois. Various tax years remain open to examinations, generally for three years after filing, although there are currently no ongoing tax examinations. Management’s policy is to recognize interest and penalties related to uncertain tax positions in income tax expense.

The provision for income taxes consists of the following components for the six month periods ended October 31:

      2019 2018
Current    
Federal $6,794  $9,673 
State  3,397   4,834 
Provision for Income Taxes $10,191  $14,507 

The differences between the U.S. federal statutory tax rate and the Company’s effective tax rate are as follows:

    Period Ended October 31,
        2019         2018
U.S. federal statutory tax rate  21.0%  21.0%
State income tax expense,        
    net of Federal tax benefit  7.5%  7.5%
Effective Tax Rate  28.5%  28.5%

 

Research and Development and Patents

 

Research and development expenditures are charged to operations as incurred. The costs of obtaining patents, primarily legal fees, are capitalized and, once obtained, are amortized over the life of the respective patent on the straight-line method.

 

Patent amortization expense for both the ninesix months ended JanuaryOctober 31, 2019 and 2018 were $6,822 and 2017 was $6,514. $5,583 respectively.

Patents relatedrelate to products that have been developed and are being marketed by the Company. Patents pending relate to products under development.

  

Use of Estimates

 

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

 

Income Per Common Share

 

Income per common share is computed by dividing net income by the weighted-average number of common shares outstanding during the period. When dilutive,Basic and diluted net income per common share is the same for the six months ended October 31, 2019 and 2018 as there are no common stock options are included as share equivalents using the treasury stock method in the calculation of diluted earnings per share. The Company has no outstanding options or other rights to acquire its unissued common shares.equivalents.

 

Comprehensive Income

 

Components of comprehensive income include amounts that are included in the comprehensive income but are excluded from net income. During the three and ninesix month periods ending JanuaryOctober 31, 20182019 and 2017,2018, there were no differences between the Company’s net income and comprehensive income.

 

Note 2 – SummaryFair Value of Significant Accounting Policies (Continued)

Income TaxesFinancial Instruments

Income taxes are provided for the tax effects of transactions reported in the financial statements and consist of taxes currently due and deferred taxes related primarily to differences in the methods of accounting for patents, inventories, certain accrued expenses and bad debt expenses for financial and income tax reporting purposes. The deferred income taxes represent the future tax consequences of those differences, which will be taxable in the future. The Company implemented ASU 2015-17 during the quarter ended October 31, 2017 on a retrospective basis, and has classified its net deferred tax liabilities as non-current.

 

The Company files tax returns inevaluates its financial instruments based on current market interest rates relative to stated interest rates, length to maturity and the U.S. federal jurisdictionexistence of readily determinable market prices. Based on the Company’s analysis, the fair value of financial instruments recorded on the balances sheets as of October 31, 2019 and with the state of Illinois. Various tax years remain open to examinations, generally for three years after filed, although there are currently no ongoing tax examinations. Management’s policy is to recognize interest and penalties related to uncertain tax positions in income tax expense.April 30, 2019, approximates their carrying value. 

 

On December 22, 2017, the Tax Cuts and Jobs Act (the “Act”) was signed into law. Among other provisions, the Act reduces the Federal statutory corporate income tax rate from 35% to 21%. This rate reduction has been applied in the provision for income tax calculation below and did not result in a material change to the deferred tax liability for the quarter ended January 31 2018.

Segments

 

Accounting standards have established annual reporting standards for an enterprise’s operating segments and related disclosures about its products, services, geographic areas and major customers. The provision for income taxes consists of the following components for the nine months ended January 31:

 20182017
Current  
     Federal$     5,012$   33,496
     State       2,807     10,885
Provision for Income Taxes$     7,819$   44,381

Company’s operations were a single reportable segment and an international segment. The differences between the U.S. federal statutory tax rate and the Company’s effective tax rateinternational segment operations are as follows:

 Nine Months ended January 31,
 20182017
U.S. federal statutory tax rate29.7%34.0%

State income tax expense, net of

Federal tax benefit

   5.0   5.0

Effect of graduated federal tax rates

and other

(13.1)  (7.4)
Effective Tax Rate 21.6% 31.6%

immaterial. See Note 2 – Summary of Significant Accounting Policies (Continued)7.

