UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington,WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period endedJanuary July 31, 2019

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

SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to ___________FOR THE TRANSITION PERIOD FROM APRIL 30, 2019 TO JULY 31, 2019

Commission file number0 -12459File Number: 0-12459

Biosynergy, Inc.

(Exact name of registrant as specified in its charter)

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.

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 JanuaryJuly 31, 2019:14,935,511

BIOSYNERGY, INC.

PART 1 –- FINANCIAL INFORMATION

Item 1.Financial Statements and Supplementary Data

BALANCE SHEETS

ITEMAssets

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

BIOSYNERGY, INC.

PART 1 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATAINFORMATION

Balance Sheets

ASSETSBALANCE SHEETS

Liabilities and Shareholders’ Equity

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

BIOSYNERGY, INC.

STATEMENTS OF OPERATIONS

Unaudited

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

BIOSYNERGY, INC.

PART 1 – FINANCIAL INFORMATIONSTATEMENT OF SHAREHOLDERS' EQUITY

BALANCE SHEETSTHREE MONTHS ENDED JULY 31, 2019

Unaudited

LIABILITIES AND SHAREHOLDER’S EQUITY

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

BIOSYNERGY, INC.

PART 1 – FINANCIAL INFORMATION

STATEMENTS OF INCOME

(Unaudited)

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

BIOSYNERGY, INC.

STATEMENTSTATEMENTS OF SHAREHOLDER’S EQUITYCASH FLOWS

Nine Months Ended January 31, 2019

(Unaudited)Unaudited

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

BIOSYNERGY, INC.

STATEMENT OF CASH FLOWS

(Unaudited)

Non-Cash TransactionsRecording of Right of Use Asset – Building Lease$ 178,200 $-

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

BIOSYNERGY, INC.

Notes to Financial Statements

NineThree Months Ended JanuaryJuly 31, 2019 and 2018

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, 20182019 Annual Report on Form 10-K.10-K/A. The results of operations for the ninethree months ended JanuaryJuly 31, 2019 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 HemoTemp^® II Blood Monitoring Device, accounted for approximately 94.4%92.48% of the sales during the nine monthsquarter ending JanuaryJuly 31, 2019 and 92.14%91.34% during the nine monthsquarter ending JanuaryJuly 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

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

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 $6,852$1,419 and $7,556$1,918 for the ninethree month periods ending JanuaryJuly 31, 2019 and 2018, respectively.

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 FASB issued an Accounting Standards Update (ASU)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 condensed consolidated financial statements is as follows:

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 nine month periodfirst quarter ending JanuaryJuly 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 cost is not material.material.

Income Taxes

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 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 ninethree month periods ended JanuaryJuly 31:

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

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 the ninethree months ended JanuaryJuly 31, 2019 and 2018 were $8,994$3,411 and $6,514$2,171 respectively.

Patents relate 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. Basic and diluted net income per common share is the same for the nine months1^st quarter ended JanuaryJuly 31, 2019 and 2018 as there are no common stock equivalents.

Comprehensive Income

Components of comprehensive income include amounts that are included in the comprehensive income but are excluded from net income. During the ninethree month periods ending JanuaryJuly 31, 2019 and 2018, there were no differences between the Company’s net income and comprehensive income.

Fair Value of Financial Instruments

The Company evaluates its financial instruments based on current market interest rates relative to stated

interest rates, length to maturity and the existence of readily determinable market prices. Based on the Company’s analysis, the fair value of financial instruments recorded on the balances sheets as of JanuaryJuly 31, 2019 and April 30, 2018,2019, approximates their carrying value.

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 Company’s operations were a single reportable segment and an international segment. The international segment operations are immaterial. See Note 7.

Recent Accounting Pronouncements

The FASB issues ASUs to amend the authoritative literature in Accounting Standards Certification (ASC). There have been a number of ASUs to date that amend the original text of ASCs. Those 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.Company.

Note 3 – Inventories

Components of inventories are as follows:

January 31, April 30,

20192018

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 JanuaryJuly 31, 2019:

Stock of Affiliates

As of JanuaryJuly 31, 2019, $19,699 was due from F. K. Suzuki International, Inc. (“FKSI”). 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 $18,341$4,624 and $21,988$8,706 for the ninethree months ended JanuaryJuly 31, 2019 and 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. 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. In February 2018, the Company entered into a two-year lease agreement for its current facilities, which started May 1, 2018 and expires on April 30, 2020. Under the new lease standard, which was early-adoptedearly adopted by the Company as of May 1, 2018, the Company’s lease was accounted for as an operating lease. As a result, the Company measured the lease liability using the two year term and rates per the lease agreement and 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 amortization expense, for the ninethree months ending JanuaryJuly 31, 2019 is $66,825. The corresponding expense, recorded as rent expense, for the nine months ending January 31, 2019 is $66,000.was $22,275. 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 JanuaryJuly 31, 2019 are presented in the following table:

Year Ending April 30:30 2020: $66,825

Note 7 – Customer Concentrations

Shipments to one customer amounted to 28.15%28.28% of sales during the first ninethree months of Fiscal 20192020 compared to 28.24%31.87% during the comparative Fiscal 20182019 period. As of JanuaryJuly 31, 2019, there were outstanding accounts receivable from this customer of $65,955$68,161 compared to $54,732$66,518 at JanuaryJuly 31, 2018. Shipments to another customer amounted to 40.51%36.96% of sales during the first ninethree months of Fiscal 20192020 and 36.67%36.42% of sales during the first ninethree months of Fiscal 2018.2019. As of JanuaryJuly 31, 2019, there were outstanding accounts receivable from this customer of $199,484$128,026 compared to $136,466$123,166 at JanuaryJuly 31, 2018.

The Company had export sales of $25,005$7,310 during the 3^rd Quarterfirst three months of Fiscal 2019,2020, and export sales of $7,160$10,790 during the 3^rd Quarterfirst three months of Fiscal 2018. For the nine months ending January 31, 2019 export sales were $68,660 and $32,120 for the same period ending January 31, 2018.2019. 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.sales and such sales are not considered to be material.   

Item 2.Management’s Discussion of Financial Condition and Results of OperationsMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Net Sales/Revenues

For the three month period ending JanuaryJuly 31, 2019 (“31^rdst Quarter”), the net sales increased 20.3%decreased .33%, or $62,877, and increased 9.18%, or $85,716, during the nine month period ending January 31, 2019,$1,047, as compared to net sales for the comparative periodsthree month period ending in 2018. The increasedecrease in net sales during the three1^st Quarter was primarily due to a decrease of $3,305 in LabTemp^® and nine month periods ending January 31, 2019 is primarily the result of higher HemoTemp^® II sales. At JanuaryActivator sales offset by an increase in HemoTemp^® II sales of $2,655. As of July 31, 2019, there werethe Company had no back orders.

In addition to the above, during the 31^rdst Quarter the Company had $630$480 of other miscellaneous revenues and $1,815 for the nine month period ending January 31, 2019 primarily from interest income and leasing a portion of its storage space to an unrelated party.a third party and interest income of $150.

Costs and Expenses

General

The operating expenses of the Company during the 31^rdst Quarter increaseddecreased overall by .35%.87%, or $672,$1,730, as compared to the 3^rd quarter in 2018. The operating expenses of the Company decreased by 3.82% or $22,764 for the ninethree month period ending January 31, 2019, as compared to the nine month period ending JanuaryJuly 31, 2018, primarily due to a decrease in legal fees, entertainmentgeneral and chemical waste disposal fees.administrative expenses.

Cost of Sales

The cost of sales during the 31^rdst Quarter decreased by $5,348, and increased by $19,240 during the nine month period ending January 31, 2019$3,261 as compared to these expenses during the same periodsthree month period ending inJuly 31, 2018. The decrease in the cost of sales during the 3^rd QuarterThis increase was due primarily due to higher freight charge revenues, which are offset against other expenses included in cost of sales. The increase for the nine month period ending January 31, 2019 was due to an increase in the cost of health insurancesalaries and certain raw materials.related employee expenses. As a percentage of sales, the cost of sales were 29.67%was 33.83% during the 31^rdst Quarter 37.42%and 32.69% for the comparative quarter ending in 2018, and 31.64% during the ninethree month period ending JanuaryJuly 31, 2019 compared to 32.48% in 2018. Subject to unanticipated changesincreases in the price of raw materials or extraordinary occurrences, 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 $130, or .03%, duringfor the 31^rdst Quarter increased by $3,001, or 8.13%, as compared to the same quarter in 2018. These costs decreased by $14,603, or 10.93%, during the nine month period ending January 31, 2019 as compared to the same period infiscal 2018. The overall cost in research and development expense decreased during the nine monthsincrease was mainly due to no chemical waste disposal fees, consulting fees or prototypehigher salaries and related employee expenses during the nine months ending January 31, 2019.and books for research. The Company is continuing its investigation and development of certain productsresearch intended to improve and expand itsthe Company’s current product line. The Company does not have sufficient information to determine the extent to which its resourcesthe Company will be required to completeallocate its resources to the continued development of suchthese products.

Marketing Expenses

Marketing expenses for the 3rd1^st Quarter decreasedincreased by $1,869, or 3.9%,$2,093 as compared to the quarter ending JanuaryJuly 31, 2018. These costs decreased by $1,431, or 1.01%, during the nine month period ending January 31, 2019 as compared to the same period in 2018. The decrease is primarilyincrease was due to lessmarketing travel and entertainment costs.higher employee expenses.