 

Recent Accounting Pronouncements

 

The FASB issues ASUs to amend the authoritative literature in Accounting Standards Certification (ASC).ASC. There have been a number of ASUs to date that amend the original text of ASCs. Those ASUs issued to date either (i) provide supplemental guidance, (ii) are technical corrections, (iii) are not applicable to the Company or (iv) are not expected to have a significant impact on the Company.

  

On February 25, 2016, the FASB issued Topic 842, its highly-anticipated leasing standard for both lessees and lessors. Under its core principle, a lessee will recognize lease assets and liabilities on the balance sheet for all arrangements with terms longer than 12 months. Lessor accounting remains largely consistent with existing U.S. GAAP. The amendments are effective for public companies for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. At inception, a lessee must classify all leases as either finance or operating. The Company intends to adopt Topic 842 upon extension of the current lease for its facilities in Elk Grove Village or upon entering into a new lease agreement for alternative facilities on or about May 1, 2018. The Company is investigating the effect of adoption of Topic 842 on its results of operations and financial condition. However, it is not anticipated that adoption of Topic 842 will have a material impact on the results of operations or financial condition of the Company.

In May 2014, the Financial Accounting Standard Board (FASB) issued ASU 2014-09, Revenue from Contract with Customers (Topic 606) (“ASU 2014-09”). ASU 2014-09 and subsequent amendments supersede the revenue recognition requirements in ASC Topic 605, Revenue Recognition, and most industry-specific guidance. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard is effective for annual periods beginning after December 15, 2017, and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures). We are currently evaluating the impact of our pending adoption of ASU 2014-09 on our financial statements and have not yet determined the method by which we will adopt the standards as of May 1, 2018.

Note 3 – Inventories

 

Components of inventories are as follows:

 

January 31,

2018

April 30,

2017

 

 

 

Raw materials $106,194$142,713
Work-in-process     15,742    16,752
Finished goods      12,003    26,847
   $133,939$186,312
  

October 31,

2019

 April 30,
2019
Raw Materials $107,485  $112,499 
Work-in-Process  29,885   32,882 
Finished Goods  19,589   17,207 
  $156,959  $162,678 

Note 4 – Common Stock

 

The Company’s common 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.

 

Note 5 - Related Party Transactions

 

The Company and its affiliates are related through common stock ownership as follows as of JanuaryOctober 31, 2018:2019:

 

 

Stock of Affiliates

 

 

 

Biosynergy, Inc.

 

F.K. Suzuki International, Inc.

 

 

 

Medlab, Inc.

 

F.K. Suzuki International, Inc30.0%     - %100.0%
Fred K. Suzuki, Officer  4.130.0     -
Lauane C. Addis, Officer    -     -     -
Jeanne S. Addis, Trustee    -28.1     -
Mary K. Friske, Officer    .3    .7     -
Laurence C. Mead, Officer    .410.0     -
Beverly K. Suzuki, Officer  2.7      -     -

Stock of Affiliates 

  

 

Biosynergy, Inc.

 F.K. Suzuki International, Inc. 

 

Medlab, Inc.

F.K. Suzuki International, Inc.  30.0%  —  %  100%
Fred K. Suzuki, Officer  4.1   30.0   —   
Jeanne S. Addis, as Trustee  —     28.1   —   
Mary K. Friske, Officer  .3   .7   —   
Laurence C. Mead, Officer  .4   10.0   —   
Beverly R. Suzuki  2.7   —     —   
Lauane C. Addis, Officer  —     —     —   
Malcolm MacCoun, Director  —     —     —   

 

As of JanuaryOctober 31, 2018,2019, $19,699 was due from F. K. Suzuki International, Inc. These balances result from an allocation of common expenses charged to FKSI prior to April 30, 2006 offset by advances received from time to time. No interest income is received or accrued by the Company. The financial condition of FKSI is such that it will unlikely be able to repay the Company during the next year without liquidating a portion of its assets, including a portion of its ownership in the Company. As a result, the receivable balance has been reclassified as a contra equity account since April 30, 2006.

 

A board member provided a variety of legal services to the Company in his capacity as a partner in a law firm. Fees for such legal services were approximately $21,988$7,585 and $15,848$14,811 for the ninesix months ended JanuaryOctober 31, 20182019 and 2017,2018 respectively.

 

Note 6 – Lease Commitments

 

On February 25, 2016, the FASB issued Topic 842, Leases. Under its core principle, a lessee will recognize lease assets and liabilities on the balance sheet for all arrangements with terms longer than 12 months. Lessor accounting remains largely consistent with existing U.S. GAAP. At inception, a lessee must classify all leases as either finance or operating. In January 2015,February 2018, the Company entered into a three-yeartwo-year lease agreement for its current facilities, which started May 1, 2018 and expires on April 30, 2018. The base rent under2020. Under the new lease escalates overstandard, which was early-adopted by the lifeCompany as of the lease. However, rent expense is recorded on a straight-line basis as required by accounting principles generally accepted in the United States of America. As of January 31,May 1, 2018, the Company’s approximate total future minimum lease payments arewas accounted for as follows:

Year Ending April 30: 
  
2018     22,319

Also included inan operating lease. As a result, the Company measured the lease liability using the two year term and rates per the lease agreement are escalation clausesand recognized a lease liability, with a corresponding right-of-use asset. A discount was not calculated due to the lease agreement only having a two year term.

The operating lease expense, recorded as an amortization expense, for the lessor’s increasessix months ending October 31, 2019 is $44,550. The actual lease liability payment for the six months ending October 31, 2019 was $45,100. Retrospective application of the new standard did not render any adjustments since all of the Company’s operating leases were less than one year.

Maturities of lease liabilities as of October 31, 2019 are presented in property taxes and other operating expenses. The Company is currentlyin negotiations to extend the lease agreement.following table:

Year Ending April 30:

2020 $ 44,550

 

Note 7 – Customer Concentrations

 

Shipments to one customer amounted to 28.24%26.95% of sales during the first ninesix months of Fiscal 20182020 compared to 27.1%30.53% during the comparative Fiscal 20172019 period. As of JanuaryOctober 31, 2018,2019, there were outstanding accounts receivable from this customer of $54,732$73,825 compared to $67,535$55,423 at JanuaryOctober 31, 2017.2018. Shipments to another customer amounted to 36.67%37.10% of sales during the first ninesix months of Fiscal 20182020 and 36.7%35.66% of sales during the first ninesix months of Fiscal 2017.2019. As of JanuaryOctober 31, 2018,2019, there were outstanding accounts receivable from this customer of $136,466$134,288 compared to $152,440$127,278 at JanuaryOctober 31, 2017.2018.

 

The Company had export sales of $32,120$15,295 during the first nine months2nd Quarter of Fiscal 2018,2020, and export sales of $7,160$32,865 during the 2ndQuarter of Fiscal 2019. For the six months ending JanuaryOctober 31, 2019 export sales were $22,605 and $43,655 for the same period ending October 31, 2018. The Company had export sales of $46,595 during the first nine months of Fiscal 2017, and export sales of $16,505 during the Quarter ending January 31, 2017. 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.

 

BIOSYNERGY, INC.

Six Months Ended October 31, 2019 and 2018

Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

Net Sales/Revenues

 

For the three month period ending JanuaryOctober 31, 20182019 (“3rd2nd Quarter”), the net sales decreased 9.54%4.91%, or $32,667,$16,126, and decreased 5.05%2.66%, or $49,641,$17,173, during the ninesix month period ending JanuaryOctober 31, 2018,2019, as compared to net sales for the comparative periods ending in 2017. The2018. This decrease in sales during the three and nine month periods ending January 31, 2018 is primarily the result of lowera decrease in the sales of HemoTempR®, HemoTemp® II and TempTrend sales. At January® products. As of October 31, 2018 there were2019, the Company had no back orders.