General and Administrative Expenses

General and administrative costs for the 31^rdst Quarter increaseddecreased by $2,411,$6,824, or 2.5%5.82%, as compared to the 3^rd quarter ending January 31, 2018, primarily due to higher electronic order processing charges and employee expenses. General and administrative costs have decreased overall by $6,730, or 2.1%, during the nine month period ending JanuaryJuly 31, 2019, as compared to2018. This decrease was primarily the same periodsresult of a decrease in 2018, primarily due to lower legal fees. Except for unforeseen expenses and normal increases in employee costs, it is unlikely general and administrative expenses will materially change during Fiscal 2020.

Net Income

The Company realized a net income of $53,364$8,578 during the 31^rdst Quarter as compared to a net income of $5,097$10,379 for the comparative quarter inof the prior yearyear. The reduction in net income during the first quarter was primarily due to higher sales during the 3^rd quarter. The Company also realized a net income of $89,741 for the nine month period ending January 31, 2019 as compared to a net income of $28,399 during the same period in 2018. This increase in net income is due to an overall increase in sales, while the operating expenses of the Company have not materially changed.reduced sales.

Assets/Liabilities

General

Since April 30, 2018,2019, the Company'sCompany’s assets have increaseddecreased by $196,606$22,429 and liabilities have increaseddecreased by $106,865.$31,007. The increaseoverall decrease in assets such as cash, accounts receivables and inventories offset by decreases in prepaid expenses,liabilities is a result ofprimarily due to the Company’s continued profitability and cash generated from operations. Also, the implementation of FASB Topic 842 related to changes in the accounting treatment for leases, (“FASB Topic 842”) increased assets by $111,375which include amortization of the right of use asset and increased liabilities by $112,200, offset by a decrease of $5,335 in other current liabilities.payments against the lease liability.

Related Party Transactions

The Company was owed $19,699 by F.K. Suzuki International, Inc. ("FKSI"), an affiliate, at JanuaryJuly 31, 2019 and April 30, 2018.2019. 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 not 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 reclassified as a reduction of FKSI’s capital in the Company.

A board member provides a variety of legal services to the companyCompany in his capacity as a partner in a law firm. Fees for such legal services were approximately $18,341$4,624 and $21,988 for the nine months ending January$8,706 at July 31, 2019 and 2018, respectively.

Current Assets/Liabilities Ratio

The ratio of current assets to current liabilities, 10.713.18 to 1, has decreasedincreased compared to 22.210.5 to 1 at April 30, 20182019, primarily due to the adoption of FASB Topic 842. This decrease is not indicative of a material change in the financial condition of the Company, but rather the result of a change in accounting reporting method for the Company’s facilities lease.higher cash balances and lower operating lease liability. The Company anticipates the ratio of current assets to current liabilities will remain substantially at its current level as a result of the change in 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 nine month period ending January 31, 2019,1^st Quarter, the Company experienced an increase in working capital of $5,740.$35,683. This iswas primarily due to the Company’s increase inhigher cash accounts receivablesbalances and inventories and a reduction in accrued expenses. Without the adoption of FASB Topic 842, working capital would have increased by $95,390.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 accounts receivable, based on past experience, the Company believes that uncollectableuncollectible accounts receivable will not have a significant effect on future liquidity.

Cash provided by operating activities was $45,244$33,522 during the ninethree month period ending JanuaryJuly 31, 2019. CashThere was no cash used forin investing activities was $11,022 during this same period.activities. Except for its operating working capital, limited equipment purchases and patent expenses,procurement 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 activities during the ninethree month periodsperiod ending JanuaryJuly 31, 2019 or 2018.

As of JanuaryJuly 31, 2019, the Company had $1,658,074$1,651,500 of current assets available. Of this amount, $31,068$50,614 was prepaid expenses, $148,048$158,038 was inventory, $304,308$229,201 was net trade receivables and $1,174,650$1,213,647 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 on the Company’s revenues or income 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 3rd1^st 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 usedusing 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:

Use of Estimates - preparation. Preparation 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 the 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.

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 the 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. TheThus, 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.

Disclosure Controls and Procedures

The Company has established and maintains disclosure controls and procedures (as defined in Rules 13a-15(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 are effective.

There have been no changes in the Company’s internal control over financial reporting during the Company’s Fiscal Quarter ending JanuaryJuly 31, 2019 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.

As of the end of the Company’s Fiscal Quarter ending JanuaryJuly 31, 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, 2018.2019. There were no significant changes to the risk factors identified on the Form 10-K10-K/A for the fiscal year ended April 30, 20182019 or during the nine monthsfirst quarter of Fiscal 2019.2020.

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.