 

In addition duringto the 3rd Quarterabove, the Company had $569$630 and $1,260 of other miscellaneous revenues primarily from interest income and leasing a portion of its storage space to an unrelated party.a third party during the three and the six month periods ending October 31, 2019, respectively.

 

Costs and Expenses

General

 

The operating expenses of the Company during the 3rd2nd Quarter increaseddecreased overall by 4.07%2.26%, or $7,328,$4,172, and decreased by 1.53%, or $5,901, for the six month period ending October 31, 2019, as compared to the 3same periods ending in 2018. The decrease during the 2rdnd quarter in 2017 primarily due to an increase in employee wages, FDA user feesQuarter and legal fees. The operating expenses of the Company increased by 5.04% or $28,580 for the ninesix month period ending JanuaryOctober 31, 2018, as compared to the nine month period ending January 31, 2017 primarily2019 was due to an increasea decrease in legal fees, general insurance and chemical waste disposaladvertising fees.

 

Cost of Sales

 

The overall cost of sales during the 3rd2nd Quarter increased by $25,963,$668 and also increased by $25,997$3,928 during the ninesix month period ending JanuaryOctober 31, 20182019 as compared to these expenses during the same periods ending in 2017. The2018. For the six months ended October 31, 2019, the increase in the cost of sales during the 3rd Quarter was primarily due to the addition of a full-timehigher employee costs and an increase in the cost of health insurance and certainhigher raw materials.material costs. As a percentage of sales, the cost of sales were 37.42%34.76% during the 3rd2nd Quarter 26.26%and 32.85% for the comparative quarter ending in 2017,2018; and 32.48%34.29% during the ninesix month period ending JanuaryOctober 31, 20182019 compared to 28.19%32.77% in 2017. Subject to unanticipated changes in the price of raw materials or extraordinary occurrences, it2018. It is not anticipated that the cost of sales as a percentage of sales will materially change in the near future.

 

Research and Development Expenses

 

Research and Development costs increased $1,182,$264, or 2.82%.68%, during the 3rd2nd Quarter as compared to the same quarter in 2017.2018. These costs increased by $11,856,$3,265, or 9.74%4.31%, during the ninesix month period ending JanuaryOctober 31, 20182019 as compared to the same period in 2017. The overall cost in research and development expense increased during the nine months2018. This increase was primarily due to chemical waste disposal fees, consulting fees and higher FDA user fees. The Company is continuing its investigation and development of certain products intended to improve and expand its current product line. The Company does not have sufficient information to determine the extent to which its resources will be required to complete the development of such products.employee costs.

  

Marketing Expenses

 

Marketing expenses for the 3rd2nd Quarter increaseddecreased by $1,999,$4,499, or 4.36%9.32%, as compared to the quarter ending JanuaryOctober 31, 2017. These costs increased2018 and decreased by $1,955,$2,405 or 1.40%2.56%, during the ninesix month period ending JanuaryOctober 31, 2018 as2019 compared to the samesix-month period ending October 31, 2018. The change in 2017. The increase ismarketing expenses for the six-month period ending October 31, 2019 compared to the six-month period ending October 31, 2018 was primarily due to higher employeelower advertising fees and lower health insurance costs.

 

General and Administrative Expenses

 

General and administrative costs for the 3rd Quarter increased by $4,147,$63, or 4.49%.06%, as compared toin the 3rd quarter ending January 31, 2017, primarily due to higher legal fees2nd Quarter, and employee expenses. General and administrative costs have increased overalldecreased by $14,769,$6,761, or 4.83%3.15%, during the ninesix month period ending JanuaryOctober 31, 2018,2019, as compared to the same periods in 2018,2018. This overall decrease for the six months ending October 31, 2019 was due primarily due to higherlower legal fees and a decrease in healthcare costs. Except for unforeseen items and ordinary cost increases, it is unlikely general insurance and employee expenses.administrative expenses will materially change during the remainder of Fiscal 2020.

 

Net Income

 

The Company realized a net income of $5,097$16,990 during the 3rd2nd Quarter as compared to a net income of $49,606$25,997 for the comparative quarter in the prior year primarily due to lower sales during the 3rd quarter.year. The Company also realized a net income of $28,399$25,568 for the ninesix month period ending JanuaryOctober 31, 20182019 as compared to a net income of $96,064$36,376 during the same period in 2017. This2018. The decrease in net income is due to an overall decrease in sales.

a result of decreased net sales for the six month period ending October 31, 2019.

  

Assets/LiabilitiesAssets /Liabilities

 

General

 

Since April 30, 2017,2019, the Company'sCompany’s assets have increaseddecreased by $8,464$37,878 and liabilities have decreased by $19,935.$63,446. The increaseoverall decrease in assets such as cash and prepaid expenses,liabilities is a resultprimarily due to the changes in the accounting treatment for leases, which include amortization of the Company’s continued profitabilityright of use asset and cash generated from operations.payments against the lease liability.

 

Related Party Transactions

 

The Company was owed $19,699 by F.K. Suzuki International, Inc. ("FKSI"), an affiliate, at JanuaryOctober 31, 20182019 and April 30, 2017.2019. This account primarily represents common expenses which were previously charged by the Company to FKSI for reimbursement. No interest is received or accrued by the Company. Collectability of the amounts due from FKSI since April 30, 2006 could notcannot be assured without the liquidation of all or a portion of its assets, including a portion of its common stock of the Company. As a result, as of April 30, 2006, all of the amount owed by FKSI to the Company was reclassifiedis classified as a reduction of FKSI’s capital in the Company.

A board member provides a variety of legal services to the Company in his capacity as a partner in a law firm. Fees for such legal services were approximately $7,585 and $14,811 for the six months ended October 31, 2019 and 2018, respectively.

 

Current Assets/Liabilities Ratio

 

The ratio of current assets to current liabilities, 29.9317.9 to 1, has increased compared to 21.2910.5 to 1 at April 30, 2017. This increase in2019, primarily due to higher cash balances and lower accrued liabilities and lower operating lease liability. The Company anticipates the ratio of current assets to current liabilities iswill remain substantially at its current level as a result of increased cash and prepaid expenses and a reductionthe change in accrued expenses.accounting methods, subject to other normal fluctuations. In order to maintain or improve the Company’s asset/liabilities ratio, the Company’s operations must remain profitable.

 

Liquidity and Capital Resources

 

During the ninesix month period ending JanuaryOctober 31, 2018,2019, the Company experienced an increase in working capital of $42,469.$79,777. This iswas primarily due to the Company’s increase inhigher cash balances and prepaid expenseslower accrued liabilities and a reduction in accrued expenses.lower operating lease liability.

 

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 to carry a minimum amount of finished inventory and raw materials to meet the delivery requirements of customers and thus, inventory represents a materialsubstantial portion of the Company’s investment in current assets.

 

The Company presently grants payment terms to customers and dealers. Although the Company experiences varying collection periods of its accountsaccount receivable, based on past experience, the Company believes that uncollectable accounts receivable will not have a significant effect on future liquidity.

 

CashThe cash provided by operating activities was $92,110$44,045 during the ninesix month period ending JanuaryOctober 31, 2018. Nothing2019. There was no cash used for equipment purchases or patent application expenditures during this same period.in investing activities. Except for its operating working capital, limited equipment purchases and patent expenses,prosecution costs, management is not aware of any other material capital requirements or material contingencies for which it must provide. There were no cash flows from financing or investing activities during the ninesix month periodsperiod ending JanuaryOctober 31, 2018 or 2017.2019.

 

As of JanuaryOctober 31, 2018,2019, the Company had $1,549,138$1,663,155 of current assets available. Of this amount, $52,233$39,836 was prepaid expenses, $133,939$156,959 was inventory, $230,274$242,190 was net trade receivables and $1,132,692$1,224,170 was cash. The Company’s available cash and cash flow from operations isare considered adequate to fund the short-term operating capital needs of the Company. The Company does not have a working line of credit, and does not anticipate obtaining a working line of credit in the near future. ThereThus there is a risk additional financing may be necessary to fund long-term capital needs of the Company.Company, although there is no such currently known long-term capital needs other than operations.

 

Effects of Inflation. With the exception of inventory, and labor costs and product sales prices increasing with inflation, inflation has not had a material effect on the Company’s revenues and income from continuing operations in the past three years. Inflation is not expected to have a material effect in the foreseeable future.

 

Critical Accounting Policies and Estimates. On December 12, 2001, the SEC issued FR-60 “Cautionary Advice Regarding Disclosure About Critical Accounting Policies.” FR-60 is an intermediate step to alert companies to the need for greater investor awareness of the sensitivity of financial statements to the methods, assumptions, and estimates underlying their preparation, including the judgments and uncertainties affecting the application of those policies and the likelihood that materially different amounts would be reported under different conditions or using different assumptions.

 

The Company’s significant accounting policies are disclosed in Note 2 to the Financial Statements for the 3rd2nd Quarter. See “Financial Statements.” Except as noted below, the impact on the Company’s financial position or results of operation would not have been materially different had the Company reported under different conditions or used different assumptions. The policies which may have materially affected the financial position and results of operations of the Company if such information had been reported under different circumstances or assumptions are: none.

 

Use of EstimatesEstimates. - preparationPreparation of financial statements and conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the Financial Statements and the reported amounts of revenues and expenses during the reporting period. The financial condition of the Company and results of operations may differ from the estimates and assumptions made by management in preparation of the Financial Statements accompanying this report.

 

Allowance for Bad Debts -. The Company periodically performs credit evaluations of its customers and generally does not require collateral to support amounts due from the sale of its products. The Company maintains an allowance for doubtful accounts based on its best estimate of collectability of accounts receivable.

 

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, risks inherit in marketing new products, 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.

 

Item 3.Quantitative and Qualitative Disclosures About Market Risk.

Item 3.Quantitative and Qualitative Disclosures About Market Risk.

 

Market risk is the risk of loss arising from adverse changes in market rates and prices, such as interest rates, foreign currency exchange rates and commodity prices. Historically, theThe Company’s primary exposure to market risk has beenis interest rate risk associated with its short term money market investments. The Company currently does not have any money market investments. The Company does not have any financial instruments held for trading or other speculative purposes and does not invest in derivative financial instruments, interest rate swaps or other investments that alter interest rate exposure. Thus, theThe Company does not have any credit facilities with variable interest rates. The Company’s operations are not exposed to financial risk that will have a material impact on its financial position and results of operation.

 

Item 4.Controls and Procedures

Item 4.Controls and Procedures

 

Disclosure Controls and Procedures

 

The Company has established and maintains disclosure controls and procedures (as defined in Rules 13a-15(e)13a15(e) and 15d-15(e) of the Exchange Act) which are controls and other procedures of the Company that are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms.

Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Accounting Officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. The Company’s Chief Executive Officer and Chief Accounting Officer have evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in

Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, the Company’s Chief Executive Officer and its Chief Accounting Officer have concluded that the Company’s disclosure controls and procedures arewere effective.

There have been no changes in the Company’s internal control over financial reporting during the Company’s Fiscal Quarter ending JanuaryOctober 31, 20182019 that have materially affected or are likely to materially affect the Company’s internal control over financial reporting.

 

PART II – OTHER INFORMATION

 

Item 1.Legal Proceedings.

Item 1.Legal Proceedings.

 

As of the end of the Company’s Fiscal Quarter ending JanuaryOctober 31, 2018,2019, there are no material pending legal proceedings to which the Company or any of its subsidiaries is a party to of which any of their property is the subject.

 

Item 1A. Risk Factors.

 

In addition to the other information set forth in this report on Form 10-Q, you should also consider the factors, risks and uncertainties which could materially affect the Company’s business, financial condition or future results as discussed in Part I, Item 1A – “Risk Factors” of our Annual Report on Form 10-K10-K/A for the fiscal year ended April 30, 2017.2019. There were no significant changes to the risk factors identified on the Form 10-K10-K/A for the fiscal year ended April 30, 20172019 or during the thirdsecond quarter of Fiscal 2018.2020.

 

Item 2.Unregistered Sales of Equity Securities and Use of Proceeds.

Item 2.Unregistered Sales of Equity Securities and Use of Proceeds.

 

During the past three years, the Company has not sold securities which were not registered under the Securities Act.

 

Item 3.Defaults Upon Senior Securities.

Item 3.(a)Defaults Upon Senior Securities.As of the end of the Company’s Fiscal Quarter ending October 31, 2019, there have been no material defaults in the payment of principal, interest, a sinking or purchase fund installment, or any other material default not cured within 30 days, with respect to any indebtedness of the registrant or any of its significant subsidiaries exceeding 5 percent of the total assets of the Company and its consolidated subsidiaries.

(b)            As of the end of the Company’s Fiscal Quarter ending October 31, 2019, there have been no material arrearages in the payment of dividends and there has been no other material delinquency not cured within 30 days, with respect to any class of preferred stock of the Company which is registered or which ranks prior to any class of registered securities, or with respect to any class of preferred stock of any significant subsidiary of the Company.

Item 4.Mine Safety Disclosures.

 

The disclosures required by this Item are not applicable to the Company.

 

Item 4.Mine Safety Disclosures.

Item 5.Other Information.

The disclosures required by this Item are not applicable to the Company.

 

Item 5.(a)Other Information.The Company is not required to disclose any information in this Form 10-Q otherwise required to be disclosed in a report on Form 8-K during the period covered by this Form 10-Q.

 

(a)       The Company is not required to disclose any information in this Form 10-Q otherwise required to be disclosed in a report on Form 8-K during the period covered by this Form 10-Q.

(b)       During the Fiscal Quarter ending January 31, 2018, there have been no material changes to the procedures by which the security holders may recommend nominees to the Company’s board of directors, where such changes were implemented after the Company last provided disclosure in response to the requirements of Regulation S-K.

(b)During the Fiscal Quarter ending October 31, 2019, there have been no material changes to the procedures by which the security holders may recommend nominees to the Company’s board of directors, where such changes were implemented after the Company last provided disclosure in response to the requirements of Regulation S-K.

 

Item 6.Exhibits.

 

The following exhibits are filed as a part of this report:

 

(2)       Plan of Acquisition, reorganization, arrangement, liquidation or succession - none

(2)Plan of Acquisition, reorganization, arrangement, liquidation or succession - none

 

(3)       Articles of Incorporation and By-laws(i)

(3)Articles of Incorporation and By-laws(i)

 

(4)Instruments defining rights of security holders, including indentures - none.

(10)Material Contracts – none.

(4)       Instruments defining rights of security holders, including indentures - none.

 

(10)       Material Contracts – none.

(11)       Statement regarding computation of per share earnings- none.

(11)Statement regarding computation of per share earnings- none.

 

(15)        Letter regarding unaudited interim financial information - none.

 

(18)       Letter regarding change in accounting principles - none.

(18)Letter regarding change in accounting principles - none.

 

(19)       Reports furnished to security holders - none.

(19)Reports furnished to security holders - none.

 

(22)       Published report regarding matters submitted to vote of security holders - none.

(22)Published report regarding matters submitted to vote of security holders - none.

 

(23)       Consents of experts and counsel - none.

(23)Consents of experts and counsel - none.

 

(24)         Power of Attorney - none.

(31.1)       Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934. Filed herewith.

(31.2)       Certification of the Chief Accounting Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934. Filed herewith.

(32.1)       Certification of the Chief Executive Officer pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934 and 18 U.S.C. Sect. 1350. Filed herewith.

(32.2)       Certification of the Chief Accounting Officer pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934 and 18 U.S.C. Sect. 1350. Filed herewith.

____________________

(31.1)Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934. Filed herewith.

 

(i)(31.2)Incorporated by referenceCertification of the Chief Accounting Officer pursuant to a Registration Statement filed on Form S-18 with the Securities and Exchange Commission, 1933 Act Registration Number 2-38015C,Rule 13a-14(a) under the Securities Exchange Act of 1933, as amended, and Incorporated by reference, with regard1934. Filed herewith.

(32.1)Certification of the Chief Executive Officer pursuant to Amended and Restated By-Laws, to the Company’s Current Statement on Form 8-K dated as of July 2, 2009 filed withRule 13a-14(b) under the Securities Exchange Act of 1934 and Exchange Commission.18 U.S.C. Sect. 1350. Filed herewith.

(32.2)Certification of the Chief Accounting Officer pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934 and 18 U.S.C. Sect. 1350. Filed herewith.
___________________

(i) Incorporated by reference to a Registration Statement filed on Form S-18 with the Securities and Exchange Commission, 1933 Act Registration Number 2-38015C, under the Securities Act of 1933, as amended, and Incorporated by reference, with regard to Amended and Restated By-Laws, to the Company’s Current Statement on Form 8-K dated as of July 2, 2009 filed with the Securities and Exchange Commission.

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

Biosynergy, Inc.

 

Date: March 19, 2018December 16, 2019

/s/ Fred K. Suzuki

Fred K. Suzuki

Chief Executive Officer, Chairman of the

Board, and President

 

 

  

Date: March 19, 2018December 16, 2019

/s/ Laurence C. Mead

Laurence C. Mead

Chief OperatingExecutive Officer, Chief Financial Officer, Chief Accounting OfficerChairman of the

Board, and TreasurerPresident

EXHIBIT 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Fred K. Suzuki, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Biosynergy, Inc.;

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

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

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: March 19, 2018

/s/ Fred K. Suzuki

Fred K. Suzuki

Chairman of the Board, Chief Executive Officer and President

 

 

 

 

 

 

EXHIBIT 31.2

CERTIFICATION OF CHIEF ACCOUNTING OFFICER

I, Laurence C. Mead, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Biosynergy, Inc.;

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

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

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: March 19, 2018

/s/ Laurence C. Mead

Laurence C. Mead

Vice President/Manufacturing and Development, Chief Financial Officer, and Chief Accounting Officer

EXHIBIT 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Report of Biosynergy, Inc. (the "Company") on Form 10-Q for the quarter ending January 31, 2018, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that:

(1)       the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities and Exchange Act of 1934, as amended; and

(2)       the information contained in the Report fairly represents, in all material respects, the financial conditions and results of operations of the Company as of January 31, 2018, and for the period then ended.

Biosynergy, Inc.

/s/ Fred K. Suzuki

Fred K. Suzuki

Chairman of the Board, Chief Executive

Officer and President

Dated: March 19, 2018

EXHIBIT 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Report of Biosynergy, Inc. (the "Company") on Form 10-Q for the quarter ending January 31, 2018, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that:

(1)       the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities and Exchange Act of 1934, as amended; and

(2)       the information contained in the Report fairly represents, in all material respects, the financial conditions and results of operations of the Company as of January 31, 2018, and for the period then ended.

Biosynergy, Inc.

/s/ Laurence C. Mead

Laurence C. Mead

Vice President/Manufacturing and Development, Chief Financial Officer and Chief Accounting Officer

Dated: March 19, 2018